2001 Legislation
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HOUSE BILL NO. 85 – Sales tax, food exempt

HOUSE BILL NO. 85

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H0085...............................................by ROBISON AND SHEPHERD
SALES TAX - Amends existing law to delete the grocery tax credit on income
tax returns for certain residents; to provide an exemption from sales and
use tax for certain food sold for human consumption; to provide an increase
in the percentage of appropriated funds distributed to the Revenue Sharing
Account from the Sales Tax Account; and to provide, beginning July 1, 2002,
a three percent sales and use tax on food and an increase in the percentage
of appropriated funds distributed to the Revenue Sharing Account from sales
tax moneys.
                                                                        
01/23    House intro - 1st rdg - to printing
01/24    Rpt prt - to Rev/Tax

Bill Text


                                                                        
                                                                        
  ||||              LEGISLATURE OF THE STATE OF IDAHO             ||||
 Fifty-sixth Legislature                  First Regular Session - 2001
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                                                                        
                                     HOUSE BILL NO. 85
                                                                        
                             BY ROBISON AND SHEPHERD COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO CERTAIN CREDITS AND REFUNDS AND SALES AND USE TAX;  AMENDING  SEC-
  3        TION  63-3024A,  IDAHO  CODE, TO ELIMINATE INCOME TAX CREDITS, REFUNDS AND
  4        PAYMENTS FROM THE REFUND FUND FOR CERTAIN RESIDENTS AND TO MAKE  TECHNICAL
  5        CORRECTIONS; AMENDING SECTION 63-3619, IDAHO CODE, TO PROVIDE AN EXEMPTION
  6        FROM  SALES  TAX FOR CERTAIN FOOD SOLD FOR HUMAN CONSUMPTION AND TO MAKE A
  7        TECHNICAL CORRECTION; AMENDING SECTION 63-3621, IDAHO CODE, TO PROVIDE  AN
  8        EXEMPTION FROM USE TAX FOR CERTAIN FOOD SOLD FOR HUMAN CONSUMPTION; AMEND-
  9        ING  SECTION  63-3638,  IDAHO CODE, TO PROVIDE FOR AN INCREASE IN THE PER-
 10        CENTAGE OF APPROPRIATED FUNDS DISTRIBUTED TO THE REVENUE  SHARING  ACCOUNT
 11        AND  TO MAKE A TECHNICAL CORRECTION; AMENDING SECTION 63-3619, IDAHO CODE,
 12        AS AMENDED IN SECTION 2 OF THIS ACT, TO IMPOSE A THREE PERCENT  SALES  TAX
 13        ON  CERTAIN  FOOD  SOLD  FOR  HUMAN CONSUMPTION; AMENDING SECTION 63-3621,
 14        IDAHO CODE, AS AMENDED IN SECTION 3 OF THIS ACT, TO IMPOSE A THREE PERCENT
 15        USE TAX ON CERTAIN FOOD  SOLD  FOR  HUMAN  CONSUMPTION;  AMENDING  SECTION
 16        63-3638,  IDAHO CODE, AS AMENDED IN SECTION 4 OF THIS ACT, TO DECREASE THE
 17        PERCENTAGE OF  APPROPRIATED  FUNDS  DISTRIBUTED  TO  THE  REVENUE  SHARING
 18        ACCOUNT; DECLARING AN EMERGENCY, PROVIDING FOR RETROACTIVE APPLICATION AND
 19        PROVIDING EFFECTIVE DATES.
                                                                        
 20    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
 21        SECTION  1.  That Section 63-3024A, Idaho Code, be, and the same is hereby
 22    amended to read as follows:
                                                                        
 23        63-3024A.  CREDITS AND REFUNDS. (a) Any resident individual  not  entitled
 24    to the credit allowed in subsection (b)(1), who is required to file by law and
 25    who  has  filed  an Idaho income tax return, shall be allowed a credit against
 26    taxes due under the Idaho income tax act equal to the amount of  fifteen  dol-
 27    lars  ($15.00)  for each personal exemption for which a deduction is permitted
 28    by section 151(b) and (c) of the Internal Revenue Code if  such  deduction  is
 29    claimed  on  the taxpayer's Idaho income tax return, and if the individual for
 30    whom the deduction is claimed is a resident of the state of  Idaho.  If  taxes
 31    due  are  less  than  the  total  credit allowed, the taxpayer shall be paid a
 32    refund equal to the balance of the unused credit. If the credit or  refund  is
 33    not  claimed for the year for which the individual income tax return is filed,
 34    the right thereafter to claim such credit or refund shall  be  forfeited.  The
 35    state  tax  commission shall prescribe the method by which the refund, if any,
 36    is to be made to the taxpayer.
 37        (b) (1)  A resident individual who has reached  his  sixty-fifth  birthday
 38        before the end of his taxable year, who is required to file by law and who
 39        has  filed  an  Idaho income tax return, shall be allowed a credit against
 40        taxes due under the Idaho income tax act equal to  the  amount  of  thirty
 41        dollars  ($30.00)  for  each  personal  exemption  representing himself, a
 42        spouse over the age of sixty-five (65) years, or a dependent over the  age
 43        of  sixty-five (65) years, but shall be allowed a credit against taxes due
                                                                        
