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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
|||| 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
2 RELATING TO THE SALES AND USE TAX; AMENDING SECTION 63-3613, IDAHO CODE, TO
3 PROVIDE THAT THE CREDIT OR REFUND FOR SALES TAXES REMITTED ON BAD DEBTS
4 MUST BE CLAIMED BY THE SELLER WHO PAID THE TAX TO THE STATE; AND AMENDING
5 SECTION 63-3626, IDAHO CODE, TO PROVIDE THAT THE THREE YEAR STATUTE OF
6 LIMITATIONS ON CLAIMS FOR CREDIT OR REFUNDS RESULTING FROM BAD DEBTS WILL
7 BEGIN ON THE DATE THE DEBT BECOMES WORTHLESS FOR INCOME TAX PURPOSES.
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
2
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
3
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
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.
Contact
Name: Dan John / Ted Spangler
Agency: State Tax Commission
Phone: 334-7530
STATEMENT OF PURPOSE/FISCAL NOTE H 8