Print Friendly HOUSE BILL NO. 590 – Sales tax, services, increased, use
HOUSE BILL NO. 590
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SALES TAX - INCREASE - Amends existing law to extend the sales tax to
certain services, to increase the sales tax by one-half cent and to provide
that the revenue from this tax would be used to replace property taxes
currently used for the support of public schools.
02/02 House intro - 1st rdg - to printing
02/03 Rpt prt - to Rev/Tax
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-fourth Legislature Second Regular Session - 1998
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 590
1 AN ACT
2 RELATING TO TAXATION POLICIES; AMENDING SECTION 33-802, IDAHO CODE, TO REDUCE
3 THE SCHOOL MAINTENANCE AND OPERATION LEVY TO ONE-TENTH OF ONE PERCENT;
4 AMENDING SECTION 33-1002, IDAHO CODE, TO REPEAL OBSOLETE SECTIONS AND TO
5 LIMIT THE LOCAL DISTRICTS' CONTRIBUTION CALCULATION AMOUNT; REPEALING SEC-
6 TION 33-1002D, IDAHO CODE; AMENDING SECTION 63-3608, IDAHO CODE, TO FUR-
7 THER DEFINE PURCHASE; AMENDING SECTION 63-3609, IDAHO CODE, TO FURTHER
8 DEFINE RETAIL SALE; AMENDING SECTION 63-3610, IDAHO CODE, TO FURTHER
9 DEFINE RETAILER; AMENDING SECTION 63-3611, IDAHO CODE, TO FURTHER DEFINE A
10 RETAILER ENGAGED IN BUSINESS IN THIS STATE; AMENDING SECTION 63-3612,
11 IDAHO CODE, TO FURTHER DEFINE A SALE BY INCLUDING CERTAIN SERVICES; AMEND-
12 ING SECTION 63-3613, IDAHO CODE, TO FURTHER DEFINE A SALES PRICE AND TO
13 MAKE TECHNICAL CORRECTIONS; AMENDING SECTION 63-3615, IDAHO CODE, TO FUR-
14 THER DEFINE USE; AMENDING SECTION 63-3619, IDAHO CODE, TO INCREASE THE
15 RATE OF THE SALES TAX BY ONE-HALF PERCENT; AMENDING SECTION 63-3621, IDAHO
16 CODE, TO INCREASE THE RATE OF THE USE TAX BY ONE-HALF PERCENT; AMENDING
17 SECTION 63-3622D, IDAHO CODE, TO FURTHER DEFINE THE PRODUCTION EXEMPTION
18 TO INCLUDE CERTAIN SERVICES; AMENDING SECTION 63-3622K, IDAHO CODE, TO
19 FURTHER DEFINE OCCASIONAL SALES AND TO MAKE TECHNICAL CORRECTIONS; AMEND-
20 ING SECTION 63-3622S, IDAHO CODE, TO FURTHER DEFINE RADIO AND TELEVISION
21 BROADCASTING EQUIPMENT; AMENDING SECTION 63-3622T, IDAHO CODE, TO FURTHER
22 DEFINE EQUIPMENT TO PRODUCE CERTAIN NEWSPAPERS; AMENDING SECTION 63-3622U,
23 IDAHO CODE, TO FURTHER DEFINE FUNERAL SERVICES; AMENDING SECTION
24 63-3622BB, IDAHO CODE, TO FURTHER DEFINE RESEARCH AND DEVELOPMENT AT THE
25 INEEL AND TO MAKE TECHNICAL CORRECTIONS; AMENDING SECTION 63-3622JJ, IDAHO
26 CODE, TO FURTHER DEFINE THE LOGGING EXEMPTION; AMENDING SECTION 63-3624,
27 IDAHO CODE, TO CLARIFY THE ADMINISTRATION OF TAXATION CONCERNING SERVICE
28 AND TO MAKE TECHNICAL CORRECTIONS; AMENDING SECTION 63-3638, IDAHO CODE,
29 TO REVISE DISTRIBUTION PERCENTAGES TO REFLECT INCREASED REVENUE, TO PRO-
30 VIDE DISTRIBUTION TO THE PUBLIC SCHOOL INCOME FUND AND TO MAKE TECHNICAL
31 CORRECTIONS; DECLARING AN EMERGENCY, PROVIDING RETROACTIVE APPLICATION AND
32 PROVIDING AN EFFECTIVE DATE.
33 Be It Enacted by the Legislature of the State of Idaho:
34 SECTION 1. That Section 33-802, Idaho Code, be, and the same is hereby
35 amended to read as follows:
36 33-802. SCHOOL LEVIES. Any tax levied for school purposes shall be a lien
37 on the property against which the tax is levied. The board of trustees shall
38 determine the levies upon each dollar of taxable property in the district for
39 the ensuing fiscal year as follows:
40 1. Bond, Interest and Judgment Obligation Levies. Such levies as shall be
41 required to satisfy all maturing bond, bond interest, and judgment obliga-
43 2. Maximum School Maintenance and Operation Levies. Such levies for main-
1 taining and operating the schools of the district and for the payment of
2 tuition and transportation, that do not exceed an amount equal to four-
3 tenths of one percent (.4%) during tax year 1994, and do not exceed an amount
4 equal to three-tenths of one percent (.3%) during tax year 1995
5 and thereafter and do not exceed an amount equal to one-tenth of
6 one percent (.1%) during tax year 1997 and thereafter , applied to the
7 actual or adjusted market value for assessment purposes of the district as
8 such valuation existed on December 31 of the previous year, but allowances
9 necessary as a credit for prepaid taxes, as provided in section 63-1607, Idaho
10 Code, shall not be included in such maximum levies.
11 3. Authorized School Maintenance and Operation Levies. Such levies for
12 maintaining and operating the schools of the district and for the payment of
13 tuition and transportation that do not exceed one hundred eleven percent
14 (111%) of the local district's contribution authorized in subsection 2. of
15 section 33-1002, Idaho Code. Implementation of the provisions of this subsec-
16 tion shall be authorized only after approval by a majority of the district's
17 electors voting on the question. Levies otherwise authorized by law shall not
18 require an election.
19 4. Supplemental Maintenance and Operation Levies. No levy in excess of
20 the levy permitted by subsection 2. or 3. of this section shall be made by a
21 noncharter school district unless such a supplemental levy in a specified
22 amount and for a specified time not to exceed two (2) years be first autho-
23 rized through an election held pursuant to chapter 4, title 33, Idaho Code,
24 and approved by a majority of the district electors voting in such election. A
25 levy approved pursuant to this subsection may be reduced by a majority vote of
26 the board of trustees in the second year.
27 5. Charter District Supplemental Maintenance and Operation. Levies pursu-
28 ant to the respective charter of any such charter district shall be first
29 authorized through an election held pursuant to chapter 4, title 33, Idaho
30 Code, and approved by a majority of the district electors voting in such elec-
32 6. The Local District Contribution. The local school district contribu-
33 tion levy is the amount utilized for calculating local district participation
34 in the educational foundation program, which is applied to the adjusted market
35 value for assessment purposes, as such valuation existed on December 31 of the
36 previous year.
37 7. The board of trustees of any school district that has, for at least
38 seven (7) consecutive years, been authorized through an election held pursuant
39 to chapter 4, title 33, Idaho Code, to certify a supplemental levy that has
40 annually been equal to or greater than twenty percent (20%) of the total gen-
41 eral maintenance and operation fund, may submit the question of an indefinite
42 term supplemental levy to the electors of the school district. Such question
43 shall clearly state the dollar amount that will be certified annually and that
44 the levy will be for an indefinite number of years. The question must be
45 approved by a majority of the district electors voting on the question in an
46 election held pursuant to chapter 4, title 33, Idaho Code. The levy approved
47 pursuant to this subsection may be reduced by a majority vote of the board of
48 trustees during any fiscal year.
49 SECTION 2. That Section 33-1002, Idaho Code, be, and the same is hereby
50 amended to read as follows:
51 33-1002. EDUCATIONAL SUPPORT PROGRAM. The educational support program is
52 calculated as follows:
53 1. State Educational Support Funds. Add the state appropriation, includ-
1 ing the moneys available in the public school income fund, together with all
2 miscellaneous revenues to determine the total state funds.