                                           2
                                                                        
  1        under the Idaho income tax act equal to fifteen dollars ($15.00) for  each
  2        personal  exemption  representing  a  spouse or dependent under the age of
  3        sixty-five (65). If taxes due are less than the total credit allowed,  the
  4        taxpayer shall be paid a refund equal to the balance of the unused credit.
  5        If the credit or refund is not claimed for the year for which the individ-
  6        ual income tax return is filed,  the right thereafter to claim such credit
  7        or refund shall be forfeited. The state tax commission shall prescribe the
  8        method by which the refund, if any, is to be made to the taxpayer.
  9        (2)  A resident individual who has reached his sixty-fifth birthday and is
 10        not  required  by  law  to  file  an  Idaho  income tax return and who has
 11        received no credit or refund under any other subsection of  this  section,
 12        shall be entitled to a refund of thirty dollars ($30.00). Any refund shall
 13        be  paid  to  such individual only upon his making application therefor at
 14        such time and in such manner as may be prescribed by the state tax commis-
 15        sion.
 16        (cb)  A resident individual of the state of Idaho who is:
 17        (i)   blind, or
 18        (ii)  a disabled American veteran of any war  engaged  in  by  the  United
 19        States,  whose  disability is recognized as a service connected disability
 20        of a degree of ten per cent percent (10%) or more, or who is in receipt of
 21        a pension for nonservice connected disabilities, in accordance  with  laws
 22        and regulations administered by the United States veterans administration,
 23        substantiated  by a statement as to status signed by a responsible officer
 24        of the United States veterans administration, or
 25        (iii) over sixty-two (62) years of age, and has been allowed none, or less
 26        than all, of the credit provided by subsection (a) or  subsection  (b)  of
 27        this  section,  shall  be entitled to a payment from the refund fund in an
 28        amount equal to fifteen dollars ($15.00), or the  balance  of  his  unused
 29        credit,  whichever  is less, upon making application therefor at such time
 30        and in such manner as the state tax commission may prescribe.
 31        (dc)  Any part-year resident entitled to a credit under this section shall
 32    receive a proportionate credit, in the manner above provided,  reflecting  the
 33    part of the year in which he was domiciled in this state.
 34        (ed)  No credit or refund may be claimed for an exemption which represents
 35    a person who has himself filed an Idaho income tax return claiming a deduction
 36    for  his  own personal exemption, and in no event shall more than one (1) tax-
 37    payer be allowed a credit or refund for the same exemption, or under more than
 38    one (1) subsection of this section.
 39        (fe)  The refunds authorized by this section shall be paid from the  state
 40    refund  fund  in the same manner as the refunds authorized by section 63-3067,
 41    Idaho Code.
 42        (gf)  An application for any refund which is due  and  payable  under  the
 43    provisions  of this section must be filed with the state tax commission within
 44    three (3) years of:
 45        (i)  the due date, including extensions, of the return required under sec-
 46        tion 63-3030, Idaho Code, if the applicant is required to file  a  return,
 47        or
 48        (ii) the  15th  day  of  April of the year following the year to which the
 49        application relates if the applicant is not required to file a return.
                                                                        
 50        SECTION 2.  That Section 63-3619, Idaho Code, be, and the same  is  hereby
 51    amended to read as follows:
                                                                        
 52        63-3619.  IMPOSITION  AND  RATE  OF THE SALES TAX. An excise tax is hereby
 53    imposed upon each sale at retail at the rate of five per cent percent (5%)  of
                                                                        
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  1    the sales price of all retail sales subject to taxation under this chapter and
  2    such  amount with the exception of food sold for human consumption which shall
  3    be exempt from sales taxation. The types and kinds of food  products  eligible
  4    for  sales  tax  exemption  shall be the same types and kinds of food products
  5    that are eligible for purchases made with coupons  issued  under  the  federal
  6    food  stamp  act  of 1977 and the food security act of 1985 and do not include
  7    restaurant sales of food. The excise tax as set forth herein shall be computed
  8    monthly on all sales at retail within the preceding month.
  9        (a)  The tax shall apply to, be computed on, and collected for all credit,
 10    instalment installment, conditional or similar sales at the time of  the  sale
 11    or, in the case of rentals, at the time the rental is charged.
 12        (b)  The  tax  hereby  imposed shall be collected by the retailer from the
 13    consumer.
 14        (c)  The state tax commission shall provide schedules  for  collection  of
 15    the tax on sales which involve a fraction of a dollar. The retailer shall cal-
 16    culate the tax upon the entire amount of the purchases of the consumer made at
 17    a  particular  time  and not separately upon each item purchased. The retailer
 18    may retain any amount collected under the bracket system prescribed  which  is
 19    in  excess of the amount of tax for which he is liable to the state during the
 20    period as compensation for the work of collecting the tax.
 21        (d)  It is unlawful for any retailer to advertise or hold out or state  to
 22    the  public  or  to  any customer, directly or indirectly, that the tax or any
 23    part thereof will be assumed or absorbed by the retailer or that it  will  not
 24    be  added to the selling price of the property sold or that if added it or any
 25    part thereof will be refunded. Any person violating any provision of this sec-
 26    tion is guilty of a misdemeanor.
 27        (e)  The tax commission may by rule provide that the amount  collected  by
 28    the  retailer from the customer in reimbursement of the tax be displayed sepa-
 29    rately from the list price, the price advertised on the premises,  the  marked
 30    price, or other price on the sales slip or other proof of sale.
 31        (f)  The  taxes  imposed  by this chapter shall apply to the sales to con-
 32    tractors purchasing for use in the performance of contracts  with  the  United
 33    States.
                                                                        
 34        SECTION  3.  That  Section 63-3621, Idaho Code, be, and the same is hereby
 35    amended to read as follows:
                                                                        
 36        63-3621.  IMPOSITION AND RATE OF THE USE TAX -- EXEMPTIONS. An excise  tax
 37    is  hereby  imposed on the storage, use, or other consumption in this state of
 38    tangible personal property acquired on or after July  1,  1965,  for  storage,
 39    use,  or  other  consumption in this state at the rate of five percent (5%) of
 40    the value of the property, and with the exception of food sold for human  con-
 41    sumption  which shall be exempt from use taxation. The types and kinds of food
 42    products eligible for use tax exemption shall be the same types and  kinds  of
 43    food  products  that are eligible for purchases made with coupons issued under
 44    the federal food stamp act of 1977 and the food security act of  1985  and  do
 45    not  include restaurant sales of food. Aa recent sales price shall be presump-
 46    tive evidence of the value of the property unless  the  property  is  wireless
 47    telecommunications equipment, in which case a recent sales price shall be con-
 48    clusive evidence of the value of the property.
 49        (a)  Every  person  storing, using, or otherwise consuming, in this state,
 50    tangible personal property is liable for the tax. His liability is not  extin-
 51    guished until the tax has been paid to this state except that a receipt from a
 52    retailer  maintaining a place of business in this state or engaged in business
 53    in this state given to the purchaser is sufficient to  relieve  the  purchaser
                                                                        
