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H0580...............................................by REVENUE AND TAXATION
SALES TAX - Amends, repeals and adds to existing law to decrease the sales
and use tax by one cent; to provide for a sales tax on services; to delete
the school maintenance and operation levies; to provide for the
distribution of sales tax revenues to the Public School Income Fund to be
utilized for property tax replacement; and to revise how the property tax
replacement is calculated.
02/16 House intro - 1st rdg - to printing
02/17 Rpt prt - to Rev/Tax
H0580
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-fifth Legislature Second Regular Session - 2000
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 580
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO TAXATION POLICIES; AMENDING SECTION 63-3609, IDAHO CODE, TO FUR-
3 THER DEFINE THE TERM "RETAIL SALE" OR "SALE AT RETAIL"; AMENDING SECTION
4 63-3610, IDAHO CODE, TO FURTHER DEFINE THE TERM "RETAILER"; AMENDING SEC-
5 TION 63-3611, IDAHO CODE, TO FURTHER DEFINE THE TERM "RETAILER ENGAGED IN
6 BUSINESS IN THIS STATE"; AMENDING SECTION 63-3612, IDAHO CODE, TO FURTHER
7 DEFINE THE TERM "SALE"; AMENDING SECTION 63-3613, IDAHO CODE, TO FURTHER
8 DEFINE THE TERM "SALES PRICE"; AMENDING SECTION 63-3619, IDAHO CODE, TO
9 DECREASE THE SALES TAX RATE TO FOUR PERCENT AND TO MAKE A TECHNICAL COR-
10 RECTION; AMENDING SECTION 63-3621, IDAHO CODE, TO DECREASE THE USE TAX
11 RATE TO FOUR PERCENT, TO PROVIDE FOR IMPOSITION ON SERVICES AND TO MAKE
12 TECHNICAL CORRECTIONS; AMENDING SECTION 63-3622, IDAHO CODE, TO PROVIDE AN
13 EXEMPTION FOR SALES OF CERTAIN SERVICES; AMENDING CHAPTER 36, TITLE 63,
14 IDAHO CODE, BY THE ADDITION OF A NEW SECTION 63-3618A, IDAHO CODE, TO
15 DEFINE THE TERM "TELECOMMUNICATIONS" FOR SALES TAX PURPOSES; AMENDING
16 CHAPTER 36, TITLE 63, IDAHO CODE, BY THE ADDITION OF A NEW SECTION
17 63-3619A, IDAHO CODE, TO PROVIDE FOR A CREDIT FOR TAXES ON TELECOMMUNICA-
18 TIONS IMPOSED BY AND PAID TO ANOTHER STATE OR LOCAL GOVERNMENT OF ANOTHER
19 STATE; AMENDING CHAPTER 36, TITLE 63, IDAHO CODE, BY THE ADDITION OF A NEW
20 SECTION 63-3621B, IDAHO CODE, TO PROVIDE FOR AN EXCISE TAX ON THE PURCHASE
21 OF ANY TELECOMMUNICATIONS; AMENDING SECTION 63-3622R, IDAHO CODE, TO PRO-
22 VIDE AN EXEMPTION FOR THE SALE OF USED MANUFACTURED HOMES IF SUCH USED
23 MANUFACTURED HOMES ARE SOLD FOR USE OUTSIDE THE STATE; AMENDING CHAPTER
24 36, TITLE 63, IDAHO CODE, BY THE ADDITION OF A NEW SECTION 63-3639, IDAHO
25 CODE, TO PROVIDE THE EFFECT ON CONTRACTS ENTERED INTO BEFORE THE EFFECTIVE
26 DATE OF THE SALES AND USE TAX ON SERVICES; AMENDING SECTION 63-3622D,
27 IDAHO CODE, TO PROVIDE APPLICATION OF THE PRODUCTION EXEMPTION TO CERTAIN
28 SERVICES; AMENDING SECTION 63-3622JJ, IDAHO CODE, TO PROVIDE APPLICATION
29 OF THE LOGGING EXEMPTION TO CERTAIN SERVICES; REPEALING SECTIONS 63-3622S,
30 63-3622T, 63-3622V AND 63-3622BB, IDAHO CODE; AMENDING SECTION 33-802,
31 IDAHO CODE, TO STRIKE REFERENCE TO SCHOOL DISTRICT LEVIES THAT MAY BE
32 IMPOSED WITHOUT VOTER APPROVAL AND TO REVISE THE LOCAL DISTRICT CONTRIBU-
33 TION; AMENDING SECTION 33-1002, IDAHO CODE, TO REVISE HOW THE EDUCATIONAL
34 SUPPORT PROGRAM IS CALCULATED AND TO MAKE A TECHNICAL CORRECTION; AMENDING
35 SECTION 33-1003, IDAHO CODE, TO STRIKE REFERENCE TO AN OBSOLETE PROVISION
36 AND TO MAKE A TECHNICAL CORRECTION; AMENDING SECTION 33-1002D, IDAHO CODE,
37 TO REVISE HOW PROPERTY TAX REPLACEMENT IS CALCULATED; REPEALING SECTION
38 33-1002D, IDAHO CODE; AMENDING SECTION 63-3638, IDAHO CODE, TO PROVIDE FOR
39 REMITTANCE OF MONEYS TO THE PUBLIC SCHOOL INCOME FUND TO BE UTILIZED FOR
40 PROPERTY TAX REPLACEMENT AND TO MAKE A TECHNICAL CORRECTION; AMENDING SEC-
41 TION 33-701, IDAHO CODE, TO DELETE REFERENCE TO MAINTENANCE AND OPERATION
42 LEVIES AND TO MAKE TECHNICAL CORRECTIONS; AMENDING SECTIONS 63-316 AND
43 67-6211, IDAHO CODE, TO PROVIDE CORRECT CODE REFERENCES; DECLARING AN
44 EMERGENCY AND PROVIDING EFFECTIVE DATES AND RETROACTIVE APPLICATION.
45 Be It Enacted by the Legislature of the State of Idaho:
2
1 SECTION 1. That Section 63-3609, Idaho Code, be, and the same is hereby
2 amended to read as follows:
3 63-3609. RETAIL SALE -- SALE AT RETAIL. The terms "retail sale" or "sale
4 at retail" means a sale for any purpose other than resale in the regular
5 course of business or lease or rental of property or service, including tele-
6 communications, in the regular course of business where such rental or lease
7 is taxable under section 63-3612(h), Idaho Code.
8 (a) All persons engaged in constructing, altering, repairing or improving
9 real estate, are consumers of the material or service used by them; all sales
10 to or use by such persons of tangible personal property or taxable service are
11 taxable whether or not such persons intend resale of the improved property.
12 (b) For the purpose of this chapter, the sale or purchase of personal
13 property incidental to the sale of used real property or used mobile homes is
14 deemed a sale of real property.
15 SECTION 2. That Section 63-3610, Idaho Code, be, and the same is hereby
16 amended to read as follows:
17 63-3610. RETAILER. The term "retailer" includes:
18 (a) Every seller who makes any retail sale or sales of tangible personal
19 property and every person engaged in the business of making retail sales at
20 auction of tangible personal property owned by the person or others.
21 (b) Every person engaged in the business of making sales for storage,
22 use, or other consumption or in the business of making sales at auction of
23 tangible personal property owned by the person or others for storage, use, or
24 other consumption.
25 (c) Every person making more than two (2) retail sales of tangible per-
26 sonal property during any twelve (12) month period, including sales made in
27 the capacity of assignee for the benefit of creditors, or receiver or trustee
28 in bankruptcy, or every person making fewer sales who holds himself out as
29 engaging in the business of selling such tangible personal property at retail
30 or who sells a motor vehicle.
31 (d) When the state tax commission determines that it is necessary for the
32 efficient administration of this act to regard any salesmen, representatives,
33 peddlers, or canvassers as agents of the dealers, distributors, supervisors,
34 or employers under whom they operate or from whom they obtain the tangible
35 personal property sold by them, irrespective of whether they are making sales
36 on their own behalf or on behalf of such dealers, distributors, supervisors,
37 or employers, the state tax commission may so regard them and may regard the
38 dealers, distributors, supervisors, or employers as retailers for the purpose
39 of this act.
40 (e) Persons conducting both contracting and retailing activities. Such
41 persons must keep separate accounts for the retail portion of their business
42 and pay tax in the usual fashion on this portion.
43 SECTION 3. That Section 63-3611, Idaho Code, be, and the same is hereby
44 amended to read as follows:
45 63-3611. RETAILER ENGAGED IN BUSINESS IN THIS STATE. "Retailer engaged in
46 business in this state" as used in this chapter means any retailer who:
47 (1) Engages in recurring solicitation of purchases from residents of this
48 state or otherwise purposefully directs its business activities at residents
49 of this state; and
50 (2) Has sufficient contact with this state, in accordance with the con-
3
1 stitution of the United States, to allow the state to require the seller to
2 collect and remit use tax on sales of tangible personal property or services
3 made to customers in this state.
4 (3) The term includes any of the following:
5 (a) Any retailer maintaining, occupying or using, permanently or tempo-
6 rarily, directly or indirectly, or through a subsidiary or agent, by what-
7 ever name called, an office, place of distribution, sales or sample room
8 or place, warehouse or storage place, or other place of business or main-
9 taining a stock of goods.
10 (b) Any retailer having any representative, agent, salesman, canvasser or
11 solicitor operating in this state under the authority of the retailer or
12 its subsidiary for the purpose of selling, delivering, installing or the
13 taking of orders for any tangible personal property.
14 (c) Any retailer, with respect to a lease or rental, deriving rentals
15 from a lease or rental of tangible personal property situated in this
16 state.
17 (d) Any retailer engaging in any activity in connection with servicing or
18 installing tangible personal property in this state.
19 (e) Any retailer owned or controlled by the same interests which own or
20 control any retailer engaged in business in the same or a similar line of
21 business in this state.
22 (f) Any retailer having a franchisee or licensee operating under its
23 trade name if the franchisee or licensee is required to collect the tax
24 under the provisions of this section.
25 (g) Any retailer performing services within this state, the sale of which
26 is subject to tax under the provisions of this chapter.
27 (h) Any retailer who, as part of his regular business activity, owns,
28 leases or operates any real or tangible personal property in this state
29 for the purpose of selling, transmitting or otherwise providing any tele-
30 communication service.
31 SECTION 4. That Section 63-3612, Idaho Code, be, and the same is hereby
32 amended to read as follows:
33 63-3612. SALE. (1) The term "sale" means any transfer of title, exchange
34 or barter, conditional or otherwise, of tangible personal property for a con-
35 sideration and shall include any similar transfer of possession found by the
36 state tax commission to be in lieu of, or equivalent to, a transfer of title,
37 exchange or barter.
38 (2) "Sale" shall also include the following transactions when a consider-
39 ation is transferred, exchanged or bartered:
40 (a) Producing, fabricating, processing, printing, or imprinting of tangi-
41 ble personal property for consumers who furnish, either directly or indi-
42 rectly, the tangible personal property used in the producing, fabricating,
43 processing, printing, or imprinting.
44 (b) Furnishing, preparing, or serving food, meals, or drinks and
45 nondepreciable goods and services directly consumed by customers included
46 in the charge thereof.
47 (c) A transfer of possession of property where the seller retains the
48 title as security for the payment of the sales price.
49 (d) A transfer of the title or possession of tangible personal property
50 which has been produced, fabricated, or printed to the special order of
51 the customer, or of any publication.
52 (e) Admission to a place or for an event in Idaho, provided that an orga-
53 nization conducting an exempt function as defined in section 527 or
4
1 exempted by section 501(c)(3) of the Internal Revenue Code, as incorpo-
2 rated in section 63-3004, Idaho Code, and collecting any charges for
3 attendance at the aforementioned event, shall not have those admission
4 charges be defined as a sale if the event:
5 (i) Is not predominately recreational or commercial; and
6 (ii) Any included entertainment value is minimal when compared to
7 the charge for attendance; and
8 (iii) Such entity has paid sales and use tax on taxable property or
9 services used during the event.
10 (f) The use of or the privilege of using tangible personal property or
11 facilities for recreation.
12 (g) Providing hotel, motel, campground, or trailer court accommodations,
13 nondepreciable goods directly consumed by customers and included services,
14 except where residence is maintained continuously under the terms of a
15 lease or similar agreement for a period in excess of thirty (30) days.
16 (h) The lease or rental of tangible personal property.