3 2. From the total state funds subtract the following amounts needed for
4 state support of special programs provided by a school district:
5 a. Pupil tuition-equivalency allowances as provided in section 33-1002B,
6 Idaho Code;
7 b. Transportation support program as provided in section 33-1006, Idaho
9 c. Feasibility studies allowance as provided in section 33-1007A, Idaho
11 d. The approved costs for border district allowance, provided in section
12 33-1403, Idaho Code, as determined by the state superintendent of public
14 e. The approved costs for exceptional child approved contract allowance,
15 provided in subsection 2. of section 33-2004, Idaho Code, as determined by
16 the state superintendent of public instruction;
17 f. Certain expectant and delivered mothers allowance as provided in sec-
18 tion 33-2006, Idaho Code;
19 g. Salary based apportionment calculated as provided in sections 33-1004
20 through 33-1004F, Idaho Code;
21 h. Unemployment insurance benefit payments according to the provisions of
22 section 72-1349C, Idaho Code;
23 i. For programs to provide basic curricula necessary to enable stu-
24 dents to enter academic or vocational postsecondary education programs,
25 an allocation of $300 per support unit for the 1994-95 school year only;
26 j. For provision of teacher supplies to facilitate classroom instruction,
27 an allocation of $200 per support unit for the 1994-95 school year only;
28 k. For expenditure as provided by the public school technology program,
29 $10,400,000 for the 1994-95 school year;
30 l. For additional school innovation pilot project grants based on recom-
31 mendations of the Idaho school reform committee, $2,000,000 for the
32 1994-95 school year; and
33 m. For the support of provisions that provide a safe environment
34 conducive to student learning and maintain classroom discipline, an allo-
35 cation of $300 per support unit;
36 n j . Any additional amounts as required by stat-
37 ute to effect administrative adjustments or as specifically required by
38 the provisions of any bill of appropriation;
39 to secure the state educational support funds.
40 3. Local Districts' Contribution Calculation. Without including any
41 allowance as a credit for prepaid taxes as provided by section 63-1607, Idaho
42 Code, the local districts' contribution shall be four-tenths per-
43 cent(.4%) one-tenth percent (.1%) during fiscal year
44 1994-95 1997-98 and each year thereafter, of the total
45 state adjusted market value for assessment purposes for the previous year with
46 such value being determined by the provisions of section 63-315, Idaho Code,
47 and four-tenths percent (.4%) one-tenth percent (.1%)
48 during fiscal year 1994-95 1997-98 and each
49 year thereafter, of the cooperative electrical associations' property values
50 that have been derived from the taxes paid in lieu of ad valorem taxes for the
51 previous year as provided in section 63-3502, Idaho Code.
52 4. Educational Support Program Distribution Funds. Add the local dis-
53 tricts' contribution, subsection 3. of this section, and the state educational
54 support program funds, subsection 1. of this section, together to secure the
55 total educational support program distribution funds.
1 5. Average Daily Attendance. The total state average daily attendance
2 shall be the sum of the average daily attendance of all of the school dis-
3 tricts of the state. The state board of education shall establish rules set-
4 ting forth the procedure to determine average daily attendance and the time
5 for, and method of, submission of such report. Average daily attendance calcu-
6 lation shall be carried out to the nearest hundredth. Computation of average
7 daily attendance shall also be governed by the provisions of section 33-1003A,
8 Idaho Code.
9 6. Support Units. The total state support units shall be determined by
10 using the tables set out hereafter called computation of kindergarten sup-
11 port units, computation of elementary support units, computation of secondary
12 support units, computation of exceptional education support units, and compu-
13 tation of alternative school secondary support units. The sum of all of the
14 total support units of all school districts of the state shall be the total
15 state support units.
16 COMPUTATION OF KINDERGARTEN SUPPORT UNITS
17 Average Daily
18 Attendance Attendance Divisor Units Allowed
19 41 or more .... 40....................... 1 or more as computed
20 31 - 40.99 ADA.... -....................... 1
21 26 - 30.99 ADA.... -....................... .85
22 21 - 25.99 ADA.... -....................... .75
23 16 - 20.99 ADA.... -....................... .6
24 8 - 15.99 ADA.... -....................... .5
25 1 - 7.99 ADA.... -....................... count as elementary
26 COMPUTATION OF ELEMENTARY SUPPORT UNITS
27 Average Daily
28 Attendance Attendance Divisor Minimum Units Allowed
29 300 or more ADA........................................ 15
30 ..23...grades 4,5 & 6....
31 ..22...grades 1,2 & 3....1994-95
32 ..21...grades 1,2 & 3....1995-96
33 ..20...grades 1,2 & 3....1996-97
34 and each year thereafter.
35 160 to 299.99 ADA... 20..................... 8.4
36 110 to 159.99 ADA... 19..................... 6.8
37 71.1 to 109.99 ADA... 16..................... 4.7
38 51.7 to 71.0 ADA... 15..................... 4.0
39 33.6 to 51.6 ADA... 13..................... 2.8
40 16.6 to 33.5 ADA... 12..................... 1.4
41 1.0 to 16.5 ADA... n/a.................... 1.0
42 COMPUTATION OF SECONDARY SUPPORT UNITS
43 Average Daily
44 Attendance Attendance Divisor Minimum Units Allowed
45 750 or more .... 18.5..................... 47
46 400 - 749.99 ADA.... 16....................... 28
47 300 - 399.99 ADA.... 14.5..................... 22
48 200 - 299.99 ADA.... 13.5..................... 17
49 100 - 199.99 ADA.... 12....................... 9
50 99.99 or fewer Units allowed as follows:
51 Grades 7-12 ......................... 8
52 Grades 9-12 ......................... 6
53 Grades 7- 9 ......................... 1 per 14 ADA
1 Grades 7- 8 ......................... 1 per 16 ADA
2 COMPUTATION OF EXCEPTIONAL EDUCATION SUPPORT UNITS
3 Average Daily
4 Attendance Attendance Divisor Minimum Units Allowed
5 14 or more .... 14.5..................... 1 or more as computed
6 12 - 13.99.... -....................... 1
7 8 - 11.99.... -....................... .75
8 4 - 7.99.... -....................... .5
9 1 - 3.99.... -....................... .25
10 COMPUTATION OF ALTERNATIVE SCHOOL SECONDARY SUPPORT UNITS
11 Pupils in Attendance Attendance Divisor Minimum Units Allowed
12 12 or more.......... 12...................... 1 or more as computed
13 In applying these tables to any given separate attendance unit, no school dis-
14 trict shall receive less total money than it would receive if it had a lesser
15 average daily attendance in such separate attendance unit. In applying the
16 kindergarten table to a kindergarten program of less days than a full school
17 year, the support unit allowance shall be in ratio to the number of days of a
18 full school year. The tables for exceptional education and alternative school
19 secondary support units shall be applicable only for programs approved by the
20 state department of education following rules established by the state board
21 of education. Moneys generated from computation of support units for alterna-
22 tive schools shall be utilized for alternative school programs. School dis-
23 trict administrative and facility costs may be included as part of the alter-
24 native school expenditures.
25 7. State Distribution Factor per Support Unit. Divide educational support
26 program distribution funds, after subtracting the amounts necessary to pay the
27 obligations specified in subsection 2. of this section, by the total state
28 support units to secure the state distribution factor per support unit.
29 8. District Share of State Funds for Educational Support Program. Ascer-
30 tain a district's share of state funds for the educational support program as
32 a. District Contribution Calculation. Without including any allowance as
33 a credit for prepaid taxes, as provided in section 63-1607, Idaho Code,
34 the district contribution calculation shall be the rate determined under
35 subsection 3. of this section.
36 b. District Support Units. The number of support units for each school
37 district in the state shall be determined as follows:
38 (1) Divide the actual average daily attendance, excluding students
39 approved for inclusion in the exceptional child educational program,
40 for the administrative schools and each of the separate schools by
41 the appropriate divisor from the tables of support units in this
42 section, then add the quotients to obtain the district's support
43 units allowance for regular students, kindergarten through grade 12
44 including alternative school secondary students. Calculations in
45 application of this subsection shall be carried out to the nearest
47 (2) Divide the combined totals of the average daily attendance of
48 all preschool, handicapped, kindergarten, elementary, secondary and
49 juvenile detention center students approved for inclusion in the
50 exceptional child program of the district by the appropriate divisor
51 from the table for computation of exceptional education support units
52 to obtain the number of support units allowed for the district's
1 approved exceptional child program. Calculations for this subsection
2 shall be carried out to the nearest tenth when more than one (1) unit
3 is allowed.
4 (3) The total number of support units of the district shall be the
5 sum of the total support units for regular students, subsection
6 8.b.(1) of this section, and the support units allowance for the
7 approved exceptional child program, subsection 8.b.(2) of this sec-
9 c. Total District Allowance Educational Program. Multiply the district's
10 total number of support units, carried out to the nearest tenth, by the
11 state distribution factor per support unit and to this product add the
12 approved amount of programs of the district provided in subsection 2. of
13 this section to secure the district's total allowance for the educational
14 support program.
15 d. District Share. To secure the district's share of state apportionment,
16 subtract the amount of the local district contribution calculation, sub-
17 section 3. of this section, from the amount of the total district allow-
18 ance, subsection 8.c. of this section.
19 e. Adjustment of District Share. The contract salary of every noncertifi-
20 cated teacher shall be subtracted from the district's share as calculated
21 from the provisions of subsection 8.d. of this section.