                                           4
                                                                        
  1    from  further  liability  for  the tax to which the receipt refers. A retailer
  2    shall not be considered to have stored, used or consumed wireless telecommuni-
  3    cations equipment by virtue of giving, selling or otherwise transferring  such
  4    equipment  at  a  discount as an inducement to a consumer  to commence or con-
  5    tinue a contract for telecommunications service.
  6        (b)  Every retailer engaged in business in this state, and making sales of
  7    tangible personal property for the storage, use, or other consumption in  this
  8    state,  not  exempted under section 63-3622, Idaho Code, shall, at the time of
  9    making the sales or, if storage, use, or other  consumption  of  the  tangible
 10    personal  property is not then taxable hereunder, at the time the storage, use
 11    or other consumption becomes taxable, collect the tax from the  purchaser  and
 12    give  to the purchaser a receipt therefor in the manner and form prescribed by
 13    the state tax commission.
 14        (c)  The provisions of this section shall not apply when the retailer pays
 15    sales tax on the transaction and collects reimbursement  for  such  sales  tax
 16    from the customer.
 17        (d)  Every  retailer  engaged  in  business in this state or maintaining a
 18    place of business in this state shall register with the state  tax  commission
 19    and give the name and address of all agents operating in this state, the loca-
 20    tion  of all distributions or sales houses or offices or other places of busi-
 21    ness in this state, and such other information as the state tax commission may
 22    require.
 23        (e)  For the purpose of the proper administration of this act and to  pre-
 24    vent  evasion  of the use tax and the duty to collect the use tax, it shall be
 25    presumed that tangible personal property sold by any person  for  delivery  in
 26    this  state  is sold for storage, use, or other consumption in this state. The
 27    burden of proving the sale is tax exempt is upon the person who makes the sale
 28    unless he obtains from the purchaser a resale certificate to the  effect  that
 29    the  property  is  purchased  for  resale or rental. It shall be presumed that
 30    sales made to a person who has completed a resale certificate for the seller's
 31    records are not taxable and the seller need not collect  sales  or  use  taxes
 32    unless the tangible personal property purchased is taxable to the purchaser as
 33    a matter of law in the particular instance claimed on the resale certificate.
 34        A  seller  may  accept  a resale certificate from a purchaser prior to the
 35    time of sale, at the time of sale, or at any reasonable time  after  the  sale
 36    when necessary to establish the privilege of the exemption. The resale certif-
 37    icate  relieves  the person selling the property from the burden of proof only
 38    if taken from a person who is engaged in the business of  selling  or  renting
 39    tangible  personal  property  and who holds the permit provided for by section
 40    63-3620, Idaho Code, or who is a retailer not  engaged  in  business  in  this
 41    state,  and  who,  at  the  time of purchasing the tangible personal property,
 42    intends to sell or rent it in the regular course of business or is  unable  to
 43    ascertain at the time of purchase whether the property will be sold or will be
 44    used for some other purpose. Other than as provided elsewhere in this section,
 45    when  a resale certificate, properly executed, is presented to the seller, the
 46    seller has no duty or obligation to collect sales or use taxes  in  regard  to
 47    any  sales transaction so documented regardless of whether the purchaser prop-
 48    erly or improperly claimed an exemption. A seller so relieved of  the  obliga-
 49    tion  to  collect  tax  is also relieved of any liability to the purchaser for
 50    failure to collect tax or for making any report or disclosure  of  information
 51    required or permitted under this chapter.
 52        The  resale  certificate shall bear the name and address of the purchaser,
 53    shall be signed by the purchaser or his agent, shall indicate  the  number  of
 54    the  permit  issued to the purchaser, or that the purchaser is an out-of-state
 55    retailer, and shall indicate the general character of  the  tangible  personal
                                                                        
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  1    property sold by the purchaser in the regular course of business. The certifi-
  2    cate  shall be substantially in such form as the state tax commission may pre-
  3    scribe.
  4        (f)  If a purchaser who gives a resale certificate makes  any  storage  or
  5    use of the property other than retention, demonstration or display while hold-
  6    ing  it for sale in the regular course of business, the storage or use is tax-
  7    able as of the time the property is first so stored or used.
  8        (g)  Any person violating any provision of this section  is  guilty  of  a
  9    misdemeanor    and  punishable  by a fine not in excess of one hundred dollars
 10    ($100), and each violation shall constitute a separate offense.
 11        (h)  It shall be presumed  that  tangible  personal  property  shipped  or
 12    brought  to  this  state  by  the purchaser was purchased from a retailer, for
 13    storage, use or other consumption in this state.
 14        (i)  It shall be presumed that tangible personal property  delivered  out-
 15    side  this state to a purchaser known by the retailer to be a resident of this
 16    state was purchased from a retailer for storage, use, or other consumption  in
 17    this  state.  This presumption may be controverted by evidence satisfactory to
 18    the state tax commission that the property was not purchased for storage, use,
 19    or other consumption in this state.
 20        (j)  When the tangible personal property subject to use tax has been  sub-
 21    jected  to  a  general  retail sales or use tax by another state of the United
 22    States in an amount equal to or greater than the amount of the Idaho tax,  and
 23    evidence  can  be  given  of such payment, the property will not be subject to
 24    Idaho use tax. If the amount paid the other state was less, the property  will
 25    be subject to use tax to the extent that the Idaho tax exceeds the tax paid to
 26    the  other state. For the purposes of this subsection, a registration certifi-
 27    cate or title issued by another state or subdivision thereof for a vehicle  or
 28    trailer or a vessel as defined in section 67-7003, Idaho Code, shall be suffi-
 29    cient evidence of payment 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 which is or will  be  incorpo-
 47    rated  into  real  property  and  which has been donated to and has become the
 48    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 is incorporated
 54    in real property by the donee, a contractor or subcontractor of the donee,  or
 55    any other person.
                                                                        