17 (i) The intrastate transportation for hire by air of freight or passen-
18 gers, except (1) as part of a regularly scheduled flight by a certified
19 air carrier, under authority of the United States, or (2) when providing
20 air ambulance services.
21 (j) Receipts from all activities described in this subsection below:
22 (i) Landscape planning and landscape architectural and counseling
23 services;
24 (ii) Lawn and garden services, and ornamental shrub and tree ser-
25 vices;
26 (iii) Drilling wells for oil or gas field operations for others on a
27 contract or fee basis and includes contractors that specialize in
28 spudding in, drilling in, redrilling and directional drilling; estab-
29 lishments engaged in performing geophysical, geological and other
30 exploration services for oil and gas on a contract or fee basis;
31 (iv) Oil and gas field services for others on a contract or fee
32 basis including excavating slush pits and cellars, grading and build-
33 ing of foundation well locations, well surveying, running, cutting
34 and pulling casings, tubes, and rods, cementing wells, shooting
35 wells, perforating well casings, acidizing and chemically treating
36 wells, and cleaning out, bailing and swabbing wells;
37 (v) Consumer credit reporting, mercantile reporting and adjustment
38 and collection services;
39 (vi) Reproduction, commercial art and photography and stenographic
40 services;
41 (vii) Services to dwellings and other buildings for disinfecting,
42 pest control and cleaning and maintenance;
43 (viii) Computer programming, data processing and other computer
44 related services, which is not custom computer programming;
45 (ix) Temporary parking of automobiles usually on an hourly, daily
46 or monthly contract or fee basis;
47 (x) Production of theatrical and nontheatrical motion pictures and
48 video tapes for exhibition or sale, including educational and indus-
49 trial films;
50 (xi) Performing services independent of motion picture production,
51 but allied thereto, such as motion picture processing, editing and
52 titling, casting bureaus, wardrobe and studio property rental, tele-
53 vision tapes services, motion picture and video tape reproduction and
54 stock footage film libraries;
55 (xii) Consulting actuaries, writers of advertising copy, radio and
5
1 television service announcers, art restoration, cloud seeding,
2 artists' studios, artists, authors, consulting chemists, nuclear con-
3 sultants, consulting entomologists, consulting geologists,
4 ghostwriters, handpainters of greeting cards, inventors, lecturers,
5 music arrangers, newspaper columnists, consulting physicists, indus-
6 trial psychologists, sculptors' studios, songwriters, stained glass
7 artists, weather forecasters, weather modification services or
8 writers;
9 (xiii) Data processing courses or training in computer programming
10 and in computer and computer peripheral equipment operation, mainte-
11 nance and repair;
12 (xiv) Courses in business machine operation, office procedures and
13 secretarial and stenographic skills;
14 (xv) Aviation schools, training in banking, commercial art schools,
15 construction equipment operation schools, correspondence schools,
16 practical nursing schools, real estate schools, restaurant operation
17 schools, trade schools, truck driving schools, vocational apprentice-
18 ship training and vocational schools, music schools, drama schools,
19 language schools, short-term examination preparatory schools, student
20 exchange programs, curriculum development and vocational counseling,
21 automobile driving instruction, baton instruction, bible schools not
22 operated by churches, ceramics schools, charm schools, civil service
23 schools, continuing education programs, cooking schools, diction
24 schools, charm and modeling schools, hypnosis schools, personal
25 development schools, public speaking schools, reading schools, speed-
26 reading schools, survival schools, tutoring;
27 (xvi) Services provided generally to individuals including laundry,
28 cleaning and garment services, photographic studios, beauty shops,
29 barber shops, shoe repair shops, providing tax return preparation
30 services without also providing accounting, auditing, or bookkeeping
31 services, and miscellaneous persons services including babysitting
32 bureaus, bartering services for individuals, birth certificate agen-
33 cies, coin-operated blood pressure or heart rate testing, buyers'
34 clubs, car title and tag services, checkroom concessions or services,
35 clothing rentals, coin-operated service machine operation of scales,
36 shoeshine, lockers, college clearinghouses, comfort station opera-
37 tions, computer photography or portraits, consumer buying services,
38 costume rentals, dating services, debt counseling or adjustment ser-
39 vices to individuals, depilatory salons, diet workshops, dress suit
40 rentals, electrolysis, escort services, genealogical investigation
41 services, hair weaving or replacement services not provided by a
42 licensed medical doctor, locker rentals, marriage bureaus, massage
43 parlors, porter services, quilting for individuals, restroom opera-
44 tions, scalp treatment services not provided by a licensed medical
45 doctor, steam baths, tanning salons, tattoo parlors, turkish baths,
46 tuxedo rentals, valet parking, wardrobe services and privately oper-
47 ated wedding chapels;
48 (xvii) Legal services provided by a licensed attorney or accounting
49 services provided by a licensed certified public accountant.
50 (k) Receipts from applying, installing, cleaning, altering, improving,
51 decorating, treating, storing or repairing tangible personal property.
52 (l) Receipts from transmitting, supplying or furnishing for a consider-
53 ation any telecommunication and all services and equipment provided in
54 connection therewith to any person.
55 The term "sale" does not include the sale of any service by the state of
6
1 Idaho, an institution of the state of Idaho, a city, county, taxing district,
2 or other political subdivision of the state.
3 (3) As used in subsections (2)(b) and (2)(g) of this section, goods
4 "directly consumed by customers" shall not be interpreted to mean any linens,
5 bedding, cloth napkins or similar nondisposable property.
6 SECTION 5. That Section 63-3613, Idaho Code, be, and the same is hereby
7 amended to read as follows:
8 63-3613. SALES PRICE. (a) The term "sales price" means the total amount
9 for which tangible personal property, including services agreed to be rendered
10 as a part of the sale, or service is sold, rented or leased, valued in money,
11 whether paid in money or otherwise, without any deduction on account of any of
12 the following:
13 1. The cost of the property sold. However, in accordance with such rules
14 as the state tax commission may prescribe, a deduction may be taken if the
15 retailer has purchased property for some purpose other than resale or
16 rental, has reimbursed his vendor for tax which the vendor is required to
17 pay to the state or has paid the use tax with respect to the property, and
18 has resold or rented the property prior to making any use of the property
19 other than retention, demonstration or display while holding it for sale
20 in the regular course of business. If such a deduction is taken by the
21 retailer, no refund or credit will be allowed to his vendor with respect
22 to the sale of the property.
23 2. The cost of materials used, labor or service cost, losses, or any
24 other expense.
25 3. The cost of transportation of the property prior to its sale.
26 4. The face value of manufacturer's discount coupons. A manufacturer's
27 discount coupon is a price reduction coupon presented by a consumer to a
28 retailer upon purchase of a manufacturer's product, the face value of
29 which may only be reimbursed by the manufacturer to the retailer.
30 5. The amount charged for applying, installing, cleaning, altering,
31 improving, decorating, storing or repairing tangible personal property.
32 6. The amount charged for taxable sales of services.
33 (b) The term "sales price" does not include any of the following:
34 1. Retailer discounts allowed and taken on sales, but only to the extent
35 that such retailer discounts represent price adjustments as opposed to
36 cash discounts offered only as an inducement for prompt payment.
37 2. Any sums allowed on merchandise accepted in payment of other merchan-
38 dise, provided that this allowance shall not apply to the sale of a "new
39 manufactured home" or a "modular building" as defined herein.
40 3. The amount charged for property returned by customers when the amount
41 charged therefor is refunded either in cash or credit; but this exclusion
42 shall not apply in any instance when the customer, in order to obtain the
43 refund, is required to purchase other property at a price greater than the
44 amount charged for the property that is returned.
45 4. The amount charged for labor or services rendered in installing or
46 applying the property sold, provided that said amount is stated separately
47 and such separate statement is not used as a means of avoiding imposition
48 of this tax upon the actual sales price of the tangible personal property;
49 except that charges by a manufactured homes dealer for set up of a manu-
50 factured home shall be included in the "sales price" of such manufactured
51 home.
52 5. The amount of any tax (not including, however, any manufacturers' or
53 importers' excise tax) imposed by the United States upon or with respect
7
1 to retail sales whether imposed upon the retailer or the consumer.
2 65. The amount charged for finance charges, carrying charges, service
3 charges, time-price differential, or interest on deferred payment sales,
4 provided such charges are not used as a means of avoiding imposition of
5 this tax upon the actual sales price of the tangible personal property.
6 76. Delivery and handling charges for transportation of tangible personal
7 property to the consumer, provided that the transportation is stated sepa-
8 rately and the separate statement is not used as a means of avoiding impo-
9 sition of the tax upon the actual sales price of the tangible personal
10 property; except that charges by a manufactured homes dealer for transpor-
11 tation of a manufactured home shall be included in the "sales price" of
12 such manufactured home.
13 87. Manufacturers' rebates when used at the time of a retail sale as a
14 down payment on or reduction to the retail sales price of a motor vehicle
15 to which the rebate applies. A manufacturer's rebate is a cash payment
16 made by a manufacturer to a consumer who has purchased or is purchasing
17 the manufacturer's product from the retailer.
18 98. The amount of any fee imposed upon an outfitter as defined in section
19 36-2102, Idaho Code, by a governmental entity pursuant to statute for the
20 purpose of conducting outfitting activities on land or water subject to
21 the jurisdiction of the governmental entity, provided that the fee is
22 stated separately and is presented as a use fee paid by the outfitted pub-
23 lic to be passed through to the governmental entity.
24 109. The amount of any discount or other price reduction on telecommuni-
25 cations equipment when offered as an inducement to the consumer to com-
26 mence or continue telecommunications service, or the amount of any commis-
27 sion or other indirect compensation received by a retailer or seller as a
28 result of the consumer commencing or continuing telecommunications ser-
29 vice.
30 10. Franchise fees paid to a city or county by cable television companies.
31 (c) The sales price of a "new manufactured home" or a "modular building"
32 as defined in this act shall be limited to and include only fifty-five percent
33 (55%) of the sales price as otherwise defined herein.
34 (d) Taxes previously paid on amounts represented by accounts found to be
35 worthless may be credited upon a subsequent payment of the tax provided in
36 this chapter or, if no such tax is due, refunded. If such accounts are there-
37 after collected, a tax shall be paid upon the amount so collected.
38 (e) Tangible personal property when sold at retail for more than eleven
39 cents ($.11) but less than one dollar and one cent ($1.01) through a vending
40 machine shall be deemed to have sold at a sales price equal to one hundred
41 seventeen percent (117%) of the price which is paid for such tangible personal
42 property and/or its component parts including packaging by the owner or opera-
43 tor of the vending machines In regard to the sale or purchase of telecommuni-
44 cations, the "sales price" means the amount paid for the act or privilege of
45 originating or receiving telecommunications in this state and for all services
46 and equipment provided in connection therewith, including access charges, by a
47 retailer, valued in money whether paid in money or otherwise, including cash,
48 credits, services and property of every kind or nature, and shall be deter-
49 mined without any deduction an account of the costs of such telecommunica-
50 tions, the cost of materials used, labor or service costs or any expense what-
51 soever. "Sales price" of telecommunication by private line service shall
52 include charges imposed for that portion of the service provided within Idaho.
53 SECTION 6. That Section 63-3619, Idaho Code, be, and the same is hereby
54 amended to read as follows:
8
1 63-3619. IMPOSITION AND RATE OF THE SALES TAX. An excise tax is hereby
2 imposed upon each sale at retail at the rate of five per cent four percent
3 (54%) of the sales price of all retail sales subject to taxation under this
4 chapter and such amount shall be computed monthly on all sales at retail
5 within the preceding month.
6 (a) The tax shall apply to, be computed on, and collected for all credit,
7 instalment installment, conditional or similar sales at the time of the sale
8 or, in the case of rentals, at the time the rental is charged. The time of
9 sale or the time of rental shall be as provided by rule of the state tax com-
10 mission.
11 (b) The tax hereby imposed shall be collected by the retailer from the
12 consumer.
13 (c) The state tax commission shall provide schedules for collection of
14 the tax on sales which involve a fraction of a dollar. The retailer shall cal-
15 culate the tax upon the entire amount of the purchases of the consumer made at
16 a particular time and not separately upon each item purchased. The retailer
17 may retain any amount collected under the bracket system prescribed which is
18 in excess of the amount of tax for which he is liable to the state during the
19 period as compensation for the work of collecting the tax.