22 SECTION 3. That Section 33-1002D, Idaho Code, be, and the same is hereby
24 SECTION 4. That Section 63-3608, Idaho Code, be, and the same is hereby
25 amended to read as follows:
26 63-3608. PURCHASE. The term "purchase" means any transfer, rental,
27 exchange, or barter, conditional or otherwise, in any manner or by any means
28 whatsoever, of tangible personal property or service for a con-
29 sideration. A transaction whereby the possession of property is transferred
30 but the seller retains the title as security for the payment of the price is a
31 purchase. A transfer for a consideration of any publication or of tangible
32 personal property which has been produced, fabricated, or printed to the spe-
33 cial order of the customer is also a purchase.
34 SECTION 5. That Section 63-3609, Idaho Code, be, and the same is hereby
35 amended to read as follows:
36 63-3609. RETAIL SALE -- SALE AT RETAIL. The terms "retail sale" or "sale
37 at retail" means a sale of tangible personal property or service
38 for any purpose other than resale of that property or service in
39 the regular course of business or lease or rental of that property in the reg-
40 ular course of business where such rental or lease is taxable under section
41 63-3612(h), Idaho Code.
42 (a) All persons engaged in constructing, altering, repairing or improving
43 real estate, are consumers of the material used by them; all sales to or use
44 by such persons of tangible personal property are taxable whether or not such
45 persons intend resale of the improved property.
46 (b) For the purpose of this chapter, the sale or purchase of personal
47 property incidental to the sale of real property or used mobile homes is
48 deemed a sale of real property.
49 SECTION 6. That Section 63-3610, Idaho Code, be, and the same is hereby
1 amended to read as follows:
2 63-3610. RETAILER. The term "retailer" includes:
3 (a) Every seller who makes any retail sale or sales of tangible personal
4 property or service and every person engaged in the business of
5 making retail sales at auction of tangible personal property owned by the per-
6 son or others.
7 (b) Every person engaged in the business of making sales for storage,
8 use, or other consumption or in the business of making sales at auction of
9 tangible personal property owned by the person or others for storage, use, or
10 other consumption.
11 (c) Every person making more than two (2) retail sales of tangible per-
12 sonal property during any twelve (12) month period, including sales made in
13 the capacity of assignee for the benefit of creditors, or receiver or trustee
14 in bankruptcy, or every person making fewer sales who holds himself out as
15 engaging in the business of selling such tangible personal property at retail
16 or who sells a self-propelled motor vehicle.
17 (d) When the state tax commission determines that it is necessary for the
18 efficient administration of this act to regard any salesmen, representatives,
19 peddlers, or canvassers as agents of the dealers, distributors, supervisors,
20 or employers under whom they operate or from whom they obtain the tangible
21 personal property sold by them, irrespective of whether they are making sales
22 on their own behalf or on behalf of such dealers, distributors, supervisors,
23 or employers, the state tax commission may so regard them and may regard the
24 dealers, distributors, supervisors, or employers as retailers for the purpose
25 of this act.
26 (e) Persons conducting both contracting and retailing activities. Such
27 persons must keep separate accounts for the retail portion of their business
28 and pay tax in the usual fashion on this portion.
29 SECTION 7. That Section 63-3611, Idaho Code, be, and the same is hereby
30 amended to read as follows:
31 63-3611. RETAILER ENGAGED IN BUSINESS IN THIS STATE. "Retailer engaged in
32 business in this state" as used in this chapter means and includes any of the
34 (a) Any retailer maintaining, occupying or using, permanently or tempo-
35 rarily, directly or indirectly, or through a subsidiary or agent, by whatever
36 name called, an office, place of distribution, sales or sample room or place,
37 warehouse or storage place, or other place of business or maintaining a stock
38 of goods.
39 (b) Any retailer having any representative, agent, salesman, canvasser or
40 solicitor operating in this state under the authority of the retailer or its
41 subsidiary for the purpose of selling, delivering, installing or the taking of
42 orders for any tangible personal property.
43 (c) Any retailer, with respect to a lease or rental, deriving rentals
44 form a lease or rental of tangible personal property situated in this state.
45 (d) Any retailer engaging in any activity in connection with servicing or
46 installing tangible personal property in this state.
47 (e) Any retailer owned or controlled by the same interests which own or
48 control any retailer engaged in business in the same or a similar line of
49 business in this state.
50 (f) Any retailer having a franchisee or licensee operating under its
51 tradename if the franchisee or licensee is required to collect the tax under
52 the provisions of this section.
1 (g) Any retailer performing services within this state, the sale of
2 which is subject to tax under the provisions of this chapter.
3 SECTION 8. That Section 63-3612, Idaho Code, be, and the same is hereby
4 amended to read as follows:
5 63-3612. SALE. (1) The term "sale" means any transfer of title, exchange
6 or barter, conditional or otherwise, of tangible personal property for a con-
7 sideration and shall include any similar transfer of possession found by the
8 state tax commission to be in lieu of, or equivalent to, a transfer of title,
9 exchange or barter.
10 (2) "Sale" shall also include the following transactions when a consider-
11 ation is transferred, exchanged or bartered:
12 (a) Producing, fabricating, processing, printing, or imprinting of tangi-
13 ble personal property for consumers who furnish, either directly or indi-
14 rectly, the tangible personal property used in the producing, fabricating,
15 processing, printing, or imprinting.
16 (b) Furnishing, preparing, or serving food, meals, or drinks and
17 nondepreciable goods and services directly consumed by customers included
18 in the charge thereof.
19 (c) A transfer of possession of property where the seller retains the
20 title as security for the payment of the sales price.
21 (d) A transfer of the title or possession of tangible personal property
22 which has been produced, fabricated, or printed to the special order of
23 the customer, or of any publication.
24 (e) Admission to a place or for an event in Idaho.
25 (f) The use of or the privilege of using tangible personal property or
26 facilities for recreation.
27 (g) Providing hotel, motel, campground, or trailer court accommodations,
28 nondepreciable goods directly consumed by customers and included services,
29 except where residence is maintained continuously under the terms of a
30 lease or similar agreement for a period in excess of thirty (30) days.
31 (h) The lease or rental of tangible personal property.
32 (i) The intrastate transportation for hire by air of freight or passen-
33 gers, except (1) as part of a regularly scheduled flight by a certified
34 air carrier, under authority of the United States, or (2) when providing
35 air ambulance services.
36 (j) Receipts from all activities described in this subsection
38 (i) Landscape planning and landscape architectural and counseling
40 (ii) Lawn and garden services, and ornamental shrub and tree ser-
42 (iii) Consumer credit reporting, mercantile reporting and adjustment
43 and collection services;
44 (iv) Services to dwellings and other buildings for disinfecting,
45 pest control and cleaning and maintenance;
46 (v) Temporary parking of automobiles usually on an hourly, daily or
47 monthly contract or fee basis;
48 (vi) Consulting actuaries, writers of advertising copy, radio and
49 television service announcers, art restoration, cloud seeding,
50 artists' studios, artists, authors, consulting chemists, nuclear con-
51 sultants, consulting entomologists, consulting geologists,
52 ghostwriters, hand painters of greeting cards, inventors, lecturers,
53 music arrangers, newspaper columnists, consulting physicists, indus-
1 trial psychologists, sculptors' studios, songwriters, stained glass
2 artists, weather forecasters, weather modification services or
4 (vii) Services provided generally to individuals including laundry,
5 cleaning and garment services, photographic studios, beauty shops,
6 barber shops, shoe repair shops, provision of providing tax return
7 preparation services without also providing accounting, auditing, or
8 bookkeeping services, and miscellaneous person's services including
9 babysitting bureaus, bartering services for individuals, birth cer-
10 tificate agencies, coin operated blood pressure or heart rate test-
11 ing, buyers' clubs, car title and tag service, checkroom concessions
12 or services, clothing rental, coin-operated services machine opera-
13 tion of scales, shoeshine, lockers, college clearinghouses, comfort
14 station operation, computer photography or portraits, consumer buying
15 service, costume rental, dating service, debt counseling or adjust-
16 ment service to individuals, depilatory salons, diet workshops, dress
17 suit rental, electrolysis, escort services, genealogical investiga-
18 tion service, hair weaving or replacement service not provided by a
19 licensed medical doctor, locker rental, marriage bureaus, massage
20 parlors, porter service, quilting for individuals, restroom opera-
21 tion, scalp treatment service not provided by a licensed medical doc-
22 tor, steam baths, tanning salons, tattoo parlors, Turkish baths,
23 tuxedo rental, valet parking, wardrobe service and privately operated
24 wedding chapels.
25 (k) Receipts from applying, installing, cleaning, altering, improving,
26 decorating, treating, storing or repairing tangible personal property.
27 (l) Receipts from the sale of sewer and garbage or trash services.
28 (m) Receipts from the sale of lottery tickets pursuant to chapter 74,
29 title 67, Idaho Code, or from the sale of tickets for pari-mutuel wagering
30 conducted pursuant to chapter 25, title 54, Idaho Code.
31 (3) As used in subsections (2)(b) and (2)(g) of this section, goods
32 "directly consumed by customers" shall not be interpreted to mean any linens,
33 bedding, cloth napkins or similar nondisposable property.
