Recently enacted Idaho legislation addresses a taxpayer’s repossession and sale of personal property before the payment of the applicable tax where the taxpayer holds a high-value purchase money security interest. Specifically, if a taxpayer holding a purchase money security interest wants to repossess and sell a specific piece of personal property, and the market value of that personal property exceeds $20,000, then that taxpayer must provide the local tax collector with a request to segregate that specific piece of personal property from the rest of the taxpayer’s taxable personal property. Along with this segregation request, the taxpayer holding the security interest must also provide the tax collector with a copy of the underlying security interest agreement.
Afterwards, the local county assessor must then determine, and provide the tax collector with, the market value of the segregated personal property for assessment purposes. The tax collector must subsequently calculate the total property tax due, including any delinquencies, late charges, accrued interest, costs incurred, and the estimated tax for the current year, relating to the segregated personal property.
Before taking possession of the segregated personal property or selling that property, the taxpayer holding the purchase money security interest must first remit to the tax collector all of the personal property tax owed, including any other applicable amounts due, that are attributable to the segregated personal property.
Finally, the segregation of specific personal property from the remaining taxable personal property does not affect the priority of the relevant tax lien on the remaining taxable personal property.
Ch. 307 (S.B. 1357), Laws 2012, effective July 1, 2012