Otter backs expansion of income tax credit

Ben Botkin
February 17, 2010
Twin Falls Times-News

BOISE — Gov. C.L. "Butch" Otter is backing an expansion of an existing income tax credit that would give a bigger break to residents who donate to some same state agencies, the governor's budget chief told the Times-News on Tuesday.

The proposed legislation, which the governor's office is crafting with lawmakers, has not yet been publicly introduced. Its overall purpose is to help agencies that have traditionally relied strongly on general-fund dollars and are facing cuts.

First, it would increase the income tax credit that residents can receive for donations. Second, it would add five state agencies to the existing list of entities that residents can receive a tax credit for donating to.

"This bill would make it an even better tax credit and expand it," said Wayne Hammon, Otter's budget chief.

The five agencies added would be: the Idaho Commission of Hispanic Affairs, Idaho Commission for the Blind and Visually Impaired, Idaho Council on Developmental Disabilities, Idaho State Independent Living Council, and Idaho Council for the Deaf and Hard of Hearing.

Otter has recommended gradually reducing state funding for those agencies and Idaho Public Television over a four-year period. Hammon said the proposal will help wean the agencies off state dollars.

The tax credit currently covers half of donations made to public and nonprofit private schools and universities, IPTV, the Idaho State Historical Society, and libraries and museums.

The credit is limited to $100 for a single filer or $200 for a couple. The proposal would increase that to $500 and $1,000, respectively. It is also capped at 20 percent of taxes owed, which the proposal would increase to 50 percent.

Sen. Brent Hill, R-Rexburg, a co-sponsor of the legislation with House Majority Leader Mike Moyle, said the bill will be a good way to get residents involved in support of schools, IPTV and other agencies.

Because the credit covers half of donations, the state's return on its investment doubles, Hill said. For example, if a resident gets a $500 tax credit, it's because they donated $1,000.

"You're doubling your money," Hill said.

The proposal estimates a reduction in tax receipts of $5 million for the next fiscal year, but an overall increase of $10 million to organizations that receive donations.

The proposal would also increase the credit limit for corporate giving from $1,000 to $5,000, and includes a five-year sunset clause.

Ben Botkin may be reached at

Originally posted at

The News Story posted here is provided by permission of its original publisher and does not necessarily reflect the views of Idaho Public Television.

Return to Idaho Public Television in the News