34 SECTION 9. That Section 63-3613, Idaho Code, be, and the same is hereby
35 amended to read as follows:
36 63-3613. SALES PRICE. (a) The term "sales price" means the total amount
37 for which tangible personal property, including services agreed to be rendered
38 as a part of the sale, or services subject to tax under this chapter,
39 is sold, rented or leased, valued in money, whether paid in money or
40 otherwise, without any deduction on account of any of the following:
41 1. The cost of the property or service sold. However, in
42 accordance with such rules as the state tax commission may prescribe, a
43 deduction may be taken if the retailer has purchased property for some
44 purpose other than resale or rental, has reimbursed his vendor for tax
45 which the vendor is required to pay to the state or has paid the use tax
46 with respect to the property, and has resold or rented the property prior
47 to making any use of the property other than retention, demonstration or
48 display while holding it for sale in the regular course of business. If
49 such a deduction is taken by the retailer, no refund or credit will be
50 allowed to his vendor with respect to the sale of the property.
51 2. The cost of materials used, labor or service cost, losses, or any
52 other expense.
53 3. The cost of transportation of the property prior to its sale.
1 4. The face value of manufacturer's discount coupons. A manufacturer's
2 discount coupon is a price reduction coupon presented by a consumer to a
3 retailer upon purchase of a manufacturer's product, the face value of
4 which may only be reimbursed by the manufacturer to the retailer.
5 (b) The term "sales price" does not include any of the following:
6 1. Retailer discounts allowed and taken on sales, but only to the extent
7 that such retailer discounts represent price adjustments as opposed to
8 cash discounts offered only as an inducement for prompt payment.
9 2. Any sums allowed on merchandise accepted in payment of other merchan-
10 dise, provided that this allowance shall not apply to the sale of a "new
11 manufactured home" or a "modular building" as defined herein.
12 3. The amount charged for property returned by customers when the amount
13 charged therefor is refunded either in cash or credit; but this exclusion
14 shall not apply in any instance when the customer, in order to obtain the
15 refund, is required to purchase other property at a price greater than the
16 amount charged for the property that is returned.
17 4. The amount charged for labor or services rendered in installing or
18 applying the property sold, provided that said amount is stated separately
19 and such separate statement is not used as a means of avoiding imposition
20 of this tax upon the actual sales price of the tangible personal property;
21 except that charges by a manufactured homes dealer for set up of a manu-
22 factured home shall be included in the "sales price" of such manufactured
24 5. The amount of any tax (not including, however, any manufacturers' or
25 importers' excise tax) imposed by the United States upon or with respect
26 to retail sales whether imposed upon the retailer or the consumer.
27 6. The amount charged for finance charges, carrying charges, service
28 charges, time-price differential, or interest on deferred payment sales,
29 provided such charges are not used as a means of avoiding imposition of
30 this tax upon the actual sales price of the tangible personal property.
31 7. Delivery and handling charges for transportation of tangible personal
32 property to the consumer, provided that the transportation is stated sepa-
33 rately and the separate statement is not used as a means of avoiding impo-
34 sition of the tax upon the actual sales price of the tangible personal
35 property; except that charges by a manufactured homes dealer for transpor-
36 tation of a manufactured home shall be included in the "sales price" of
37 such manufactured home.
38 8. Manufacturers' rebates when used at the time of a retail sale as a
39 down payment on or reduction to the retail sales price of a motor vehicle
40 to which the rebate applies. A manufacturer's rebate is a cash payment
41 made by a manufacturer to a consumer who has purchased or is purchasing
42 the manufacturer's product from the retailer.
43 9. The amount of any fee imposed upon an outfitter as defined in section
44 36-2102, Idaho Code, by a governmental entity pursuant to statute for the
45 purpose of conducting outfitting activities on land or water subject to
46 the jurisdiction of the governmental entity, provided that the fee is
47 stated separately and is presented as a use fee paid by the outfitted pub-
48 lic to be passed through to the governmental entity.
49 10. The amount of any discount or other price reduction on telecommunica-
50 tions equipment when offered as an inducement to the consumer to commence
51 or continue telecommunications service, or the amount of any commission or
52 other indirect compensation received by a retailer or seller as a result
53 of the consumer commencing or continuing telecommunications service.
54 (c) The sales price of a "new manufactured home" or a "modular building"
55 as defined in this act shall be limited to and include only fifty-five
1 per cent percent (55%) of the sales price as otherwise
2 defined herein.
3 (d) For sales made on and after January 1, 1967, taxes previously paid on
4 amounts represented by accounts found to be worthless and actually charged off
5 for income tax purposes may be credited upon a subsequent payment of the tax
6 provided in this chapter or, if no such tax is due, refunded. If such accounts
7 are thereafter collected, a tax shall be paid upon the amount so collected.
8 (e) Tangible personal property when sold at retail for more than eleven
9 cents ($.11) but less than one dollar and one cent ($1.01) through a vending
10 machine shall be deemed to have sold at a sales price equal to one hundred
11 seventeen per cent percent (117%) of the price which
12 is paid for such tangible personal property and/or its component parts includ-
13 ing packaging by the owner or operator of the vending machines.
14 SECTION 10. That Section 63-3615, Idaho Code, be, and the same is hereby
15 amended to read as follows:
16 63-3615. STORAGE -- USE. (a) The term "storage" includes any keeping or
17 retention in this state for any purpose except sale in the regular course of
18 business or subsequent use solely outside this state of tangible personal
19 property purchased from a retailer.
20 (b) The term "use" includes the exercise of any right or power over tan-
21 gible personal property incident to the ownership or the leasing of that prop-
22 erty or the exercise of any right or power over tangible personal property by
23 any person in the performance of a contract, or to fulfill contract or subcon-
24 tract obligations, whether the title of such property be in the subcontractor,
25 contractor, contractee, subcontractee, or any other person, or whether the
26 titleholder of such property would be subject to the sales or use tax, unless
27 such property would be exempt to the titleholder under section 63-3622D, Idaho
28 Code, except that the term "use" does not include the sale of that property in
29 the regular course of business.
30 (c) "Storage" and "use" do not include the keeping, retaining, or exer-
31 cising of any right or power over tangible personal property for the purpose
32 of subsequently transporting it outside the state for use thereafter solely
33 outside the state, or for the purpose of being processed, fabricated, or manu-
34 factured into, attached to, or incorporated into other tangible personal prop-
35 erty to be transported outside the state, and thereafter used solely outside
36 the state.
37 (d) The term "use" includes receipt, in this state of the benefit
38 of services enumerated in section 63-3612, Idaho Code.
39 SECTION 11. That Section 63-3619, Idaho Code, be, and the same is hereby
40 amended to read as follows:
41 63-3619. IMPOSITION AND RATE OF THE SALES TAX. An excise tax is hereby
42 imposed upon each sale at retail at the rate of five per cent
43 and one-half percent (5 .5 %) of the sales price of
44 all property subject to taxation under this act and such amount shall be com-
45 puted monthly on all sales at retail within the preceding month.
46 (a) The tax shall apply to, be computed on, and collected for all credit,
47 instalment, conditional or similar sales at the time of the sale or, in the
48 case of rentals, at the time the rental is charged.
49 (b) The tax hereby imposed shall be collected by the retailer from the
51 (c) The state tax commission shall provide schedules for collection of
1 the tax on sales which involve a fraction of a dollar. The retailer shall cal-
2 culate the tax upon the entire amount of the purchases of the consumer made at
3 a particular time and not separately upon each item purchased. The retailer
4 may retain any amount collected under the bracket system prescribed which is
5 in excess of the amount of tax for which he is liable to the state during the
6 period as compensation for the work of collecting the tax.
7 (d) It is unlawful for any retailer to advertise or hold out or state to
8 the public or to any customer, directly or indirectly, that the tax or any
9 part thereof will be assumed or absorbed by the retailer or that it will not
10 be added to the selling price of the property sold or that if added it or any
11 part thereof will be refunded. Any person violating any provision of this sec-
12 tion is guilty of a misdemeanor.
13 (e) The tax commission may by rule provide that the amount collected by
14 the retailer from the customer in reimbursement of the tax be displayed sepa-
15 rately from the list price, the price advertised on the premises, the marked
16 price, or other price on the sales slip or other proof of sale.
17 (f) The tax imposed by this act shall apply to the sales of any tangible
18 personal property to contractors purchasing such property for resale to the
19 United States or for use in the performance of contracts with the United
21 SECTION 12. That Section 63-3621, Idaho Code, be, and the same is hereby
22 amended to read as follows:
23 63-3621. IMPOSITION AND RATE OF THE USE TAX -- EXEMPTIONS. An excise tax
24 is hereby imposed on the storage, use, or other consumption in this state of
25 tangible personal property acquired on or after July 1, 1965, for storage,
26 use, or other consumption in this state or service performed in this
27 state at the rate of five per cent and one-half per-
28 cent (5 .5 %) of the value of the property or service
29 , and a recent sales price shall be presumptive evidence of the value of
30 the property unless the property is wireless telecommunications equipment, in
31 which case a recent sales price shall be conclusive evidence of the value of
32 the property.
