Accountable USA - Idaho

Idaho’s major economic development subsidies favor high-tech companies, many of which have migrated from California to take advantage of the lower cost of living and less restrictive environmental regulation.  Idaho does not have a history of striking many big company-specific deals, perhaps because the traditionally conservative state legislature is responsible for the few that it has approved.

Hewlett-Packard was among the first such companies to arrive in Idaho in the 1970s, and other footloose high-tech businesses followed. One of the state's largest-ever subsidies went to home-grown silicon chip fabricator Micron Technology in a 2005 plant expansion/retention deal (see below).   As with the Micron deal, Areva Inc. obtained subsidies via the state legislature; the nuclear energy firm was subsidized to build a uranium enrichment facility in eastern Idaho in 2008 (see below).  

Micron and Areva were both exempted from sales tax on production equipment and supplies, including equipment for fabricating operations, clean rooms, and materials processing equipment.  Overall, this exemption cost the state some $130 million annually.  The 3% Investment Income Tax Credit is another expensive economic development program, valued at $38 million for FY2014.  Advocacy groups and some state legislators have repeatedly called for the elimination of this credit in the interest of fiscal responsibility.  Idaho also allows corporate income tax credits for research and development expenditures and for adding new jobs in certain industrial sectors.  The state administers a workforce training fund through which it provides discretionary training grants, as well.

Idaho has no deal-specific online information for any of the five subsidy programs we examined, making it difficult for taxpayers to get any sense of costs or benefits.  It is one of three states without online disclosure.

Key Subsidy Programs

Subsidy Program Recent Annual
Cost
Online Recipient
Disclosure
Recipient Disclosure
Score
Job-Creation/
Job-Quality Score**
Monitoring/
Enforcement Score***

3% Investment Income Tax Credit

controversial credit against corporate income tax worth up to 3% of the value of capital investment; may be carried forward for 14 years

$38 million (2014)
0/100
10/100
43/100

Business Advantage Program

a wide package of incentives including tax credits, sales tax rebates, and property tax exemptions

unknown
0/100
not included
not included

Hire One Tax Credit

sliding scale income tax credit for employers

$7.6 million (annualized estimate)
0/100
not included
not included

New Jobs Tax Credit

corporate income tax credit of up to $3,000 per job

unknown
0/100
60/100
63/100

Research and Development Activity Income Tax Credit

corporate income tax credit for spending on R&D

$2.6 million (2014)
0/100
10/100
33/100

* The score is derived from the Good Jobs First report Show Us the Subsidized Jobs (January 2014).

** The score is derived from the Good Jobs First report Money for Something (December 2011).

*** The score is derived from the Good Jobs First report Money-Back Guarantees for Taxpayers (January 2012).

Major Subsidy Deals

Micron Technology (2005)

Chipmaker Micron Technology, which was founded in Idaho and grew to become the largest private employer in the state, has never been shy about seeking tax breaks and other subsidies. One of its more audacious moves came in 2005, when the company made it known that financial assistance from the state would be a major factor in its decision on where to expand its operations. Rather than waiting for the state's offer, Micron specified that it wanted a property tax abatement for new facilities and a sales and use tax exemption on new equipment used in research and development. Before long, the state legislature was considering a bill, pushed by Gov. Dirk Kempthorne, that would limit the company’s assessed value for property tax purposes to a total of $700 million a year. Since its valuation was already at about $776 million, that meant that $76 million of its property would become tax-exempt along with new facilities worth hundreds of millions more. Another bill provided the R&D sales tax exemption.

The measures sailed through the legislature, though the property tax exemption threshold was raised to $800 million. Two years later, in the wake of major Idaho layoffs by Micron while it expanded overseas, lawmakers wondered if they had made a big mistake. In 2009 the state used $5 million of its federal Recovery Act funds to give Micron a grant for the development of energy-efficient lighting. (Key sources)

Areva (2008)

In early 2008 there were reports that Areva Inc., a nuclear energy company controlled by the French government, was in talks with officials in Idaho and other states about its plan to build a $2 billion uranium enrichment facility for what it saw as a reviving U.S. nuclear power industry. Idaho, whose involvement in nuclear work dated back to the creation of the federal Idaho National Laboratory (INL) in 1949, was eager to win the prize. Before long, the state legislature was considering a bill providing substantial tax benefits for such a facility, including a sales tax exemption on the purchase of fuel-processing equipment and a cap on property tax value at $400 million for any company investing $1 billion in the state over a seven-year period.

The sales tax break would save the company about $30 million, while the assessment cap was reported to be worth about $15 million a year. The measures passed both chambers in March 2008 and were signed by the governor. In May 2008 Areva announced it would build the plant outside Idaho Falls near INL. In May 2010 Areva was awarded a $2 billion loan guarantee by the U.S. Energy Department. The enrichment plant, which is opposed by environmental groups such as the Snake River Alliance, received approval from the U.S. Nuclear Regulatory Commission in October 2011. (Key sources)

Walmart in Idaho

  • Good Jobs First found no instances of Wal-Mart subsidies in Idaho, but given the absence of comprehensive centralized data, it is still possible that deals have quietly occurred.
  • We found no instances of property tax assessment challenges by Wal-Mart in Idaho, but given the absence of centralized data, it is still possible that appeals have occurred.
  • Many Wal-Mart workers are ineligible for health coverage from their employer or choose not to purchase what is available, because it is too expensive or too limited in scope. These workers often turn to taxpayer-funded health programs such as Medicaid. Idaho is among those states that have not disclosed data on the employers with the most workers or their dependents enrolled in such programs.

For more information, see Wal-Mart Subsidy Watch.