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H0369aa.............................................by REVENUE AND TAXATION SALES TAX EXEMPTION - HEATING MATERIALS - Amends existing law to clarify that heating materials qualifying for the sales tax exemption are further exempt under the production and logging exemptions. 03/22 House intro - 1st rdg - to printing 03/23 Rpt prt - to Rev/Tax 03/24 Rpt out - to Gen Ord Rpt out amen - to engros 03/28 Rpt engros - 1st rdg - to 2nd rdg as amen 03/29 2nd rdg - to 3rd rdg as amen Rls susp - PASSED - 58-11-1 AYES -- Anderson, Andrus, Barraclough, Barrett, Bastian, Bayer, Bedke, Bell, Bilbao, Black, Block, Bolz, Bradford, Chadderdon, Collins, Crow, Denney, Edmunson, Ellsworth, Eskridge, Field(18), Field(23), Garrett, Hart, Harwood, Henderson, Jaquet, Jones, Kemp, Loertscher, Martinez, Mathews, McGeachin, McKague, Miller, Moyle, Nielsen, Nonini, Pasley-Stuart, Pence, Raybould, Ring, Ringo, Roberts, Rydalch, Sali, Sayler, Schaefer, Shepherd(2), Shepherd(8), Shirley, Skippen, Smylie, Stevenson, Trail, Wills, Wood, Mr. Speaker NAYS -- Boe, Cannon, Clark, Deal, Henbest, Lake, LeFavour, Mitchell, Rusche, Smith(30), Snodgrass Absent and excused -- Smith(24) Floor Sponsors - Eskridge & Anderson Title apvd - to Senate 03/29 Senate intro - 1st rdg - to Loc Gov
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]] Fifty-eighth Legislature First Regular Session - 2005IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 369 BY REVENUE AND TAXATION COMMITTEE 1 AN ACT 2 RELATING TO SALES AND USE TAXATION; AMENDING SECTION 63-3622D, IDAHO CODE, TO 3 DELETE REFERENCE TO THE SALES TAX EXEMPTION FOR HEATING MATERIALS AND TO 4 MAKE TECHNICAL CORRECTIONS; REPEALING SECTION 63-3622G, IDAHO CODE, RELAT- 5 ING TO AN EXEMPTION FOR SALES AND USE TAXATION FOR THE PURCHASE OF ANY 6 MATTER USED TO PRODUCE HEAT BY BURNING; AND AMENDING SECTION 63-3622JJ, 7 IDAHO CODE, TO DELETE REFERENCE TO THE SALES TAX EXEMPTION FOR HEATING 8 MATERIALS. 9 Be It Enacted by the Legislature of the State of Idaho: 10 SECTION 1. That Section 63-3622D, Idaho Code, be, and the same is hereby 11 amended to read as follows: 12 63-3622D. PRODUCTION EXEMPTION. There are exempted from the taxes imposed 13 by this chapter: 14 (a) The sale at retail, storage, use or other consumption in this state 15 of: 16 (1) Tangible personal property which will enter into and become an ingre- 17 dient or component part of tangible personal property manufactured, proc- 18 essed, mined, produced or fabricated for sale. 19 (2) Tangible personal property primarily and directly used or consumed in 20 or during a manufacturing, processing, mining, farming, or fabricating 21 operation, including, but not limited to, repair parts, lubricants, 22 hydraulic oil, and coolants, which become a component part of such tangi- 23 ble personal property; provided that the use or consumption of such tangi- 24 ble personal property is necessary or essential to the performance of such 25 operation. 26 (3) Chemicals, catalysts, and other materials which are used for the pur- 27 pose of producing or inducing a chemical or physical change in the product 28 or for removing impurities from the product or otherwise placing the prod- 29 uct in a more marketable condition as part of an operation described in 30 subsection (a)(2) of this section, and chemicals and equipment used in 31 clean-in-place systems in the food processing and food manufacturing 32 industries. 33 (4) Safety equipment and supplies required to meet a safety standard of a 34 state or federal agency when such safety equipment and supplies are used 35 as part of an operation described in subsection (a)(2) of this section. 36 (5) Plants to be used as part of a farming operation. 37 (b) Other than as provided in subsection (c) of this section, the exemp- 38 tions allowed in subsections (a)(1), (a)(2), (a)(3) and (a)(4) of this section 39 are available only to a business or separately operated segment of a business 40 which is primarily devoted to producing tangible personal property which that 41 business will sell and which is intended for ultimate sale at retail within or 42 without this state. A contractor providing services to a business entitled to 43 an exemption under this section is not exempt as to any property owned, 2 1 leased, rented or used by it unless, as a result of the terms of the contract, 2 the use of the property is exempt under section 63-3615(b), Idaho Code. 3 (c) The exemptions allowed in subsections (a)(1), (a)(2), (a)(3) and 4 (a)(4) of this section shall also be available to a business, or separately 5 operated segment of a business, engaged in farming or mining, whether as a 6 subcontractor, contractor, contractee or subcontractee, when such business or 7 segment of a business is primarily devoted to producing tangible personal 8 property which is intended for ultimate sale at retail within or without this 9 state, without regard to the ownership of the product being produced. 