20 (d) It is unlawful for any retailer to advertise or hold out or state to
21 the public or to any customer, directly or indirectly, that the tax or any
22 part thereof will be assumed or absorbed by the retailer or that it will not
23 be added to the selling price of the property sold or that if added it or any
24 part thereof will be refunded. Any person violating any provision of this sec-
25 tion is guilty of a misdemeanor.
26 (e) The tax commission may by rule provide that the amount collected by
27 the retailer from the customer in reimbursement of the tax be displayed sepa-
28 rately from the list price, the price advertised on the premises, the marked
29 price, or other price on the sales slip or other proof of sale.
30 (f) The taxes imposed by this chapter shall apply to the sales to con-
31 tractors purchasing for use in the performance of contracts with the United
32 States.
33 SECTION 7. That Section 63-3621, Idaho Code, be, and the same is hereby
34 amended to read as follows:
35 63-3621. IMPOSITION AND RATE OF THE USE TAX -- EXEMPTIONS. An excise tax
36 is hereby imposed on the storage, use, or other consumption in this state of
37 tangible personal property acquired on or after July 1, 1965, for storage,
38 use, or other consumption in this state at the rate of five four percent (54%)
39 of the value of the property, and a recent sales price shall be presumptive
40 evidence of the value of the property or service unless the property is wire-
41 less telecommunications equipment, in which case a recent sales price shall be
42 conclusive evidence of the value of the property or service. An excise tax is
43 furthermore imposed on taxable services consumed in this state at the rate of
44 four percent (4%) of the value of the service.
45 (a) Every person storing, using, or otherwise consuming, in this state,
46 tangible personal property or taxable service is liable for the tax. His lia-
47 bility is not extinguished until the tax has been paid to this state except
48 that a receipt from a retailer maintaining a place of business in this state
49 or engaged in business in this state given to the purchaser is sufficient to
50 relieve the purchaser from further liability for the tax to which the receipt
51 refers. A retailer shall not be considered to have stored, used or consumed
52 wireless telecommunications equipment by virtue of giving, selling or other-
53 wise transferring such equipment at a discount as an inducement to a consumer
9
1 to commence or continue a contract for telecommunications service.
2 (b) Every retailer engaged in business in this state, and making sales of
3 tangible personal property or taxable services for the storage, use, or other
4 consumption in this state, not exempted under section 63-3622, Idaho Code,
5 shall, at the time of making the sales or, if storage, use or other consump-
6 tion of the tangible personal property or service is not then taxable hereun-
7 der, at the time the storage, use or other consumption becomes taxable, col-
8 lect the tax from the purchaser and give to the purchaser a receipt therefor
9 in the manner and form prescribed by the state tax commission.
10 (c) The provisions of this section shall not apply when the retailer pays
11 sales tax on the transaction and collects reimbursement for such sales tax
12 from the customer.
13 (d) Every retailer engaged in business in this state or maintaining a
14 place of business in this state shall register with the state tax commission
15 and give the name and address of all agents operating in this state, the loca-
16 tion of all distributions or sales houses or offices or other places of busi-
17 ness in this state, and such other information as the state tax commission may
18 require.
19 (e) For the purpose of the proper administration of this act and to pre-
20 vent evasion of the use tax and the duty to collect the use tax, it shall be
21 presumed that tangible personal property or taxable service sold by any person
22 for delivery in this state is sold for storage, use, or other consumption in
23 this state. The burden of proving the sale is tax exempt is upon the person
24 who makes the sale unless he obtains from the purchaser a resale certificate
25 to the effect that the property or service is purchased for resale or rental.
26 It shall be presumed that sales made to a person who has completed a resale
27 certificate for the seller's records are not taxable and the seller need not
28 collect sales or use taxes unless the tangible personal property or taxable
29 service purchased is taxable to the purchaser as a matter of law in the par-
30 ticular instance claimed on the resale certificate.
31 A seller may accept a resale certificate from a purchaser prior to the
32 time of sale, at the time of sale, or at any reasonable time after the sale
33 when necessary to establish the privilege of the exemption. The resale certif-
34 icate relieves the person selling the property or service from the burden of
35 proof only if taken from a person who is engaged in the business of selling or
36 renting tangible personal property or a taxable service and who holds the per-
37 mit provided for by section 63-3620, Idaho Code, or who is a retailer not
38 engaged in business in this state, and who, at the time of purchasing the tan-
39 gible personal property or taxable service, intends to sell or rent it in the
40 regular course of business or is unable to ascertain at the time of purchase
41 whether the property or service will be sold or will be used for some other
42 purpose. Other than as provided elsewhere in this section, when a resale cer-
43 tificate, properly executed, is presented to the seller, the seller has no
44 duty or obligation to collect sales or use taxes in regard to any sales trans-
45 action so documented regardless of whether the purchaser properly or improp-
46 erly claimed an exemption. A seller so relieved of the obligation to collect
47 tax is also relieved of any liability to the purchaser for failure to collect
48 tax or for making any report or disclosure of information required or permit-
49 ted under this chapter.
50 The resale certificate shall bear the name and address of the purchaser,
51 shall be signed by the purchaser or his agent, shall indicate the number of
52 the permit issued to the purchaser, or that the purchaser is an out-of-state
53 retailer, and shall indicate the general character of the tangible personal
54 property or taxable service sold by the purchaser in the regular course of
55 business. The certificate shall be substantially in such form as the state tax
10
1 commission may prescribe.
2 (f) If a purchaser who gives a resale certificate makes any storage or
3 use of the property or service other than retention, demonstration or display
4 while holding it for sale in the regular course of business, the storage or
5 use is taxable as of the time the property or service is first so stored or
6 used.
7 (g) Any person violating any provision of this section is guilty of a
8 misdemeanor and punishable by a fine not in excess of one hundred dollars
9 ($100), and each violation shall constitute a separate offense.
10 (h) It shall be presumed that tangible personal property or taxable ser-
11 vice shipped or brought to this state by the purchaser was purchased from a
12 retailer, for storage, use or other consumption in this state.
13 (i) It shall be presumed that tangible personal property or taxable ser-
14 vice delivered outside this state to a purchaser known by the retailer to be a
15 resident of this state was purchased from a retailer for storage, use, or
16 other consumption in this state. This presumption may be controverted by evi-
17 dence satisfactory to the state tax commission that the property or service
18 was not purchased for storage, use, or other consumption in this state.
19 (j) When the tangible personal property or taxable service subject to use
20 tax has been subjected to a general retail sales or use tax by another state
21 of the United States in an amount equal to or greater than the amount of the
22 Idaho tax, and evidence can be given of such payment, the property or taxable
23 service will not be subject to Idaho use tax. If the amount paid the other
24 state was less, the property or taxable service will be subject to use tax to
25 the extent that the Idaho tax exceeds the tax paid to the other state. For the
26 purposes of this subsection, a registration certificate or title issued by
27 another state or subdivision thereof for a vehicle or trailer or a vessel as
28 defined in section 67-7003, Idaho Code, shall be sufficient evidence of pay-
29 ment of a general retail sales or use tax.
30 (k) The use tax herein imposed shall not apply to the use by a nonresi-
31 dent of this state of a motor vehicle which is registered or licensed under
32 the laws of the state of his residence and is not used in this state more than
33 a cumulative period of time totaling ninety (90) days in any consecutive
34 twelve (12) months, and which is not required to be registered or licensed
35 under the laws of this state.
36 (l) The use tax herein imposed shall not apply to the use of household
37 goods and personal effects by a resident of this state, if such articles were
38 acquired by such person in another state while a resident of that state and
39 primarily for use outside this state and if such use was actual and substan-
40 tial, but if an article was acquired less than three (3) months prior to the
41 time he entered this state, it will be presumed that the article was acquired
42 for use in this state and that its use outside this state was not actual and
43 substantial. For purposes of this subsection, "resident" shall be as defined
44 in section 63-3013 or 63-3013A, Idaho Code.
45 (m) The use tax herein imposed shall not apply to the storage, use or
46 other consumption of tangible personal property or taxable service which is or
47 will be incorporated into real property and which has been donated to and has
48 become the property of:
49 (1) A nonprofit organization as defined in section 63-3622O, Idaho Code;
50 or
51 (2) The state of Idaho; or
52 (3) Any political subdivision of the state.
53 This exemption applies whether the tangible personal property or taxable ser-
54 vice is incorporated in real property by the donee, a contractor or subcon-
55 tractor of the donee, or any other person.
11
1 SECTION 8. That Section 63-3622, Idaho Code, be, and the same is hereby
2 amended to read as follows:
3 63-3622. EXEMPTIONS -- EXEMPTION AND RESALE CERTIFICATES -- PENALTIES.
4 (a) To prevent evasion of the sales and use tax, it shall be presumed that all
5 sales are subject to the taxes imposed by the provisions of this chapter and
6 the retailer shall have the burden of establishing the facts giving rise to
7 such exemption unless the purchaser delivers to the retailer, or has on file
8 with the retailer, an exemption or resale certificate.
9 (b) An exemption certificate shall show the purchaser's name, business
10 name and address (if any), address, and signature and the reason for and
11 nature of the claimed exemption.
12 (c) A resale certificate shall be signed by and bear the name and address
13 of the purchaser or his agent, shall indicate the number of the permit issued
14 to the purchaser or that the purchaser is an out-of-state retailer, and shall
15 indicate the general character of the tangible personal property sold or
16 rented by the purchaser in the regular course of business. A resale certifi-
17 cate relieves the seller from the burden of proof only if taken from a person
18 who is engaged in the business of selling or renting tangible personal prop-
19 erty and who holds a permit provided for in this section, or who is a retailer
20 not engaged in business in this state, and who, at the time of purchasing the
21 tangible personal property, intends to sell or rent it in the regular course
22 of business or is unable to ascertain at the time of purchase whether the
23 property will be sold or will be used for some other purpose. If a purchaser
24 who gives a resale certificate makes any use of the property other than reten-
25 tion, demonstration or display while holding it for sale or rent in the regu-
26 lar course of business, the use shall be taxable to the purchaser as of the
27 time the property is first used by him, and the sales price of the property to
28 him shall be deemed the measure of the tax.
29 (d) A seller may accept an exemption or resale certificate from a pur-
30 chaser prior to the time of sale, at the time of the sale, or at any reason-
31 able time after the sale when necessary to establish the privilege of the
32 exemption. Other than as provided elsewhere in this section, when an exemption
33 or resale certificate, properly executed, is presented to or is on file with
34 the seller, the seller has no duty or obligation to collect sales or use taxes
35 in regard to any sales transaction so documented regardless of whether the
36 purchaser properly or improperly claimed an exemption. A seller so relieved of
37 the obligation to collect tax is also relieved of any liability to the pur-
38 chaser for failure to collect tax or for making any report or disclosure of
39 information required or permitted under this chapter. A seller need not accept
40 an exemption or resale certificate that is not readable, legible or copyable.
41 (e) Any person who gives an exemption or resale certificate with the
42 intention of evading payment of the amount of the tax applicable to the trans-
43 action is guilty of a misdemeanor and punishable by a fine not exceeding one
44 thousand dollars ($1,000) or imprisonment for not more than one (1) year, or
45 by both such fine and imprisonment.
46 (f) An exemption or resale certificate shall be substantially in such
47 form as the state tax commission may prescribe. The claim for the exemption
48 may be a part of the documentation on a sales invoice, purchase order, or
49 other documentation retained by the retailer with regard to the sale. Unless
50 the purchaser has an exemption or resale certificate on file with the seller,
51 the purchaser or his agent must sign the exemption claim, which shall be in
52 addition to any other signature which the seller normally requires on sales
53 invoices, purchase orders, or other sales documentation.
54 (g) It shall be presumed that sales made to a person who has completed an
12
1 exemption or resale certificate for the seller's records are not taxable and
2 the seller need not collect sales or use taxes unless the tangible personal
3 property or services purchased are taxable to the purchaser as a matter of law
4 in the particular instance claimed on the exemption certificate.
5 (h) The exemptions provided in this chapter for the sale, storage, use or
6 other consumption of tangible personal property shall also apply to services
7 otherwise taxable under the provisions of this chapter.
