2003 Legislation
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HOUSE BILL NO. 88 – Sales tax, credits/refunds, claims


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Daily Data Tracking History

H0088..................................................by REVENUE AND TAXATION
SALES TAX - Amends existing law to provide that the credit or refund for sales
taxes remitted on bad debts must be claimed by the seller who paid the tax to
the state; and to provide that the three-year statute of limitations on claims
for credit or refunds resulting from bad debts will begin on the date the debt
becomes worthless for income tax purposes.
01/20    House intro - 1st rdg - to printing
01/21    Rpt prt - to Rev/Tax
01/28    Rpt out - rec d/p - to 2nd rdg
01/29    2nd rdg - to 3rd rdg
02/03    3rd rdg - PASSED - 67-0-3
      AYES -- Andersen, Barraclough, Barrett, Bauer, Bedke, Bell, Bieter,
      Block, Boe, Bolz, Bradford, Campbell, Cannon, Clark, Collins, Crow,
      Cuddy, Deal, Denney, Douglas, Eberle, Edmunson, Ellsworth, Eskridge,
      Field(18), Field(23), Gagner, Garrett, Harwood, Henbest, Jaquet, Jones,
      Kellogg, Kulczyk, Lake, Langford, Langhorst, Martinez, McGeachin,
      McKague, Meyer, Miller, Mitchell, Moyle, Nacarrato, Nielsen, Raybould,
      Ridinger, Ring, Ringo, Roberts, Robison, Rydalch, Sayler, Shepherd,
      Shirley, Skippen, Smith(30), Smith(24), Smylie, Snodgrass, Stevenson,
      Tilman, Trail, Wills, Wood, Mr. Speaker
      NAYS -- None
      Absent and excused -- Black, Sali, Schaefer(Schaefer)
    Floor Sponsor - Barrett
    Title apvd - to Senate
02/04    Senate intro - 1st rdg - to Loc Gov

