Print Friendly HOUSE BILL NO. 459 – Tax licenses/permits/accts, violatn
HOUSE BILL NO. 459
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H0459...............................................by REVENUE AND TAXATION
TAX - LICENSE, PERMITS, ACCOUNTS - Adds to, amends and repeals existing law
to revise the laws regarding tax licenses, permits and accounts for persons
or entities that collect cigarette tax, motor fuels tax or who withhold
income tax; and to provide civil penalties for violations.
01/24 House intro - 1st rdg - to printing
01/25 Rpt prt - to Rev/Tax
02/17 Rpt out - rec d/p - to 2nd rdg
02/20 2nd rdg - to 3rd rdg
02/23 3rd rdg - PASSED - 63-0-7
AYES -- Anderson, Andrus, Barraclough, Barrett, Bastian, Bayer,
Bedke, Bell, Bilbao, Boe, Bolz, Bradford, Cannon, Chadderdon, Clark,
Collins, Crow, Denney, Edmunson, Ellsworth, Eskridge, Field(18),
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), Smylie(Luker),
Snodgrass, Stevenson, Trail, Wills, Mr. Speaker
NAYS -- None
Absent and excused -- Black, Block, Brackett, Deal, Field(23), Sali,
Floor Sponsor - Clark
Title apvd - to Senate
02/24 Senate intro - 1st rdg - to Loc Gov
03/02 Rpt out - rec d/p - to 2nd rdg
03/03 2nd rdg - to 3rd rdg
03/07 3rd rdg - PASSED - 33-0-2
AYES -- Andreason, Brandt, Broadsword, Bunderson, Burkett, Cameron,
Coiner, Compton, Corder, Darrington, Davis, Fulcher, Gannon, Geddes,
Goedde, Hill, Jorgenson, Kelly, Keough, Langhorst, Little, Lodge,
Malepeai, Marley, McGee, McKenzie, Richardson, Schroeder, Stegner,
Stennett, Sweet, Werk, Williams
NAYS -- None
Absent and excused -- Burtenshaw, Pearce
Floor Sponsor - Langhorst
Title apvd - to House
03/08 To enrol
03/09 Rpt enrol - Sp signed
03/10 Pres signed
03/13 To Governor
03/14 Governor signed
Session Law Chapter 60
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-eighth Legislature Second Regular Session - 2006
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 459
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO TAX LICENSES, PERMITS AND ACCOUNTS; AMENDING CHAPTER 24, TITLE 63,
3 IDAHO CODE, BY THE ADDITION OF A NEW SECTION 63-2427C, IDAHO CODE, TO PRO-
4 VIDE FOR THE CANCELLATION, REVOCATION AND SUSPENSION OF LICENSES OF MOTOR
5 FUEL DEALERS AND TO PROVIDE FOR CIVIL PENALTIES FOR DOING BUSINESS WITHOUT
6 A REQUIRED LICENSE; AMENDING SECTION 63-2503, IDAHO CODE, TO PROVIDE FOR
7 THE CANCELLATION, REVOCATION AND SUSPENSION OF PERMITS OF CIGARETTE WHOLE-
8 SALERS, TO PROVIDE FOR CIVIL PENALTIES FOR DOING BUSINESS WITHOUT A
9 REQUIRED PERMIT AND TO MAKE TECHNICAL CORRECTIONS; REPEALING SECTION
10 63-2518, IDAHO CODE, RELATING TO REVOCATION OF CIGARETTE WHOLESALERS' PER-
11 MITS; AMENDING SECTION 63-2512, IDAHO CODE, TO DELETE PROVISIONS IMPOSING
12 CIVIL PENALTIES FOR FAILURE TO POSSESS A VALID CIGARETTE PERMIT; AMENDING
13 CHAPTER 30, TITLE 63, IDAHO CODE, BY THE ADDITION OF A NEW SECTION
14 63-3035C, IDAHO CODE, TO PROVIDE FOR THE CANCELLATION, REVOCATION AND SUS-
15 PENSION OF INCOME TAX WITHHOLDING ACCOUNTS AND TO PROVIDE FOR CIVIL PENAL-
16 TIES FOR DOING BUSINESS WITHOUT A REQUIRED INCOME TAX WITHHOLDING ACCOUNT;
17 AND AMENDING SECTION 63-2510A, IDAHO CODE, TO PROVIDE A CORRECT CODE REF-
19 Be It Enacted by the Legislature of the State of Idaho:
20 SECTION 1. That Chapter 24, Title 63, Idaho Code, be, and the same is
21 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
22 ignated as Section 63-2427C, Idaho Code, and to read as follows:
23 63-2427C. REVOCATION AND SUSPENSION OF LICENSE -- PENALTIES. (1) A license
24 issued under section 63-2427A or 63-2427B, Idaho Code, shall be held only by
25 persons actively engaged in activities requiring a license under this chapter.