33 (a) Every person storing, using, or otherwise consuming, in this state,
34 tangible personal property or service is liable for the tax. His
35 liability is not extinguished until the tax has been paid to this state
36 except that a receipt from a retailer maintaining a place of business in this
37 state or engaged in business in this state given to the purchaser is suffi-
38 cient to relieve the purchaser from further liability for the tax to which the
39 receipt refers. A retailer shall not be considered to have stored, used or
40 consumed wireless telecommunications equipment by virtue of giving, selling or
41 otherwise transferring such equipment at a discount as an inducement to a con-
42 sumer to commence or continue a contract for telecommunications service.
43 (b) Every retailer engaged in business in this state, and making sales of
44 tangible personal property or service for the storage, use, or
45 other consumption in this state, not exempted under section 63-3622, Idaho
46 Code, shall, at the time of making the sales or, if storage, use or other con-
47 sumption of the tangible personal property is not then taxable hereunder, at
48 the time the storage, use or other consumption becomes taxable, collect the
49 tax from the purchaser and give to the purchaser a receipt therefor in the
50 manner and form prescribed by the state tax commission.
51 (c) The provisions of this section shall not apply when the retailer pays
52 sales tax on the transaction and collects reimbursement for such sales tax
53 from the customer.
1 (d) Every retailer engaged in business in this state or maintaining a
2 place of business in this state shall register with the state tax commission
3 and give the name and address of all agents operating in this state, the loca-
4 tion of all distributions or sales houses or offices or other places of busi-
5 ness in this state, and such other information as the state tax commission may
7 (e) For the purpose of the proper administration of this act and to pre-
8 vent evasion of the use tax and the duty to collect the use tax, it shall be
9 presumed that tangible personal property or service sold by any
10 person for delivery in this state is sold for storage, use, or other consump-
11 tion in this state. The burden of proving the sale is tax exempt is upon the
12 person who makes the sale unless he obtains from the purchaser a resale cer-
13 tificate to the effect that the property is purchased for resale or rental. It
14 shall be presumed that sales made to a person who has completed a resale cer-
15 tificate for the seller's records are not taxable and the seller need not col-
16 lect sales or use taxes unless the tangible personal property purchased is
17 taxable to the purchaser as a matter of law in the particular instance claimed
18 on the resale certificate.
19 A seller may accept a resale certificate from a purchaser prior to the
20 time of sale, at the time of sale, or at any reasonable time after the sale
21 when necessary to establish the privilege of the exemption. The resale certif-
22 icate relieves the person selling the property from the burden of proof only
23 if taken from a person who is engaged in the business of selling or renting
24 tangible personal property and who holds the permit provided for by section
25 63-3620, Idaho Code, or who is a retailer not engaged in business in this
26 state, and who, at the time of purchasing the tangible personal property,
27 intends to sell or rent it in the regular course of business or is unable to
28 ascertain at the time of purchase whether the property will be sold or will be
29 used for some other purpose. Other than as provided elsewhere in this section,
30 when a resale certificate, properly executed, is presented to the seller, the
31 seller has no duty or obligation to collect sales or use taxes in regard to
32 any sales transaction so documented regardless of whether the purchaser prop-
33 erly or improperly claimed an exemption. A seller so relieved of the obliga-
34 tion to collect tax is also relieved of any liability to the purchaser for
35 failure to collect tax or for making any report or disclosure of information
36 required or permitted under this chapter.
37 The resale certificate shall bear the name and address of the purchaser,
38 shall be signed by the purchaser or his agent, shall indicate the number of
39 the permit issued to the purchaser, or that the purchaser is an out-of-state
40 retailer, and shall indicate the general character of the tangible personal
41 property sold by the purchaser in the regular course of business. The certifi-
42 cate shall be substantially in such form as the state tax commission may pre-
44 (f) If a purchaser who gives a resale certificate makes any storage or
45 use of the property or service other than retention, demonstra-
46 tion or display while holding it for sale in the regular course of business,
47 the storage or use is taxable as of the time the property is first so stored
48 or used.
49 (g) Any person violating any provision of this section is guilty of a
50 misdemeanor and punishable by a fine not in excess of one hundred dollars
51 ($100), and each violation shall constitute a separate offense.
52 (h) It shall be presumed that tangible personal property shipped or
53 brought to this state by the purchaser or service performed in this
54 state was purchased from a retailer, for storage, use or other con-
55 sumption in this state.
1 (i) It shall be presumed that tangible personal property delivered out-
2 side this state to a purchaser known by the retailer to be a resident of this
3 state was purchased from a retailer for storage, use, or other consumption in
4 this state. This presumption may be controverted by evidence satisfactory to
5 the state tax commission that the property was not purchased for storage, use,
6 or other consumption in this state.
7 (j) When the tangible personal property or service subject
8 to use tax has been subjected to a general retail sales or use tax by another
9 state of the United States in an amount equal to or greater than the amount of
10 the Idaho tax, and evidence can be given of such payment, the property will
11 not be subject to Idaho use tax. If the amount paid the other state was less,
12 the property or service will be subject to use tax to the extent
13 that the Idaho tax exceeds the tax paid to the other state. For the purposes
14 of this subsection, a registration certificate or title issued by another
15 state or subdivision thereof for a vehicle or trailer or a vessel as defined
16 in section 67-7003, Idaho Code, shall be sufficient evidence of payment of a
17 general retail sales or use tax.
18 (k) The use tax herein imposed shall not apply to the use by a nonresi-
19 dent of this state of a motor vehicle which is registered or licensed under
20 the laws of the state of his residence and is not used in this state more than
21 a cumulative period of time totaling ninety (90) days in any consecutive
22 twelve (12) months, and which is not required to be registered or licensed
23 under the laws of this state, or to the use of household goods, personal
24 effects and private automobiles by a bona fide resident of this state, if such
25 articles were acquired by such person in another state while a bona fide resi-
26 dent thereof and primarily for use outside this state and if such use was
27 actual and substantial, but if an article was acquired less than three (3)
28 months prior to the time he entered this state, it will be presumed that the
29 article was acquired for use in this state and that its use outside this state
30 was not actual and substantial.
31 (l) The use tax herein imposed shall not apply to the storage, use or
32 other consumption of tangible personal property which is or will be incorpo-
33 rated into real property and which has been donated to and has become the
34 property of:
35 (1) A nonprofit organization as defined in section 63-3622O, Idaho Code;
37 (2) The state of Idaho; or
38 (3) Any political subdivision of the state.
39 This exemption applies whether the tangible personal property is incorporated
40 in real property by the donee, a contractor or subcontractor of the donee, or
41 any other person.
42 SECTION 13. That Section 63-3622D, Idaho Code, be, and the same is hereby
43 amended to read as follows:
44 63-3622D. PRODUCTION EXEMPTION. There are exempted from the taxes imposed
45 by this chapter:
46 (a) The sale at retail, storage, use or other consumption in this state
48 (1) Tangible personal property which will enter into and become an ingre-
49 dient or component part of tangible personal property manufactured, proc-
50 essed, mined, produced or fabricated for sale.
51 (2) Tangible personal property or service primarily and
52 directly used or consumed in or during a manufacturing, processing, min-
53 ing, farming, or fabricating operation, including, but not limited to,
1 repair parts, lubricants, hydraulic oil, and coolants, which become a com-
2 ponent part of such tangible personal property; provided that the use or
3 consumption of such tangible personal property is necessary or essential
4 to the performance of such operation.
5 (3) Chemicals, catalysts, and other materials which are used for the pur-
6 pose of producing or inducing a chemical or physical change in the product
7 or for removing impurities from the product or otherwise placing the prod-
8 uct in a more marketable condition as part of an operation described in
9 subsection (a)(2) of this section, and chemicals and equipment used in
10 clean-in-place systems in the food processing and food manufacturing
12 (4) Safety equipment and supplies required to meet a safety standard of a
13 state or federal agency when such safety equipment and supplies are used
14 as part of an operation described in subsection (a)(2) of this section.
15 (5) Plants to be used as part of a farming operation.
16 (b) Other than as provided in subsection (c) of this section, the exemp-
17 tions allowed in subsections (a)(1), (2), (3) and (4) of this section are
18 available only to a business or separately operated segment of a business
19 which is primarily devoted to producing tangible personal property which that
20 business will sell and which is intended for ultimate sale at retail within or
21 without this state. A contractor providing services to a business entitled to
22 an exemption under this section is not exempt as to any property owned,
23 leased, rented or used by it unless, as a result of the terms of the contract,
24 the use of the property is exempt under section 63-3615(b), Idaho Code.
