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H0012...............................................by REVENUE AND TAXATION SALES TAX - OCCASIONAL SALES - Amends existing law to provide that the definition of occasional sales for sales and use tax purposes does not apply to use tax on tangible personal property used to improve real property when the property is obtained directly or indirectly from a person in the business of making like or similar improvements to real property. 01/19 House intro - 1st rdg - to printing 01/20 Rpt prt - to Rev/Tax 01/26 Rpt out - rec d/p - to 2nd rdg 01/27 2nd rdg - to 3rd rdg 01/31 3rd rdg - PASSED - 64-0-6 AYES -- Anderson, Andrus, Barraclough, Barrett, Bastian, Bayer, Bedke, Bell, Bilbao, Black, Block, Boe, Bolz, Bradford, Cannon, Chadderdon, Collins, Crow, Deal, Denney, Ellsworth, Field(18), Field(23), Garrett, Hart, Harwood, Henbest, Henderson, Jaquet, Kemp, Lake, LeFavour, Loertscher, Martinez, Mathews, McGeachin, McKague, Miller, Mitchell, Moyle, Nielsen, Nonini, Pasley-Stuart, Pence, Raybould, Ring, Ringo, Roberts, Rusche, Rydalch, Sayler, Schaefer, Shepherd(2), Shepherd(8), Shirley, Skippen, Smith(30), Smith(24), Snodgrass, Stevenson, Trail, Wills, Wood, Mr. Speaker NAYS -- None Absent and excused -- Clark, Edmunson, Eskridge, Jones, Sali, Smylie Floor Sponsor - Lake Title apvd - to Senate 02/01 Senate intro - 1st rdg - to Loc Gov 02/04 Rpt out - rec d/p - to 2nd rdg 02/07 2nd rdg - to 3rd rdg 02/08 3rd rdg - PASSED - 35-0-0 AYES -- Andreason, Brandt, Broadsword, Bunderson, Burkett, Burtenshaw, Cameron, Coiner, Compton, Corder, Darrington, Davis, Gannon, Geddes, Goedde, Hill, Jorgenson, Kelly, Keough, Langhorst, Little, Lodge, Malepeai, Marley, McGee, McKenzie, Noble, Pearce, Richardson, Schroeder, Stegner, Stennett, Sweet, Werk, Williams NAYS -- None Absent and excused -- None Floor Sponsor - Hill Title apvd - to House 02/09 To enrol 02/10 Rpt enrol - Sp signed 02/11 Pres signed 02/14 To Governor 02/18 Governor signed Session Law Chapter 15 Effective: 07/01/05
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]] Fifty-eighth Legislature First Regular Session - 2005 IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 12 BY REVENUE AND TAXATION COMMITTEE 1 AN ACT 2 RELATING TO SALES AND USE TAXES; AMENDING SECTION 63-3622K, IDAHO CODE, TO 3 PROVIDE THAT THE DEFINITION OF "OCCASIONAL SALES" DOES NOT APPLY TO USE 4 TAX ON TANGIBLE PERSONAL PROPERTY USED TO IMPROVE REAL PROPERTY WHEN THE 5 PROPERTY IS OBTAINED DIRECTLY OR INDIRECTLY FROM A PERSON IN THE BUSINESS 6 OF MAKING LIKE OR SIMILAR IMPROVEMENTS TO REAL PROPERTY. 7 Be It Enacted by the Legislature of the State of Idaho: 8 SECTION 1. That Section 63-3622K, Idaho Code, be, and the same is hereby 9 amended to read as follows: 10 63-3622K. OCCASIONAL SALES. (a) There are exempted from the taxes imposed 11 by this chapter occasional sales of tangible personal property. 12 (b) As used in this section, the term "occasional sale" means: 13 (1) A sale of property not held or used by a person in the course of an 14 activity for which he is required to hold a seller's permit, provided such 15 sale is not one (1) of a series of sales sufficient in number or of such a 16 nature as to constitute the seller a "retailer" under section 63-3610(c), 17 Idaho Code. The definition of "occasional sales" provided in this subsec- 18 tion does not apply to use tax in regard to tangible personal property 19 used to improve real property when such property is obtained, directly or 20 indirectly, from a person in the business of making like or similar 21 improvements to real property. 22 (2) Any transfer of all or substantially all of the property held or used 23 by a person in a business requiring a seller's permit when, after such 24 transfer, the real or ultimate ownership of such property is substantially 25 similar to that which existed before such transfer. For the purpose of 26 this section, stockholders, bondholders, partners, or other persons hold- 27 ing an interest in a corporation or other entity are regarded as having a 28 "real or ultimate ownership" of the property of such corporation or other 29 entity. 