                                           6
                                                                        
  1        SECTION  4.  That  Section 63-3638, Idaho Code, be, and the same is hereby
  2    amended to read as follows:
                                                                        
  3        63-3638.  SALES TAX -- DISTRIBUTION. All moneys collected under this chap-
  4    ter, except as may otherwise be required in section 63-3203, Idaho Code, shall
  5    be distributed by the tax commission as follows:
  6        (1)  An amount of money shall be distributed to the state  refund  account
  7    sufficient  to  pay  current  refund claims. All refunds authorized under this
  8    chapter by the commission shall be paid through the state refund account,  and
  9    those moneys are continuously appropriated.
 10        (2)  Five  million dollars ($5,000,000) per year is continuously appropri-
 11    ated and shall be distributed to the permanent building fund, provided by sec-
 12    tion 57-1108, Idaho Code.
 13        (3)  Four million eight hundred thousand dollars ($4,800,000) per year  is
 14    continuously appropriated and shall be distributed to the water pollution con-
 15    trol account established by section 39-3605, Idaho Code.
 16        (4)  An  amount  equal to the sum required to be certified by the chairman
 17    of the Idaho housing and finance association to the state tax commission  pur-
 18    suant  to  section 67-6211, Idaho Code, in each year is continuously appropri-
 19    ated and shall be paid to any capital reserve fund, established by  the  Idaho
 20    housing  and finance association pursuant to section 67-6211, Idaho Code. Such
 21    amounts, if any, as may be appropriated hereunder to the capital reserve  fund
 22    of  the Idaho housing and finance association shall be repaid for distribution
 23    under the provisions of this section, subject to  the  provisions  of  section
 24    67-6215,  Idaho Code, by the Idaho housing and finance association, as soon as
 25    possible, from any moneys available therefor and  in  excess  of  the  amounts
 26    which the association determines will keep it self-supporting.
 27        (5)  An  amount  equal  to  the  sum required by the provisions of section
 28    63-709, Idaho Code, is continuously appropriated and shall be paid as provided
 29    by section 63-709, Idaho Code.
 30        (6)  An amount required by the provisions of chapter 53, title  33,  Idaho
 31    Code. of this section
 32        (7)  One  dollar  ($1.00)  on each application for certificate of title or
 33    initial application for registration of  a  motor  vehicle,  snowmobile,  all-
 34    terrain vehicle or other vehicle processed by the county assessor or the Idaho
 35    transportation  department  excepting those applications in which any sales or
 36    use taxes due have been previously collected by a retailer, shall be a fee for
 37    the services of the assessor of the county or the Idaho transportation depart-
 38    ment in collecting such taxes, and shall be paid into the current expense fund
 39    of the county or state highway account established in  section  40-702,  Idaho
 40    Code.
 41        (8)  Thirteen  Sixteen  and three-quarters two-tenths percent (13.7516.2%)
 42    is continuously appropriated and shall be distributed to the  revenue  sharing
 43    account  which is created in the state treasury, and the moneys in the revenue
 44    sharing account will be paid by the tax commission as follows:
 45        (a)  Twenty-eight and two-tenths percent (28.2%) shall be paid to the var-
 46        ious cities as follows:
 47             (i)   Fifty percent (50%) of such amount shall be paid to the various
 48             cities, and each city shall be entitled to an amount in  the  propor-
 49             tion  that the population of that city bears to the population of all
 50             cities within the state; and
 51             (ii)  Fifty percent (50%) of such amount shall be paid to the various
 52             cities, and each city shall be entitled to an amount in  the  propor-
 53             tion  that  the preceding year's market value for assessment purposes
 54             for that city bears to the preceding year's market value for  assess-
                                                                        
                                           7
                                                                        
  1             ment purposes for all cities within the state.
  2        (b)  Twenty-eight and two-tenths percent (28.2%) shall be paid to the var-
  3        ious counties as follows:
  4             (i)   One  million three hundred twenty thousand dollars ($1,320,000)
  5             shall be distributed one forty-fourth (1/44) to each of  the  various
  6             counties; and
  7             (ii)  The  balance  of such amount shall be paid to the various coun-
  8             ties, and each county shall be entitled to an amount in  the  propor-
  9             tion  that  the  population of that county bears to the population of
 10             the state;
 11        (c)  Thirty-five and nine-tenths percent (35.9%) of the  amount  appropri-
 12        ated in this subsection (8) shall be paid to the several counties for dis-
 13        tribution to the cities and counties as follows:
 14             (i)   Each  city and county which received a payment under the provi-
 15             sions of section 63-3638(e), Idaho Code, during the fourth quarter of
 16             calendar year 1999, shall be entitled to a like  amount  during  suc-
 17             ceeding calendar quarters.
 18             (ii)  If  the  dollar amount of money available under this subsection
 19             (8)(c) in any quarter does not equal the amount paid  in  the  fourth
 20             quarter of calendar year 1999, each city's and county's payment shall
 21             be reduced proportionately.
 22             (iii) If  the  dollar amount of money available under this subsection
 23             (8)(c) in any quarter exceeds the amount paid in the  fourth  quarter
 24             of  calendar  year  1999, each city and county shall be entitled to a
 25             proportionately increased payment, but such increase shall not exceed
 26             one hundred five percent (105%) of the  total  payment  made  in  the
 27             fourth quarter of calendar year 1999.
 28             (iv)  If  the  dollar amount of money available under this subsection
 29             (8)(c) in any quarter exceeds one hundred five percent (105%) of  the
 30             total  payment  made in the fourth quarter of calendar year 1999, any
 31             amount over and above such one hundred five percent (105%)  shall  be
 32             paid fifty percent (50%) to the various cities in the proportion that
 33             the  population  of  the  city  bears to the population of all cities
 34             within the state, and fifty percent (50%) to the various counties  in
 35             the  proportion  that the population of a county bears to the popula-
 36             tion of the state; and
 37        (d)  Seven and seven-tenths percent (7.7%) of the amount  appropriated  in
 38        this subsection (8) shall be paid to the several counties for distribution
 39        to special purpose taxing districts as follows:
 40             (i)   Each  such  district  which received a payment under the provi-
 41             sions of section 63-3638(e), Idaho Code, during the fourth quarter of
 42             calendar year 1999, shall be entitled to a like  amount  during  suc-
 43             ceeding calendar quarters.
 44             (ii)  If  the  dollar amount of money available under this subsection
 45             (8)(d) in any quarter exceeds the amount distributed under  paragraph
 46             (i)  of  this subsection (8)(d), each special purpose taxing district
 47             shall be entitled to a share of the excess based  on  the  proportion
 48             each  such district's current property tax budget bears to the sum of
 49             the current property tax budgets of all such districts in the  state.
 50             The  state  tax  commission shall calculate district current property
 51             tax budgets to include any unrecovered foregone amounts as determined
 52             under section 63-802(1)(e), Idaho Code. When a special purpose taxing
 53             district is situated in more than one (1) county, the tax  commission
 54             shall  determine the portion attributable to the special purpose tax-
 55             ing district from each county in which it is situated.
                                                                        