26 Any person not so engaged shall forthwith surrender his license to the commis-
27 sion for cancellation.
28 (2) Whenever any person fails to comply with any provision of this chap-
29 ter relating to the receipt, purchase, sale or offering for sale or distribu-
30 tion of motor fuel or any rules of the commission relating to motor fuels
31 taxes prescribed and adopted under this chapter, the commission may revoke or
32 suspend any license held by the person or may deny a new license to such per-
34 (3) The commission may revoke the license of a person not actively
35 engaged in activities requiring a license under this section.
36 (4) Notice of revocation shall be given in the manner provided for defi-
37 ciencies in taxes in section 63-3629, Idaho Code, which shall be subject to
38 review as provided in section 63-3631, Idaho Code.
39 (5) A license, held by a person who for a period of twelve (12) consecu-
40 tive months reports no motor fuels activity under this chapter, shall expire
41 automatically upon the state tax commission providing notice of the expiration
42 to the last known address of the person to whom the license was issued.
43 (6) A person who engaged in activities requiring a license under this
1 chapter without such license or after a license has been revoked or suspended,
2 and any person who is a responsible person, as defined in section 63-3627,
3 Idaho Code, of such a business shall, after receiving written notice from the
4 state tax commission, be subject to a civil penalty not in excess of one hun-
5 dred dollars ($100), and each day shall constitute a separate offense, which
6 the state tax commission may assess as a deficiency pursuant to section
7 63-2434, Idaho Code.
8 SECTION 2. That Section 63-2503, Idaho Code, be, and the same is hereby
9 amended to read as follows:
10 63-2503. PERMITS. ( a1) It shall be unlawful for a person to act as a
11 wholesaler of cigarettes without a permit. The permit shall be obtained by
12 application to the tax commission upon a form furnished by it, accompanied by
13 a fee of fifty dollars ($50.00). The wholesaler permit shall be nonassignable
14 and shall continue in force until surrendered or canceled.
15 ( b2) It shall be unlawful for any retailer to purchase, sell, offer for
16 sale, distribute, store or possess any cigarettes without first applying for
17 and receiving a seller's permit under section 63-3620, Idaho Code.
18 (3) A permit shall be held only by persons actively engaged in making
19 wholesale sales of cigarettes subject to tax under this chapter. Any person
20 not so engaged shall forthwith surrender his permit to the state tax commis-
21 sion for cancellation.
22 (4) Whenever any person fails to comply with any provision of this chap-
23 ter relating to the purchase, sale or offering for sale or distribution of
24 cigarettes or any rules of the state tax commission relating to the cigarette
25 tax prescribed and adopted under this chapter, the state tax commission may
26 revoke or suspend any permit held by the person or may deny a new permit to
27 such person.
28 (5) The state tax commission may revoke the permit of a person not activ-
29 ely engaged in activities requiring a permit under this section.
30 (6) Notice of revocation shall be given in the manner provided for defi-
31 ciencies in taxes in section 63-3629, Idaho Code, which shall be subject to
32 review as provided in section 63-3631, Idaho Code.
33 (7) A permit, held by a person who for a period of twelve (12) consecu-
34 tive months reports no cigarette tax due under this chapter, shall expire
35 automatically upon the state tax commission providing notice of the expiration
36 to the last known address of the person to whom the permit was issued.
37 (8) A person who engaged in activities requiring a permit under this sec-
38 tion without a permit or after a permit has been revoked or suspended, and any
39 person who is a responsible person, as defined in section 63-3627, Idaho
40 Code, of such a business shall, after receiving written notice from the state
41 tax commission, be subject to a civil penalty not in excess of one hundred
42 dollars ($100), and each day shall constitute a separate offense, which the
43 state tax commission may assess as a deficiency pursuant to section 63-2516,
44 Idaho Code.
45 SECTION 3. That Section 63-2518, Idaho Code, be, and the same is hereby
47 SECTION 4. That Section 63-2512, Idaho Code, be, and the same is hereby
48 amended to read as follows:
49 63-2512. PENALTIES. The penalties herein prescribed are not intended as
50 exclusive, but are in addition and supplemental to any and all other existing
1 remedies and procedures prescribed by law for the enforcement of the revenue
2 laws of this state.