30 (3) A transfer of capital assets to or by a business when the transfer is 31 accomplished through an adjustment of the beneficial interest of the busi- 32 ness and the transferor has paid sales or use taxes pursuant to section 33 63-3619 or 63-3621, Idaho Code, on the capital assets, incidental to: 34 (i) A division of joint venture, partnership, or limited liability 35 company assets among the members or partners in exchange for a pro- 36 portional reduction of the transferee's interest in the joint ven- 37 ture, partnership, or limited liability company. For the purposes of 38 this section, the term "limited liability company" means a business 39 organization as defined in chapter 6, title 53, Idaho Code; 40 (ii) The formation of a partnership, joint venture, or limited lia- 41 bility company by the transfer of assets to the partnership, joint 42 venture, or limited liability company or transfers to a partnership, 43 joint venture, or limited liability company in exchange for propor- 2 1 tionate interests in the partnership, joint venture, or limited lia- 2 bility company; 3 (iii) The formation of a corporation by the owners of a business and 4 the transfer of their business assets to the corporation in exchange 5 for stock in proportion to assets contributed; 6 (iv) The transfer of assets of shareholders in the formation or dis- 7 solution of a corporation; 8 (v) The transfer of capital assets by a corporation to its stock- 9 holders in exchange for surrender of capital stock; 10 (vi) The transfer of assets from a parent corporation to a subsid- 11 iary corporation which is owned at least eighty percent (80%) by the 12 parent corporation, which transfer is solely in exchange for stock or 13 securities of the subsidiary corporation; 14 (vii) The transfer of assets from a subsidiary corporation which is 15 owned at least eighty percent (80%) by the parent corporation to a 16 parent corporation or another subsidiary which is owned at least 17 eighty percent (80%) by the parent corporation, which transfer is 18 solely in exchange for stock or securities of the parent corporation 19 or the subsidiary which received the assets. 20 (4) The sale, lease or rental of a capital asset in substantially the 21 same form as acquired by the transferor and on which the initial transfer- 22 or has paid sales or use taxes pursuant to section 63-3619 or 63-3621, 23 Idaho Code, when the owners of all of the outstanding stock, equity or 24 interest of the transferor are the same as the transferee or are members 25 of the same family within the second degree of consanguinity or affinity. 26 (5) The sale of substantially all of the operating assets of a business 27 or of a separate division, branch, or identifiable segment to a buyer who 28 continues operation of the business. For the purpose of this subsection, a 29 "separate division, branch, or identifiable segment" shall be deemed to 30 exist if, prior to its sale, the income and expense attributable to such 31 "separate division, branch, or identifiable segment" could be separately 32 ascertained from the books of accounts and records. 33 (6) Sales by persons who are not defined as "retailers" in section 34 63-3610, Idaho Code. 35 (7) Sales of animals by any 4-H club or FFA club held in conjunction with 36 a fair or the western Idaho spring lamb sale. 37 (8) The sale or purchase of tangible personal property at home yard 38 sales; provided however, that no more than two (2) such home yard sales 39 per individual calendar year shall be exempt. 40 (c) As used in this section, the term "occasional sale," when applied to 41 the sale of a motor vehicle, means only: 42 (1) Sales of motor vehicles between members of a family related within 43 the second degree of consanguinity, unless a sales or use tax was not 44 imposed on the sale of that motor vehicle at the time of purchase, in 45 which situation the sale is taxable. 46 (2) Sales of motor vehicles that fall within the scope of the transac- 47 tions detailed in subsection (b)(2) through (b)(5) of this section. 48 (d) The exemption provided by subsection (b)(1), (b)(4), (b)(6) or (b)(8) 49 of this section shall not apply to the sale, purchase or use of aircraft, as 50 defined in section 21-201, Idaho Code, nor shall it apply to the sale, pur- 51 chase or use of boats or vessels, as defined in section 67-7003, Idaho Code, 52 nor shall it apply to the sale, purchase or use of snowmobiles, recreational 53 vehicles or off-highway motorbikes, as defined in section 63-3622HH, Idaho 54 Code.
STATEMENT OF PURPOSE RS 14431 This bill excludes from the occasional sales exemption in the Idaho Sales0 Tax Act use tax on tangible personal property used to improve real property when the property is obtained from a person in the business of making like or similar improvements to real property. FISCAL IMPACT Additional $50,000 in sales and use tax revenue. CONTACT Name: Dan John Agency: State Tax Commission Phone: 334-7530 STATEMENT OF PURPOSE/FISCAL NOTE H 12