                                           8
                                                                        
  1             (iii) If special  purpose  taxing  districts  are  consolidated,  the
  2             resulting  district  is entitled to a base amount equal to the sum of
  3             the base amounts which were received in the last calendar quarter  by
  4             each district prior to the consolidation.
  5             (iv)  If   a   special   purpose  taxing  district  is  dissolved  or
  6             disincorporated, the state tax commission shall continuously distrib-
  7             ute to the board of county commissioners  an amount equal to the last
  8             quarter's distribution prior to dissolution or disincorporation.  The
  9             board  of  county commissioners shall determine any redistribution of
 10             moneys so received.
 11             (v)   Taxing districts formed after January 1, 2001, are not entitled
 12             to a payment under the provisions of this subsection (8)(d).
 13             (vi)  For purposes of this subsection (8)(d), a special purpose  tax-
 14             ing  district is any taxing district which is not a city, a county or
 15             a school district.
 16        (9)  Any moneys remaining over and  above  those  necessary  to  meet  and
 17    reserve for payments under other subsections of this section shall be distrib-
 18    uted to the general account fund.
                                                                        
 19        SECTION  5.  That  Section 63-3619, Idaho Code, as amended in Section 2 of
 20    this Act, be, and the same is hereby amended to read as follows:
                                                                        
 21        63-3619.  IMPOSITION AND RATE OF THE SALES TAX. An excise  tax  is  hereby
 22    imposed upon each sale at retail at the rate of five percent (5%) of the sales
 23    price  of  all  retail  sales  subject to taxation under this chapter with the
 24    exception of food sold for human consumption which shall be exempt from  sales
 25    taxation taxed at the rate of three percent (3%) of the sales price. The types
 26    and  kinds  of  food products eligible for sales tax exemption taxation at the
 27    rate of three percent (3%) shall be the same types and kinds of food  products
 28    that  are  eligible  for  purchases made with coupons issued under the federal
 29    food stamp act of 1977 and the food security act of 1985 and  do  not  include
 30    restaurant sales of food. The excise tax as set forth herein shall be computed
 31    monthly on all sales at retail within the preceding month.
 32        (a)  The tax shall apply to, be computed on, and collected for all credit,
 33    installment,  conditional  or similar sales at the time of the sale or, in the
 34    case of rentals, at the time the rental is charged.
 35        (b)  The tax hereby imposed shall be collected by the  retailer  from  the
 36    consumer.
 37        (c)  The  state  tax  commission shall provide schedules for collection of
 38    the tax on sales which involve a fraction of a dollar. The retailer shall cal-
 39    culate the tax upon the entire amount of the purchases of the consumer made at
 40    a particular time and not separately upon each item  purchased.  The  retailer
 41    may  retain  any amount collected under the bracket system prescribed which is
 42    in excess of the amount of tax for which he is liable to the state during  the
 43    period as compensation for the work of collecting the tax.
 44        (d)  It  is unlawful for any retailer to advertise or hold out or state to
 45    the public or to any customer, directly or indirectly, that  the  tax  or  any
 46    part  thereof  will be assumed or absorbed by the retailer or that it will not
 47    be added to the selling price of the property sold or that if added it or  any
 48    part thereof will be refunded. Any person violating any provision of this sec-
 49    tion is guilty of a misdemeanor.
 50        (e)  The  tax  commission may by rule provide that the amount collected by
 51    the retailer from the customer in reimbursement of the tax be displayed  sepa-
 52    rately  from  the list price, the price advertised on the premises, the marked
 53    price, or other price on the sales slip or other proof of sale.
                                                                        
                                           9
                                                                        
  1        (f)  The taxes imposed by this chapter shall apply to the  sales  to  con-
  2    tractors  purchasing  for  use in the performance of contracts with the United
  3    States.
                                                                        
  4        SECTION 6.  That Section 63-3621, Idaho Code, as amended in Section  3  of
  5    this Act, be, and the same is hereby amended to read as follows:
                                                                        
