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H0065..............................................................by TRAIL
SALES TAX - SERVICES - Adds to, amends and repeals existing law to impose
a sales tax on certain services and on the sale of lottery tickets; to
reduce the sales and use tax rate to four percent; and to repeal certain
sales tax exemptions.
01/28 House intro - 1st rdg - to printing
01/31 Rpt prt - to Rev/Tax
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-eighth Legislature First Regular Session - 2005
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 65
BY TRAIL
1 AN ACT
2 RELATING TO SALES AND USE TAXATION POLICIES AND ECONOMIC RECOVERY; PROVIDING A
3 SHORT TITLE; PROVIDING A STATEMENT OF LEGISLATIVE INTENT; AMENDING SEC-
4 TION 63-3608, IDAHO CODE, TO INCLUDE SERVICES OR BENEFITS OF SERVICE IN
5 THE DEFINITION OF "PURCHASE"; AMENDING SECTION 63-3609, IDAHO CODE, TO
6 DEFINE A SERVICE PURCHASED FOR RESALE; AMENDING SECTION 63-3610, IDAHO
7 CODE, TO INCLUDE A SELLER OF SERVICES IN THE DEFINITION OF "RETAILER";
8 AMENDING SECTION 63-3612, IDAHO CODE, TO PROVIDE THAT THE DELIVERY OR PER-
9 FORMANCE OF ANY SERVICE IN THIS STATE FOR A CONSIDERATION IS A SALE AND TO
10 PROVIDE THAT THE SALE OF LOTTERY TICKETS AND PARI-MUTUEL BETTING TICKETS
11 IS A SALE; AMENDING SECTION 63-3613, IDAHO CODE, TO INCLUDE SERVICES IN
12 THE DEFINITION OF "SALES PRICE," TO DELETE THE EXCLUSION OF TRADE-IN VALUE
13 INCLUDING REFERENCES TO MANUFACTURED HOMES AND MODULAR BUILDINGS, TO
14 DELETE DELIVERY CHARGES AND CERTAIN OUTFITTER FEES FROM THE DEFINITION OF
15 "SALES PRICE," TO DELETE PROVISIONS RELATING TO TELECOMMUNICATIONS EQUIP-
16 MENT AND TO DELETE PROVISIONS RELATING TO VENDING MACHINES; AMENDING CHAP-
17 TER 36, TITLE 63, IDAHO CODE, BY THE ADDITION OF A NEW SECTION 63-3614A,
18 IDAHO CODE, TO PROVIDE A DEFINITION OF "SERVICES"; AMENDING SECTION
19 63-3615, IDAHO CODE, TO PROVIDE THAT AS APPLIED TO SERVICES, "USE" MEANS
20 THE PURCHASE OF OR THE RECEIPT OF THE BENEFIT OR ENJOYMENT OF SERVICES IN
21 THIS STATE; AMENDING SECTION 63-3619, IDAHO CODE, AS ADDED BY SECTION 7,
22 CHAPTER 318, LAWS OF 2003, TO REDUCE THE SALES TAX RATE FROM FIVE PERCENT
23 TO FOUR PERCENT AND TO ADD REFERENCE TO SALES OF SERVICES; AMENDING SEC-
24 TION 63-3621, IDAHO CODE, AS ADDED BY SECTION 8, CHAPTER 318, LAWS OF
25 2003, TO REDUCE THE USE TAX RATE FROM FIVE PERCENT TO FOUR PERCENT, TO ADD
26 REFERENCE TO THE RECEIPT OR USE OF SERVICES AND TO DELETE LANGUAGE REGARD-
27 ING THE USE TAX EXEMPTION ON CERTAIN WIRELESS TELECOMMUNICATIONS EQUIP-
28 MENT; AMENDING SECTION 63-3622K, IDAHO CODE, TO DELETE THE DEFINITION OF
29 "OCCASIONAL SALE" WHEN APPLIED TO THE SALE OF A MOTOR VEHICLE; REPEALING
30 SECTION 63-3622Y, IDAHO CODE, AS ADDED BY SECTION 1, CHAPTER 435, LAWS OF
31 1990, AND SECTIONS 63-3622F, 63-3622G, 63-3622S, 63-3622V, 63-3622Y,
32 63-3622BB, 63-3622CC, 63-3622DD AND 63-3622GG, IDAHO CODE; AMENDING SEC-
33 TION 67-7439, IDAHO CODE, TO DELETE THE RESTRICTION ON TAXATION OF LOTTERY
34 TICKETS; AMENDING SECTION 63-3622D, IDAHO CODE, TO DELETE CODE REFERENCES;
35 AMENDING SECTION 63-3622JJ, IDAHO CODE, TO DELETE REFERENCE TO A SALES TAX
36 EXEMPTION FOR HEATING MATERIALS; AMENDING SECTION 63-3623, IDAHO CODE, TO
37 DELETE REFERENCE TO A SALES TAX EXEMPTION FOR SALES THROUGH VENDING
38 MACHINES; AMENDING SECTION 63-3640, IDAHO CODE, TO PROVIDE A CORRECT CODE
39 REFERENCE; AND PROVIDING SEVERABILITY.
40 Be It Enacted by the Legislature of the State of Idaho:
41 SECTION 1. This act shall be known as the "Idaho Economic Recovery and
42 Tax Reform Act of 2005."
43 SECTION 2. The Legislature hereby declares that:
2
1 (1) The economic and personal health and welfare of the people of the
2 state of Idaho is dependent upon the provision by the state of funding, and
3 the means of funding, of a sound infrastructure at both the state and local
4 levels; and
5 (2) There has developed an erosion of the tax base which can best be
6 reversed by: (a) a modernization of the sales tax to reflect Idaho's shift
7 since 1965 to a service-based economy, and (b) making the tax structure more
8 economically fair and fiscally sound by broadening it by repealing certain tax
9 exemptions; and
10 (3) Absent reform of the tax structure, the state of Idaho faces severe
11 budget deficits for the foreseeable future; and
12 (4) Proper and adequate funding of state government serves as a stimulus
13 to the economy through the creation and maintenance of jobs, demand for goods
14 and services, and enhancement of the quality of education and other institu-
15 tions that foster business and commerce.
16 SECTION 3. That Section 63-3608, Idaho Code, be, and the same is hereby
17 amended to read as follows:
18 63-3608. PURCHASE. The term "purchase" means:
19 (1) Aany transfer, rental, exchange, or barter, conditional or otherwise,
20 in any manner or by any means whatsoever, of tangible personal property for a
21 consideration. A transaction whereby the possession of property is transferred
22 but the seller retailer retains the title as security for the payment of the
23 price is a purchase. A transfer for a consideration of any publication or of
24 tangible personal property which has been produced, fabricated, or printed to
25 the special order of the customer is also a purchase.
