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H0191..................................................by REVENUE AND TAXATION
SALES TAX EXEMPTIONS - Repeals and amends existing law to delete the sales and
use tax exemption to sales occurring within the boundaries of an Indian
reservation located in Idaho when the business or enterprise is wholly owned
and operated by an Idaho Indian tribe.
02/07 House intro - 1st rdg - to printing
02/10 Rpt prt - to Rev/Tax
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-seventh Legislature First Regular Session - 2003
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 191
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO THE SALES AND USE TAX BY IDAHO INDIAN TRIBES; REPEALING SECTION
3 63-3622Z, IDAHO CODE, WHICH PROVIDED A SALES AND USE TAX EXEMPTION TO
4 SALES OCCURRING WITHIN THE BOUNDARIES OF AN INDIAN RESERVATION LOCATED IN
5 IDAHO WHEN THE BUSINESS OR ENTERPRISE WAS WHOLLY OWNED AND OPERATED BY AN
6 IDAHO INDIAN TRIBE; AND AMENDING SECTION 37-2732A, IDAHO CODE, TO PROVIDE
7 A DEFINITION FOR "RESERVATION" AND TO MAKE A TECHNICAL CORRECTION.
8 Be It Enacted by the Legislature of the State of Idaho:
9 SECTION 1. That Section 63-3622Z, Idaho Code, be, and the same is hereby
10 repealed.
11 SECTION 2. That Section 37-2732A, Idaho Code, be, and the same is hereby
12 amended to read as follows:
13 37-2732A. SACRAMENTAL USE OF PEYOTE PERMITTED. (1) The criminal sanctions
14 provided in this chapter do not apply to that plant of the genus Lophophora
15 Williamii williamsii commonly known as peyote when such controlled substance
16 is transported, delivered or possessed to be used as the sacrament in reli-
17 gious rites of a bona fide native American religious ceremony conducted by a
18 bona fide religious organization; provided, that this exemption shall apply
19 only to persons of native American descent who are members or eligible for
20 membership in a federally recognized Indian tribe. Use of peyote as a sacra-
21 ment in religious rites shall be restricted to Indian reservations as defined
22 in subsection (2) of this section. section 63-3622Z, Idaho Code. A person
23 transporting, possessing or distributing peyote in this state for religious
24 rites shall have on their person a tribal enrollment card, a card identifying
25 the person as a native American church member and a permit issued by a bona
26 fide religious organization authorizing the transportation, possession and
27 distribution of peyote for religious rites.
28 (2) As used in this section the word "reservation" means lands which are:
29 (a) Indian lands federally declared to be reservations because they are
30 reserved for Indian tribes by treaty between Indian tribes and any terri-
31 torial governments, state government, or the United States government; or
32 established by acts of the United States congress; or established by for-
33 mal decision of the executive branch of the United States; or
34 (b) Held by an Idaho Indian tribe not holding lands which meet the defi-
35 nition of subsection (2)(a) of this section and are tribal lands held in
36 trust by the United States for the use and benefit of such tribe but not
37 placed in trust after March 25, 1988.
STATEMENT OF PURPOSE
RS 12655C1
This legislation repeals the special sales and use tax exemptions on
tangible and personal property sold by tribally-owned businesses,
section 63-3622Z, and moves the definition clause of that section to
37-2732A. It is critical that these sales and use tax exemptions are
repealed for the following reasons.
1. Combined with other tax exemptions and special
privileges, this law gives tribal businesses unfair
and potentially massive competitive price advantages
and favoritism over Idaho retail businesses that are
required to pay taxes.
2. The exemption causes unwarranted loss to the general
fund and unnecessarily exposes the general fund to
significant additional losses. For example, Tribal
businesses may under the existing law, operate any
retail business, including automobile, truck and heavy
equipment dealerships and not collect and remit state
sales and use taxes. Idaho citizens purchasing
vehicles from a Tribal dealership would be required to
register and license their vehicle with the state but
under existing law would be exempt from paying the use
tax.
3. Fairness
FISCAL IMPACT
The fiscal impact would be positive to the state general fund
because it would reduce the competitive advantage non-taxpaying
tribal retail businesses have over taxpaying businesses.
However, the amount of benefit to the general fund cannot be
determined because sales by Tribal businesses are not reported or
known. Further, at least in the case of large ticket items, this
repeal of the law allows the state to pursue collection of state
use tax directly from non-tribal customers who seek to avoid
paying the tax.
Contact
Name: Representative Leon Smith
Senator Hal Bunderson
Phone: 332-1330
STATEMENT OF PURPOSE/FISCAL NOTE H 19