View Bill Status
View Bill Text
View Statement of Purpose / Fiscal Impact
H0083...............................................by REVENUE AND TAXATION SALES TAX - FOOD - Amends, adds to and repeals existing law to delete the grocery tax credit; and to provide that food will be taxed at the rate of 3%. 01/31 House intro - 1st rdg - to printing 02/01 Rpt prt - to Rev/Tax
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]] Fifty-ninth Legislature First Regular Session - 2007IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 83 BY REVENUE AND TAXATION COMMITTEE 1 AN ACT 2 RELATING TO TAXATION; REPEALING SECTION 63-3024A, IDAHO CODE, RELATING TO THE 3 GROCERY TAX CREDIT; AMENDING CHAPTER 36, TITLE 63, IDAHO CODE, BY THE 4 ADDITION OF A NEW SECTION 63-3622UU, IDAHO CODE, TO EXEMPT FOOD FOR HUMAN 5 CONSUMPTION FROM THE SALES AND USE TAX, WITH EXCEPTIONS; AMENDING SECTION 6 63-3619, IDAHO CODE, TO REDUCE THE RATE OF THE SALES TAX ON THE SALES OF 7 FOOD AND FOOD INGREDIENTS; AMENDING SECTION 63-3621, IDAHO CODE, TO REDUCE 8 THE RATE OF THE USE TAX ON THE SALES OF FOOD AND FOOD INGREDIENTS; AMEND- 9 ING SECTION 63-3638, IDAHO CODE, TO REVISE THE REVENUE SHARING DISTRIBU- 10 TION; DECLARING AN EMERGENCY, PROVIDING RETROACTIVE APPLICATION AND PRO- 11 VIDING EFFECTIVE DATES. 12 Be It Enacted by the Legislature of the State of Idaho: 13 SECTION 1. That Section 63-3024A, Idaho Code, be, and the same is hereby 14 repealed. 15 SECTION 2. That Chapter 36, Title 63, Idaho Code, be, and the same is 16 hereby amended by the addition thereto of a NEW SECTION, to be known and des- 17 ignated as Section 63-3622UU, Idaho Code, and to read as follows: 18 63-3622UU. EXEMPTIONS -- SALES OF FOOD AND FOOD INGREDIENTS. (1) For the 19 purpose of the tax levied and assessed pursuant to sections 63-3619 and 20 63-3621, Idaho Code, "food and food ingredients" means substances, whether in 21 liquid, concentrated, solid, frozen, dried or dehydrated form, that are sold 22 for ingestion or chewing by humans and are consumed for their taste or nutri- 23 tional value. "Food and food ingredients" does not include: 24 (a) "Alcoholic beverages," which means beverages that are suitable for 25 human consumption and contain one-half of one percent (.5%) or more of 26 alcohol by volume; and 27 (b) "Tobacco," which means cigarettes, cigars, chewing or pipe tobacco, 28 or any other item that contains tobacco; and 29 (c) "Candy," which means a rich sweet confection made with sugar and 30 often flavored or combined with chocolate, fruits or nuts. 31 (2) The exemption of "food and food ingredients" provided for in subsec- 32 tion (1) of this section shall not apply to prepared food, soft drinks, or 33 dietary supplements. 34 (a) "Prepared food" means: 35 (i) Food sold in a heated state or heated by the seller and such 36 items meet the definition of food; 37 (ii) Food sold with eating utensils provided by the seller, includ- 38 ing plates, knives, forks, spoons, glasses, cups, napkins or straws. 39 A plate does not include a container or packaging used to transport 40 the food; or 41 (iii) Two (2) or more food ingredients mixed or combined by the 42 seller for sale as a single item, except: 2 1 1. Food that is only cut, repackaged or pasteurized by the 2 seller; or 3 2. Raw eggs, fish, meat, poultry and foods containing these raw 4 animal foods requiring cooking by the consumer as recommended by 5 the federal food and drug administration in chapter 3, part 6 401.11 of "The Food Code," published by the food and drug admin- 7 istration, as amended or renumbered as of 2005, so as to pre- 8 vent foodborne illness. 9 (b) "Prepared food" does not include the following food or food ingredi- 10 ents, if the food or food ingredients are sold without eating utensils 11 provided by the seller: 12 (i) Food sold by a seller whose proper primary North American 13 industry classification system (NAICS) classification is manufactur- 14 ing in sector 311, except subsector 3118 (bakeries), as provided in 15 the "North American Industry Classification System -- United States, 16 2002"; 17 (ii) Food sold in an unheated state by weight or volume as a single 18 item; or 19 (iii) Bakery items. The term "bakery items" includes bread, rolls, 20 buns, biscuits, bagels, croissants, pastries, donuts, danish, cakes, 21 tortes, pies, tarts, muffins, bars, cookies or tortillas. 22 (c) "Soft drinks" means nonalcoholic beverages that contain natural or 23 artificial sweeteners. Soft drinks do not include beverages that contain: 24 milk or milk products; soy, rice or similar milk substitutes; or greater 25 than fifty percent (50%) of vegetable or fruit juice by volume. 26 (d) "Dietary supplement" means any product, other than tobacco, intended 27 to supplement the diet that: 28 (i) Contains one (1) or more of the following dietary ingredients: 29 1. A vitamin; 30 2. A mineral; 31 3. An herb or other botanical; 32 4. An amino acid; 33 5. A dietary substance for use by humans to supplement the diet 34 by increasing the total dietary intake; or 35 6. A concentrate, metabolite, constituent, extract or combina- 36 tion of any ingredient described in this subsection; 37 (ii) Is intended for ingestion in tablet, capsule, powder, softgel, 38 gelcap, or liquid form, or if not intended for ingestion in such 39 form, is not represented as conventional food and is not represented 40 for use as a sole item of a meal or of the diet; and 41 (iii) Is required to be labeled as a dietary supplement, identifiable 42 by the "supplement facts" box found on the label as required pursuant 43 to 21 C.F.R. sec. 101.36. 44 (3) Notwithstanding anything in this section to the contrary, the exemp- 45 tion of "food and food ingredients" provided in this section shall apply to 46 food and food ingredients that are furnished, prepared or served as meals: 47 (a) Under a state administered nutrition program for the aged as provided 48 for in the older Americans act (P.L. 95-478, title III); or 49 (b) That are provided to senior citizens, disabled persons or low-income 50 persons by a not-for-profit organization. 