26 (2) Any transaction whereby a service or benefits of a service are
27 obtained for a consideration.
28 SECTION 4. That Section 63-3609, Idaho Code, be, and the same is hereby
29 amended to read as follows:
30 63-3609. RETAIL SALE -- SALE AT RETAIL. (1) The terms "retail sale" or
31 "sale at retail" means a sale for any purpose other than resale in the regular
32 course of business or lease or rental of property in the regular course of
33 business where such rental or lease is taxable under section 63-3612(h), Idaho
34 Code. The term "retail sale" or "sale at retail" also includes:
35 (a) Sales by all persons engaged in constructing, altering, repairing or
36 improving real property, of labor or other construction services includ-
37 ing services purchased by the seller for resale as defined in subsection
38 (3) of this section;
39 (b) Sales of tangible personal property and of materials incorporated
40 into real property by aAll persons engaged in constructing, altering,
41 repairing or improving the real estate, are consumers of the material used
42 by them; all property;
43 (c) Ssales to or use by such persons engaged in constructing, altering,
44 repairing or improving real property of tangible personal property are
45 taxable whether or not such persons or materials incorporated into real
46 property when the purchaser does not intend resale of the improved prop-
47 erty.
48 (b2) For the purpose of this chapter, the sale or purchase of personal
49 property incidental to the sale of real property or used mobile homes is
50 deemed a sale of real property.
51 (3) A service is purchased for resale only when:
3
1 (a) The service is to repair, maintain or otherwise care for tangible
2 personal property held solely for resale in the regular course of a busi-
3 ness operated by the purchaser; or
4 (b) The service is purchased for the benefit of one (1) or more specific
5 clients or customers of the purchaser of the service, identifiable at the
6 time of the purchase of the service, to whom the purchase price of the
7 service will be passed.
8 SECTION 5. That Section 63-3610, Idaho Code, be, and the same is hereby
9 amended to read as follows:
10 63-3610. RETAILER. The term "retailer" includes:
11 (a) Every seller who makes any retail sale or sales of tangible personal
12 property or services and every person engaged in the business of making retail
13 sales at auction of tangible personal property or services owned by the person
14 or others.
15 (b) Every person engaged in the business of making sales for storage,
16 use, or other consumption or in the business of making sales at auction of
17 tangible personal property or services owned by the person or others for stor-
18 age, use, or other consumption.
19 (c) Every person making more than two (2) retail sales of tangible per-
20 sonal property or services during any twelve (12) month period, including
21 sales made in the capacity of assignee for the benefit of creditors, or
22 receiver or trustee in bankruptcy, or every person making fewer sales who
23 holds himself out as engaging in the business of selling such tangible per-
24 sonal property or services at retail or who sells a motor vehicle.
25 (d) When the state tax commission determines that it is necessary for the
26 efficient administration of this act to regard any salesmen, representatives,
27 peddlers, or canvassers as agents of the dealers, distributors, supervisors,
28 or employers under whom they operate or from whom they obtain the tangible
29 personal property or services sold by them, irrespective of whether they are
30 making sales on their own behalf or on behalf of such dealers, distributors,
31 supervisors, or employers, the state tax commission may so regard them and may
32 regard the dealers, distributors, supervisors, or employers as retailers for
33 the purpose of this act.
34 (e) Persons conducting both contracting and retailing activities. Such
35 persons must keep separate accounts for the retail portion of their business
36 and pay tax in the usual fashion on this portion.
37 SECTION 6. That Section 63-3612, Idaho Code, be, and the same is hereby
38 amended to read as follows:
39 63-3612. SALE. (1) The term "sale" means:
40 (a) Aany transfer of title, exchange or barter, conditional or otherwise,
41 of tangible personal property for a consideration; and
42 (b) The delivery or performance of any service in this state for a con-
43 sideration.
44 "Sale" shall include any similar transfer of possession found by the state tax
45 commission to be in lieu of, or equivalent to, a transfer of title, exchange
46 or barter.
47 (2) "Sale" shall also include the following transactions when a consider-
48 ation is transferred, exchanged or bartered:
49 (a) Producing, fabricating, processing, printing, or imprinting of tangi-
50 ble personal property for consumers who furnish, either directly or indi-
51 rectly, the tangible personal property used in the producing, fabricating,
4
1 processing, printing, or imprinting.
2 (b) Furnishing, preparing, or serving food, meals, or drinks and
3 nondepreciable goods and services directly consumed by customers included
4 in the charge thereof.
5 (c) A transfer of possession of property where the seller retains the
6 title as security for the payment of the sales price.
7 (d) A transfer of the title or possession of tangible personal property
8 which has been produced, fabricated, or printed to the special order of
9 the customer, or of any publication.
10 (e) Admission to a place or for an event in Idaho, provided that an orga-
11 nization conducting an exempt function as defined in section 527 or
12 exempted by section 501(c)(3) of the Internal Revenue Code, as incorpo-
13 rated in section 63-3004, Idaho Code, and collecting any charges for
14 attendance at the aforementioned event, shall not have those admission
15 charges be defined as a sale if the event:
16 (i) Is not predominately recreational or commercial; and
17 (ii) Any included entertainment value is minimal when compared to
18 the charge for attendance; and
19 (iii) Such entity has paid sales and use tax on taxable property or
20 services used during the event.
21 (f) The use of or the privilege of using tangible personal property or
22 facilities for recreation.
23 (g) Providing hotel, motel, campground, or trailer court accommodations,
24 nondepreciable goods directly consumed by customers and included services,
25 except where residence is maintained continuously under the terms of a
26 lease or similar agreement for a period in excess of thirty (30) days.
27 (h) The lease or rental of tangible personal property.
28 (i) The intrastate transportation for hire by air of freight or passen-
29 gers, except (1) as part of a regularly scheduled flight by a certified
30 air carrier, under authority of the United States, or (2) when providing
31 air ambulance services.
32 (j) The sale of lottery tickets and pari-mutuel betting tickets.
33 (3) As used in subsections (2)(b) and (2)(g) of this section, goods
34 "directly consumed by customers" shall not be interpreted to mean any linens,
35 bedding, cloth napkins or similar nondisposable property.