8 SECTION 9. That Chapter 36, Title 63, Idaho Code, be, and the same is
9 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
10 ignated as Section 63-3618A, Idaho Code, and to read as follows:
11 63-3618A. TELECOMMUNICATIONS -- DEFINED. (1) As used in this chapter, the
12 term "telecommunications" includes:
13 (a) Any one-way transmission or any two-way interactive transmission of
14 sounds, signals or other intelligence converted to like form, which effect
15 or are intended to effect meaningful communications by electronic or
16 electromagnetic means via wire, cable, satellite, light waves, microwaves,
17 radiowaves or otherwise;
18 (b) The transmission of messages, programming or information through use
19 of local, toll and wide area telephone services, private line services,
20 channel services, telegraph services, teletypewriter, computer exchange
21 services, cellular mobile telecommunications services, specialized mobile
22 radio, stationary two-way radio, paging service or any other transmission
23 of messages, programming or information by electronic or similar means
24 between or among points by wire, cable, fiber optic, laser, microwave,
25 radio satellite or similar facilities;
26 (c) Providing cable television or any other distribution of television,
27 video or radio services with or without wires or cable to subscribers,
28 users or other paying customers, including all service charges and rental
29 charges, whether for basic service, premium channels or special service,
30 and including installation and repair services and any other services
31 related thereto.
32 (2) Telecommunications subject to taxation under this chapter are only
33 those originating from or received at a service address in Idaho and the
34 charge for the service is billed to an apparatus or account within Idaho
35 regardless of where the bill for such service is actually received.
36 (3) The provisions of subsections (1)(a) and (1)(b) of this section do
37 not include information stored in an electronic form that may be obtained by
38 means of a telecommunication when the charge for such information is sepa-
39 rately stated by the retailer.
40 (4) "Service address" means the location of telecommunications equipment
41 from which telecommunications services are originated or at which telecommuni-
42 cations services are received by a taxpayer. In the event this may not be a
43 defined location, as in the case of mobile phones, paging systems, maritime
44 systems, air-to-ground systems and the like, service address shall mean the
45 location of a taxpayer's primary use of the telecommunications equipment as
46 defined by telephone number of location in Idaho where the bills are sent.
47 SECTION 10. That Chapter 36, Title 63, Idaho Code, be, and the same is
48 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
49 ignated as Section 63-3619A, Idaho Code, and to read as follows:
50 63-3619A. CREDIT FOR TAXES OF TELECOMMUNICATIONS IMPOSED BY AND PAID TO
51 ANOTHER STATE. If any sale or purchase of interstate telecommunications sub-
13
1 ject to tax under the provisions of this chapter has previously been the sub-
2 ject of a tax on the sale or purchase of telecommunications imposed by another
3 state or local government of another state, the amount of tax due to this
4 state in regard to that interstate telecommunications shall be reduced by the
5 amount of tax first paid to the other state or local government, but in no
6 event shall the tax due to this state be less than zero.
7 SECTION 11. That Chapter 36, Title 63, Idaho Code, be, and the same is
8 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
9 ignated as Section 63-3621B, Idaho Code, and to read as follows:
10 63-3621B. TAX ON PURCHASE OF TELECOMMUNICATIONS. An excise tax is hereby
11 imposed on the purchase of any telecommunications subject to taxation under
12 this chapter. The tax shall be calculated by applying the tax rate estab-
13 lished in section 63-3621, Idaho Code, to the sales price of the telecommuni-
14 cations, as defined in section 63-3613, Idaho Code. Every person who purchases
15 telecommunications subject to tax under this section is liable for the tax.
16 The tax shall be reported and paid in the same manner as the use taxes under
17 section 63-3621, Idaho Code, are paid. The provisions of this section shall
18 not apply when the seller of the telecommunication collects sales tax from the
19 purchaser of the telecommunication pursuant to section 63-3619, Idaho Code.
20 SECTION 12. That Section 63-3622R, Idaho Code, be, and the same is hereby
21 amended to read as follows:
22 63-3622R. MOTOR VEHICLES AND USED MOBILE HOMES. There are exempted from
23 the taxes imposed by this chapter:
24 (a) Sales of motor vehicles for use outside of this state, even though
25 delivery be made within this state, but only when:
26 (1) The motor vehicles or trailers will be taken from the point of deliv-
27 ery in this state directly to a point outside this state; and
28 (2) The motor vehicles and trailers will be titled and licensed immedi-
29 ately under the laws of another state, will not be used in this state more
30 than twenty-five percent (25%) of the mileage in any calendar year, and
31 will not be required to be titled under the laws of this state.
32 (b) Sale of used manufactured homes, whether or not if such used manufac-
33 tured homes are sold for use outside this state, and whether or not such used
34 manufactured homes are sold by a dealer. Every manufactured home sale after
35 its sale as a "new manufactured home," as defined in section 63-3606, Idaho
36 Code, is a sale as a used manufactured home.
37 (c) Sale or lease of motor vehicles with a maximum gross registered
38 weight over twenty-six thousand (26,000) pounds, which shall be immediately
39 registered under the international registration plan or similar proportional
40 or pro rata registration system, whether or not base plated in Idaho, and the
41 sale or lease of trailers which are part of a fleet of vehicles registered
42 under such proportional or pro rata registration system when such vehicles and
43 trailers are substantially used in interstate commerce. If such a motor vehi-
44 cle or trailer is not substantially used in interstate commerce during any
45 calendar year, it shall be deemed used in Idaho and subject to the use tax
46 under section 63-3621, Idaho Code. For the purpose of this subsection,
47 "substantially used in interstate commerce" means that the vehicles or
48 trailers will be part of a fleet with a minimum of ten percent (10%) of the
49 miles operated by the fleet accrued outside of Idaho in any calendar year.
50 (d) The use or other consumption of a motor vehicle temporarily donated
51 to a driver's education program sponsored by a nonprofit educational institu-
14
1 tion as defined in section 63-3622O, Idaho Code.
2 SECTION 13. That Chapter 36, Title 63, Idaho Code, be, and the same is
3 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
4 ignated as Section 63-3639, Idaho Code, and to read as follows:
5 63-3639. CONTRACTS ENTERED INTO BEFORE EFFECTIVE DATE OF EXTENSION OF
6 SALES TAX TO SERVICES. (1) Commencing June 1, 2000, and ending June 30, 2001,
7 services otherwise subject to the taxes imposed in this chapter performed by a
8 person shall be exempt from the additional taxes if:
9 (a) The service is performed pursuant to a qualified contract; and
10 (b) The taxpayer claims the exemption in the manner provided in subsec-
11 tion (3) of this section.
12 (2) As used in this section, the term "qualified contract" means a con-
13 tract which:
14 (a) Is a written contract; and
15 (b) Was in effect on June 1, 2000, or was submitted for bid or bid in
16 written form on or before May 31, 2000, and subsequently became a written
17 contract; and
18 (c) Was negotiated or bid based upon the sales or use tax being applied
19 only to tangible personal property; and
20 (d) Requires the cost of the sales or use tax to be borne by the person
21 providing the services.
22 (3) The provisions of this section shall not apply to a change order
23 which increases the price of a contract when the change order was entered into
24 on or after June 1, 2000.
25 SECTION 14. That Section 63-3622D, Idaho Code, be, and the same is hereby
26 amended to read as follows:
27 63-3622D. PRODUCTION EXEMPTION. There are exempted from the taxes imposed
28 by this chapter:
29 (a) The sale at retail, storage, use or other consumption in this state
30 of:
31 (1) Tangible personal property which will enter into and become an ingre-
32 dient or component part of tangible personal property manufactured, proc-
33 essed, mined, produced or fabricated for sale.
34 (2) Tangible personal property primarily and directly used or consumed in
35 or during a manufacturing, processing, mining, farming, or fabricating
36 operation, including, but not limited to, repair parts, lubricants,
37 hydraulic oil, and coolants, which become a component part of such tangi-
38 ble personal property; provided that the use or consumption of such tangi-
39 ble personal property is necessary or essential to the performance of such
40 operation.
41 (3) Chemicals, catalysts, and other materials which are used for the pur-
42 pose of producing or inducing a chemical or physical change in the product
43 or for removing impurities from the product or otherwise placing the prod-
44 uct in a more marketable condition as part of an operation described in
45 subsection (a)(2) of this section, and chemicals and equipment used in
46 clean-in-place systems in the food processing and food manufacturing
47 industries.
48 (4) Safety equipment and supplies required to meet a safety standard of a
49 state or federal agency when such safety equipment and supplies are used
50 as part of an operation described in subsection (a)(2) of this section.
51 (5) Plants to be used as part of a farming operation.
15
1 (b) Other than as provided in subsection (c) of this section, the exemp-
2 tions allowed in subsections (a)(1), (2), (3) and (4) of this section are
3 available only to a business or separately operated segment of a business
4 which is primarily devoted to producing tangible personal property which that
5 business will sell and which is intended for ultimate sale at retail within or
6 without this state. A contractor providing services to a business entitled to
7 an exemption under this section is not exempt as to any property owned,
8 leased, rented or used by it unless, as a result of the terms of the contract,
9 the use of the property is exempt under section 63-3615(b), Idaho Code.
10 (c) The exemptions allowed in subsections (a)(1), (a)(2), (a)(3) and
11 (a)(4) of this section shall also be available to a business, or separately
12 operated segment of a business, engaged in farming or mining, whether as a
13 subcontractor, contractor, contractee or subcontractee, when such business or
14 segment of a business is primarily devoted to producing tangible personal
15 property which is intended for ultimate sale at retail within or without this
16 state, without regard to the ownership of the product being produced.
17 (d) As used in this section, the term "directly used or consumed in or
18 during" a farming operation means the performance of a function reasonably
19 necessary to the operation of the total farming business, including, the
20 planting, growing, harvesting and initial storage of crops and other agricul-
21 tural products and movement of crops and produce from the place of harvest to
22 the place of initial storage. It includes disinfectants used in the dairy
23 industry to clean cow udders or to clean pipes, vats or other milking equip-
24 ment.
25 (e) The exemptions allowed in this section do not include machinery,
26 equipment, materials and supplies used in a manner that is incidental to the
27 manufacturing, processing, mining, farming or fabricating operations such as
28 maintenance and janitorial equipment and supplies.
29 (f) Without regard to the use of such property, this section does not
30 exempt:
31 (1) Hand tools with a unit purchase price not in excess of one hundred
32 dollars ($100). A hand tool is an instrument used or worked by hand.
33 (2) Tangible personal property used in any activities other than the
34 actual manufacturing, processing, mining, farming or fabricating opera-
35 tions such as office equipment and supplies, and equipment and supplies
36 used in selling or distributing activities.
37 (3) Property used in research or development.
38 (4) Property used in transportation activities.
39 (5) Machinery, equipment, tools or other property used to make repairs.
40 This subsection does not include repair parts that become a component part
41 of tangible property exempt from tax under this section or lubricants,
42 hydraulic oil, or coolants used in the operation of tangible personal
43 property exempt under this section.
44 (6) Machinery, equipment, tools or other property used to manufacture,
45 fabricate, assemble or install tangible personal property which is:
46 (i) Not held for resale in the regular course of business; and
47 (ii) Owned by the manufacturer, processor, miner, farmer or fabrica-
48 tor;
49 provided, however, this subsection does not prevent exemption of machin-
50 ery, equipment, tools or other property exempted from tax under subsection
51 (a)(2) or (a)(3) of this section.
52 (7) Any improvement to real property or fixture thereto or any tangible
53 personal property which becomes or is intended to become a component of
54 any real property or any improvement or fixture thereto.
55 (8) Motor vehicles and aircraft.
16
1 (9) Tangible personal property used or consumed in processing, producing
2 or fabricating tangible personal property exempted from tax under this
3 chapter in sections 63-3622F, 63-3622G and 63-3622I, Idaho Code.
4 (10) Tangible personal property described in section 63-3622HH, Idaho
5 Code.
6 (g) Any tangible personal property exempt under this section which ceases
7 to qualify for this exemption, and does not qualify for any other exemption or
8 exclusion of the taxes imposed by this chapter, shall be subject to use tax
9 based upon its value at the time it ceases to qualify for exemption. Any tan-
10 gible personal property taxed under this chapter which later qualifies for
11 this exemption shall not entitle the owner of it to any claim for refund.
12 (h) The exemption provided in this section for sale, storage, use or
13 other consumption of tangible personal property shall also apply to any ser-
14 vices otherwise taxable under the provisions of this chapter, which are
15 related in any manner to the exempt tangible personal property. This exemp-
16 tion includes, but is not limited to, services and transportation activities
17 performed in mining or farming operations.