3 (a) Any person who shall forge or counterfeit an Idaho cigarette stamp
4 shall be guilty of a felony and upon conviction thereof shall be punished in
5 accordance with the provisions of the criminal code, and additionally shall be
6 ineligible to have issued him or to hold any state license or permit to sell
7 or vend goods or merchandise of any kind or type, or to be employed by or work
8 in any manner for any person who sells cigarettes for a period of five (5)
9 years thereafter.
10 (b) The possession by any person of more than ten (10) packages of ciga-
11 rettes without Idaho cigarette stamps is a misdemeanor. Any person upon con-
12 viction shall be subject to a fine of five dollars ($5.00) for each full or
13 partial package of unstamped cigarettes in his possession in excess of ten
14 (10), but the maximum punishment for each offense shall not exceed a fine of
15 three hundred dollars ($300) or imprisonment in the county jail not to exceed
16 ninety (90) days or both.
17 (c) Failure to possess a valid permit, as required by section 63-2503,
18 Idaho Code, shall be punishable by the imposition of civil penalties at the
19 rate of twenty-five dollars ($25.00) per day, per violation, and such penalty
20 shall be assessed and collected, as provided in section 63-2516, Idaho Code.
21 (d) All violations of the provisions of this chapter for which criminal
22 penalties are not otherwise imposed shall be misdemeanors and punishable in
23 accordance with the provisions of the criminal code.
24 ( ed) The provisions of this section shall be applicable to all proceed-
25 ings pending before the state tax commission, the board of tax appeals, or the
26 courts of this state on the effective date of this act.
27 SECTION 5. That Chapter 30, Title 63, Idaho Code, be, and the same is
28 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
29 ignated as Section 63-3035C, Idaho Code, and to read as follows:
30 63-3035C. REVOCATION AND SUSPENSION OF WITHHOLDING ACCOUNTS -- PENALTIES.
31 (1) An income tax withholding account issued under section 63-3035, Idaho
32 Code, shall be held only by persons actively engaged in activities requiring
33 such an account under this chapter. Any person not so engaged shall forthwith
34 cancel his account number by notifying the state tax commission.
35 (2) Whenever any person fails to comply with any provision of this chap-
36 ter relating to the withholding, reporting or payment of income tax withhold-
37 ing or any rules of the commission relating to such withholding prescribed and
38 adopted under this chapter, the state tax commission may revoke or suspend any
39 withholding account held by the person or may deny a new account to such per-
41 (3) The state tax commission may revoke the withholding account of a per-
42 son not actively engaged in activities requiring an account under section
43 63-3035, Idaho Code.
44 (4) Notice of revocation shall be given in the manner provided for defi-
45 ciencies in taxes in section 63-3045, Idaho Code, which shall be subject to
46 review as provided in that section.
47 (5) A withholding account, held by a person who for a period of twelve
48 (12) consecutive months reports no income tax withholding due under this chap-
49 ter, shall expire automatically upon the state tax commission providing notice
50 of the expiration to the last known address of the person to whom the account
51 was issued.
52 (6) A person who engages in activities requiring a withholding account
53 under this chapter without such an account or after an account has been
1 revoked or suspended, and any person who is a responsible person, as defined
2 in section 63-3078, Idaho Code, of such a business shall, after receiving
3 written notice from the state tax commission, be subject to a civil penalty
4 not in excess of one hundred dollars ($100), and each day shall constitute a
5 separate offense, which the state tax commission may assess as a deficiency
6 pursuant to section 63-3045, Idaho Code.