36 SECTION 7. That Section 63-3613, Idaho Code, be, and the same is hereby
37 amended to read as follows:
38 63-3613. SALES PRICE. (a) The term "sales price" means the total amount
39 for which tangible personal property, including or services agreed to be ren-
40 dered as a part of the sale, is are sold, rented or leased, valued in money,
41 whether paid in money or otherwise, without any deduction on account of any of
42 the following:
43 1. The cost of the property or services sold. However, in accordance with
44 such rules as the state tax commission may prescribe, a deduction may be
45 taken if the retailer has purchased property for some purpose other than
46 resale or rental, has reimbursed his vendor for tax which the vendor is
47 required to pay to the state or has paid the use tax with respect to the
48 property, and has resold or rented the property prior to making any use of
49 the property other than retention, demonstration or display while holding
50 it for sale in the regular course of business. If such a deduction is
51 taken by the retailer, no refund or credit will be allowed to his vendor
52 with respect to the sale of the property.
53 2. The cost of materials used, labor or service cost, losses, or any
5
1 other expense.
2 3. The cost of transportation of the property prior to its sale.
3 4. The face value of manufacturer's discount coupons. A manufacturer's
4 discount coupon is a price reduction coupon presented by a consumer to a
5 retailer upon purchase of a manufacturer's product, the face value of
6 which may only be reimbursed by the manufacturer to the retailer.
7 (b) The term "sales price" does not include any of the following:
8 1. Retailer discounts allowed and taken on sales, but only to the extent
9 that such retailer discounts represent price adjustments as opposed to
10 cash discounts offered only as an inducement for prompt payment.
11 2. Any sums allowed on merchandise accepted in payment of other merchan-
12 dise, provided that this allowance shall not apply to the sale of a "new
13 manufactured home" or a "modular building" as defined herein.
14 3. The amount charged for property returned by customers when the amount
15 charged therefor is refunded either in cash or credit; but this exclusion
16 shall not apply in any instance when the customer, in order to obtain the
17 refund, is required to purchase other property at a price greater than the
18 amount charged for the property that is returned.
19 43. The amount charged for labor or services rendered in installing or
20 applying the property sold, provided that said amount is stated separately
21 and such separate statement is not used as a means of avoiding imposition
22 of this tax upon the actual sales price of the tangible personal property;
23 except that charges by a manufactured homes dealer for set up of a manu-
24 factured home shall be included in the "sales price" of such manufactured
25 home.
26 54. The amount of any tax (not including, however, any manufacturers' or
27 importers' excise tax) imposed by the United States upon or with respect
28 to retail sales whether imposed upon the retailer or the consumer.
29 65. The amount charged for finance charges, carrying charges, service
30 charges, time-price differential, or interest on deferred payment sales,
31 provided such charges are not used as a means of avoiding imposition of
32 this tax upon the actual sales price of the tangible personal property.
33 7. Delivery and handling charges for transportation of tangible personal
34 property to the consumer, provided that the transportation is stated sepa-
35 rately and the separate statement is not used as a means of avoiding impo-
36 sition of the tax upon the actual sales price of the tangible personal
37 property; except that charges by a manufactured homes dealer for transpor-
38 tation of a manufactured home shall be included in the "sales price" of
39 such manufactured home.
40 86. Manufacturers' rebates when used at the time of a retail sale as a
41 down payment on or reduction to the retail sales price of a motor vehicle
42 to which the rebate applies. A manufacturer's rebate is a cash payment
43 made by a manufacturer to a consumer who has purchased or is purchasing
44 the manufacturer's product from the retailer.
45 9. The amount of any fee imposed upon an outfitter as defined in section
46 36-2102, Idaho Code, by a governmental entity pursuant to statute for the
47 purpose of conducting outfitting activities on land or water subject to
48 the jurisdiction of the governmental entity, provided that the fee is
49 stated separately and is presented as a use fee paid by the outfitted pub-
50 lic to be passed through to the governmental entity.
51 10. The amount of any discount or other price reduction on telecommunica-
52 tions equipment when offered as an inducement to the consumer to commence
53 or continue telecommunications service, or the amount of any commission or
54 other indirect compensation received by a retailer or seller as a result
55 of the consumer commencing or continuing telecommunications service.
6
1 (c) The sales price of a "new manufactured home" or a "modular building"
2 as defined in this act shall be limited to and include only fifty-five percent
3 (55%) of the sales price as otherwise defined herein.
4 (d) Taxes previously paid on amounts represented by accounts found to be
5 worthless may be credited upon a subsequent payment of the tax provided in
6 this chapter or, if no such tax is due, refunded. If such accounts are there-
7 after collected, a tax shall be paid upon the amount so collected.
8 (e) Tangible personal property when sold at retail for more than eleven
9 cents ($.11) but less than one dollar and one cent ($1.01) through a vending
10 machine shall be deemed to have sold at a sales price equal to one hundred
11 seventeen percent (117%) of the price which is paid for such tangible personal
12 property and/or its component parts including packaging by the owner or opera-
13 tor of the vending machines.
14 SECTION 8. That Chapter 36, Title 63, Idaho Code, be, and the same is
15 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
16 ignated as Section 63-3614A, Idaho Code, and to read as follows:
17 63-3614A. SERVICES. (1) The term "services" includes transportation ser-
18 vices, professional services, business services, personal services and health
19 services.
20 (a) As used in this section, the term "SIC Code" means the standard
21 industrial classification code established by the office of management and
22 budget in the standard industrial classification manual of 1987.
23 (b) Transportation services means those services included in SIC code
24 major group 47.
25 (c) Professional services means those services included in SIC code major
26 groups 81 and 87.
27 (d) Business services means those services included in SIC code major
28 group 73.
29 (e) Personal services means those services included in SIC code major
30 group 72.
31 (f) Health services means those services included in SIC code major group
32 80.
33 (2) A service is in this state when the benefit or enjoyment of the ser-
34 vice is in this state. Services in this state include:
35 (a) Services relating to real property located in this state.
36 (b) Services relating to tangible personal property when:
37 (i) The tangible personal property is delivered in this state; or
38 (ii) The tangible personal property is located in this state at the
39 time the service is performed.
40 (c) Services not relating to real property or tangible personal property
41 that are performed for an individual in this state or for a business, or
42 an identifiable segment of a business, operating solely in this state.
43 (d) In the case of a service used both within and outside this state, the
44 portion of services used outside of this state shall not be subject to tax
45 under this chapter. To the extent that a purchaser's use of a service can-
46 not be assigned to a use by an individual in this state or to a business
47 or an identifiable segment of a business operating in this state, then the
48 purchaser shall allocate or apportion the service based on rules promul-
49 gated by the state tax commission. In the absence of rules, the purchaser
50 may use any reasonable method of allocation or apportionment that can be
51 substantiated by the purchaser's books and records and other facts and
52 circumstances.