18 SECTION 15. That Section 63-3622JJ, Idaho Code, be, and the same is
19 hereby amended to read as follows:
20 63-3622JJ. LOGGING EXEMPTION. There are exempted from the taxes imposed
21 by this chapter:
22 (1) The sale at retail, storage, use or other consumption in this state
23 of tangible personal property which is primarily and directly used or consumed
24 in logging including, but not limited to, log loaders, log jammers, log
25 skidders and fuel used in logging trucks, provided that the use or consumption
26 of such tangible personal property is necessary or essential to logging.
27 (2) The exemption allowed by subsection (1) of this section does not
28 include machinery, equipment, materials and supplies used in a manner that is
29 incidental to logging such as maintenance and janitorial equipment and sup-
30 plies, and hand tools with a unit purchase price not in excess of one hundred
31 dollars ($100); nor does it include tangible personal property used in any
32 activities other than the actual logging, such as office equipment and sup-
33 plies, equipment and supplies used in selling or distributing activities, in
34 research, or, except for fuel used in logging trucks, in transportation activ-
35 ities; nor shall this exemption include motor vehicles or aircraft, without
36 regard to the use to which such motor vehicles or aircraft are put; nor shall
37 this exemption apply to vehicles or equipment described in section 63-3622HH,
38 Idaho Code; nor shall this exemption include tangible personal property used
39 to produce tangible personal property exempted from the tax under this chapter
40 by section 63-3622G, Idaho Code.
41 (3) The exemptions provided in this section for the sale, storage, use or
42 other consumption of tangible personal property shall also apply to any ser-
43 vices otherwise taxable under the provisions of this chapter, which are
44 related to the exempt tangible personal property. This exemption includes, but
45 is not limited to, services and transportation activities performed in logging
46 operations.
47 SECTION 16. That Sections 63-3622S, 63-3622T, 63-3622V and 63-3622BB,
48 Idaho Code, be, and the same are hereby repealed.
49 SECTION 17. That Section 33-802, Idaho Code, be, and the same is hereby
50 amended to read as follows:
17
1 33-802. SCHOOL LEVIES. Any tax levied for school purposes shall be a lien
2 on the property against which the tax is levied. The board of trustees shall
3 determine the levies upon each dollar of taxable property in the district for
4 the ensuing fiscal year as follows:
5 1. Bond, Interest and Judgment Obligation Levies. Such levies as shall be
6 required to satisfy all maturing bond, bond interest, and judgment obliga-
7 tions.
8 2. Maximum School Maintenance and Operation Levies. Such levies for main-
9 taining and operating the schools of the district and for the payment of
10 tuition and transportation, that do not exceed an amount equal to four-tenths
11 of one percent (.4%) during tax year 1994, and do not exceed an amount equal
12 to three-tenths of one percent (.3%) during tax year 1995 and thereafter,
13 applied to the actual or adjusted market value for assessment purposes of the
14 district as such valuation existed on December 31 of the previous year, but
15 Credit Against Prepaid Taxes. Aallowances necessary as a credit for prepaid
16 taxes, as provided in section 63-1607, Idaho Code, shall not be included in
17 such maximum levies.
18 3. Authorized School Maintenance and Operation Levies. Such levies for
19 maintaining and operating the schools of the district and for the payment of
20 tuition and transportation that do not exceed one hundred eleven percent
21 (111%) of the local district's contribution authorized in subsection 2. of
22 section 33-1002, Idaho Code. Implementation of the provisions of this subsec-
23 tion shall be authorized only after approval by a majority of the district's
24 electors voting on the question. Levies otherwise authorized by law shall not
25 require an election Specially Chartered School Districts -- Levies for Mainte-
26 nance and Operation. Specially chartered school districts shall be entitled to
27 levy for maintenance and operation purposes as authorized by their charters,
28 except as provided in section 33-1002D, Idaho Code.
29 4. Supplemental Maintenance and Operation Levies. No levy in excess of
30 the levy permitted by subsection 2. or 3. of this section shall be made by a
31 noncharter school district unless such a supplemental levy in a specified
32 amount and for a specified time not to exceed two (2) years be first autho-
33 rized through an election held pursuant to chapter 4, title 33, Idaho Code,
34 and approved by a majority of the district electors voting in such election. A
35 levy approved pursuant to this subsection may be reduced by a majority vote of
36 the board of trustees in the second year.
37 5. Charter District Supplemental Maintenance and Operation. Levies pursu-
38 ant to the respective charter of any such charter district shall be first
39 authorized through an election held pursuant to chapter 4, title 33, Idaho
40 Code, and approved by a majority of the district electors voting in such elec-
41 tion.
42 6. The Local District Contribution. The local school district contribu-
43 tion levy is the amount utilized for calculating local district participation
44 in the educational foundation support program, which is applied to the
45 adjusted market value for assessment purposes, as such valuation existed on
46 December 31 of the previous year. For all participating school districts, this
47 amount shall be computed annually as specified in section 33-1002, Idaho Code.
48 7. The board of trustees of any school district that has, for at least
49 seven (7) consecutive years, been authorized through an election held pursuant
50 to chapter 4, title 33, Idaho Code, to certify a supplemental levy that has
51 annually been equal to or greater than twenty percent (20%) of the total gen-
52 eral maintenance and operation fund, may submit the question of an indefinite
53 term supplemental levy to the electors of the school district. Such question
54 shall clearly state the dollar amount that will be certified annually and that
55 the levy will be for an indefinite number of years. The question must be
18
1 approved by a majority of the district electors voting on the question in an
2 election held pursuant to chapter 4, title 33, Idaho Code. The levy approved
3 pursuant to this subsection may be reduced by a majority vote of the board of
4 trustees during any fiscal year.
5 SECTION 18. That Section 33-1002, Idaho Code, be, and the same is hereby
6 amended to read as follows:
7 33-1002. EDUCATIONAL SUPPORT PROGRAM. In order to be eligible to receive
8 moneys pursuant to the educational support program, a school district, includ-
9 ing a specially chartered district, shall reduce its revenue from property tax
10 for maintenance and operation as provided in sections 33-802 and 33-1002D,
11 Idaho Code. If in any year a school district, including a specially chartered
12 district has not reduced its property tax revenue for maintenance and opera-
13 tion by the amount provided in section 33-1002D, Idaho Code, it shall be inel-
14 igible to participate in the educational support program for that year. The
15 educational support program is calculated as follows:
16 1. State Educational Support Funds. Add the state appropriation, includ-
17 ing the moneys available in the public school income fund, including replace-
18 ment funds as calculated in section 33-1002D, Idaho Code, or moneys which have
19 come from another source, together with all miscellaneous revenues to deter-
20 mine the total state funds.
21 2. From the total state funds subtract the following amounts needed for
22 state support of special programs provided by a school district:
23 a. Pupil tuition-equivalency allowances as provided in section 33-1002B,
24 Idaho Code;
25 b. Transportation support program as provided in section 33-1006, Idaho
26 Code;
27 c. Feasibility studies allowance as provided in section 33-1007A, Idaho
28 Code;
29 d. The approved costs for border district allowance, provided in section
30 33-1403, Idaho Code, as determined by the state superintendent of public
31 instruction;
32 e. The approved costs for exceptional child approved contract allowance,
33 provided in subsection 2. of section 33-2004, Idaho Code, as determined by
34 the state superintendent of public instruction;
35 f. Certain expectant and delivered mothers allowance as provided in sec-
36 tion 33-2006, Idaho Code;
37 g. Salary-based apportionment calculated as provided in sections 33-1004
38 through 33-1004F, Idaho Code;
39 h. Unemployment insurance benefit payments according to the provisions of
40 section 72-1349A, Idaho Code;
41 i. For programs to provide basic curricula necessary to enable students
42 to enter academic or professional-technical postsecondary education pro-
43 grams, an allocation of $300 per support unit for the 1994-95 school year
44 only;
45 j. For provision of teacher supplies to facilitate classroom instruction,
46 an allocation of $200 per support unit for the 1994-95 school year only;
47 k. For expenditure as provided by the public school technology program,
48 $10,400,000 for the 1994-95 school year;
49 l. For additional school innovation pilot project grants based on recom-
50 mendations of the Idaho school reform committee, $2,000,000 for the
51 1994-95 school year; and
52 m. For the support of provisions that provide a safe environment condu-
53 cive to student learning and maintain classroom discipline, an allocation
19
1 of $300 per support unit;
2 n. Any additional amounts as required by statute to effect administrative
3 adjustments or as specifically required by the provisions of any bill of
4 appropriation;
5 to secure the state educational support funds.
6 3. Local Districts' Contribution Calculation. Without including any
7 allowance as a credit for prepaid taxes as provided by section 63-1607, Idaho
8 Code, the local districts' contribution shall be four-tenths percent (.4%)
9 during fiscal year 1994-95 1999-2000 and zero percent (0%) during fiscal year
10 2000-2001 and each year thereafter, of the total state adjusted market value
11 for assessment purposes for the previous year with such value being determined
12 by the provisions of section 63-315, Idaho Code, and four-tenths percent (.4%)
13 during fiscal year 1994-95 1999-2000 and zero percent (0%) during fiscal year
14 2000-2001 and each year thereafter, of the cooperative electrical associa-
15 tions' property values that have been derived from the taxes paid in lieu of
16 ad valorem taxes for the previous year as provided in section 63-3502, Idaho
17 Code.
18 4. Educational Support Program Distribution Funds. Add the local dis-
19 tricts' contribution, subsection 3. of this section, and the state educational
20 support program funds, subsection 1. of this section, together to secure the
21 total educational support program distribution funds.
22 5. Average Daily Attendance. The total state average daily attendance
23 shall be the sum of the average daily attendance of all of the school dis-
24 tricts of the state. The state board of education shall establish rules set-
25 ting forth the procedure to determine average daily attendance and the time
26 for, and method of, submission of such report. Average daily attendance calcu-
27 lation shall be carried out to the nearest hundredth. Computation of average
28 daily attendance shall also be governed by the provisions of section 33-1003A,
29 Idaho Code.
30 6. Support Units. The total state support units shall be determined by
31 using the tables set out hereafter called computation of kindergarten support
32 units, computation of elementary support units, computation of secondary sup-
33 port units, computation of exceptional education support units, and computa-
34 tion of alternative school secondary support units. The sum of all of the
35 total support units of all school districts of the state shall be the total
36 state support units.
37 COMPUTATION OF KINDERGARTEN SUPPORT UNITS
38 Average Daily
39 Attendance Attendance Divisor Units Allowed
40 41 or more .... 40....................... 1 or more as computed
41 31 - 40.99 ADA.... -....................... 1
42 26 - 30.99 ADA.... -....................... .85
43 21 - 25.99 ADA.... -....................... .75
44 16 - 20.99 ADA.... -....................... .6
45 8 - 15.99 ADA.... -....................... .5
46 1 - 7.99 ADA.... -....................... count as elementary
47 COMPUTATION OF ELEMENTARY SUPPORT UNITS
48 Average Daily
49 Attendance Attendance Divisor Minimum Units Allowed
50 300 or more ADA........................................ 15
51 ..23...grades 4,5 & 6....
52 ..22...grades 1,2 & 3....1994-95
53 ..21...grades 1,2 & 3....1995-96
54 ..20...grades 1,2 & 3....1996-97
20
1 and each year thereafter.
2 160 to 299.99 ADA... 20..................... 8.4
3 110 to 159.99 ADA... 19..................... 6.8
4 71.1 to 109.99 ADA... 16..................... 4.7
5 51.7 to 71.0 ADA... 15..................... 4.0
6 33.6 to 51.6 ADA... 13..................... 2.8
7 16.6 to 33.5 ADA... 12..................... 1.4
8 1.0 to 16.5 ADA... n/a.................... 1.0
9 COMPUTATION OF SECONDARY SUPPORT UNITS
10 Average Daily
11 Attendance Attendance Divisor Minimum Units Allowed
12 750 or more .... 18.5..................... 47
13 400 - 749.99 ADA.... 16....................... 28
14 300 - 399.99 ADA.... 14.5..................... 22
15 200 - 299.99 ADA.... 13.5..................... 17
16 100 - 199.99 ADA.... 12....................... 9
17 99.99 or fewer Units allowed as follows:
18 Grades 7-12 ......................... 8
19 Grades 9-12 ......................... 6
20 Grades 7- 9 ......................... 1 per 14 ADA
21 Grades 7- 8 ......................... 1 per 16 ADA
22 COMPUTATION OF EXCEPTIONAL EDUCATION SUPPORT UNITS
23 Average Daily
24 Attendance Attendance Divisor Minimum Units Allowed
25 14 or more .... 14.5..................... 1 or more as computed
26 12 - 13.99.... -....................... 1
27 8 - 11.99.... -....................... .75
28 4 - 7.99.... -....................... .5
29 1 - 3.99.... -....................... .25
30 COMPUTATION OF ALTERNATIVE SCHOOL SECONDARY SUPPORT UNITS
31 Pupils in Attendance Attendance Divisor Minimum Units Allowed
32 12 or more.......... 12...................... 1 or more as computed
33 In applying these tables to any given separate attendance unit, no school
34 district shall receive less total money than it would receive if it had a
35 lesser average daily attendance in such separate attendance unit. In applying
36 the kindergarten table to a kindergarten program of less days than a full
37 school year, the support unit allowance shall be in ratio to the number of
38 days of a full school year. The tables for exceptional education and alterna-
39 tive school secondary support units shall be applicable only for programs
40 approved by the state department of education following rules established by
41 the state board of education. Moneys generated from computation of support
42 units for alternative schools shall be utilized for alternative school pro-
43 grams. School district administrative and facility costs may be included as
44 part of the alternative school expenditures.
