“Amount Paid on Redemption” Includes Interest & Late Charges:
East Side Highway District v. Kootenai County (Idaho 2025)

1. Introduction

In East Side Highway District v. Kootenai County, the Idaho Supreme Court resolved a fiscal tug-of-war between county government and multiple local taxing districts (three highway districts and two cities) over who is entitled to the statutory late-charge (2%) and interest (1% per month) assessed on delinquent property taxes. Kootenai County’s treasurer, citing collection costs, announced in 2022 that the County would henceforth keep 100 % of those penalties. The taxing districts, forecasting significant revenue losses, sought declaratory and mandamus relief. The district court sided with them; the County appealed. The Supreme Court has now affirmed, holding that:

• The phrase “amount paid on account of such redemption” in Idaho Code § 63-1015 necessarily includes the delinquent tax, late charges, and accrued interest described in § 63-1007(1); and
• Those monies must be proportionately apportioned to every taxing district in the same manner as ordinary property-tax collections, after the County first deducts statutory collection costs.

2. Summary of the Judgment

Applying a plain-language reading of the interconnected statutory scheme governing delinquent taxes, the Court held:

1. Entitlement to Funds. Late charges and interest are part of the “amount paid” when a landowner redeems property from tax sale. Section 63-1015 therefore obligates the county treasurer to apportion these amounts among the taxing districts, not retain them wholesale.
2. County Collection Costs. Idaho Code § 63-1314 authorizes counties to recover reasonable “collection costs,” but not to appropriate all penalty revenues. If counties believe the statutory schedule is inadequate, their remedy lies with the Legislature, not the judiciary.
3. Attorney Fees. Because the litigation pitted one governmental entity against others, Idaho Code § 12-117(4) mandates that the prevailing party (here, the taxing districts) receive attorney fees both in the district court and on appeal—without any reasonableness qualifier.

3. Detailed Analysis

3.1 Precedents & Authorities Cited

• Statutory-interpretation framework: The Court reiterated canons from City of Idaho Falls v. H-K Contractors (2018) and TCR, LLC v. Teton County (2024): when language is plain, courts enforce it as written and must harmonize related provisions to avoid superfluity.
• Agency relationship: Hamilton v. Village of McCall (1965) and Bagley v. Gilbert (1942) were invoked to emphasise that county officials act merely as agents for other taxing districts when collecting taxes.
• Analytical tools: United States Supreme Court decisions (Davis v. Michigan Treasury, Utility Air Regulatory Group v. EPA, Robinson v. Shell Oil) provided context for reading statutory phrases “in context and within the overall scheme.”
• Attorney-fee jurisprudence:
  • Lunneborg v. My Fun Life (2018) & Yellowstone Log Homes v. City of Rigby (2023) – abuse-of-discretion standard for fee awards.
  • Ada County v. City of Garden City (2014) – distinguished; the Court clarified that § 12-117(4) (added 2010) sets a different, automatic fee rule for suits strictly between governmental entities.

3.2 Court’s Legal Reasoning

a. Statutory Text Controls

The Court began with the operative language of § 63-1015 (“amount paid on account of such redemption”) and held it unambiguous once read in pari materia with § 63-1007(1) (defining what must be paid to redeem), § 63-1002 (how partial payments are applied), and the highway-district-specific § 40-805. Because those cross-references expressly include “late charges” and “accrued interest,” the phrase amount paid necessarily sweeps them in.

b. Harmonizing the Statutory Scheme

Section 63-1015 has a two-step grammatical structure: (1) identify the pool (“amount paid”); (2) dictate its destination (“to be apportioned … as provided for the apportionment of property taxes”). Reading the statute otherwise would silently excise the words “amount paid” or render them surplusage—contravening basic interpretive doctrine.

c. Rejection of Ambiguity & Policy Arguments

The County’s plea for a broader, policy-driven interpretation was rebuffed. The Court admonished that dissatisfaction with statutory allocations is a legislative, not judicial, concern (Verska v. St. Alphonsus, 2011).

d. Attorney Fees—Automatic When Both Sides Are Governmental

Subsection (4) of § 12-117 uses mandatory “shall” language and omits the “without a reasonable basis” condition found in subsection (1). The Court refused to graft that limitation onto subsection (4); doing so would violate separation-of-powers principles.

3.3 Impact on Idaho Law & Beyond

1. Financial redistribution. All Idaho counties must now share late charges and interest with every taxing district represented on the annual tax-bill. Highway districts, cities, school districts, library districts, and others will see revenues restored or increased, while counties may experience budgetary shortfalls if they had been depending on those penalties to fund operations.
2. Legislative pressure. Counties may lobby the Idaho Legislature to raise the statutory “collection costs” fee schedule or otherwise amend Title 63 to compensate for lost revenue.
3. Clarity for treasurers. The opinion supplies a bright-line rule: keep documented “collection costs” (Idaho Code § 63-1314); distribute the rest in the same percentages used for the original levy.
4. Attorney-fee precedent. The Court’s explicit reading of § 12-117(4) will likely spur governmental litigants to reassess the risks of inter-agency lawsuits, knowing fees are now virtually automatic for the victor.
5. Guidance on “idle funds.” Although the Court declined to decide whether late-charge/interest monies qualify as “idle funds” under Idaho’s Public Depository Law, its dicta cautions counties against unilaterally categorising undisbursed penalty money as surplus investment capital.

4. Complex Concepts Simplified

• Delinquency: Any property tax or assessment not paid by the statutory deadline (Dec 20) becomes “delinquent,” triggering penalties.
• Late Charge vs. Interest: A one-time 2 % penalty (“late charge”) plus continuing 1 % per month interest accrue on the overdue amount.
• Redemption: The act by which an owner rescues property from tax sale by paying all amounts due (tax, penalties, interest, costs).
• Apportionment: Distribution of collected funds to each taxing district according to its percentage share of the original levy.
• In Pari Materia: A canon of construction requiring statutes on the same subject to be read together to harmonize meaning.
• Mandamus: A court order compelling a public official to perform a nondiscretionary, legally required act—in this case, distributing funds.
• § 12-117(4) Fees: In suits solely between governmental entities, the winner automatically recovers reasonable attorney fees and costs.

5. Conclusion

East Side Highway District v. Kootenai County unequivocally establishes that interest and late charges paid to redeem delinquent property taxes belong, proportionally, to every taxing district that levied the underlying tax. Counties act as fiduciary intermediaries, not proprietors, of these funds and may retain only documented “collection costs.”

The opinion simultaneously clarifies attorney-fee exposure among governmental litigants and leaves open, for future legislation or litigation, how “idle funds” doctrine meshes with mandated apportionment. For Idaho’s fiscal ecosystem—especially its cities, highway districts, and schools—the ruling restores revenue streams potentially worth millions statewide and fortifies the principle that statutory text, not expedient policy, governs public-finance disputes.