10 (d) As used in this section, the term "directly used or consumed in or 11 during" a farming operation means the performance of a function reasonably 12 necessary to the operation of the total farming business, including, the 13 planting, growing, harvesting and initial storage of crops and other agricul- 14 tural products and movement of crops and produce from the place of harvest to 15 the place of initial storage. It includes disinfectants used in the dairy 16 industry to clean cow udders or to clean pipes, vats or other milking equip- 17 ment. 18 (e) The exemptions allowed in this section do not include machinery, 19 equipment, materials and supplies used in a manner that is incidental to the 20 manufacturing, processing, mining, farming or fabricating operations such as 21 maintenance and janitorial equipment and supplies. 22 (f) Without regard to the use of such property, this section does not 23 exempt: 24 (1) Hand tools with a unit purchase price not in excess of one hundred 25 dollars ($100). A hand tool is an instrument used or worked by hand. 26 (2) Tangible personal property used in any activities other than the 27 actual manufacturing, processing, mining, farming or fabricating opera- 28 tions such as office equipment and supplies, and equipment and supplies 29 used in selling or distributing activities. 30 (3) Property used in research or development. 31 (4) Property used in transportation activities. 32 (5) Machinery, equipment, tools or other property used to make repairs. 33 This subsection does not include repair parts that become a component part 34 of tangible property exempt from tax under this section or lubricants, 35 hydraulic oil, or coolants used in the operation of tangible personal 36 property exempt under this section. 37 (6) Machinery, equipment, tools or other property used to manufacture, 38 fabricate, assemble or install tangible personal property which is: 39 (i) Not held for resale in the regular course of business; and 40 (ii) Owned by the manufacturer, processor, miner, farmer or fabrica- 41 tor; 42 provided, however, this subsection does not prevent exemption of machin- 43 ery, equipment, tools or other property exempted from tax under subsection 44 (a)(2) or (a)(3) of this section. 45 (7) Any improvement to real property or fixture thereto or any tangible 46 personal property which becomes or is intended to become a component of 47 any real property or any improvement or fixture thereto. 48 (8) Motor vehicles and aircraft. 49 (9) Tangible personal property used or consumed in processing, producing 50 or fabricating tangible personal property exempted from tax under this 51 chapter in sections 63-3622F, 63-3622Gand 63-3622I, Idaho Code. 52 (10) Tangible personal property described in section 63-3622HH, Idaho 53 Code. 54 (g) Any tangible personal property exempt under this section which ceases 55 to qualify for this exemption, and does not qualify for any other exemption or 3 1 exclusion of the taxes imposed by this chapter, shall be subject to use tax 2 based upon its value at the time it ceases to qualify for exemption. Any tan- 3 gible personal property taxed under this chapter which later qualifies for 4 this exemption shall not entitle the owner of it to any claim for refund. 5 SECTION 2. That Section 63-3622G, Idaho Code, be, and the same is hereby 6 repealed. 7 SECTION 3. That Section 63-3622JJ, Idaho Code, be, and the same is hereby 8 amended to read as follows: 9 63-3622JJ. LOGGING EXEMPTION. There are exempted from the taxes imposed 10 by this chapter: 11 (1) The sale at retail, storage, use or other consumption in this state 12 of tangible personal property which is primarily and directly used or consumed 13 in logging including, but not limited to, log loaders, log jammers, log 14 skidders and fuel used in logging trucks, provided that the use or consumption 15 of such tangible personal property is necessary or essential to logging. 16 (2) The exemption allowed by subsection (1) of this section does not 17 include machinery, equipment, materials and supplies used in a manner that is 18 incidental to logging such as maintenance and janitorial equipment and sup- 19 plies, and hand tools with a unit purchase price not in excess of one hundred 20 dollars ($100); nor does it include tangible personal property used in any 21 activities other than the actual logging, such as office equipment and sup- 22 plies, equipment and supplies used in selling or distributing activities, in 23 research, or, except for fuel used in logging trucks, in transportation activ- 24 ities; nor shall this exemption include motor vehicles or aircraft, without 25 regard to the use to which such motor vehicles or aircraft are put; nor shall 26 this exemption apply to vehicles or equipment described in section 63-3622HH, 27 Idaho Code; nor shall this exemption include tangible personal property used28to produce tangible personal property exempted from the tax under this chapter29by section 63-3622G, Idaho Code.