7
1 SECTION 9. That Section 63-3615, Idaho Code, be, and the same is hereby
2 amended to read as follows:
3 63-3615. STORAGE -- USE. (a) The term "storage" includes any keeping or
4 retention in this state for any purpose except sale in the regular course of
5 business or subsequent use solely outside this state of tangible personal
6 property purchased from a retailer.
7 (b) The term "use" includes the exercise of any right or power over tan-
8 gible personal property incident to the ownership or the leasing of that prop-
9 erty or the exercise of any right or power over tangible personal property by
10 any person in the performance of a contract, or to fulfill contract or subcon-
11 tract obligations, whether the title of such property be in the subcontractor,
12 contractor, contractee, subcontractee, or any other person, or whether the
13 titleholder of such property would be subject to the sales or use tax, unless
14 such property would be exempt to the titleholder under section 63-3622D, Idaho
15 Code, except that the term "use" does not include the sale of that property in
16 the regular course of business.
17 (c) As applied to services, "use" means the purchase of or the receipt of
18 the benefit or enjoyment of services in this state.
19 (d) "Storage" and "use" do not include the keeping, retaining, or exer-
20 cising of any right or power over tangible personal property for the purpose
21 of subsequently transporting it outside the state for use thereafter solely
22 outside the state, or for the purpose of being processed, fabricated, or manu-
23 factured into, attached to, or incorporated into other tangible personal prop-
24 erty to be transported outside the state, and thereafter used solely outside
25 the state.
26 SECTION 10. That Section 63-3619, Idaho Code, as added by Section 7,
27 Chapter 318, Laws of 2003, be, and the same is hereby amended to read as fol-
28 lows:
29 63-3619. IMPOSITION AND RATE OF THE SALES TAX. An excise tax is hereby
30 imposed upon each sale at retail at the rate of five four percent (54%) of the
31 sales price of all retail sales and services subject to taxation under this
32 chapter and such amount shall be computed monthly on all sales at retail
33 within the preceding month.
34 (a) The tax shall apply to, be computed on, and collected for all credit,
35 installment, conditional or similar sales at the time of the sale or, in the
36 case of rentals, at the time the rental is charged.
37 (b) The tax hereby imposed shall be collected by the retailer from the
38 consumer.
39 (c) The state tax commission shall provide schedules for collection of
40 the tax on sales which involve a fraction of a dollar. The retailer shall cal-
41 culate the tax upon the entire amount of the purchases of the consumer made at
42 a particular time and not separately upon each item purchased. The retailer
43 may retain any amount collected under the bracket system prescribed which is
44 in excess of the amount of tax for which he is liable to the state during the
45 period as compensation for the work of collecting the tax.
46 (d) It is unlawful for any retailer to advertise or hold out or state to
47 the public or to any customer, directly or indirectly, that the tax or any
48 part thereof will be assumed or absorbed by the retailer or that it will not
49 be added to the selling price of the property sold or that if added it or any
50 part thereof will be refunded. Any person violating any provision of this sec-
51 tion is guilty of a misdemeanor.
52 (e) The tax commission may by rule provide that the amount collected by
8
1 the retailer from the customer in reimbursement of the tax be displayed sepa-
2 rately from the list price, the price advertised on the premises, the marked
3 price, or other price on the sales slip or other proof of sale.
4 (f) The taxes imposed by this chapter shall apply to the sales to con-
5 tractors purchasing for use in the performance of contracts with the United
6 States.
7 SECTION 11. That Section 63-3621, Idaho Code, as added by Section 8,
8 Chapter 318, Laws of 2003, be, and the same is hereby amended to read as fol-
9 lows:
10 63-3621. IMPOSITION AND RATE OF THE USE TAX -- EXEMPTIONS. An excise tax
11 is hereby imposed on the storage, use, or other consumption in this state of
12 tangible personal property acquired on or after July 1, 2005, for storage,
13 use, or other consumption in this state, and on the receipt or use of services
14 in this state, at the rate of five four percent (54%) of the value of the
15 property, and a recent sales price shall be presumptive evidence of the value.
16 of the property unless the property is wireless telecommunications equipment,
17 in which case a recent sales price shall be conclusive evidence of the value
18 of the property.
19 (a) Every person storing, using, or otherwise consuming, in this state,
20 tangible personal property is liable for the tax. His liability is not extin-
21 guished until the tax has been paid to this state except that a receipt from a
22 retailer maintaining a place of business in this state or engaged in business
23 in this state given to the purchaser is sufficient to relieve the purchaser
24 from further liability for the tax to which the receipt refers. A retailer
25 shall not be considered to have stored, used or consumed wireless telecommuni-
26 cations equipment by virtue of giving, selling or otherwise transferring such
27 equipment at a discount as an inducement to a consumer to commence or continue
28 a contract for telecommunications service.
29 (b) Every retailer engaged in business in this state, and making sales of
30 tangible personal property for the storage, use, or other consumption in this
31 state, not exempted under section 63-3622, Idaho Code, shall, at the time of
32 making the sales or, if storage, use or other consumption of the tangible per-
33 sonal property is not then taxable hereunder, at the time the storage, use or
34 other consumption becomes taxable, collect the tax from the purchaser and give
35 to the purchaser a receipt therefor in the manner and form prescribed by the
36 state tax commission.
37 (c) The provisions of this section shall not apply when the retailer pays
38 sales tax on the transaction and collects reimbursement for such sales tax
39 from the customer.
40 (d) Every retailer engaged in business in this state or maintaining a
41 place of business in this state shall register with the state tax commission
42 and give the name and address of all agents operating in this state, the loca-
43 tion of all distributions or sales houses or offices or other places of busi-
44 ness in this state, and such other information as the state tax commission may
45 require.
46 (e) For the purpose of the proper administration of this act and to pre-
47 vent evasion of the use tax and the duty to collect the use tax, it shall be
48 presumed that tangible personal property sold by any person for delivery in
49 this state is sold for storage, use, or other consumption in this state. The
50 burden of proving the sale is tax exempt is upon the person who makes the sale
51 unless he obtains from the purchaser a resale certificate to the effect that
52 the property is purchased for resale or rental. It shall be presumed that
53 sales made to a person who has completed a resale certificate for the seller's
9
1 records are not taxable and the seller need not collect sales or use taxes
2 unless the tangible personal property purchased is taxable to the purchaser as
3 a matter of law in the particular instance claimed on the resale certificate.