25 (c) The exemptions allowed in subsections (a)(1), (a)(2), (a)(3) and
26 (a)(4) of this section shall also be available to a business, or separately
27 operated segment of a business, engaged in farming or mining, whether as a
28 subcontractor, contractor, contractee or subcontractee, when such business or
29 segment of a business is primarily devoted to producing tangible personal
30 property which is intended for ultimate sale at retail within or without this
31 state, without regard to the ownership of the product being produced.
32 (d) As used in this section, the term "directly used or consumed in or
33 during" a farming operation means the performance of a function reasonably
34 necessary to the operation of the total farming business, including, the
35 planting, growing, harvesting and initial storage of crops and other agricul-
36 tural products and movement of crops and produce from the place of harvest to
37 the place of initial storage. It includes disinfectants used in the dairy
38 industry to clean cow udders or to clean pipes, vats or other milking equip-
40 (e) The exemptions allowed in this section do not include machinery,
41 equipment, materials and supplies or service used in a manner
42 that is incidental to the manufacturing, processing, mining, farming or fab-
43 ricating operations such as maintenance and janitorial equipment and supplies.
44 (f) Without regard to the use of such property, this section does not
46 (1) Hand tools with a unit purchase price not in excess of one hundred
47 dollars ($100). A hand tool is an instrument used or worked by hand.
48 (2) Tangible personal property or service used in any activ-
49 ities other than the actual manufacturing, processing, mining, farming or
50 fabricating operations such as office equipment and supplies, and equip-
51 ment and supplies used in selling or distributing activities.
52 (3) Property or service used in research or development.
53 (4) Property or service used in transportation activities.
54 (5) Machinery, equipment, tools or other property or service
55 used to make repairs. This subsection does not include repair parts that
1 become a component part of tangible property exempt from tax under this
2 section or lubricants, hydraulic oil, or coolants used in the operation of
3 tangible personal property exempt under this section.
4 (6) Machinery, equipment, tools or other property or service
5 used to manufacture, fabricate, assemble or install tangible personal
6 property which is:
7 (i) Not held for resale in the regular course of business; and
8 (ii) Owned by the manufacturer, processor, miner, farmer or fabri-
9 cator; provided, however, this subsection does not prevent exemption
10 of machinery, equipment, tools or other property or service
11 exempted from tax under subsection (a)(2) or (a)(3) of this
13 (7) Any improvement to real property or fixture thereto or any tangible
14 personal property which becomes or is intended to become a component of
15 any real property or any improvement or fixture thereto or service
16 related thereto .
17 (8) Motor vehicles licensed or required to be licensed by the laws of
18 this state or another state or any aircraft.
19 (9) Tangible personal property or service used or consumed
20 in processing, producing or fabricating tangible personal property
21 exempted from tax under this chapter in sections 63-3622F, 63-3622G and
22 63-3622I, Idaho Code.
23 (10) Tangible personal property described in section 63-3622HH, Idaho
25 (g) Any tangible personal property exempt under this section which ceases
26 to qualify for this exemption, and does not qualify for any other exemption or
27 exclusion of the taxes imposed by this chapter, shall be subject to use tax
28 based upon its value at the time it ceases to qualify for exemption. Any tan-
29 gible personal property taxed under this chapter which later qualifies for
30 this exemption shall not entitle the owner of it to any claim for refund.
31 SECTION 14. That Section 63-3622K, Idaho Code, be, and the same is hereby
32 amended to read as follows:
33 63-3622K. OCCASIONAL SALES. (a) There are exempted from the taxes imposed
34 by this chapter occasional sales of tangible personal property or ser-
35 vice .
36 (b) As used in this section, the term "occasional sale" means:
37 (1) A sale of property or service not held or used by a per-
38 son in the course of an activity for which he is required to hold a
39 seller's permit, provided such sale is not one (1) of a series of sales
40 sufficient in number or of such a nature as to constitute the seller a
41 "retailer" under section 63-3610(c), Idaho Code.
42 (2) Any transfer of all or substantially all of the property held or used
43 by a person in a business requiring a seller's permit when, after such
44 transfer, the real or ultimate ownership of such property is substantially
45 similar to that which existed before such transfer. For the purpose of
46 this section, stockholders, bondholders, partners, or other persons hold-
47 ing an interest in a corporation or other entity are regarded as having a
48 "real or ultimate ownership" of the property of such corporation or other
50 (3) A transfer of capital assets to or by a business when the transfer is
51 accomplished through an adjustment of the beneficial interest of the busi-
52 ness and the transferor has paid sales or use taxes pursuant to section
53 63-3619 or 63-3621, Idaho Code, on the capital assets, incidental to:
1 (i) A division of joint venture, partnership, or limited liability
2 company assets among the members or partners in exchange for a pro-
3 portional reduction of the transferee's interest in the joint ven-
4 ture, partnership, or limited liability company. For the purposes of
5 this section, the term "limited liability company" means a business
6 organization as defined in chapter 6, title 53, Idaho Code;
7 (ii) The formation of a partnership, joint venture, or limited lia-
8 bility company by the transfer of assets to the partnership, joint
9 venture, or limited liability company or transfers to a partnership,
10 joint venture, or limited liability company in exchange for propor-
11 tionate interests in the partnership, joint venture, or limited lia-
12 bility company;
13 (iii) The formation of a corporation by the owners of a business and
14 the transfer of their business assets to the corporation in exchange
15 for stock in proportion to assets contributed;
16 (iv) The transfer of assets of shareholders in the formation or dis-
17 solution of a corporation;
18 (v) The transfer of capital assets by a corporation to its stock-
19 holders in exchange for surrender of capital stock;
20 (vi) The transfer of assets from a parent corporation to a subsid-
21 iary corporation which is owned at least eighty per cent
22 percent (80%) by the parent corporation, which transfer
23 is solely in exchange for stock or securities of the subsidiary cor-
25 (vii) The transfer of assets from a subsidiary corporation which is
26 owned at least eighty per cent percent
27 (80%) by the parent corporation to a parent corporation or another
28 subsidiary which is owned at least eighty per cent
29 percent (80%) by the parent corporation, which transfer is
30 solely in exchange for stock or securities of the parent corporation
31 or the subsidiary which received the assets.
32 (4) The sale, lease or rental of a capital asset in substantially the
33 same form as acquired by the transferor and on which the initial transfer-
34 or has paid sales or use taxes pursuant to section 63-3619 or 63-3621,
35 Idaho Code, when the owners of all of the outstanding stock, equity or
36 interest of the transferor are the same as the transferee or are members
37 of the same family within the second degree of consanguinity or affinity.
38 (5) The sale of substantially all of the operating assets of a business
39 or of a separate division, branch, or identifiable segment to a buyer who
40 continues operation of the business. For the purpose of this subsection, a
41 "separate division, branch, or identifiable segment" shall be deemed to
42 exist if, prior to its sale, the income and expense attributable to such
43 "separate division, branch, or identifiable segment" could be separately
44 ascertained from the books of accounts and records.
45 (6) Sales by persons who are not defined as "retailers" in section
46 63-3610, Idaho Code.
47 (7) Sales of animals by any 4-H club or FFA club held in conjunction with
48 a fair or the western Idaho spring lamb sale.
49 (8) The sale or purchase of tangible personal property at home yard
50 sales; provided however, that no more than two (2) such home yard sales
51 per individual calendar year shall be exempt.
52 (c) As used in this section, the term "occasional sale," when applied to
53 the sale of a self-propelled motor vehicle, means only:
54 (1) Sales of motor vehicles between members of a family related within
55 the second degree of consanguinity, unless a sales or use tax was not
1 imposed on the sale of that motor vehicle at the time of purchase, in
2 which situation the sale is taxable.
3 (2) Sales of motor vehicles that fall within the scope of the transac-
4 tions detailed in subsection (b)(2) through (b)(5) of this section.
5 (d) The exemption provided by subsection (b)(1), (b)(4), (b)(6) or (b)(8)
6 of this section shall not apply to the sale, purchase or use of aircraft, as
7 defined in section 21-201, Idaho Code, nor shall it apply to the sale, pur-
8 chase or use of boats or vessels, as defined in section 67-7003, Idaho Code,
9 nor shall it apply to the sale, purchase or use of snowmobiles, recreational
10 vehicles or off-highway motorbikes, as defined in section 63-3622HH, Idaho
12 SECTION 15. That Section 63-3622S, Idaho Code, be, and the same is hereby
13 amended to read as follows:
14 63-3622S. RADIO AND TELEVISION BROADCASTING EQUIPMENT. There are
15 exempted from the taxes imposed by this chapter receipts from the sale, stor-
16 age, use or other consumption in this state of tangible personal property
17 or service directly used and consumed in the production and
18 broadcasting of radio and television programs when the purchase, storage, use
19 or other consumption is by a business or segment of a business which is pri-
20 marily devoted to such production and broadcasting, provided, that the use or
21 consumption of such tangible personal property is necessary or essential to
22 the performance of such operation. This exemption does not include machinery,
23 equipment, materials and supplies or service used in a manner
24 that is incidental to the production and broadcasting operation, such as main-
25 tenance and janitorial equipment and supplies and hand tools with a unit price
26 not in excess of one hundred dollars ($100); nor does it include tangible per-
27 sonal property or service used in any activities other than
28 actual production and broadcasting operation such as office equipment and sup-
29 plies, equipment and supplies used in selling and distributing activities, in
30 research, or in transportation activities; nor shall this exemption include
31 motor vehicles or aircraft required to be licensed by the laws of this state,
32 without regard to the use to which such motor vehicles or aircraft are put.