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]] Fifty-eighth Legislature First Regular Session - 2005Moved by Wood Seconded by Crow IN THE HOUSE OF REPRESENTATIVES HOUSE AMENDMENT TO H.B. NO. 369 1 AMENDMENT TO THE BILL 2 On page 3 of the printed bill, delete lines 5 and 6; and in line 7, delete 3 "SECTION 3" and insert: "SECTION 2". 4 CORRECTION TO TITLE 5 On page 1, delete lines 4 through 6 and insert: "MAKE TECHNICAL CORREC- 6 TIONS; AND AMENDING SECTION 63-3622JJ,".
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]] Fifty-eighth Legislature First Regular Session - 2005IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 369, As Amended BY REVENUE AND TAXATION COMMITTEE 1 AN ACT 2 RELATING TO SALES AND USE TAXATION; AMENDING SECTION 63-3622D, IDAHO CODE, TO 3 DELETE REFERENCE TO THE SALES TAX EXEMPTION FOR HEATING MATERIALS AND TO 4 MAKE TECHNICAL CORRECTIONS; AND AMENDING SECTION 63-3622JJ, IDAHO CODE, TO 5 DELETE REFERENCE TO THE SALES TAX EXEMPTION FOR HEATING MATERIALS. 6 Be It Enacted by the Legislature of the State of Idaho: 7 SECTION 1. That Section 63-3622D, Idaho Code, be, and the same is hereby 8 amended to read as follows: 9 63-3622D. PRODUCTION EXEMPTION. There are exempted from the taxes imposed 10 by this chapter: 11 (a) The sale at retail, storage, use or other consumption in this state 12 of: 13 (1) Tangible personal property which will enter into and become an ingre- 14 dient or component part of tangible personal property manufactured, proc- 15 essed, mined, produced or fabricated for sale. 16 (2) Tangible personal property primarily and directly used or consumed in 17 or during a manufacturing, processing, mining, farming, or fabricating 18 operation, including, but not limited to, repair parts, lubricants, 19 hydraulic oil, and coolants, which become a component part of such tangi- 20 ble personal property; provided that the use or consumption of such tangi- 21 ble personal property is necessary or essential to the performance of such 22 operation. 23 (3) Chemicals, catalysts, and other materials which are used for the pur- 24 pose of producing or inducing a chemical or physical change in the product 25 or for removing impurities from the product or otherwise placing the prod- 26 uct in a more marketable condition as part of an operation described in 27 subsection (a)(2) of this section, and chemicals and equipment used in 28 clean-in-place systems in the food processing and food manufacturing 29 industries. 30 (4) Safety equipment and supplies required to meet a safety standard of a 31 state or federal agency when such safety equipment and supplies are used 32 as part of an operation described in subsection (a)(2) of this section. 33 (5) Plants to be used as part of a farming operation. 34 (b) Other than as provided in subsection (c) of this section, the exemp- 35 tions allowed in subsections (a)(1), (a)(2), (a)(3) and (a)(4) of this section 36 are available only to a business or separately operated segment of a business 37 which is primarily devoted to producing tangible personal property which that 38 business will sell and which is intended for ultimate sale at retail within or 39 without this state. A contractor providing services to a business entitled to 40 an exemption under this section is not exempt as to any property owned, 41 leased, rented or used by it unless, as a result of the terms of the contract, 42 the use of the property is exempt under section 63-3615(b), Idaho Code. 43 (c) The exemptions allowed in subsections (a)(1), (a)(2), (a)(3) and 2 1 (a)(4) of this section shall also be available to a business, or separately 2 operated segment of a business, engaged in farming or mining, whether as a 3 subcontractor, contractor, contractee or subcontractee, when such business or 4 segment of a business is primarily devoted to producing tangible personal 5 property which is intended for ultimate sale at retail within or without this 6 state, without regard to the ownership of the product being produced. 7 (d) As used in this section, the term "directly used or consumed in or 8 during" a farming operation means the performance of a function reasonably 9 necessary to the operation of the total farming business, including, the 10 planting, growing, harvesting and initial storage of crops and other agricul- 11 tural products and movement of crops and produce from the place of harvest to 12 the place of initial storage. It includes disinfectants used in the dairy 13 industry to clean cow udders or to clean pipes, vats or other milking equip- 14 ment. 15 (e) The exemptions allowed in this section do not include machinery, 16 equipment, materials and supplies used in a manner that is incidental to the 17 manufacturing, processing, mining, farming or fabricating operations such as 18 maintenance and janitorial equipment and supplies. 