Bill Text

  ||||              LEGISLATURE OF THE STATE OF IDAHO             ||||
 Fifty-seventh Legislature                 First Regular Session - 2003
                              IN THE HOUSE OF REPRESENTATIVES
                                     HOUSE BILL NO. 88
                             BY REVENUE AND TAXATION COMMITTEE
  1                                        AN ACT
  8    Be It Enacted by the Legislature of the State of Idaho:
  9        SECTION  1.  That  Section 63-3613, Idaho Code, be, and the same is hereby
 10    amended to read as follows:
 11        63-3613.  SALES PRICE. (a) The term "sales price" means the  total  amount
 12    for which tangible personal property, including services agreed to be rendered
 13    as  a  part  of  the sale, is sold, rented or leased, valued in money, whether
 14    paid in money or otherwise, without any deduction on account  of  any  of  the
 15    following:
 16        1.  The  cost of the property sold. However, in accordance with such rules
 17        as the state tax commission may prescribe, a deduction may be taken if the
 18        retailer has purchased property for some  purpose  other  than  resale  or
 19        rental,  has reimbursed his vendor for tax which the vendor is required to
 20        pay to the state or has paid the use tax with respect to the property, and
 21        has resold or rented the property prior to making any use of the  property
 22        other  than  retention, demonstration or display while holding it for sale
 23        in the regular course of business. If such a deduction  is  taken  by  the
 24        retailer,  no  refund or credit will be allowed to his vendor with respect
 25        to the sale of the property.
 26        2.  The cost of materials used, labor or  service  cost,  losses,  or  any
 27        other expense.
 28        3.  The cost of transportation of the property prior to its sale.
 29        4.  The  face  value  of manufacturer's discount coupons. A manufacturer's
 30        discount coupon is a price reduction coupon presented by a consumer  to  a
 31        retailer  upon  purchase  of  a  manufacturer's product, the face value of
 32        which may only be reimbursed by the manufacturer to the retailer.
 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
  1        amount charged for the property that is returned.
  2        4.  The  amount  charged  for  labor or services rendered in installing or
  3        applying the property sold, provided that said amount is stated separately
  4        and such separate statement is not used as a means of avoiding  imposition
  5        of  this  tax  upon the actual sales  price of the tangible personal prop-
  6        erty; except that charges by a manufactured homes dealer for set up  of  a
  7        manufactured  home shall be included in the "sales price" of such manufac-
  8        tured home.
  9        5.  The amount of any tax (not including, however, any  manufacturers'  or
 10        importers'  excise  tax) imposed by the United States upon or with respect
 11        to retail sales whether imposed upon the retailer or the consumer.
 12        6.  The amount charged for  finance  charges,  carrying  charges,  service
 13        charges,  time-price  differential, or interest on deferred payment sales,
 14        provided such charges are not used as a means of  avoiding  imposition  of
 15        this tax upon the actual sales price of the tangible personal property.
 16        7.  Delivery  and handling charges for transportation of tangible personal
 17        property to the consumer, provided that the transportation is stated sepa-
 18        rately and the separate statement is not used as a means of avoiding impo-
 19        sition of the tax upon the actual sales price  of  the  tangible  personal
 20        property; except that charges by a manufactured homes dealer for transpor-
 21        tation  of  a  manufactured home shall be included in the "sales price" of
 22        such manufactured home.
 23        8.  Manufacturers' rebates when used at the time of a  retail  sale  as  a
 24        down  payment on or reduction to the retail sales price of a motor vehicle
 25        to which the rebate applies. A manufacturer's rebate  is  a  cash  payment
 26        made  by  a  manufacturer to a consumer who has purchased or is purchasing
 27        the manufacturer's product from the retailer.
 28        9.  The amount of any fee imposed upon an outfitter as defined in  section
 29        36-2102,  Idaho Code, by a governmental entity pursuant to statute for the
 30        purpose of conducting outfitting activities on land or  water  subject  to
 31        the  jurisdiction  of  the  governmental  entity, provided that the fee is
 32        stated separately and is presented as a use fee paid by the outfitted pub-
 33        lic to be passed through to the governmental entity.
 34        10. The amount of any discount or other price reduction on  telecommunica-
 35        tions  equipment when offered as an inducement to the consumer to commence
 36        or continue telecommunications service, or the amount of any commission or
 37        other indirect compensation received by a retailer or seller as  a  result
 38        of the consumer commencing or continuing telecommunications service.
 39        (c)  The  sales price of a "new manufactured home" or a "modular building"
 40    as defined in this act shall be limited to and include only fifty-five percent
 41    (55%) of the sales price as otherwise defined herein.
 42        (d)  Taxes previously paid on amounts represented by accounts found to  be
 43    worthless  may  be  credited  upon a subsequent payment of the tax provided in
 44    this chapter by the seller who originally remitted the tax to  the  state  tax
 45    commission  or,  if  no  such  tax  is  due,  refunded to such seller. If such
 46    accounts are thereafter collected, a tax shall be paid upon the amount so col-
 47    lected.
 48        (e)  Tangible personal property when sold at retail for more  than  eleven
 49    cents  ($.11)  but less than one dollar and one cent ($1.01) through a vending
 50    machine shall be deemed to have sold at a sales price  equal  to  one  hundred
 51    seventeen percent (117%) of the price which is paid for such tangible personal
 52    property and/or its component parts including packaging by the owner or opera-
 53    tor of the vending machines.
 54        SECTION  2.  That  Section 63-3626, Idaho Code, be, and the same is hereby
  1    amended to read as follows:
  2        63-3626.  REFUNDS, LIMITATIONS, INTEREST. (a) Subject to the provisions of
  3    subsection (b) of this section, if any amount due under this chapter has  been
  4    overpaid,  the  excess  amount  may  be credited on any amount then due to the
  5    state tax commission from the person by whom the excess was paid and any  bal-
  6    ance refunded to that person.
  7        (b) (1)  No  such  credit or refund shall be allowed after three (3) years
  8        from the time the payment was made to the  state  tax  commission,  unless
  9        before  the  expiration  of  such period a written claim therefor is filed
 10        with the state tax commission by the claimant or the claimant's  represen-
 11        tative, but only if the claimant has authorized in writing the representa-
 12        tive to file a claim.
 13        (2)  For  periods  in  regard  to which the state tax commission asserts a
 14        deficiency under section 63-3629 or  63-3630,  Idaho  Code,  a  claim  for
 15        refund,  relating  to  the period to which the deficiency relates, must be
 16        made on or before the later of:
 17             (i)   The date provided in subsection (b)(1) of this section; or
 18             (ii)  The date upon which any administrative or  judicial  proceeding
 19             relating to such deficiency is finally resolved; or
 20             (iii) The  date  specified in any agreement under section 63-3633(g),
 21             Idaho Code.
 22        (3)  A taxpayer claiming a refund of amounts paid  in  obedience  to  such
 23        deficiencies  must do so by appealing within the time limits prescribed in
 24        sections 63-3631 and 63-3049, Idaho Code.
 25        (c)  In the case of credits or refunds for bad debts allowable under  sec-
 26    tion  63-3613,  Idaho  Code,  the three (3) year period provided by subsection
 27    (b)(1) of this section shall begin on the  date  the  debt  becomes  worthless
 28    within the meaning of section 166 of the Internal Revenue Code.
 29        (d)  Interest shall be allowed on the amount of such credits or refunds at
 30    the  rate  provided in section 63-3045, Idaho Code, from the date such tax was
 31    paid to the state tax commission.
 32        (de)  If the state tax commission denies a claim for refund in whole or in
 33    part, it shall provide notice of the denial in the manner provided in  section
 34    63-3629(c), Idaho Code. The claimant may petition the state tax commission for
 35    a  redetermination  of  the denial as provided in section 63-3631, Idaho Code.
 36    The state tax commission shall issue a final decision pursuant to the require-
 37    ments of section 63-3045B, Idaho Code. Appeal of  a  tax  commission  decision
 38    denying  in  whole  or  in part a claim for refund shall be made in accordance
 39    with and within the time limits prescribed in section 63-3049, Idaho Code.

Statement of Purpose / Fiscal Impact

                       STATEMENT OF PURPOSE
                            RS 12400

     This bill changes two provisions of the Idaho Sales Tax Act
relating to the credit or refund allowed retailers for bad debts. 
     Provides that the seller who paid the tax to the state must
claim the credit or refund for sales taxes remitted on bad debts.
     Provides that the three-year statutes of limitations on
claims for credit or refunds resulting from bad debts will begin
on the date the debt becomes worthless for income tax purposes.  

                           FISCAL NOTE

     No fiscal effect.  

     Name:  Dan John / Ted Spangler 
   Agency:  State Tax Commission 
    Phone:  334-7530

STATEMENT OF PURPOSE/FISCAL NOTE                       H 8