7 SECTION 6. That Section 63-2510A, Idaho Code, be, and the same is hereby
8 amended to read as follows:
9 63-2510A. BONDING. (1) At the time an application for a wholesaler's
10 license or permit, under section 63-2503, Idaho Code, is submitted to the
11 state tax commission, the applicant shall file a bond, in such form as the
12 commission may determine, conditioned upon faithful performance of all of the
13 requirements of this chapter. The total amount of the bond shall be fixed by
14 the commission and shall be equivalent to, at least, twice the estimated aver-
15 age tax liability for the reporting period for which the applicant will be
16 required to file a return, under section 63-2510, Idaho Code. The bond
17 required shall, in no case, be less than one thousand dollars ($1,000). The
18 total amount required to be secured by the bond may be increased or reduced by
19 the commission at any time. Any bond given in conjunction with the provisions
20 of this section shall be a continuing instrument, and shall cover the period
21 during which the license or permit in connection with which the bond is given
22 is in effect, unless the surety on the bond is released or discharged by the
23 commission. Any surety on any bond furnished by a wholesaler shall be dis-
24 charged only by the commission. Any surety on any bond furnished by a whole-
25 saler shall be discharged and released by the commission from, any and all,
26 liability to the state, accruing on the bond after the expiration of thirty
27 (30) days from the date upon which the surety shall have lodged with the com-
28 mission a written request to be released and discharged. The request shall not
29 operate to relieve, release, or discharge the surety from any liability
30 accrued, or which will accrue, before the expiration of the thirty (30) day
31 period. The commission shall promptly, upon receipt of the notice of the
32 request, notify the wholesaler and require him to furnish a new bond. Unless
33 the wholesaler files a new bond with the commission in the amount provided in
34 this section before the expiration of the thirty (30) day period, the commis-
35 sion shall immediately cancel the wholesaler's license or permit.
36 (2) In the event that any taxes due under the provisions of this chapter
37 are not paid by a wholesaler, and the unpaid taxes are assessed by the commis-
38 sion, and after all avenues for appeal of the assessment have been exhausted,
39 the commission may apply the unpaid tax liability against the bond required in
40 this section.
41 (3) A wholesaler may petition for release from the bond requirement after
42 having filed timely and fully paid cigarette tax returns, as provided in sec-
43 tion 63-2510, Idaho Code, for a period of not less than twelve (12) months.
44 Upon such petition from the wholesaler, the commission will review the ciga-
45 rette tax return filing and payment record of the wholesaler and, if deter-
46 mined necessary, within sixty (60) days examine the books and records of the
47 wholesaler. The commission will, no later than ninety (90) days from the date
48 of receipt of the petition, advise the wholesaler in writing of its determina-
49 tion and the reasons therefor. If the wholesaler wishes to seek a redetermina-
50 tion of the commission's decision, a petition for redetermination may be filed
51 as provided in section 63-3045, Idaho Code.
52 (4) If at any time after release of a bond requirement the wholesaler
53 becomes delinquent for any period in the filing of tax returns or the payment
1 of the tax as required in section 63-2510, Idaho Code, the commission may make
2 immediate demand that the return be filed or the payment be tendered and that
3 a bond be filed as set forth in subsection (1) of this section. Any wholesaler
4 against whom such demand is made may petition for a redetermination as pro-
5 vided in section 63-3045, Idaho Code, except that the petition must be filed
6 no later than ten (10) days after service upon the person of notice thereof.
7 If a petition for redetermination is not filed within the ten (10) day period,
8 the determination shall become final and the commission shall issue a jeopardy
9 assessment as provided in section 63-3630, Idaho Code, and thereafter may:
10 (a) Seize all Idaho cigarette stamps in the possession of the wholesaler
11 which are not applied to cigarettes;
12 (b) File a lien of record upon the cigarettes held in inventory by the
13 wholesaler or seize such cigarettes;
14 (c) Revoke the wholesaler's cigarette permit as provided in section
15 63-2518 63-2503, Idaho Code, except that no notice or hearing shall be
16 required; and
17 (d) Notify the manufacturers of the cigarettes held in inventory by the
18 wholesaler of any or all actions so taken.
19 (5) A wholesaler who acquires all cigarettes with tax stamps affixed at
20 the time of acquisition may petition the state tax commission for waiver of
21 the bond required in subsection (1) of this section. Upon receipt of evidence
22 establishing that the wholesaler is not required to pay cigarette taxes under
23 this chapter because the wholesaler exclusively purchases cigarettes with
24 stamps affixed by another wholesaler, the state tax commission may waive the
25 requirement for a bond. Any such waiver is conditioned upon the wholesaler's
26 continuing qualification for the waiver under this subsection.
STATEMENT OF PURPOSE
Cigarette wholesalers, motor fuel distributors, and
employers are issued permits, licenses, or account numbers for
administering the cigarette tax, motor fuel tax, and income tax
withholding. This bill authorizes the State Tax Commission to
revoke or suspend these permits, licenses, and accounts when the
holders are no longer engaged in a business in which they are
required or when the holder is in violation of law governing
these taxes. The bill also provides civil penalties for doing
business without a required permit, license, or account. The
provisions are modeled after provisions in the Idaho Sales Tax
Act governing sellers' permits under that Act.
Name: Dan John
Agency: State Tax Commission
STATEMENT OF PURPOSE/FISCAL NOTE H 459