19 (f) Without regard to the use of such property, this section does not 20 exempt: 21 (1) Hand tools with a unit purchase price not in excess of one hundred 22 dollars ($100). A hand tool is an instrument used or worked by hand. 23 (2) Tangible personal property used in any activities other than the 24 actual manufacturing, processing, mining, farming or fabricating opera- 25 tions such as office equipment and supplies, and equipment and supplies 26 used in selling or distributing activities. 27 (3) Property used in research or development. 28 (4) Property used in transportation activities. 29 (5) Machinery, equipment, tools or other property used to make repairs. 30 This subsection does not include repair parts that become a component part 31 of tangible property exempt from tax under this section or lubricants, 32 hydraulic oil, or coolants used in the operation of tangible personal 33 property exempt under this section. 34 (6) Machinery, equipment, tools or other property used to manufacture, 35 fabricate, assemble or install tangible personal property which is: 36 (i) Not held for resale in the regular course of business; and 37 (ii) Owned by the manufacturer, processor, miner, farmer or fabrica- 38 tor; 39 provided, however, this subsection does not prevent exemption of machin- 40 ery, equipment, tools or other property exempted from tax under subsection 41 (a)(2) or (a)(3) of this section. 42 (7) Any improvement to real property or fixture thereto or any tangible 43 personal property which becomes or is intended to become a component of 44 any real property or any improvement or fixture thereto. 45 (8) Motor vehicles and aircraft. 46 (9) Tangible personal property used or consumed in processing, producing 47 or fabricating tangible personal property exempted from tax under this 48 chapter in sections 63-3622F, 63-3622Gand 63-3622I, Idaho Code. 49 (10) Tangible personal property described in section 63-3622HH, Idaho 50 Code. 51 (g) Any tangible personal property exempt under this section which ceases 52 to qualify for this exemption, and does not qualify for any other exemption or 53 exclusion of the taxes imposed by this chapter, shall be subject to use tax 54 based upon its value at the time it ceases to qualify for exemption. Any tan- 55 gible personal property taxed under this chapter which later qualifies for 3 1 this exemption shall not entitle the owner of it to any claim for refund. 2 SECTION 2. That Section 63-3622JJ, Idaho Code, be, and the same is hereby 3 amended to read as follows: 4 63-3622JJ. LOGGING EXEMPTION. There are exempted from the taxes imposed 5 by this chapter: 6 (1) The sale at retail, storage, use or other consumption in this state 7 of tangible personal property which is primarily and directly used or consumed 8 in logging including, but not limited to, log loaders, log jammers, log 9 skidders and fuel used in logging trucks, provided that the use or consumption 10 of such tangible personal property is necessary or essential to logging. 11 (2) The exemption allowed by subsection (1) of this section does not 12 include machinery, equipment, materials and supplies used in a manner that is 13 incidental to logging such as maintenance and janitorial equipment and sup- 14 plies, and hand tools with a unit purchase price not in excess of one hundred 15 dollars ($100); nor does it include tangible personal property used in any 16 activities other than the actual logging, such as office equipment and sup- 17 plies, equipment and supplies used in selling or distributing activities, in 18 research, or, except for fuel used in logging trucks, in transportation activ- 19 ities; nor shall this exemption include motor vehicles or aircraft, without 20 regard to the use to which such motor vehicles or aircraft are put; nor shall 21 this exemption apply to vehicles or equipment described in section 63-3622HH, 22 Idaho Code; nor shall this exemption include tangible personal property used23to produce tangible personal property exempted from the tax under this chapter24by section 63-3622G, Idaho Code.
STATEMENT OF PURPOSE RS 15169 Removes Section 63-3622G, Idaho Code, which prevents certain industries from receiving the production exemption. There are four wood pellet manufacturing companies located in Idaho that are prohibited from fully participating in the State's sales and use tax exemption afforded to all other manufacturing companies. FISCAL IMPACT The Tax Commission estimates a reduction of $150,000 to the general fund. Contact Name: Rep. George Eskridge Phone: 332-1270 Rep. Eric Anderson Phone: 332-1232 Senator Shawn Keough Phone: 332-1349 STATEMENT OF PURPOSE/FISCAL NOTE H 369