4 A seller may accept a resale certificate from a purchaser prior to the
5 time of sale, at the time of sale, or at any reasonable time after the sale
6 when necessary to establish the privilege of the exemption. The resale certif-
7 icate relieves the person selling the property from the burden of proof only
8 if taken from a person who is engaged in the business of selling or renting
9 tangible personal property and who holds the permit provided for by section
10 63-3620, Idaho Code, or who is a retailer not engaged in business in this
11 state, and who, at the time of purchasing the tangible personal property,
12 intends to sell or rent it in the regular course of business or is unable to
13 ascertain at the time of purchase whether the property will be sold or will be
14 used for some other purpose. Other than as provided elsewhere in this section,
15 when a resale certificate, properly executed, is presented to the seller, the
16 seller has no duty or obligation to collect sales or use taxes in regard to
17 any sales transaction so documented regardless of whether the purchaser prop-
18 erly or improperly claimed an exemption. A seller so relieved of the obliga-
19 tion to collect tax is also relieved of any liability to the purchaser for
20 failure to collect tax or for making any report or disclosure of information
21 required or permitted under this chapter.
22 The resale certificate shall bear the name and address of the purchaser,
23 shall be signed by the purchaser or his agent, shall indicate the number of
24 the permit issued to the purchaser, or that the purchaser is an out-of-state
25 retailer, and shall indicate the general character of the tangible personal
26 property sold by the purchaser in the regular course of business. The certifi-
27 cate shall be substantially in such form as the state tax commission may pre-
28 scribe.
29 (f) If a purchaser who gives a resale certificate makes any storage or
30 use of the property other than retention, demonstration or display while hold-
31 ing it for sale in the regular course of business, the storage or use is tax-
32 able as of the time the property is first so stored or used.
33 (g) Any person violating any provision of this section is guilty of a
34 misdemeanor and punishable by a fine not in excess of one hundred dollars
35 ($100), and each violation shall constitute a separate offense.
36 (h) It shall be presumed that tangible personal property shipped or
37 brought to this state by the purchaser was purchased from a retailer, for
38 storage, use or other consumption in this state.
39 (i) It shall be presumed that tangible personal property delivered out-
40 side this state to a purchaser known by the retailer to be a resident of this
41 state was purchased from a retailer for storage, use, or other consumption in
42 this state. This presumption may be controverted by evidence satisfactory to
43 the state tax commission that the property was not purchased for storage, use,
44 or other consumption in this state.
45 (j) When the tangible personal property subject to use tax has been sub-
46 jected to a general retail sales or use tax by another state of the United
47 States in an amount equal to or greater than the amount of the Idaho tax, and
48 evidence can be given of such payment, the property will not be subject to
49 Idaho use tax. If the amount paid the other state was less, the property will
50 be subject to use tax to the extent that the Idaho tax exceeds the tax paid to
51 the other state. For the purposes of this subsection, a registration certifi-
52 cate or title issued by another state or subdivision thereof for a vehicle or
53 trailer or a vessel as defined in section 67-7003, Idaho Code, shall be suffi-
54 cient evidence of payment of a general retail sales or use tax.
55 (k) The use tax herein imposed shall not apply to the use by a nonresi-
10
1 dent of this state of a motor vehicle which is registered or licensed under
2 the laws of the state of his residence and is not used in this state more than
3 a cumulative period of time totaling ninety (90) days in any consecutive
4 twelve (12) months, and which is not required to be registered or licensed
5 under the laws of this state.
6 (l) The use tax herein imposed shall not apply to the use of household
7 goods, personal effects and personally owned motor vehicles by a resident of
8 this state, if such articles were acquired by such person in another state
9 while a resident of that state and primarily for use outside this state and if
10 such use was actual and substantial, but if an article was acquired less than
11 three (3) months prior to the time he entered this state, it will be presumed
12 that the article was acquired for use in this state and that its use outside
13 this state was not actual and substantial. For purposes of this subsection,
14 "resident" shall be as defined in section 63-3013 or 63-3013A, Idaho Code.
15 (m) The use tax herein imposed shall not apply to the storage, use or
16 other consumption of tangible personal property which is or will be incorpo-
17 rated into real property and which has been donated to and has become the
18 property of:
19 (1) A nonprofit organization as defined in section 63-3622O, Idaho Code;
20 or
21 (2) The state of Idaho; or
22 (3) Any political subdivision of the state.
23 This exemption applies whether the tangible personal property is incorporated
24 in real property by the donee, a contractor or subcontractor of the donee, or
25 any other person.
26 SECTION 12. That Section 63-3622K, Idaho Code, be, and the same is hereby
27 amended to read as follows:
28 63-3622K. OCCASIONAL SALES. (a) There are exempted from the taxes imposed
29 by this chapter occasional sales of tangible personal property.
30 (b) As used in this section, the term "occasional sale" means:
31 (1) A sale of property not held or used by a person in the course of an
32 activity for which he is required to hold a seller's permit, provided such
33 sale is not one (1) of a series of sales sufficient in number or of such a
34 nature as to constitute the seller a "retailer" under section 63-3610(c),
35 Idaho Code.
36 (2) Any transfer of all or substantially all of the property held or used
37 by a person in a business requiring a seller's permit when, after such
38 transfer, the real or ultimate ownership of such property is substantially
39 similar to that which existed before such transfer. For the purpose of
40 this section, stockholders, bondholders, partners, or other persons hold-
41 ing an interest in a corporation or other entity are regarded as having a
42 "real or ultimate ownership" of the property of such corporation or other
43 entity.
44 (3) A transfer of capital assets to or by a business when the transfer is
45 accomplished through an adjustment of the beneficial interest of the busi-
46 ness and the transferor has paid sales or use taxes pursuant to section
47 63-3619 or 63-3621, Idaho Code, on the capital assets, incidental to:
48 (i) A division of joint venture, partnership, or limited liability
49 company assets among the members or partners in exchange for a pro-
50 portional reduction of the transferee's interest in the joint ven-
51 ture, partnership, or limited liability company. For the purposes of
52 this section, the term "limited liability company" means a business
53 organization as defined in chapter 6, title 53, Idaho Code;
11
1 (ii) The formation of a partnership, joint venture, or limited lia-
2 bility company by the transfer of assets to the partnership, joint
3 venture, or limited liability company or transfers to a partnership,
4 joint venture, or limited liability company in exchange for propor-
5 tionate interests in the partnership, joint venture, or limited lia-
6 bility company;
7 (iii) The formation of a corporation by the owners of a business and
8 the transfer of their business assets to the corporation in exchange
9 for stock in proportion to assets contributed;
10 (iv) The transfer of assets of shareholders in the formation or dis-
11 solution of a corporation;
12 (v) The transfer of capital assets by a corporation to its stock-
13 holders in exchange for surrender of capital stock;
14 (vi) The transfer of assets from a parent corporation to a subsid-
15 iary corporation which is owned at least eighty percent (80%) by the
16 parent corporation, which transfer is solely in exchange for stock or
17 securities of the subsidiary corporation;
18 (vii) The transfer of assets from a subsidiary corporation which is
19 owned at least eighty percent (80%) by the parent corporation to a
20 parent corporation or another subsidiary which is owned at least
21 eighty percent (80%) by the parent corporation, which transfer is
22 solely in exchange for stock or securities of the parent corporation
23 or the subsidiary which received the assets.
