The bill amends several sections of the Idaho Code to enhance the homestead property tax exemption, changing the exemption amount from the first $125,000 of market value to a full exemption of 100% for owner-occupied homesteads. It establishes the Homestead Property Tax Replacement Fund and makes technical corrections to tax definitions and provisions related to sales and use taxes. Homeowners must meet specific conditions to apply for the exemption, including owner-occupancy and certification by the state tax commission. The bill also outlines the process for recovering improperly claimed exemptions and emphasizes the importance of maintaining accurate records to prevent fraud.

Additionally, the bill modifies the age requirement for claimants and updates the definition of "homestead" to allow for a maximum of one-half acre of land surrounding the dwelling. It creates a homeowner property tax relief account funded by state moneys and mandates the state tax commission to reimburse counties for homeowner property tax relief. The bill also increases the sales and use tax rate from six percent to eight percent to support the new fund and ensure taxing districts are compensated for revenue lost due to the expanded exemption. Furthermore, it outlines the distribution of sales tax revenues and appropriations for public services, including education and infrastructure, with a retroactive effect to January 1, 2026, for certain sections.

Statutes affected:
Bill Text: 63-602G, 63-701, 63-724, 63-3619, 63-3621, 63-3638