45 7. State Distribution Factor per Support Unit. Divide educational support
46 program distribution funds, after subtracting the amounts necessary to pay the
47 obligations specified in subsection 2. of this section, by the total state
48 support units to secure the state distribution factor per support unit.
49 8. District Share of State Funds for Educational Support Program. Ascer-
50 tain a district's share of state funds for the educational support program as
51 follows:
21
1 a. District Contribution Calculation. Without including any allowance as
2 a credit for prepaid taxes, as provided in section 63-1607, Idaho Code,
3 the district contribution calculation shall be the rate determined under
4 subsection 3. of this section.
5 b. District Support Units. The number of support units for each school
6 district in the state shall be determined as follows:
7 (1) Divide the actual average daily attendance, excluding students
8 approved for inclusion in the exceptional child educational program,
9 for the administrative schools and each of the separate schools by
10 the appropriate divisor from the tables of support units in this sec-
11 tion, then add the quotients to obtain the district's support units
12 allowance for regular students, kindergarten through grade 12 includ-
13 ing alternative school secondary students. Calculations in applica-
14 tion of this subsection shall be carried out to the nearest tenth.
15 (2) Divide the combined totals of the average daily attendance of
16 all preschool, handicapped, kindergarten, elementary, secondary and
17 juvenile detention center students approved for inclusion in the
18 exceptional child program of the district by the appropriate divisor
19 from the table for computation of exceptional education support units
20 to obtain the number of support units allowed for the district's
21 approved exceptional child program. Calculations for this subsection
22 shall be carried out to the nearest tenth when more than one (1) unit
23 is allowed.
24 (3) The total number of support units of the district shall be the
25 sum of the total support units for regular students, subsection
26 8.b.(1) of this section, and the support units allowance for the
27 approved exceptional child program, subsection 8.b.(2) of this sec-
28 tion.
29 c. Total District Allowance Educational Program. Multiply the district's
30 total number of support units, carried out to the nearest tenth, by the
31 state distribution factor per support unit and to this product add the
32 approved amount of programs of the district provided in subsection 2. of
33 this section to secure the district's total allowance for the educational
34 support program.
35 d. District Share. To secure the district's share of state apportionment,
36 subtract the amount of the local district contribution calculation, sub-
37 section 3. of this section, from the amount of the total district allow-
38 ance, subsection 8.c. of this section.
39 e. Adjustment of District Share. The contract salary of every noncertifi-
40 cated teacher shall be subtracted from the district's share as calculated
41 from the provisions of subsection 8.d. of this section.
42 SECTION 19. That Section 33-1003, Idaho Code, be, and the same is hereby
43 amended to read as follows:
44 33-1003. SPECIAL APPLICATIONS OF EDUCATIONAL SUPPORT PROGRAM. 1. Decrease
45 in Average Daily Attendance. -- Any school district which has a decrease in
46 total average daily attendance of one percent (1%) of its average daily atten-
47 dance in the then current school year from the total average daily attendance
48 used for determining the allowance in the educational support program for the
49 school year immediately preceding, the allowance of funds from the educational
50 support program may be based on the average daily attendance of the school
51 year immediately preceding, less one percent (1%). When this provision is
52 applied, the decrease in average daily attendance shall be proportionately
53 distributed among the various categories of support units that are appropriate
22
1 for the district.
2 2. Application of Support Program to Separate Schools in District.
3 a. Separate Elementary School. -- Any separate elementary school shall be
4 allowed to participate in the educational support program as though the
5 school were the only elementary school operated by the district.
6 b. Hardship Elementary School. -- Upon application of the board of
7 trustees of a school district, the state board of education is empowered
8 to determine that a given elementary school or elementary schools within
9 the school district, not otherwise qualifying, are entitled to be counted
10 as a separate elementary school as defined in section 33-1001, Idaho Code,
11 when, in the discretion of the state board of education, special condi-
12 tions exist warranting the retention of the school as a separate atten-
13 dance unit and the retention results in a substantial increase in cost per
14 pupil in average daily attendance above the average cost per pupil in
15 average daily attendance of the remainder of the district's elementary
16 grade school pupils.
17 c. Separate Secondary School. -- Any separate secondary school shall be
18 allowed to participate in the educational support program as though the
19 school were the only secondary school operated by the district.
20 d. Minimum Pupils Required. -- Any elementary school having less than ten
21 (10) pupils in average daily attendance shall not be allowed to partici-
22 pate in the state or county support program unless the school has been
23 approved for operation by the state board of education.
24 3. Remote Schools. -- The board of trustees of any Idaho school district
25 which operates and maintains a school which is remote and isolated from the
26 other schools of the state because of geographical or topographical conditions
27 may petition the state board of education to recognize and approve the school
28 as a remote and necessary school. The petition shall be in form and content
29 approved by the state board of education and shall provide such information as
30 the state board of education may require. Petitions for the recognition of a
31 school as a remote and necessary school shall be filed annually at least
32 ninety (90) days prior to the date of the annual meeting of the board of
33 trustees as established in section 33-510, Idaho Code.
34 Within forty-five (45) days after the receipt of a petition for the recog-
35 nition of a remote and necessary school, the state board of education shall
36 either approve or disapprove the petition and notify the board of trustees of
37 its decision. Schools which the state board of education approves as being
38 necessary and remote shall be allowed adequate funding within the support pro-
39 gram for an acceptable educational program for the students of the school. In
40 the case of a remote and necessary secondary school, grades 7-12, the educa-
41 tional program shall be deemed acceptable when, in the opinion of the state
42 board of education, the accreditation standard relating to staff size, estab-
43 lished in accordance with section 33-119, Idaho Code, has been met. The final
44 determination of an acceptable program and adequate funding in the case of a
45 remote and necessary elementary school shall be made by the state board of
46 education.
47 4. Support Program When District Boundaries are Changed.
48 a. In new districts formed by the division of a district, the support
49 program computed for the district divided in its last year of operation,
50 shall be apportioned to the new districts created by the division, in the
51 proportion that the average daily attendance of pupils, elementary and
52 secondary combined, residing in the area of each new district so created,
53 is to the average daily attendance of all pupils, elementary and secondary
54 combined, in the district divided in its last year of operation before the
55 division.
23
1 b. When boundaries of districts are changed by excision or annexation of
2 territory, the support program of any district from which territory is
3 excised for the last year of operation before such excision shall be
4 divided, and apportioned among the districts involved, as prescribed in
5 subsection 4a. hereof of this section.
6 c. In new districts formed by consolidation of former districts, the sup-
7 port program allowance for a seven (7) year period following the formation
8 of the new district, shall not be less than the combined support program
9 allowances of the component districts in the last year of operation
10 before consolidation.
11 5. For the fiscal year which commences on July 1, 1986, and for each suc-
12 ceeding fiscal year, any school district whose adjusted market value for
13 assessment purposes decreases forty percent (40%) or more from the previous
14 year's adjusted market value for assessment purposes as such valuation existed
15 on December 31, is eligible to receive an adjustment to its educational sup-
16 port program entitlement, subject to qualifications as follows:
17 a. The adjusted market value for assessment purposes has decreased forty
18 percent (40%) or more from the previous year's adjusted market value for
19 assessment purposes as such valuation existed on December 31; and
20 b. The school levy to be certified for the general maintenance and opera-
21 tion fund shall be no less than four-tenths of one percent (.4%); and
22 c. An eligible school district has made application to the state depart-
23 ment of education for an adjustment to entitlement from the state educa-
24 tional support program on or before June 1 of the fiscal year. Such appli-
25 cation must document the need for additional funds and must include a dis-
26 trict plan to minimize impact of a reduced local tax base.
27 SECTION 20. That Section 33-1002D, Idaho Code, be, and the same is hereby
28 amended to read as follows:
29 33-1002D. PROPERTY TAX REPLACEMENT. The purpose of this section is to
30 replace a portion of the authorized sSchool maintenance and operation property
31 tax levy with state sales tax receipts revenues shall be replaced as provided
32 in this section. To participate in property tax replacement as provided in
33 this section, specially chartered school districts shall reduce their property
34 tax computation ratios for maintenance and operation by subtracting .003 from
35 their 1999 property tax computation ratio, provided the result is not less
36 than zero (0). As used in this section, the term "property tax computation
37 ratio" shall mean a ratio determined by dividing the district's 1999 certified
38 property tax maintenance and operation budget by the greater of the actual or
39 adjusted market value for assessment purposes as such values existed on Decem-
40 ber 31, of the previous calendar year 1998.
41 (1) (a) In the case of a school district that had a property tax computa-
42 tion ratio of not less than four-tenths of one percent (.4%) in tax year
43 1994, that school district shall receive from the appropriations made for
44 that purpose, an amount equal to the greater of the district's actual or
45 adjusted market value for assessment purposes as such valuation existed on
46 December 31 of the previous calendar year multiplied by one-tenth of one
47 percent (.1%).
48 (b) In the case of a school district that had a property tax computation
49 ratio of less than four-tenths of one percent (.4%) in tax year 1994, the
50 greater of the 1992, 1993 or 1994 property tax computation ratio less
51 three-tenths of one percent (.3%) shall be designated the district's base
52 multiplier. In no case shall the base multiplier be less than zero (0).
53 Four-tenths of one percent (.4%) less the greater of the district's 1992,
24
1 1993 or 1994 property tax computation ratio shall be designated the
2 district's adjustment factor. In no case shall the adjustment factor be
3 greater than one-tenth of one percent (.1%) or less than zero (0). Each
4 school district's actual multiplier shall be the base multiplier plus one-
5 fifth (1/5) of the adjustment factor in tax year 1995, the base multiplier
6 plus two-fifths (2/5) of the adjustment factor in tax year 1996, the base
7 multiplier plus three-fifths (3/5) of the adjustment factor in tax year
8 1997, the base multiplier plus four-fifths (4/5) of the adjustment factor
9 in tax year 1998, and the base multiplier plus the adjustment factor in
10 tax year 1999 and beyond. Each school district shall receive, from the
11 appropriations made for that purpose, an amount equal to the district's
12 actual or adjusted market value for assessment purposes as such valuation
13 existed on December 31 of the previous calendar year multiplied by the
14 district's actual multiplier.
15 (2) (a) Participation in this property tax reduction program is voluntary
16 for a charter district. If a charter district participates, in addition to
17 the provisions of subsection (1) of this section it shall not have a prop-
18 erty tax computation ratio that is above three-tenths of one percent
19 (.3%) or the district's property tax computation ratio in tax year 1994,
20 less one-tenth of one percent (.1%), whichever is greater.
21 (b) If in any year the charter district's property tax computation ratio
22 used to calculate its maintenance and operation budget is increased above
23 the limit specified in this subsection the district shall not be eligible
24 for the distribution pursuant to subsection (1) of this section for that
25 year.
26 (3) Limitations imposed upon a school district's property tax computation
27 ratio under the provisions of this section do not apply to any levy approved
28 by electors of the school district as provided by law.
29 (4) Distributions calculated as provided in this section shall be made to
30 school districts of this state in two (2) equal installments on the due dates
31 as specified in section 63-903(1), Idaho Code, for the property taxes being
32 replaced.
33 (5) For purposes of section 33-1002, Idaho Code, moneys distributed pur-
34 suant to this section shall not be included in determining total state funds
35 Property tax replacement funds shall be deposited into the public school
36 income fund as provided in section 63-3638, Idaho Code, and utilized as pro-
37 vided in section 33-1002, Idaho Code. For tax year 2000 and thereafter, the
38 property tax replacement shall be calculated by multiplying .004 times the
39 greater of each school district's actual or adjusted market value as such
40 values are determined under section 63-315, Idaho Code, on December 31 of the
41 previous year.