  6        63-3621.  IMPOSITION  AND RATE OF THE USE TAX -- EXEMPTIONS. An excise tax
  7    is hereby imposed on the storage, use, or other consumption in this  state  of
  8    tangible  personal  property  acquired  on or after July 1, 1965, for storage,
  9    use, or other consumption in this state at the rate of five  percent  (5%)  of
 10    the  value of the property, with the exception of food sold for human consump-
 11    tion which shall be exempt from use taxation taxed at the rate of  three  per-
 12    cent  (3%)  of the value of the property. The types and kinds of food products
 13    eligible for use tax exemption taxation at the  rate  of  three  percent  (3%)
 14    shall  be the same types and kinds of food products that are eligible for pur-
 15    chases made with coupons issued under the federal food stamp act of  1977  and
 16    the  food  security act of 1985 and do not include restaurant sales of food. A
 17    recent sales price shall be presumptive evidence of the value of the  property
 18    unless  the property is wireless telecommunications equipment, in which case a
 19    recent sales price shall be conclusive evidence of the value of the property.
 20        (a)  Every person storing, using, or otherwise consuming, in  this  state,
 21    tangible  personal property is liable for the tax. His liability is not extin-
 22    guished until the tax has been paid to this state except that a receipt from a
 23    retailer maintaining a place of business in this state or engaged in  business
 24    in  this  state  given to the purchaser is sufficient to relieve the purchaser
 25    from further liability for the tax to which the  receipt  refers.  A  retailer
 26    shall not be considered to have stored, used or consumed wireless telecommuni-
 27    cations  equipment by virtue of giving, selling or otherwise transferring such
 28    equipment at a discount as an inducement to a consumer to commence or continue
 29    a contract for telecommunications service.
 30        (b)  Every retailer engaged in business in this state, and making sales of
 31    tangible personal property for the storage, use, or other consumption in  this
 32    state,  not  exempted under section 63-3622, Idaho Code, shall, at the time of
 33    making the sales or, if storage, use, or other  consumption  of  the  tangible
 34    personal  property is not then taxable hereunder, at the time the storage, use
 35    or other consumption becomes taxable, collect the tax from the  purchaser  and
 36    give  to the purchaser a receipt therefor in the manner and form prescribed by
 37    the state tax commission.
 38        (c)  The provisions of this section shall not apply when the retailer pays
 39    sales tax on the transaction and collects reimbursement  for  such  sales  tax
 40    from the customer.
 41        (d)  Every  retailer  engaged  in  business in this state or maintaining a
 42    place of business in this state shall register with the state  tax  commission
 43    and give the name and address of all agents operating in this state, the loca-
 44    tion  of all distributions or sales houses or offices or other places of busi-
 45    ness in this state, and such other information as the state tax commission may
 46    require.
 47        (e)  For the purpose of the proper administration of this act and to  pre-
 48    vent  evasion  of the use tax and the duty to collect the use tax, it shall be
 49    presumed that tangible personal property sold by any person  for  delivery  in
 50    this  state  is sold for storage, use, or other consumption in this state. The
 51    burden of proving the sale is tax exempt is upon the person who makes the sale
 52    unless he obtains from the purchaser a resale certificate to the  effect  that
 53    the  property  is  purchased  for  resale or rental. It shall be presumed that
                                                                        
                                           10
                                                                        
  1    sales made to a person who has completed a resale certificate for the seller's
  2    records are not taxable and the seller need not collect  sales  or  use  taxes
  3    unless the tangible personal property purchased is taxable to the purchaser as
  4    a matter of law in the particular instance claimed on the resale certificate.
  5        A  seller  may  accept  a resale certificate from a purchaser prior to the
  6    time of sale, at the time of sale, or at any reasonable time  after  the  sale
  7    when  necessary  to establish  the privilege of the exemption. The resale cer-
  8    tificate relieves the person selling the property from  the  burden  of  proof
  9    only  if  taken  from  a  person  who is engaged in the business of selling or
 10    renting tangible personal property and who holds the permit  provided  for  by
 11    section  63-3620,  Idaho Code, or who is a retailer not engaged in business in
 12    this state, and who, at the time of purchasing the tangible personal property,
 13    intends to sell or rent it in the regular course of business or is  unable  to
 14    ascertain at the time of purchase whether the property will be sold or will be
 15    used for some other purpose. Other than as provided elsewhere in this section,
 16    when  a resale certificate, properly executed, is presented to the seller, the
 17    seller has no duty or obligation to collect sales or use taxes  in  regard  to
 18    any  sales transaction so documented regardless of whether the purchaser prop-
 19    erly or improperly claimed an exemption. A seller so relieved of  the  obliga-
 20    tion  to  collect  tax  is also relieved of any liability to the purchaser for
 21    failure to collect tax or for making any report or disclosure  of  information
 22    required or permitted under this chapter.
 23        The  resale  certificate shall bear the name and address of the purchaser,
 24    shall be signed by the purchaser or his agent, shall indicate  the  number  of
 25    the  permit  issued to the purchaser, or that the purchaser is an out-of-state
 26    retailer, and shall indicate the general character of  the  tangible  personal
 27    property sold by the purchaser in the regular course of business. The certifi-
 28    cate  shall be substantially in such form as the state tax commission may pre-
 29    scribe.
 30        (f)  If a purchaser who gives a resale certificate makes  any  storage  or
 31    use of the property other than retention, demonstration or display while hold-
 32    ing  it for sale in the regular course of business, the storage or use is tax-
 33    able as of the time the property is first so stored or used.
 34        (g)  Any person violating any provision of this section  is  guilty  of  a
 35    misdemeanor  and  punishable  by  a  fine not in excess of one hundred dollars
 36    ($100), and each violation shall constitute a separate offense.
 37        (h)  It shall be presumed  that  tangible  personal  property  shipped  or
 38    brought  to  this  state  by  the purchaser was purchased from a retailer, for
 39    storage, use or other consumption in this state.
 40        (i)  It shall be presumed that tangible personal property  delivered  out-
 41    side  this state to a purchaser known by the retailer to be a resident of this
 42    state was purchased from a retailer for storage, use, or other consumption  in
 43    this  state.  This presumption may be controverted by evidence satisfactory to
 44    the state tax commission that the property was not purchased for storage, use,
 45    or other consumption in this state.
 46        (j)  When the tangible personal property subject to use tax has been  sub-
 47    jected  to  a  general  retail sales or use tax by another state of the United
 48    States in an amount equal to or greater than the amount of the Idaho tax,  and
 49    evidence  can  be  given  of such payment, the property will not be subject to
 50    Idaho use tax. If the amount paid the other state was less, the property  will
 51    be subject to use tax to the extent that the Idaho tax exceeds the tax paid to
 52    the  other state. For the purposes of this subsection, a registration certifi-
 53    cate or title issued by another state or subdivision thereof for a vehicle  or
 54    trailer or a vessel as defined in section 67-7003, Idaho Code, shall be suffi-
 55    cient evidence of payment of a general retail sales or use tax.
                                                                        