24 (4) The sale, lease or rental of a capital asset in substantially the
25 same form as acquired by the transferor and on which the initial transfer-
26 or has paid sales or use taxes pursuant to section 63-3619 or 63-3621,
27 Idaho Code, when the owners of all of the outstanding stock, equity or
28 interest of the transferor are the same as the transferee or are members
29 of the same family within the second degree of consanguinity or affinity.
30 (5) The sale of substantially all of the operating assets of a business
31 or of a separate division, branch, or identifiable segment to a buyer who
32 continues operation of the business. For the purpose of this subsection, a
33 "separate division, branch, or identifiable segment" shall be deemed to
34 exist if, prior to its sale, the income and expense attributable to such
35 "separate division, branch, or identifiable segment" could be separately
36 ascertained from the books of accounts and records.
37 (6) Sales by persons who are not defined as "retailers" in section
38 63-3610, Idaho Code.
39 (7) Sales of animals by any 4-H club or FFA club held in conjunction with
40 a fair or the western Idaho spring lamb sale.
41 (8) The sale or purchase of tangible personal property at home yard
42 sales; provided however, that no more than two (2) such home yard sales
43 per individual calendar year shall be exempt.
44 (c) As used in this section, the term "occasional sale," when applied to
45 the sale of a motor vehicle, means only:
46 (1) Sales of motor vehicles between members of a family related within
47 the second degree of consanguinity, unless a sales or use tax was not
48 imposed on the sale of that motor vehicle at the time of purchase, in
49 which situation the sale is taxable.
50 (2) Sales of motor vehicles that fall within the scope of the transac-
51 tions detailed in subsection (b)(2) through (b)(5) of this section.
52 (d) The exemption provided by subsection (b)(1), (b)(4), (b)(6) or (b)(8)
53 of this section shall not apply to the sale, purchase or use of aircraft, as
54 defined in section 21-201, Idaho Code, nor shall it apply to the sale, pur-
55 chase or use of boats or vessels, as defined in section 67-7003, Idaho Code,
12
1 nor shall it apply to the sale, purchase or use of snowmobiles, recreational
2 vehicles or off-highway motorbikes, as defined in section 63-3622HH, Idaho
3 Code.
4 SECTION 13. That Section 63-3622Y, Idaho Code, as added by Section 1,
5 Chapter 435, Laws of 1990, and Sections 63-3622F, 63-3622G, 63-3622S,
6 63-3622V, 63-3622Y, 63-3622BB, 63-3622CC, 63-3622DD and 63-3622GG, Idaho Code,
7 be, and the same are hereby repealed.
8 SECTION 14. That Section 67-7439, Idaho Code, be, and the same is
9 hereby amended to read as follows:
10 67-7439. TAXES. Income taxes shall only be imposed on lottery prizes
11 received from lottery tickets purchased after the effective date of this act.
12 Lottery prizes awarded by the Idaho state lottery under six hundred dollars
13 ($600) shall not be subject to the state income tax. No taxes of any kind
14 whatsoever shall be imposed upon the sale, purchase, storage, use or other
15 consumption of Idaho lottery tickets or shares, or upon equipment, devices or
16 systems directly used in the production, operation, sales, distribution,
17 tracking, drawing, accounting, communication of or computation of lottery
18 games.
19 The state lottery shall pay to a city, county, the state or any political
20 subdivision or municipality thereof in which the state lottery occupies a
21 premises owned by the state a grant not to exceed the amount that would be
22 payable as taxes on the property in that year, if the property were not exempt
23 from taxation.
24 SECTION 15. That Section 63-3622D, Idaho Code, be, and the same is hereby
25 amended to read as follows:
26 63-3622D. PRODUCTION EXEMPTION. There are exempted from the taxes imposed
27 by this chapter:
28 (a) The sale at retail, storage, use or other consumption in this state
29 of:
30 (1) Tangible personal property which will enter into and become an ingre-
31 dient or component part of tangible personal property manufactured, proc-
32 essed, mined, produced or fabricated for sale.
33 (2) Tangible personal property primarily and directly used or consumed in
34 or during a manufacturing, processing, mining, farming, or fabricating
35 operation, including, but not limited to, repair parts, lubricants,
36 hydraulic oil, and coolants, which become a component part of such tangi-
37 ble personal property; provided that the use or consumption of such tangi-
38 ble personal property is necessary or essential to the performance of such
39 operation.
40 (3) Chemicals, catalysts, and other materials which are used for the pur-
41 pose of producing or inducing a chemical or physical change in the product
42 or for removing impurities from the product or otherwise placing the prod-
43 uct in a more marketable condition as part of an operation described in
44 subsection (a)(2) of this section, and chemicals and equipment used in
45 clean-in-place systems in the food processing and food manufacturing
46 industries.
47 (4) Safety equipment and supplies required to meet a safety standard of a
48 state or federal agency when such safety equipment and supplies are used
49 as part of an operation described in subsection (a)(2) of this section.
50 (5) Plants to be used as part of a farming operation.
13
1 (b) Other than as provided in subsection (c) of this section, the exemp-
2 tions allowed in subsections (a)(1), (2), (3) and (4) of this section are
3 available only to a business or separately operated segment of a business
4 which is primarily devoted to producing tangible personal property which that
5 business will sell and which is intended for ultimate sale at retail within
6 or without this state. A contractor providing services to a business entitled
7 to an exemption under this section is not exempt as to any property owned,
8 leased, rented or used by it unless, as a result of the terms of the contract,
9 the use of the property is exempt under section 63-3615(b), Idaho Code.
10 (c) The exemptions allowed in subsections (a)(1), (a)(2), (a)(3) and
11 (a)(4) of this section shall also be available to a business, or separately
12 operated segment of a business, engaged in farming or mining, whether as a
13 subcontractor, contractor, contractee or subcontractee, when such business or
14 segment of a business is primarily devoted to producing tangible personal
15 property which is intended for ultimate sale at retail within or without this
16 state, without regard to the ownership of the product being produced.
