2006 Legislation
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HOUSE BILL NO. 459 – Tax licenses/permits/accts, violatn

HOUSE BILL NO. 459

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Bill Status



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,
      Wood
    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
         Effective: 07/01/06

Bill Text


                                                                        
                                                                        
  ]]]]              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-
 18        ERENCE.
                                                                        
 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-
 33    son.
 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
                                                                        
                                           2
                                                                        
  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
 46    repealed.
                                                                        
 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
                                                                        
                                           3
                                                                        
  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-
 40    son.
 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
                                                                        
                                           4
                                                                        
  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
                                                                        
                                           5
                                                                        
  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 / Fiscal Impact


                      STATEMENT OF PURPOSE
                                
                           RS 15390c1

     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.


                          FISCAL NOTE
     None.




CONTACT
Name:     Dan John
Agency:   State Tax Commission
Phone:    334-7530

STATEMENT OF PURPOSE/FISCAL NOTE                              H 459