42 SECTION 21. That Section 33-1002D, Idaho Code, be, and the same is hereby
43 repealed.
44 SECTION 22. That Section 63-3638, Idaho Code, be, and the same is hereby
45 amended to read as follows:
46 63-3638. SALES TAX -- DISTRIBUTION. All moneys collected under this chap-
47 ter, except as may otherwise be required in section 63-3203, Idaho Code, shall
48 be distributed by the tax commission as follows:
49 (a) An amount of money shall be distributed to the state refund account
50 sufficient to pay current refund claims. All refunds authorized under this
51 chapter by the commission shall be paid through the state refund account, and
52 those moneys are continuously appropriated.
25
1 (b) An amount determined by multiplying .004 times the greater of all
2 school districts in the state's actual or adjusted market value as such values
3 are determined under section 63-315, Idaho Code, on December 31 of the previ-
4 ous year shall be distributed to the public school income fund for the purpose
5 of property tax replacement.
6 (c) Five hundred thousand dollars ($500,000) per year is continuously
7 appropriated and shall be distributed to the permanent building account, pro-
8 vided by section 57-1108, Idaho Code.
9 (cd) Four million eight hundred thousand dollars ($4,800,000) per year is
10 continuously appropriated and shall be distributed to the water pollution con-
11 trol account established by section 39-3605, Idaho Code.
12 (de) (1) An amount equal to the sum required to be certified by the
13 chairman of the Idaho housing and finance association to the state tax
14 commission pursuant to section 67-6211, Idaho Code, in each year is con-
15 tinuously appropriated and shall be paid to any capital reserve fund,
16 established by the Idaho housing and finance association pursuant to sec-
17 tion 67-6211, Idaho Code. Such amounts, if any, as may be appropriated
18 hereunder to the capital reserve fund of the Idaho housing and finance
19 association shall be repaid for distribution under the provisions of this
20 section, subject to the provisions of section 67-6215, Idaho Code, by the
21 Idaho housing and finance association, as soon as possible, from any
22 moneys available therefor and in excess of the amounts which the associa-
23 tion determines will keep it self-supporting.
24 (2) An amount equal to the sum required by the provisions of section
25 63-709, Idaho Code, is continuously appropriated and shall be paid as pro-
26 vided by section 63-709, Idaho Code.
27 (3) An amount required by the provisions of chapter 53, title 33, Idaho
28 Code.
29 (ef) Six percent (6%) is hereby appropriated and shall be paid to the
30 county treasurer of each county in amounts to be determined as follows:
31 (1) Each taxing district other than school districts shall be entitled to
32 a base share of sales tax moneys equal to the amount distributed to that
33 district for the fourth calendar quarter of 1979. The computation shall
34 not include any distributions made to the credit of either the former
35 county school levy or the state water pollution control levy. The percent-
36 age so determined for each taxing district shall be applied each quarter
37 to the above percentage of sales tax. The resulting sums shall be paid to
38 the county treasurer of each county for distribution to each taxing dis-
39 trict, except school districts, which received sales tax moneys in 1979.
40 Whenever a taxing district is dissolved, the dissolved district's share of
41 sales moneys shall be credited continuously to the county current expense
42 fund.
43 (2) Whenever the amount of nonschool district sales tax moneys distrib-
44 uted exceeds in any quarter the total amount of moneys distributed to non-
45 school districts for the base quarter, which is the fourth calendar quar-
46 ter of 1979, by ten percent (10%), or more, the excess of the base quarter
47 shall be paid to the county treasurer of each county for distribution to
48 each taxing district in the county, except school districts, in the fol-
49 lowing manner.
50 The state tax commission shall compute the percentage that the aver-
51 age amount of taxes collected from assessments for the years 1965, 1966
52 and 1967 on the personal property described as business inventory in sub-
53 sections (1) and (2) of section 63-602W, Idaho Code, for each county bears
54 to the average total amount of taxes collected from assessments for said
55 years on the personal property described as business inventory in subsec-
26
1 tions (1) and (2) of section 63-602W, Idaho Code, for all counties in the
2 state. The percentage so determined for each county shall be applied to
3 the sales tax distributed under this subsection and the resulting sum
4 shall be paid to the county treasurer of each county for distribution to
5 each taxing district, except school districts, in the county as follows:
6 (i) Each year the county commissioners in each county shall take
7 the tax charge, applicable to the current property roll equalized by
8 county commissioners sitting as a board of equalization, of each tax-
9 ing district within the county, except school districts, and divide
10 it by the total current tax charges applicable to the current prop-
11 erty roll of all taxing districts, except school districts, within
12 said county and the resulting percentages shall be applied to the
13 county's proportionate share of said sales tax account and the
14 resulting amount shall be distributed to each taxing district in the
15 county periodically but not less frequently than quarterly by the
16 county auditor and applied by such taxing districts in the same man-
17 ner and in the same proportions as revenues from property taxation.
18 (ii) The moneys set aside and appropriated to the county treasurer
19 out of the sales tax account above may be considered by the counties
20 and other taxing districts and budgeted against at the same time, in
21 the same manner and in the same year as revenues from taxation on all
22 classes of personal property which these moneys replace.
23 (3) All moneys distributed pursuant to subsection (ef) shall be subject
24 to the redistribution provisions of section 40-801, Idaho Code, where
25 applicable.
26 (fg) One dollar ($1.00) on each application for certificate of title or
27 initial application for registration of a motor vehicle, snowmobile,
28 allterrain all-terrain vehicle or other vehicle processed by the county asses-
29 sor or the Idaho transportation department excepting those applications in
30 which any sales or use taxes due have been previously collected by a retailer,
31 shall be a fee for the services of the assessor of the county or the Idaho
32 transportation department in collecting such taxes, and shall be paid into the
33 current expense fund of the county or state highway account established in
34 section 40-702, Idaho Code.
35 (gh) Seven and three-quarters percent (7.75%) is continuously appropri-
36 ated and shall be distributed to the revenue sharing account which is created
37 in the state operating fund, and the moneys in the revenue sharing account
38 will be paid by the tax commission as follows:
39 (1) One-half (1/2) shall be paid to the various cities as follows:
40 (i) Fifty percent (50%) of such amount shall be paid to the various
41 cities, and each city shall be entitled to an amount in the propor-
42 tion that the population of that city bears to the population of all
43 cities within the state; and
44 (ii) Fifty percent (50%) of such amount shall be paid to the various
45 cities, and each city shall be entitled to an amount in the propor-
46 tion that the preceding year's market value for assessment purposes
47 for that city bears to the preceding year's market value for assess-
48 ment purposes for all cities within the state.
49 (2) One-half (1/2) shall be paid to the state's general account or to the
50 various counties as follows:
51 (i) One million three hundred twenty thousand dollars ($1,320,000)
52 shall be distributed one forty-fourth (1/44) to each of the various
53 counties; and
54 (ii) The balance of such amount shall be paid to the various coun-
55 ties, and each county shall be entitled to an amount in the propor-
27
1 tion that the population of that county bears to the population of
2 the state.
3 (hi) Any moneys remaining over and above those necessary to meet and
4 reserve for payments under other subsections of this section shall be distrib-
5 uted to the general account.
6 SECTION 23. That Section 33-701, Idaho Code, be, and the same is hereby
7 amended to read as follows:
8 33-701. FISCAL YEAR -- PAYMENT AND ACCOUNTING OF FUNDS. The fiscal year
9 of each school district shall be a period of twelve (12) months commencing on
10 the first day of July in each year.
11 The board of trustees of each school district shall have the following
12 powers and duties:
13 1. To determine and order paid all lawful expenses for salaries, wages
14 and purchases, whether or not there be money in the treasury for payment of
15 warrants drawn against any fund of the district. Warrants shall be signed by
16 the treasurer of the district and countersigned by the chairman or vice chair-
17 man of the board of trustees.
18 Whenever any school district has sufficient funds on deposit so to do, it
19 may pay any allowed claim for salaries, wages or purchases by regular bank
20 check signed by the treasurer or assistant treasurer of the district and coun-
21 tersigned by the chairman, or vice-chairman vice chairman, of the board of
22 trustees.
23 The total amount of warrants or orders for warrants drawn on any fund,
24 together with disbursements from such fund in any other manner made, shall not
25 exceed ninety-five percent (95%) of the estimated income and revenue accrued
26 or accruing to such fund for the same school year, until such income and reve-
27 nue shall have been paid into the treasury to the credit of the district;
28 2. To invest all or part of any plant facilities reserve fund, or any
29 fund accumulated for the payment of interest on, and the redemption of, out-
30 standing bonds, or other obligations of the district in bonds or certificates
31 of indebtedness of the United States of America, or in bonds or warrants of
32 the state of Idaho, or in warrants or tax anticipation notes of any county or
33 school district of the state of Idaho, when such investments shall be due and
34 payable on or before the date any plant facilities reserve fund shall be
35 required to be expended or any bonds or other obligations, or interest
36 thereon, of the investing district shall become payable.
37 Whenever in the judgment of the board of trustees, the proceeds of any
38 bond issue should be temporarily invested pending the expenditure of such pro-
39 ceeds for the purposes for which such bonds were issued, the proceeds may be
40 invested in the manner and form hereinabove prescribed. Any interest, or prof-
41 its accruing from such investments shall be used for the purposes for which
42 the bonds were issued. Unless otherwise provided by law, any interest or prof-
43 its accruing from the investment of any funds shall be credited to the general
44 fund of the district;
45 3. To insure any school house schoolhouse and other property, and the
46 district, against any loss by fire, casualty, or liability, and the board, its
47 officers and employees, and to preserve its property for the benefit of the
48 district. In case of loss of any insured property, any proceeds from insur-
49 ance:
50 (a) mMay be expended in constructing a temporary or permanent structure,
51 but no sum greater than the insurance proceeds shall be so expended except
52 upon approval of a majority of the school district electors voting in an
53 election called for that purpose; or
28
1 (b) mMay be placed in and made a part of the school plant facilities
2 reserve fund of the district, if the district has such a fund; or
3 (c) mMay be placed in a separate account in the bond interest and redemp-
4 tion fund of the district to repay any kind of obligation incurred by the
5 district in replacing or restoring the property for which the insurance
6 proceeds were received, and shall not be included in the computations of
7 bond and bond interest levies as provided in section 33-802A, Idaho Code.
8 If the proceeds of any insurance received by a school district by reason of
9 loss on real property shall be less than five thousand dollars ($5,000), such
10 proceeds may be credited to the general fund of the district;
11 4. To pay from the general fund of the district the expense of any member
12 of the board incurred while traveling on the business of the board, or attend-
13 ing any meeting called by the state board of education or by the state super-
14 intendent of public instruction, or attending any annual or special meetings
15 of the state school trustees association, and to pay the membership fee of the
16 board of trustees in said association. Whenever any member of the board of
17 trustees resides at such distance from the meeting place of the board as to
18 require, in the judgment of the board, such member to incur extraordinary
19 expense in traveling from his home to and from said meeting place, the board
20 may approve payment to such member of the extraordinary expense incurred in
21 attending any meeting of the board.
22 For the purpose of this paragraph, the term "expense" or "extraordinary
23 expense" shall include allowance for mileage or actual travel expense incur-
24 red;
25 5. To prepare, or cause to be prepared and published, in the manner here-
26 inafter prescribed, within one hundred twenty (120) days from the last day of
27 each fiscal year, an annual statement of financial condition and report of the
28 school district as of the end of such fiscal year in a form prescribed by the
29 state superintendent of public instruction. Such annual statement shall
30 include, but not be limited to, the amounts of money budgeted and received and
31 from what sources, and the amounts budgeted and expended for salaries and
32 other expenses by category. Salaries may be reported in gross amount. Each
33 school district shall have available at the administrative office, upon
34 request, a full and complete list of vendors and the amount paid to each and a
35 list of the number of teachers paid at each of the several stated gross salary
36 levels in effect in the district.
37 Nothing herein provided shall be construed as limiting any school district
38 as to any additional or supplementary statements and reports it may elect to
39 make for the purpose of informing the public of its financial operations,
40 either as to form, content, method, or frequency; and if all the information
41 required herein to be published shall have been published as provided herein
42 at regular intervals during the fiscal year covering successive portions of
43 the fiscal year, then such information may be omitted from the annual state-
44 ment of financial condition and report for such portions of the fiscal year as
45 already have been reported.