17 (d) As used in this section, the term "directly used or consumed in or
18 during" a farming operation means the performance of a function reasonably
19 necessary to the operation of the total farming business, including, the
20 planting, growing, harvesting and initial storage of crops and other agricul-
21 tural products and movement of crops and produce from the place of harvest to
22 the place of initial storage. It includes disinfectants used in the dairy
23 industry to clean cow udders or to clean pipes, vats or other milking equip-
24 ment.
25 (e) The exemptions allowed in this section do not include machinery,
26 equipment, materials and supplies used in a manner that is incidental to the
27 manufacturing, processing, mining, farming or fabricating operations such as
28 maintenance and janitorial equipment and supplies.
29 (f) Without regard to the use of such property, this section does not
30 exempt:
31 (1) Hand tools with a unit purchase price not in excess of one hundred
32 dollars ($100). A hand tool is an instrument used or worked by hand.
33 (2) Tangible personal property used in any activities other than the
34 actual manufacturing, processing, mining, farming or fabricating opera-
35 tions such as office equipment and supplies, and equipment and supplies
36 used in selling or distributing activities.
37 (3) Property used in research or development.
38 (4) Property used in transportation activities.
39 (5) Machinery, equipment, tools or other property used to make repairs.
40 This subsection does not include repair parts that become a component part
41 of tangible property exempt from tax under this section or lubricants,
42 hydraulic oil, or coolants used in the operation of tangible personal
43 property exempt under this section.
44 (6) Machinery, equipment, tools or other property used to manufacture,
45 fabricate, assemble or install tangible personal property which is:
46 (i) Not held for resale in the regular course of business; and
47 (ii) Owned by the manufacturer, processor, miner, farmer or fabrica-
48 tor;
49 provided, however, this subsection does not prevent exemption of machin-
50 ery, equipment, tools or other property exempted from tax under subsection
51 (a)(2) or (a)(3) of this section.
52 (7) Any improvement to real property or fixture thereto or any tangible
53 personal property which becomes or is intended to become a component of
54 any real property or any improvement or fixture thereto.
55 (8) Motor vehicles and aircraft.
14
1 (9) Tangible personal property used or consumed in processing, producing
2 or fabricating tangible personal property exempted from tax under this
3 chapter in sections 63-3622F, 63-3622G and 63-3622I, Idaho Code.
4 (10) Tangible personal property described in section 63-3622HH, Idaho
5 Code.
6 (g) Any tangible personal property exempt under this section which ceases
7 to qualify for this exemption, and does not qualify for any other exemption or
8 exclusion of the taxes imposed by this chapter, shall be subject to use tax
9 based upon its value at the time it ceases to qualify for exemption. Any tan-
10 gible personal property taxed under this chapter which later qualifies for
11 this exemption shall not entitle the owner of it to any claim for refund.
12 SECTION 16. That Section 63-3622JJ, Idaho Code, be, and the same is
13 hereby amended to read as follows:
14 63-3622JJ. LOGGING EXEMPTION. There are exempted from the taxes imposed
15 by this chapter:
16 (1) The sale at retail, storage, use or other consumption in this state
17 of tangible personal property which is primarily and directly used or consumed
18 in logging including, but not limited to, log loaders, log jammers, log
19 skidders and fuel used in logging trucks, provided that the use or consumption
20 of such tangible personal property is necessary or essential to logging.
21 (2) The exemption allowed by subsection (1) of this section does not
22 include machinery, equipment, materials and supplies used in a manner that is
23 incidental to logging such as maintenance and janitorial equipment and sup-
24 plies, and hand tools with a unit purchase price not in excess of one hundred
25 dollars ($100); nor does it include tangible personal property used in any
26 activities other than the actual logging, such as office equipment and sup-
27 plies, equipment and supplies used in selling or distributing activities, in
28 research, or, except for fuel used in logging trucks, in transportation activ-
29 ities; nor shall this exemption include motor vehicles or aircraft, without
30 regard to the use to which such motor vehicles or aircraft are put; nor shall
31 this exemption apply to vehicles or equipment described in section 63-3622HH,
32 Idaho Code; nor shall this exemption include tangible personal property used
33 to produce tangible personal property exempted from the tax under this chapter
34 by section 63-3622G, Idaho Code.
35 SECTION 17. That Section 63-3623, Idaho Code, be, and the same is hereby
36 amended to read as follows:
37 63-3623. RETURNS AND PAYMENTS. (a) The taxes imposed by this act are due
38 and payable to the state tax commission monthly on or before the twentieth day
39 of the succeeding month.
40 (b) All moneys collected or received by the state tax commission from the
41 taxes, penalties, interest and fees imposed by this act shall be deposited
42 with the state treasurer to be credited by him to the sales tax account cre-
43 ated by this act.
44 (c) On or before the twentieth day of the month a return shall be filed
45 with the state tax commission in such form as the state tax commission may
46 prescribe.
47 (d) For the purpose of the sales tax, a return shall be filed by every
48 seller. For the purposes of the use tax, a return shall be filed by every
49 retailer engaged in business in this state and by every person purchasing tan-
50 gible personal property, the storage, use, or other consumption of which is
51 subject to the use tax, who has not paid the use tax due to a retailer
15
1 required to collect the tax. Returns shall be signed by the person required to
2 file the return or by his duly authorized agent.
3 (e) For the purposes of the sales tax, the return shall show the total
4 sales at retail subject to tax under this act during the reporting period. For
5 the purposes of the use tax, in case of a return filed by a retailer, the
6 return shall show the total sales price of the property sold by him, the stor-
7 age, use, or consumption of which property became subject to the use tax dur-
8 ing the reporting period; in the case of a return filed by a purchaser, the
9 return shall show the total sales price of the property purchased by him, the
10 storage, use, or consumption of which became subject to the use tax during the
11 reporting period.
12 (f) The return shall show the amount of the taxes for the period covered
13 by the return and such other information as the state tax commission deems
14 necessary for the proper administration of this act.
15 (g) The person required to file the return shall mail or deliver the
16 return together with a remittance of any tax due to the state tax commission
17 for the reporting period.
18 (h) The state tax commission, if it deems it necessary in order to insure
19 payment to or facilitate the collection by the state of taxes, may require
20 returns for periods other than monthly periods.
21 (i) For the purposes of the sales tax, gross amounts from rentals or
22 leases of tangible personal property which may be subject to tax under this
23 act shall be reported and the tax paid in accordance with such rules as the
24 state tax commission may prescribe.
25 (j) The state tax commission for good cause may extend, for not to exceed
26 one (1) month, the time for making any return or paying any amount required to
27 be paid under this act.