                                           11
                                                                        
  1        (k)  The  use  tax herein imposed shall not apply to the use by a nonresi-
  2    dent of this state of a motor vehicle which is registered  or  licensed  under
  3    the laws of the state of his residence and is not used in this state more than
  4    a  cumulative  period  of  time  totaling  ninety (90) days in any consecutive
  5    twelve (12) months, and which is not required to  be  registered  or  licensed
  6    under the laws of this state.
  7        (l)  The  use  tax  herein imposed shall not apply to the use of household
  8    goods  and personal effects by a resident of this state, if such articles were
  9    acquired by such person in another state while a resident of  that  state  and
 10    primarily  for  use outside this state and if such use was actual and substan-
 11    tial, but if an article was acquired less than three (3) months prior  to  the
 12    time  he entered this state, it will be presumed that the article was acquired
 13    for use in this state and that its use outside this state was not  actual  and
 14    substantial.  For  purposes of this subsection, "resident" shall be as defined
 15    in section 63-3013 or 63-3013A, Idaho Code.
 16        (m)  The use tax herein imposed shall not apply to  the  storage,  use  or
 17    other  consumption  of tangible personal property which is or will be incorpo-
 18    rated into real property and which has been donated  to  and  has  become  the
 19    property of:
 20        (1)  A  nonprofit organization as defined in section 63-3622O, Idaho Code;
 21        or
 22        (2)  The state of Idaho; or
 23        (3)  Any political subdivision of the state.
 24    This exemption applies whether the tangible personal property is  incorporated
 25    in  real property by the donee, a contractor or subcontractor of the donee, or
 26    any other person.
                                                                        
 27        SECTION 7.  That Section 63-3638, Idaho Code, as amended by Section  4  of
 28    this Act, be, and the same is hereby amended to read as follows:
                                                                        
 29        63-3638.  SALES TAX -- DISTRIBUTION. All moneys collected under this chap-
 30    ter, except as may otherwise be required in section 63-3203, Idaho Code, shall
 31    be distributed by the tax commission as follows:
 32        (1)  An  amount  of money shall be distributed to the state refund account
 33    sufficient to pay current refund claims. All  refunds  authorized  under  this
 34    chapter  by the commission shall be paid through the state refund account, and
 35    those moneys are continuously appropriated.
 36        (2)  Five million dollars ($5,000,000) per year is continuously  appropri-
 37    ated and shall be distributed to the permanent building fund, provided by sec-
 38    tion 57-1108, Idaho Code.
 39        (3)  Four  million eight hundred thousand dollars ($4,800,000) per year is
 40    continuously appropriated and shall be distributed to the water pollution con-
 41    trol account established by section 39-3605, Idaho Code.
 42        (4)  An amount equal to the sum required to be certified by  the  chairman
 43    of  the Idaho housing and finance association to the state tax commission pur-
 44    suant to section 67-6211, Idaho Code, in each year is  continuously  appropri-
 45    ated  and  shall be paid to any capital reserve fund, established by the Idaho
 46    housing and finance association pursuant to section 67-6211, Idaho Code.  Such
 47    amounts,  if any, as may be appropriated hereunder to the capital reserve fund
 48    of the Idaho housing and finance association shall be repaid for  distribution
 49    under  the  provisions  of  this section, subject to the provisions of section
 50    67-6215, Idaho Code, by the Idaho housing and finance association, as soon  as
 51    possible,  from  any  moneys  available  therefor and in excess of the amounts
 52    which the association determines will keep it self-supporting.
 53        (5)  An amount equal to the sum required  by  the  provisions  of  section
                                                                        
                                           12
                                                                        
  1    63-709, Idaho Code, is continuously appropriated and shall be paid as provided
  2    by section 63-709, Idaho Code.
  3        (6)  An  amount  required by the provisions of chapter 53, title 33, Idaho
  4    Code.
  5        (7)  One dollar ($1.00) on each application for certificate  of  title  or
  6    initial  application  for  registration  of  a motor vehicle, snowmobile, all-
  7    terrain vehicle or other vehicle processed by the county assessor or the Idaho
  8    transportation department excepting those applications in which any  sales  or
  9    use taxes due have been previously collected by a retailer, shall be a fee for
 10    the services of the assessor of the county or the Idaho transportation depart-
 11    ment in collecting such taxes, and shall be paid into the current expense fund
 12    of  the  county  or state highway account established in section 40-702, Idaho
 13    Code.
 14        (8)  Sixteen  Fourteen  and  two-tenths  sixty-five   hundredths   percent
 15    (16.214.65%) is continuously appropriated and shall be distributed to the rev-
 16    enue sharing account which is created in the state treasury, and the moneys in
 17    the revenue sharing account will be paid by the tax commission as follows:
 18        (a)  Twenty-eight and two-tenths percent (28.2%) shall be paid to the var-
 19        ious cities as follows:
 20             (i)   Fifty percent (50%) of such amount shall be paid to the various
 21             cities,  and  each city shall be entitled to an amount in the propor-
 22             tion that the population of that city bears to the population of  all
 23             cities within the state; and
 24             (ii)  Fifty percent (50%) of such amount shall be paid to the various
 25             cities,  and  each city shall be entitled to an amount in the propor-
 26             tion that the preceding year's market value for  assessment  purposes
 27             for  that city bears to the preceding year's market value for assess-
 28             ment purposes for all cities within the state.
 29        (b)  Twenty-eight and two-tenths percent (28.2%) shall be paid to the var-
 30        ious counties as follows:
 31             (i)   One million three hundred twenty thousand dollars  ($1,320,000)
 32             shall  be  distributed one forty-fourth (1/44) to each of the various
 33             counties; and
 34             (ii)  The balance of such amount shall be paid to the  various  coun-
 35             ties,  and  each county shall be entitled to an amount in the propor-
 36             tion that the population of that county bears to  the  population  of
 37             the state;
 38        (c)  Thirty-five  and  nine-tenths percent (35.9%) of the amount appropri-
 39        ated in this subsection (8) shall be paid to the several counties for dis-
 40        tribution to the cities and counties as follows:
 41             (i)   Each city and county which received a payment under the  provi-
 42             sions of section 63-3638(e), Idaho Code, during the fourth quarter of
 43             calendar  year  1999,  shall be entitled to a like amount during suc-
 44             ceeding calendar quarters.
 45             (ii)  If the dollar amount of money available under  this  subsection
 46             (8)(c)  in  any  quarter does not equal the amount paid in the fourth
 47             quarter of calendar year 1999, each city's and county's payment shall
 48             be reduced proportionately.
 49             (iii) If the dollar amount of money available under  this  subsection
 50             (8)(c)  in  any quarter exceeds the amount paid in the fourth quarter
 51             of calendar year 1999, each city and county shall be  entitled  to  a
 52             proportionately increased payment, but such increase shall not exceed
 53             one  hundred  five  percent  (105%)  of the total payment made in the
 54             fourth quarter of calendar year 1999.
 55             (iv)  If the dollar amount of money available under  this  subsection
                                                                        