46 The annual statement of financial condition and report shall be published
47 within the time above prescribed in one (1) issue of a newspaper printed and
48 published within the district, or, if there be none, then in a newspaper as
49 provided in section 60-106, Idaho Code, published within the district, or, if
50 there be none, then in a newspaper as provided in section 60-106, Idaho Code,
51 in the county in which the school district is located, or, if more than one
52 (1) newspaper is published in said district or county, then in the newspaper
53 most likely to give best general notice of the contents of such annual state-
54 ment of financial condition and report to the residents of said district; pro-
55 vided, that if no newspaper is published in the district or county, then such
29
1 statement of financial condition and report shall be published in a newspaper
2 as provided in section 60-106, Idaho Code, most likely to give best general
3 notice of the contents to the residents of said district.
4 The chairman, clerk and treasurer of each school district shall certify
5 the annual statement of financial condition and report to be true and correct,
6 and the certification shall be included in each published statement.
7 In the event the board of trustees of any school district shall fail to
8 prepare or cause to be prepared or to publish the annual statement of finan-
9 cial condition and report as herein required, the state superintendent of pub-
10 lic instruction shall cause the same to be prepared and published, and the
11 cost thereof shall be an obligation of the school district. One (1) copy of
12 the annual statement of financial condition and report shall be retained in
13 the office of the clerk of the board of school trustees, where the same shall
14 be open at all times to examination and inspection by any person;
15 6. To cause to be made a full and complete audit of the financial state-
16 ments of the district as required in section 67-450B, Idaho Code.
17 The auditor shall be employed on written contract.
18 One (1) copy of the audit report shall be filed with the state department
19 of education, after its acceptance by the board of trustees, but not later
20 than October 15;
21 7. To file annually with the state department of education such financial
22 and statistical reports as said state superintendent of public instruction may
23 require;
24 8. To order and have destroyed any canceled check or warrant, or any form
25 of claim or voucher which has been paid, at any time after five (5) years from
26 the date the same was canceled and paid;
27 9. To review the school district budget periodically and make appropriate
28 budget adjustments to reflect the availability of funds and the requirements
29 of the school district. Revenue derived from maintenance and operation levies
30 made pursuant to section 33-802 2, Idaho Code, shall be excluded from budget
31 adjustments as provided in this paragraph. Any person or persons proposing a
32 budget adjustment under this section shall notify in writing each member of
33 the board of trustees one (1) week prior to the meeting at which such proposal
34 will be made. Prior to the final vote on such a proposal, notice shall be
35 posted and published once, as prescribed in section 33-402, Idaho Code. A bud-
36 get adjustment shall not be approved unless voted affirmatively by sixty per-
37 cent (60%) of the members of the board of trustees. Such amended budgets shall
38 be submitted to the state superintendent of public instruction;
39 10. To invest any money coming into the hands of the school district in
40 investments permitted by section 67-1210, Idaho Code. Unless otherwise pro-
41 vided by law, any interest or profits accruing from the investment of any
42 funds shall be credited to the general fund of the district.
43 SECTION 24. That Section 63-316, Idaho Code, be, and the same is hereby
44 amended to read as follows:
45 63-316. ADJUSTMENT OF ASSESSED VALUE -- COMPLETION OF ASSESSMENT PROGRAM
46 BY STATE TAX COMMISSION -- PAYMENT OF COSTS. (1) Whenever the state tax com-
47 mission, after a hearing, determines that any county assessor or the county
48 commissioners in assessing property in the county subject to taxation have
49 failed to abide by, adhere to and conform with the laws of the state of Idaho
50 and the rules of the state tax commission in determining market value for
51 assessment purposes, the state tax commission shall order the county assessor
52 and county commissioners of such county to make the necessary changes or cor-
53 rections in such assessments and if the county assessor and the county commis-
30
1 sioners refuse or neglect to comply with such order, the state tax commission
2 is authorized to and shall forthwith adjust or change the property roll in
3 such county.
4 (2) In lieu of the hearings and actions permitted in subsection (1) of
5 this section, the state tax commission shall monitor each county's implementa-
6 tion of the continuing appraisal required in section 63-314, Idaho Code, and
7 may require each county to file such reports of its progress at implementation
8 of such continuing appraisals as the commission may find necessary. In the
9 event that the commission finds that any county is failing to meet the
10 requirements of section 63-314, Idaho Code, the commission may order that
11 county's indexing or appraisal or reappraisal programs be conducted under the
12 exclusive and complete control of the state tax commission and the results of
13 such programs shall be binding upon the county officers of the county for
14 which ordered. Payments for the actual cost of such programs shall be made
15 from the sales tax distribution created in section 63-3638, Idaho Code, and
16 the amount of such payments shall be withheld from the payments otherwise made
17 under the provisions of section 63-3638(ef) and (gh), Idaho Code, to the
18 county for which indexing, appraisal or reappraisal has been ordered, and this
19 subsection shall constitute the necessary appropriation to accomplish such
20 payments, any other provision of law notwithstanding.
21 SECTION 25. That Section 67-6211, Idaho Code, be, and the same is hereby
22 amended to read as follows:
23 67-6211. ADDITIONAL DEFINITIONS AND CAPITAL RESERVE FUND PROCEDURES. As
24 used in this section, the following words and phrases shall have the following
25 meanings unless the context shall indicate another or different meaning or
26 intent:
27 (a) "Maximum capital reserve fund requirement" shall mean the amount set
28 forth in the association's resolution or indenture authorizing the bonds or
29 other obligations secured by a capital reserve fund, or, if no amount is
30 stated in such resolution or indenture, then, as of any particular date of
31 computation, an amount of money equal to the greatest of the respective
32 amounts, for the then current or any future fiscal year of the association, of
33 annual debt service of the association, such annual debt service for any fis-
34 cal year being the amount of money equal to the aggregate of:
35 (1) All interest payable during such fiscal year on all bonds secured by
36 such capital reserve fund of the association outstanding on said date of
37 computation, plus
38 (2) The principal amount of all bonds of the association secured by such
39 capital reserve fund, outstanding on said date of computation which
40 matures during such fiscal year, plus
41 (3) The amount of all annual sinking fund payments payable during such
42 fiscal year with respect to any bonds of the association secured by such
43 capital reserve fund, outstanding on said date of computation.
44 (b) "Annual sinking fund payment" shall mean the amount of money speci-
45 fied in the resolution authorizing term bonds as payable into a sinking fund
46 during a particular fiscal year for the retirement of term bonds which mature
47 after such fiscal year, but shall not include any amount payable by reason
48 only of the maturity of a bond.
49 (c) "Available operating revenues" shall mean all amounts received on
50 account of rentals and fees and other charges imposed by the association, if
51 any, and income or interest earned or added to funds of the association due to
52 the investment thereof and not required under the terms or provisions of any
53 covenant or agreement with holders of any bonds or notes of the association to
31
1 be applied to any purposes other than payment of expenses of the association.
2 (d) "Amortized value," when used with respect to securities purchased at
3 a premium above or a discount below par, shall mean the value as of any given
4 date obtained by dividing the total premiums or discount at which such securi-
5 ties were purchased by the number of interest payments remaining to maturity
6 on such securities after such purchase, and by multiplying the amount so cal-
7 culated by the number of interest payment dates having passed since the date
8 of such purchase; and
9 (1) In the case of securities purchased at a premium, by deducting the
10 product thus obtained from the purchase price, and
11 (2) In the case of securities purchased at a discount, by adding the
12 product thus obtained to the purchase price.
13 (e) The association shall create and establish one (1) or more special
14 funds (herein referred to as "capital reserve funds"), and shall credit each
15 such capital reserve fund:
16 (1) Any proceeds of sale of notes or bonds, to the extent provided in the
17 resolution or resolutions of the association authorizing the issuance
18 thereof,
19 (2) Any funds directed to be transferred by the association to such fund,
20 and
21 (3) Any other moneys which may be made available to the association for
22 the purpose of such fund from any other source or sources.
23 (f) All moneys held in or credited to each such capital reserve fund,
24 except as hereinafter provided, shall be used, as required, solely for the
25 payment of the principal of bonds or of the sinking fund payments hereinafter
26 mentioned with respect to such bonds, the purchase or redemption of bonds, the
27 payment of interest on bonds or the payment of any redemption premium required
28 to be paid when such bonds are redeemed prior to maturity; provided, however:
29 (1) That moneys in any such fund shall not be withdrawn therefrom at any
30 time in such amount as would reduce the amount of such fund to less than
31 the maximum capital reserve fund requirement, except for the purposes of
32 making payment, when due, with respect to such bonds, of principal or
33 redemption price of, interest and the sinking fund payments, as the same
34 become due, and for the payment of which other moneys of the association
35 are not available.
36 (2) Any income or interest earned by, or increment to, any capital
37 reserve fund due to the investment thereof may be transferred by the asso-
38 ciation to other funds or accounts of the association to the extent it
39 does not reduce the amount of such capital reserve fund below the maximum
40 capital reserve fund requirement.
41 (g) Within sixty (60) days after the close of the association's fiscal
42 year, the chairman of the association shall certify to the state tax commis-
43 sion the amount, if any, required to maintain the capital reserve funds estab-
44 lished pursuant to this section at the maximum capital reserve fund require-
45 ment, but only for any capital reserve fund of the association which is
46 required by a resolution of the association to be maintained by a continuing
47 appropriation from the sales tax account. The chairman of the association
48 shall not be entitled to so certify to the state tax commission for any capi-
49 tal reserve fund of the association for bonds issued by the association after
50 January 1, 1996.
51 (h) The association shall not issue bonds at any time if upon issuance
52 there will be created a capital reserve fund and the amount in the capital
53 reserve fund securing such bonds will be less than the maximum capital reserve
54 fund requirement, unless the association, at the time of issuance of such
55 bonds, shall deposit in such fund, from the proceeds of the bonds so to be
32
1 issued, or sources other than the state sales tax fund, an amount which,
2 together with the amount then in such fund, will not be less than the maximum
3 capital reserve fund requirement.
4 (i) Moneys in a capital reserve fund not required for immediate use or
5 disbursement may be invested in obligations of the state or the United States
6 of America or obligations the principal of and interest on which are guaran-
7 teed by the state or the United States of America or obligations of agencies
8 of the United States of America or any obligations which may from time to time
9 be legally purchased by banks under title 26, Idaho Code, as investment of
10 funds belonging to them or in their control. In computing the amount of a cap-
11 ital reserve fund for the purposes of this section, securities in which all or
12 a portion of such fund are invested shall be valued at par if purchased at par
13 or, if purchased at other than par, at amortized value.
14 (j) The association shall create and establish such other fund or funds
15 as may be necessary or desirable for its corporate purposes.
16 (k) In the event of the dissolution of the association, any funds or
17 assets of the association remaining after paying its bonds, notes or other
18 obligations shall revert to the state.
19 (l) The total principal amount of the association's outstanding bonds
20 secured by a capital reserve fund entitled to appropriation from the state
21 sales tax account pursuant to section 67-6211(g), Idaho Code, and section
22 63-3638(de)(1), Idaho Code, shall not exceed the sum of eighty-nine million
23 dollars ($89,000,000).
24 SECTION 26. An emergency existing therefor, which emergency is hereby
25 declared to exist, Sections 1 through 16, 22, 23, 24 and 25 of this act shall
26 be in full force and effect on and after June 1, 2000; Sections 17, 18, 19 and
27 20 of this act shall be in full force and effect on and after its passage and
28 approval, and retroactively to January 1, 2000, and Section 21 of this act
29 shall be in full force and effect on and after January 1, 2003.
STATEMENT OF PURPOSE
RS 0968OC3
This intent of this legislation is to eliminate school M&O levies from property tax
and redefine taxation of retail services by reducing the sales tax rate from 5% to
4% and to extend sales tax to services excluding health care.
It provides replacement moneys for local school levies of .003% of property
values and removes local school district M&O levying authority.
FISCAL IMPACT
Based on FY00 projection, there would be a property tax reduction of $176
million without any negative impact to the General Fund.
Contact Primary Sponsor: Rep. Frank Bruneel
Name: Rep. Frank Bruneel Co-Sponsor: Rep. Dan Mader
Phone: 208-332-1000 Sen. Joe Stegner
STATEMENT OF PURPOSE/FISCAL NOTE H 580