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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