2006 Legislation
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SENATE CONCURRENT RESOLUTION NO. 135 – Excise taxes, study

SENATE CONCURRENT RESOLUTION NO. 135

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Bill Status



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

Bill Text


                                                                        
                                                                        
  ]]]]              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 / Fiscal Impact



                       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