28 (k) Any person to whom an extension is granted and who pays the tax
29 within the period for which the extension is granted shall pay, in addition to
30 the tax, interest at the rate provided in section 63-3045, Idaho Code, from
31 the date on which the tax would have been due without the extension until the
32 day of payment.
33 (l) Upon the transfer of ownership of a motor vehicle subject to sales or
34 use tax, a certificate of title will be issued to the new owner only upon pre-
35 sentation of evidence of payment of sales or use tax on the transaction.
36 (m) The owner of a motor vehicle or trailer required to be registered by
37 the laws of this state shall, upon demand, furnish to the officer issuing such
38 registration, satisfactory evidence that any sales or use tax to which such
39 motor vehicle or trailer is subject has been paid to this state before any
40 such registration shall be issued.
41 (n) Retail sales of tangible personal property through a vending machine
42 which are taxable upon the purchase price paid by the owner or operator of the
43 vending machine pursuant to subsection (e) of section 63-3613, Idaho Code,
44 shall be reported upon the sales tax return of the owner or operator of the
45 vending machine in the manner by which the tax commission may by rule pre-
46 scribe.
47 SECTION 18. That Section 63-3640, Idaho Code, be, and the same is hereby
48 amended to read as follows:
49 63-3640. CONTRACTS ENTERED INTO BEFORE EFFECTIVE DATE OF INCREASED TAX.
50 (1) Commencing May 1, 2003, and ending June 30, 2005, the purchase, use, stor-
51 age or other consumption of tangible personal property which is otherwise sub-
52 ject to the taxes imposed by this chapter by persons defined in section
53 63-3609(a1), Idaho Code, shall be exempt from one cent (1¢) of the taxes
16
1 imposed by sections 63-3619 and 63-3621, Idaho Code, if:
2 (a) The tangible personal property is purchased, used, stored or other-
3 wise consumed for incorporation into real property; and
4 (b) The tangible personal property is purchased, used, stored or other-
5 wise consumed in regard to a project performed by such person pursuant to
6 a qualified contract; and
7 (c) The taxpayer claims the exemption in the manner provided by subsec-
8 tion (3) of this section.
9 (2) As used in this section, the term "qualified contract" means a con-
10 tract which:
11 (a) Is a written contract; and
12 (b) Was in effect on April 15, 2003, or was submitted for bid or bid in
13 written form on or before April 15, 2003, and subsequently became a writ-
14 ten contract; and
15 (c) Was negotiated or bid based upon the sales or use tax being five per-
16 cent (5%); and
17 (d) Requires the cost of the sales or use tax to be borne by the contrac-
18 tor.
19 (3) A person entitled to the exemption granted in subsection (1) of this
20 section may submit a claim for refund to the state tax commission for the
21 amount of one cent (1¢) of the tax imposed by sections 63-3619 and 63-3621,
22 Idaho Code, if it has actually been paid by him. The claim for refund shall
23 include:
24 (a) A copy of a written contract which is a qualified contract; and
25 (b) A detailed invoice prepared by the seller showing all items of tangi-
26 ble personal property purchased by the claimant, the sale of which is sub-
27 ject to the exemption granted in subsection (1) of this section; and
28 (c) A document signed by the purchaser certifying that the tangible per-
29 sonal property shown on the invoice required by subsection (3)(b) of this
30 section has in fact been used by him on the project to which the qualified
31 contract relates.
32 (4) Upon receipt of the claim for refund, the state tax commission shall
33 review the claim and, if it finds it to be proper, shall pay the refund
34 together with interest from the date that the claim was filed at the rate
35 established by section 63-3045, Idaho Code, within thirty (30) days from the
36 date the claim was received by the commission.
37 (5) The use or incorporation into real property of any tangible personal
38 property upon which the exemption provided by subsection (1) of this section
39 has been claimed pursuant to any contract other than a qualified contract
40 shall be a misdemeanor.
41 (6) In addition to the criminal penalties provided by subsection (5) of
42 this section, the use or incorporation into real property of tangible personal
43 property upon which the exemption provided by subsection (1) of this section
44 has been claimed pursuant to any contract which is not a qualified contract
45 shall subject the user to a penalty of three (3) times the sales or use tax
46 otherwise due under this chapter to be enforced and collected as provided by
47 sections 63-3634 and 63-3635, Idaho Code.
48 (7) In the case of a retailer who makes sales of tangible personal prop-
49 erty to any person entitled to the exemption granted in subsection (1) of this
50 section who is for any reason unable to collect one cent (1¢) of the tax
51 imposed by sections 63-3619 and 63-3621, Idaho Code, from the purchaser, the
52 retailer shall be entitled to claim the refund otherwise available to the pur-
53 chaser. The claim for refund shall be filed in the manner prescribed by sub-
54 section (3) of this section. Nothing in this subsection shall excuse the
55 retailer from reporting sales and use taxes at the full statutory rate on all
17
1 taxable sales made during the period to which his sales or use tax return
2 relates. If a refund claim is filed concurrently with the return, the refund
3 claimed may be credited against the tax due on the return. Any retailer who
4 claims a refund for any taxes actually collected from the purchaser shall be
5 subject to a penalty of three (3) times the sales or use tax refund improperly
6 claimed to be enforced and collected as provided by sections 63-3634 and
7 63-3635, Idaho Code.
8 SECTION 19. SEVERABILITY. The provisions of this act are hereby declared
9 to be severable and if any provision of this act or the application of such
10 provision to any person or circumstance is declared invalid for any reason,
11 such declaration shall not affect the validity of the remaining portions of
12 this act.
STATEMENT OF PURPOSE
RS 14737
This bill enacts the "Idaho Economic Recovery and Sales Tax
Reform Act of 2005" which reduces the Sales and Use Tax from six
percent (6%) to four percent (4%). It repeals certain Sales and
Use Tax exemptions and subjects certain services to the Sales and
Use Tax, with the result that there is a new gain of $61,300,000
in revenues as demonstrated by the following table:
Sales Tax Collections Per 1% $180,000,000
(Dollar value per 1%)
Gain from Removing Certain
Sales Tax Exemptions: $49,800,000
Tax 4% Services(except medical) $191,500,000
Total $241,300,000
1 Cent Sales Tax Off $180,000,000
Net Gain to General Fund $61,300,000
FISCAL NOTE
This bill will result in a increase in annual revenue to the
State of Idaho of approximately $61,300,000 commencing
July 1, 2005.
The implementation will be accomplished with in-house staff
and in-house printing services, thus requiring an appropriation
of less than $200,000.
Contact
Name: Representative Tom Trail
Phone: 332-1000
STATEMENT OF PURPOSE/FISCAL NOTE H 65