                                           13
                                                                        
  1             (8)(c)  in any quarter exceeds one hundred five percent (105%) of the
  2             total payment made in the fourth quarter of calendar year  1999,  any
  3             amount  over  and above such one hundred five percent (105%) shall be
  4             paid fifty percent (50%) to the various cities in the proportion that
  5             the population of the city bears to  the  population  of  all  cities
  6             within  the state, and fifty percent (50%) to the various counties in
  7             the proportion that the population of a county bears to  the  popula-
  8             tion of the state; and
  9        (d)  Seven  and  seven-tenths percent (7.7%) of the amount appropriated in
 10        this subsection (8) shall be paid to the several counties for distribution
 11        to special purpose taxing districts as follows:
 12             (i)   Each such district which received a payment  under  the  provi-
 13             sions of section 63-3638(e), Idaho Code, during the fourth quarter of
 14             calendar  year  1999,  shall be entitled to a like amount during suc-
 15             ceeding calendar quarters.
 16             (ii)  If the dollar amount of money available under  this  subsection
 17             (8)(d)  in any quarter exceeds the amount distributed under paragraph
 18             (i) of this subsection (8)(d), each special purpose  taxing  district
 19             shall  be  entitled  to a share of the excess based on the proportion
 20             each such district's current property tax budget bears to the sum  of
 21             the  current property tax budgets of all such districts in the state.
 22             The state tax commission shall calculate  district  current  property
 23             tax budgets to include any unrecovered foregone amounts as determined
 24             under section 63-802(1)(e), Idaho Code. When a special purpose taxing
 25             district  is situated in more than one (1) county, the tax commission
 26             shall determine the portion attributable to the special purpose  tax-
 27             ing district from each county in which it is situated.
 28             (iii) If  special  purpose  taxing  districts  are  consolidated, the
 29             resulting district is entitled to a base amount equal to the  sum  of
 30             the  base amounts which were received in the last calendar quarter by
 31             each district prior to the consolidation.
 32             (iv)  If  a  special  purpose  taxing  district   is   dissolved   or
 33             disincorporated, the state tax commission shall continuously distrib-
 34             ute  to the board of county commissioners an amount equal to the last
 35             quarter's distribution prior to dissolution or disincorporation.  The
 36             board  of  county commissioners shall determine any redistribution of
 37             moneys so received.
 38             (v)   Taxing districts formed after January 1, 2001, are not entitled
 39             to a payment under the provisions of this subsection (8)(d).
 40             (vi)  For purposes of this subsection (8)(d), a special purpose  tax-
 41             ing  district is any taxing district which is not a city, a county or
 42             a school district.
 43        (9)  Any moneys remaining over and  above  those  necessary  to  meet  and
 44    reserve for payments under other subsections of this section shall be distrib-
 45    uted to the general fund.
                                                                        
 46        SECTION  8.  An  emergency  existing  therefor,  which emergency is hereby
 47    declared to exist, Section 1 of this act shall be in full force and effect  on
 48    and after its passage and approval, and retroactively to January 1, 2001; Sec-
 49    tions  2,  3  and 4 of this act shall be in full force and effect on and after
 50    July 1, 2001; Sections 5, 6 and 7 of this act  shall  be  in  full  force  and
 51    effect on and after July 1, 2002.

Statement of Purpose / Fiscal Impact


                       STATEMENT OF PURPOSE
                            RS 10758
This legislation would eliminate the sales tax on groceries for
the fiscal year July 1, 2001 to June 30, 2002 and provide $107
million in tax relief, reaching nearly all Idahoans.  It would
use both surplus revenue ($89 million) and ongoing revenue ($18
million).  The share of sales tax revenue going to countries and
other local government would be increased to avoid any reduction
in revenue sharing for local government.  The grocery tax credit
would be repealed effective January 1, 2001, except the credit
for senior citizens would continue in fiscal 2001 and thereafter. 
This legislation would be a substitute for a proposed income tax
rebate and a small continuing income tax reduction.  It does not
conflict with other proposed tax cut measures.
1.  Provide tax relief to the nearly 30 per cent of households
with no tax liability, the households that receive nothing with
an income tax rebate or income tax cut.
2.  Provide far more one-time tax relief in fiscal year 2002 than
a proposed $91 million income tax rebate.  That proposal would
give an average of only $32 to 130,000 households with from zero
to $10,000 taxable income.  This is more than one third of all
households with state income tax liability.
3.  Provide more continuing tax relief to middle income and most
higher income taxpayers than a permanent income reduction.
4.  Leave every tax relief dollar in the pockets of Idahoans
rather than have them see a large part of their relief sent to
Washington in added federal taxes.
5.  Provide benefits to grocery retailers near Idaho's borders.

6.  Give far more tax relief to people in rural Idaho where
average incomes are lower than in urban areas.

                          FISCAL IMPACT
Impact to the general fund would be $107 million in fiscal 2002. 
In fiscal 2003 it would be $38 million.


















Contact
Name: Rep. Robison 
Phone: 332-1203


STATEMENT OF PURPOSE/FISCAL NOTE                          H8