33 SECTION 16. That Section 63-3622T, Idaho Code, be, and the same is hereby
34 amended to read as follows:
35 63-3622T. EQUIPMENT TO PRODUCE CERTAIN NEWSPAPERS. There are exempted
36 from the taxes imposed by this chapter:
37 (a) Receipts from the sale, storage, use or other consumption in this
38 state of tangible personal property or service directly used and
39 consumed in the production of publications in a newspaper format which are
40 distributed to the public at large and which rely on advertising revenue as
41 their primary source of income; provided, that the purchase, storage, use or
42 other consumption is by a business or segment of a business which is primarily
43 devoted to such production of said publications; provided, further, that the
44 use or consumption of such tangible personal property is necessary or essen-
45 tial to the performance of such publication business. This exemption does not
46 include machinery, equipment, materials and supplies or service
47 used in a manner that is incidental to the production of said publications,
48 such as maintenance and janitorial equipment and supplies and hand tools with
49 a unit price not in excess of one hundred dollars ($100); nor does it include
50 tangible personal property or service used in any activities
51 other than the actual production of the publication and shall not include
52 property such as office equipment and supplies, equipment and supplies used in
1 selling and distributing activities, in research or in transportation activi-
2 ties; nor shall this exemption include motor vehicles or aircraft required to
3 be licensed by the laws of this state without regard to the use to which such
4 motor vehicles or aircraft are put.
5 (b) Provided, further, that this exemption shall apply when the publica-
6 tion referred to herein is distributed to the public free of charge.
7 (c) Provided, further, that in order for the exemption to be applicable,
8 at least ten percent (10%) of the total publication, computed on an average
9 annual column inch basis, must be devoted to the publication of nonincome pro-
10 ducing informative material.
11 SECTION 17. That Section 63-3622U, Idaho Code, be, and the same is hereby
12 amended to read as follows:
13 63-3622U. FUNERAL SERVICES. There is exempted from the taxes imposed by
14 this chapter the sale of tangible personal property or service
15 relating to funeral services by a licensed funeral establishment.
16 SECTION 18. That Section 63-3622BB, Idaho Code, be, and the same is
17 hereby amended to read as follows:
18 63-3622BB. RESEARCH AND DEVELOPMENT AT THE INE E L. There is
19 exempted from the taxes imposed by this chapter, the sale or use of that prop-
20 erty or service primarily or directly used or consumed in connec-
21 tion with research, development, experimental and testing activities, when
22 exclusively financed by the United States in connection with the Idaho
23 national engineering and environmental laboratory.
24 SECTION 19. That Section 63-3622JJ, Idaho Code, be, and the same is
25 hereby amended to read as follows:
26 63-3622JJ. LOGGING EXEMPTION. There are exempted from the taxes imposed
27 by this chapter:
28 (1) The sale at retail, storage, use or other consumption in this state
29 of tangible personal property or service which is primarily and
30 directly used or consumed in logging including, but not limited to,
31 logloaders, log jammers, log skidders and fuel used in logging trucks, pro-
32 vided that the use or consumption of such tangible personal property is neces-
33 sary or essential to logging.
34 (2) The exemption allowed by subsection (1) of this section does not
35 include machinery, equipment, materials and supplies or service
36 used in a manner that is incidental to logging such as maintenance and janito-
37 rial equipment and supplies, and hand tools with a unit purchase price not in
38 excess of one hundred dollars ($100); nor does it include tangible personal
39 property or service used in any activities other than the actual
40 logging, such as office equipment and supplies, equipment and supplies used
41 in selling or distributing activities, in research, or, except for fuel used
42 in logging trucks, in transportation activities; nor shall this exemption
43 include motor vehicles or aircraft licensed or required to be licensed by the
44 laws of this state, without regard to the use to which such motor vehicles or
45 aircraft are put; nor shall this exemption apply to vehicles or equipment
46 described in section 63-3622HH, Idaho Code; nor shall this exemption include
47 tangible personal property used to produce tangible personal property exempted
48 from the tax under this chapter by section 63-3622G, Idaho Code.
1 SECTION 20. That Section 63-3624, Idaho Code, be, and the same is hereby
2 amended to read as follows:
3 63-3624. ADMINISTRATION. (a) The state tax commission shall enforce the
4 provisions of this act and may prescribe, adopt, and enforce rules relating to
5 the administration and enforcement of this act. The state tax commission may
6 prescribe the extent to which any rule shall be applied without retroactive
8 (b) The state tax commission shall employ qualified auditors for examina-
9 tion of taxpayers' records and books. The state tax commission shall also
10 employ such accountants, investigators, regional supervisors, assistants,
11 clerks, and other personnel as are necessary for the efficient administration
12 of this act, and may delegate authority to its representatives to conduct
13 hearings, or perform any other duties imposed by this act.
14 (c) Every seller, every retailer, and every person storing, using, or
15 otherwise consuming in this state tangible personal property or service
16 purchased from a retailer shall keep such records, receipts, invoices
17 and other pertinent papers as the state tax commission may require. Every such
18 seller, retailer or person who files the returns required under this act shall
19 keep such records for not less than four (4) years from the making of such
20 records unless the state tax commission in writing sooner authorizes their
22 (d) Retail food stores may petition to the state tax commission to be
23 relieved from the responsibility of retaining detailed invoices of nontaxed
24 sales for which the documentation required in section s 63-3620,
25 63-3621 , or 63-3622, Idaho Code, and any other documentation
26 which may be required by the tax commission, has been obtained by the store
27 from the purchaser. The tax commission shall review each petition and may
28 examine the books and records of the petitioner to insure that the products
29 sold by the petitioner are those sold by a retail food store. The tax commis-
30 sion shall give written notice of its determination to the petitioner as soon
31 as practicable after receiving the written request, but in no event later than
32 sixty (60) days after receiving the petition. As used in this section, "retail
33 food stores" shall mean those retail stores primarily engaged in selling food
34 for home preparation and consumption described in major group 54 of the stan-
35 dard industrial classification manual (SIC) of 1987, as amended, published by
36 the office of management and budget of the executive office of the president
37 of the United States.
38 (e) The state tax commission, or any person authorized in writing by it,
39 may examine the books, papers, records, and equipment of any person selling
40 tangible personal property or service and any person liable for
41 the use tax and may investigate the character of the business of the person in
42 order to verify the accuracy of any return made, or, if no return is made by
43 the person, to ascertain and determine the amount required to be paid.
44 (f) Purchasers claiming exemption from tax and retailers whose pertinent
45 records are kept outside of the state must bring the records to Idaho for
46 examination by the state tax commission upon request of the latter, or, by
47 agreement with the state tax commission, permit an auditor designated by the
48 state tax commission to visit the place where the records are kept, and there
49 audit such records.
50 (g) In the administration of the use tax, the state tax commission may
51 require the filing of reports by any person or class of persons having in his
52 or their possession or custody information relating to sales of tangible per-
53 sonal property or service the storage, use, or other consumption
54 of which is subject to the tax. The reports shall be filed when the state tax
1 commission requires and shall set forth the names and addresses of purchasers
2 of tangible personal property or service , the sale price of the
3 property, the date of sale, and such other information as the state tax com-
4 mission may require.
5 (h) When the tax commission determines that a retail sale is not exempt
6 and the purchaser has failed to voluntarily pay sales or use tax in regard to
7 the property or services purchased, the tax commission may collect the sales
8 tax which was due at the time of the sale or the use tax due at the time of
9 storage, use or other consumption of the taxable goods or services by issuing
10 to the purchaser a notice of deficiency determination, asserting tax together
11 with interest, at the rate provided in section 63-3045, Idaho Code, and may
12 assert penalties found elsewhere in this chapter.
13 (i) If the tax commission determines that the purchaser has repeatedly or
14 intentionally made purchases claimed to be exempt that are not exempt, and the
15 purchaser has failed to voluntarily report and pay use tax in regard to those
16 purchases, or the commission determines that the purchaser has repeatedly or
17 intentionally made purchases claimed to be exempt that are not exempt and has
18 removed the goods from this state, the commission may assert a penalty equal
19 to five percent (5%) of the sales price of the property or service
20 or two hundred dollars ($200), whichever is greater. The tax commission
21 may abate the penalty when the purchaser establishes during a proceeding for
22 redetermination that there were reasonable grounds for believing that the pur-
23 chase was properly exempt from tax.
