The Senate has voted 33-2 in favor of HB 425, the annual IRS tax conformity bill. As soon as Gov. Butch Otter signs the bill into law, Idahoans with business income can begin filing their state income tax returns; they’ve been waiting since Jan. 19.

The bill ran into trouble in the House over same-sex marriage issues, because the original version deleted a 2014 clause in the law that required Idaho same-sex married couples to re-calculate their federal income taxes so they could file separately in Idaho. That clause was invalidated by the legalization of same-sex marriage nationwide. But some lawmakers said they didn’t want to delete the clause because the state Constitution still contains a ban on same-sex marriage, though it’s been invalidated in court. The new version left that clause in, but added another section after it essentially setting it aside for purposes of tax filings. 

Sen. Jim Rice, R-Caldwell, told the Senate the impact is “identical.”

Sen. Maryanne Jordan, D-Boise, said, “I realize that this bill needs to pass, people need to be able to file their taxes. But there is language in this bill that is very troubling to me. Regardless of anyone’s thoughts or opinions on the issue, marriage equality is the law of the land.”

Sen. Grant Burgoyne, D-Boise, noted that the bill ensures Idaho small business owners won’t see a big tax increase, to the tune of $22 million next year, because it conforms to a federal change regarding depreciation of equipment. Rice called it a “phantom tax cut,” because it’s a tax break that Congress had approved temporarily each year and now has finally made permanent.

The two "no" votes came from Jordan and Sen. Sheryl Nuxoll, R-Cottonwood.

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