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SCR135.....................................................by STATE AFFAIRS
EXCISE TAX - STUDY - Stating findings of the Legislature and authorizing
the Legislative Council to appoint a committee to undertake and complete a
study of excise taxes in the state of Idaho.
03/30 Senate intro - 1st rdg - to printing
03/31 Rpt prt - to 10th Ord
04/03 10th Ord - ADOPTED - 33-0-2
AYES -- Andreason, Brandt, Broadsword, Bunderson, Burkett,
Burtenshaw, Cameron, Coiner, Compton, Corder, Darrington, Davis,
Fulcher, Geddes, Goedde, Hill, Jorgenson, Kelly, Keough, Langhorst,
Little, Lodge, Malepeai, Marley, McGee, McKenzie, Pearce, Richardson,
Schroeder, Stegner, Stennett, Werk, Williams
NAYS -- None
Absent and excused -- Gannon, Sweet
Floor Sponsor - Bunderson
Title apvd - to House
04/04 House intro - 1st rdg - to W/M
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-eighth Legislature Second Regular Session - 2006
IN THE SENATE
SENATE CONCURRENT RESOLUTION NO. 135
BY STATE AFFAIRS COMMITTEE
1 A CONCURRENT RESOLUTION
2 STATING THE FINDINGS OF THE LEGISLATURE AUTHORIZING THE LEGISLATIVE COUNCIL TO
3 APPOINT A COMMITTEE TO UNDERTAKE AND COMPLETE A STUDY OF EXCISE TAXES IN
4 THE STATE OF IDAHO.
5 Be It Resolved by the Legislature of the State of Idaho:
6 WHEREAS, Idaho imposes excise taxes on kilowatt hours, cigarettes,
7 tobacco, and beer and wine sold through private licensed wholesale distribu-
8 tors; and
9 WHEREAS, the public policy underlying each excise tax, the basis on which
10 each excise tax is levied, and the reasonableness and adequacy of each excise
11 tax to defray public costs associated with the products on which the tax is
12 imposed, has not been reevaluated and justified since the taxes were imposed
13 several decades ago; and
14 WHEREAS, the excise tax on kilowatt hours dates back to the beginning of
15 the nineteenth century and the underlying purposes of the tax should be
16 reevaluated; and
17 WHEREAS, the bases on which excise taxes are imposed on similar products
18 are inconsistent and result in product discrimination and favoritism by state
19 government, with the excise tax on tobacco based on price, the excise tax on
20 cigarettes based on volume, and the excise tax on beer and wine based on the
21 equivalent number of barrels and gallons sold, respectively; and
22 WHEREAS, the excise tax on beer has been frozen since 1961, and the excise
23 tax on wine has been frozen since 1971; and
24 WHEREAS, the societal cost of alcohol abuse has increased significantly in
25 recent decades, placing sharply increased costs on local and state law
26 enforcement, including prosecutions, courts, jails, and prisons, and on medic-
27 aid and certain other programs administered by the Department of Health and
28 Welfare; and
29 WHEREAS, spirits, wine and beer sold through the Idaho State Liquor Dis-
30 pensary are sold at market price plus a 2% surcharge to raise money for drug
31 courts but beer and wine sold through private licensed wholesale distributors
32 do not have such a surcharge; and
33 WHEREAS, the excise tax and surcharge on beer and wine sold through pri-
34 vate licensed wholesale distributors has not increased commensurate with the
35 rise in alcohol abuse related costs, although there has been such an increase
36 relating to the sales of spirits, wine and beer sold through the Idaho State
37 Liquor Dispensary; and
38 WHEREAS, in the face of increasing costs, the excise tax base on beer and
39 wine, as a percentage of price, has actually eroded over 85% and such erosion
40 aggregates over $21 million annually; and
41 WHEREAS, the favorable volume-based excise tax on beer and wine sold
42 through private licensed wholesale distributors, and the 2% surcharge on Idaho
43 State Liquor Dispensary sales, has given private licensed wholesale distribu-
44 tors an increasingly competitive price advantage over the Idaho State Liquor
2
1 Dispensary and has resulted in shifting market share to private licensed
2 wholesale distributors.
3 NOW, THEREFORE, BE IT RESOLVED by the members of the Second Regular Ses-
4 sion of the Fifty-eighth Idaho Legislature, the Senate and the House of Repre-
5 sentatives concurring therein, that the public policy underlying each excise
6 tax within the state of Idaho, the basis on which each excise tax is levied,
7 and the reasonableness and adequacy of each excise tax to defray public costs
8 associated with the products upon which the tax is levied, should be
9 reevaluated and justified.
10 BE IT FURTHER RESOLVED, that the Legislative Council is authorized to
11 appoint a committee to undertake and complete a study of excise taxes in the
12 state of Idaho and report its findings to the First Regular Session of the
13 Fifty-ninth Idaho Legislature. The Legislative Council shall determine the
14 number of legislators and membership from each house appointed to the commit-
15 tee and shall authorize the committee to receive input, advice and assistance
16 from interested and affected parties who are not members of the Legislature.
17 BE IT FURTHER RESOLVED, that nonlegislative advisory members may be
18 appointed to the committee by the cochairs of the committee. Nonlegislative
19 advisory members shall not be reimbursed from legislative funds for per diem,
20 mileage, or other expenses and shall not have voting privileges regarding the
21 committee's recommendations or proposed legislation.
STATEMENT OF PURPOSE
RS 16293
This resolution authorizes Legislative Council to appoint a
committee to study excise taxes.
Idaho imposes excise taxes on kilowatt hours, cigarettes,
tobacco, beer and wine sold by private state-licensed wholesale
distributors (Sales of spirits, wine and beer sold by the Idaho
State Liquor Dispensary (ISLD) is not assessed an excise tax
since all of it's net income is dedicated for public purposes.
Additionally, all products sold through ISLD bears a 2% of price
surcharge dedicated to funding drug courts this surcharge is
not technically expressed as an excise tax.)
The public policy underlying each excise tax, the basis on which
each tax is levied and reasonableness of each tax to defray the
public costs associated with the products on which the tax is
imposed, has not been evaluated and justified since the taxes
were imposed several decades ago.
With regard to cigarettes, tobacco, beer and wine excise taxes,
there is increasing criticism and conflict charging
inconsistencies, adverse market effects due to state law that in
effect supports allowing competitive market advantage and
selective erosion of the tax base between competing products.
As background material, the committee has available past
legislation and proposals and other reports produced over the
past several years, e.g. the 1999 Legislative Interim Committee
Report on the Alcohol Beverage Code, a White Paper issued by
Budget and Policy Analysis describing the alcohol beverage
industry in Idaho and Governor Kempthorne's Blue Ribbon Committee
report.
With regard to the kilowatt hour tax, the underlying public
policy and basis of the excise tax dates back to the early 1900s
and is unclear.
FISCAL NOTE
The fiscal impact is not known. It is subject to Legislative
Council's direction. However, costs would be minimized because
the work should not require statewide travel. Public input could
be made available by statewide release of exposure drafts of the
Committee's findings and recommendations for public comment.
Contact:
Name: Senator Hal Bunderson
Phone: (208) 332-1320
Name: Senator Brent Hill
Phone: (208) 332-1347
STATEMENT OF PURPOSE/FISCAL NOTE SCR 135