24 SECTION 21. That Section 63-3638, Idaho Code, be, and the same is hereby
25 amended to read as follows:
26 63-3638. SALES TAX -- DISTRIBUTION. All moneys collected under this chap-
27 ter, except as may otherwise be required in section 63-3203, Idaho Code, shall
28 be distributed by the tax commission as follows:
29 (a) An amount of money shall be distributed to the state refund account
30 sufficient to pay current refund claims. All refunds authorized under this
31 chapter by the commission shall be paid through the state refund account, and
32 those moneys are continuously appropriated.
33 (b) Five hundred thousand dollars ($500,000) per year is continuously
34 appropriated and shall be distributed to the permanent building account, pro-
35 vided by section 57-1108, Idaho Code.
36 (c) Four million eight hundred thousand dollars ($4,800,000) per year is
37 continuously appropriated and shall be distributed to the water pollution con-
38 trol account established by section 39-3605, Idaho Code.
39 (d) (1) An amount equal to the sum required to be certified by the chair-
40 man of the Idaho housing and finance association to the state tax commis-
41 sion pursuant to section 67-6211, Idaho Code, in each year is continuously
42 appropriated and shall be paid to any capital reserve fund, established by
43 the Idaho housing and finance association pursuant to section 67-6211,
44 Idaho Code. Such amounts, if any, as may be appropriated hereunder to the
45 capital reserve fund of the Idaho housing and finance association shall be
46 repaid for distribution under the provisions of this section, subject to
47 the provisions of section 67-6215, Idaho Code, by the Idaho housing and
48 finance association, as soon as possible, from any moneys available there-
49 for and in excess of the amounts which the association determines will
50 keep it self-supporting.
51 (2) An amount equal to the sum required by the provisions of section
52 63-709, Idaho Code, is continuously appropriated and shall be paid as pro-
53 vided by section 63-709, Idaho Code.
1 (3) An amount required by the provisions of section 33-1002D, Idaho
3 (e) Six per cent Five and twenty-one hundredths per-
4 cent ( 6 5.21 %) is hereby appropriated and
5 shall be paid to the county treasurer of each county in amounts to be deter-
6 mined as follows:
7 (1) Each taxing district other than school districts shall be entitled to
8 a base share of sales tax moneys equal to the amount distributed to that
9 district for the fourth calendar quarter of 1979. The computation shall
10 not include any distributions made to the credit of either the former
11 county school levy or the state water pollution control levy. The percent-
12 age so determined for each taxing district shall be applied each quarter
13 to the above percentage of sales tax. The resulting sums shall be paid to
14 the county treasurer of each county for distribution to each taxing dis-
15 trict, except school districts, which received sales tax moneys in 1979.
16 Whenever a taxing district is dissolved, the dissolved district's share of
17 sales moneys shall be credited continuously to the county current expense
19 (2) Whenever the amount of nonschool district sales tax moneys distrib-
20 uted exceeds in any quarter the total amount of moneys distributed to non-
21 school districts for the base quarter, which is the fourth calendar quar-
22 ter of 1979, by ten per cent percent (10%), or
23 more, the excess of the base quarter shall be paid to the county treasurer
24 of each county for distribution to each taxing district in the county,
25 except school districts, in the following manner.
26 The state tax commission shall compute the percentage that the aver-
27 age amount of taxes collected from assessments for the years 1965, 1966
28 and 1967 on the personal property described as business inventory in sub-
29 sections (1) and (2) of section 63-602W, Idaho Code, for each county bears
30 to the average total amount of taxes collected from assessments for said
31 years on the personal property described as business inventory in subsec-
32 tions (1) and (2) of section 63-602W, Idaho Code, for all counties in the
33 state. The percentage so determined for each county shall be applied to
34 the sales tax distributed under this subsection and the resulting sum
35 shall be paid to the county treasurer of each county for distribution to
36 each taxing district, except school districts, in the county as follows:
37 (i) Each year the county commissioners in each county shall take
38 the tax charge, applicable to the current property roll equalized by
39 county commissioners sitting as a board of equalization, of each tax-
40 ing district within the county, except school districts, and divide
41 it by the total current tax charges applicable to the current prop-
42 erty roll of all taxing districts, except school districts, within
43 said county and the resulting percentages shall be applied to the
44 county's proportionate share of said sales tax account and the
45 resulting amount shall be distributed to each taxing district in the
46 county periodically but not less frequently than quarterly by the
47 county auditor and applied by such taxing districts in the same man-
48 ner and in the same proportions as revenues from property taxation.
49 (ii) The moneys set aside and appropriated to the county treasurer
50 out of the sales tax account above may be considered by the counties
51 and other taxing districts and budgeted against at the same time, in
52 the same manner and in the same year as revenues from taxation on all
53 classes of personal property which these moneys replace.
54 (3) All moneys distributed pursuant to subsection (e) shall be subject to
55 the redistribution provisions of section 40-801, Idaho Code, where appli-
2 (f) One dollar ($1.00) on each application for certificate of title to a
3 motor vehicle, or initial application for registration processed by the county
4 assessor or the Idaho transportation department excepting those applications
5 in which any sales or use taxes due have been previously collected by a
6 retailer, shall be a fee for the services of the assessor of the county or the
7 Idaho transportation department in collecting such taxes, and shall be paid
8 into the current expense fund of the county or state highway account estab-
9 lished in section 40-702, Idaho Code.
10 (g) Seven and three-quarters per cent Six and seventy-
11 three hundredths percent ( 7.75 6.73 %) is con-
12 tinuously appropriated and shall be distributed to the revenue sharing account
13 which is created in the state operating fund, and the moneys in the revenue
14 sharing account will be paid by the tax commission as follows:
15 (1) One-half (1/2) shall be paid to the various cities as follows:
16 (i) Fifty per cent percent (50%) of such
17 amount shall be paid to the various cities, and each city shall be
18 entitled to an amount in the proportion that the population of that
19 city bears to the population of all cities within the state; and
20 (ii) Fifty per cent percent (50%) of such
21 amount shall be paid to the various cities, and each city shall be
22 entitled to an amount in the proportion that the preceding year's
23 market value for assessment purposes for that city bears to the pre-
24 ceding year's market value for assessment purposes for all cities
25 within the state.
26 (2) One-half (1/2) shall be paid to the state's general account or to the
27 various counties as follows:
28 (i) One million three hundred twenty thousand dollars ($1,320,000)
29 shall be distributed one forty-fourth (1/44) to each of the various
30 counties; and
31 (ii) The balance of such amount shall be paid to the various coun-
32 ties, and each county shall be entitled to an amount in the propor-
33 tion that the population of that county bears to the population of
34 the state.
35 (h) For fiscal year 1998-99, one hundred sixty-two million dollars
36 ($162,000,000) shall be paid to the state department of education for distri-
37 bution to school districts as calculated by section 33-1002, Idaho Code. The
38 state tax commission shall deposit the money into the public school income
39 fund in five (5) equal payments on dates provided in section 33-1009, 1.a.,
40 Idaho Code.
41 (i) Any moneys remaining over and above those necessary to meet
42 and reserve for payments under other subsections of this section shall be dis-
43 tributed to the general account.
44 SECTION 22. An emergency existing therefor, which emergency is hereby
45 declared to exist, Sections 1, 2 and 3 of this act shall be in full force and
46 effect retroactively to January 1, 1998; and Sections 4 through 20 of this act
47 shall be in full force and effect on and after June 1, 1998.
STATEMENT OF PURPOSE
This legislation addresses the public concern for property tax
relief for funding Public School Maintenance and Operations. The
bill implements a more equalized and broad-based tax structure by
reducing the school district M & O portion paid out of personal
property tax to only a fourth of its original assessment. This
equalization is achieved by shifting the property tax reduction
to the amount of sales tax on goods and selected services. There
is no change in the income tax rate.
With this bill, there is a reduction in the M & O portion
supported by property tax from 0.03 to 0.01 percent of the local
district's contribution beginning with fiscal year 1999. Through
the 1995 passage of HB 156, approximately one-fourth of schools M
& O costs were essentially derived from the state's sales taxes.
To support an additional one-quarter of the M & O from sales tax
revenue, this bill will increase the sales tax by .5%; bringing
the total sales tax support for school M & O to 50%.
A corresponding 5.5% tax on services is invoked for repairs
on tangible personal property and on personal and other
miscellaneous services. This provides the final one-quarter of
funding required for school M & O. The result is revenue neutral
through the tax shift from property tax to the commodity sales and
service sector. In total systems terms this is a tax restructuring
which does not represent an overall tax increase, but in fact,
over time will lead to a net tax reduction for our citizens.
As this legislation is revenue neutral, there will be an increase
in the state's sales tax on goods and services for distribution as
property tax relief. This is through a shift of approximately 104
million dollars from property tax to sales and service taxes. Its
effect on the school support formula should remain revenue stable.
The net result to home-owner citizens is an equivalent property
CONTACT: Representative Maynard Miller
STATEMENT OF PURPOSE/FISCAL NOTE
Bill No.H 590