51 (4) Subsection (1) of this section notwithstanding, the retail sale of 52 food and food ingredients is subject to sales tax under this chapter at 53 the six percent (6%) rate if the food and food ingredients are sold 54 through a vending machine. 3 1 2 SECTION 3. That Section 63-3619, Idaho Code, be, and the same is hereby 3 amended to read as follows: 4 63-3619. IMPOSITION AND RATE OF THE SALES TAX. An excise tax is hereby 5 imposed upon each sale at retail at the rate of six percent (6%) of the sales 6 price of all retail sales subject to taxation under this chapter, with the 7 exception of food and food ingredients as defined in section 63-3622UU, Idaho 8 Code, which shall be taxed at three percent (3%) of the sales price and such 9 amount shall be computed monthly on all sales at retail within the preceding 10 month. 11 (a) The tax shall apply to, be computed on, and collected for all credit, 12 installment, conditional or similar sales at the time of the sale or, in the 13 case of rentals, at the time the rental is charged. 14 (b) The tax hereby imposed shall be collected by the retailer from the 15 consumer. 16 (c) The state tax commission shall provide schedules for collection of 17 the tax on sales which involve a fraction of a dollar. The retailer shall cal- 18 culate the tax upon the entire amount of the purchases of the consumer made at 19 a particular time and not separately upon each item purchased. The retailer 20 may retain any amount collected under the bracket system prescribed which is 21 in excess of the amount of tax for which he is liable to the state during the 22 period as compensation for the work of collecting the tax. 23 (d) It is unlawful for any retailer to advertise or hold out or state to 24 the public or to any customer, directly or indirectly, that the tax or any 25 part thereof will be assumed or absorbed by the retailer or that it will not 26 be added to the selling price of the property sold or that if added it or any 27 part thereof will be refunded. Any person violating any provision of this sec- 28 tion is guilty of a misdemeanor. 29 (e) The tax commission may by rule provide that the amount collected by 30 the retailer from the customer in reimbursement of the tax be displayed sepa- 31 rately from the list price, the price advertised on the premises, the marked 32 price, or other price on the sales slip or other proof of sale. 33 (f) The taxes imposed by this chapter shall apply to the sales to con- 34 tractors purchasing for use in the performance of contracts with the United 35 States. 36 SECTION 4. That Section 63-3621, Idaho Code, be, and the same is hereby 37 amended to read as follows: 38 63-3621. IMPOSITION AND RATE OF THE USE TAX -- EXEMPTIONS. An excise tax 39 is hereby imposed on the storage, use, or other consumption in this state of 40 tangible personal property acquired on or after October 1, 2006, for storage, 41 use, or other consumption in this state at the rate of six percent (6%) of the 42 value of the property, with the exception of food and food ingredients as 43 defined in section 63-3622UU, Idaho Code, which shall be taxed at three per- 44 cent (3%) of the sales price, and a recent sales price shall be presumptive 45 evidence of the value of the property unless the property is wireless telecom- 46 munications equipment, in which case a recent sales price shall be conclusive 47 evidence of the value of the property. 48 (a) Every person storing, using, or otherwise consuming, in this state, 49 tangible personal property is liable for the tax. His liability is not extin- 50 guished until the tax has been paid to this state except that a receipt from a 51 retailer maintaining a place of business in this state or engaged in business 52 in this state given to the purchaser is sufficient to relieve the purchaser 4 1 from further liability for the tax to which the receipt refers. A retailer 2 shall not be considered to have stored, used or consumed wireless telecommuni- 3 cations equipment by virtue of giving, selling or otherwise transferring such 4 equipment at a discount as an inducement to a consumer to commence or con- 5 tinue a contract for telecommunications service. 6 (b) Every retailer engaged in business in this state, and making sales of 7 tangible personal property for the storage, use, or other consumption in this 8 state, not exempted under section 63-3622, Idaho Code, shall, at the time of 9 making the sales or, if storage, use or other consumption of the tangible per- 10 sonal property is not then taxable hereunder, at the time the storage, use or 11 other consumption becomes taxable, collect the tax from the purchaser and give 12 to the purchaser a receipt therefor in the manner and form prescribed by the 13 state tax commission. 14 (c) The provisions of this section shall not apply when the retailer pays 15 sales tax on the transaction and collects reimbursement for such sales tax 16 from the customer. 17 (d) Every retailer engaged in business in this state or maintaining a 18 place of business in this state shall register with the state tax commission 19 and give the name and address of all agents operating in this state, the loca- 20 tion of all distributions or sales houses or offices or other places of busi- 21 ness in this state, and such other information as the state tax commission may 22 require. 23 (e) For the purpose of the proper administration of this act and to pre- 24 vent evasion of the use tax and the duty to collect the use tax, it shall be 25 presumed that tangible personal property sold by any person for delivery in 26 this state is sold for storage, use, or other consumption in this state. The 27 burden of proving the sale is tax exempt is upon the person who makes the sale 28 unless he obtains from the purchaser a resale certificate to the effect that 29 the property is purchased for resale or rental. It shall be presumed that 30 sales made to a person who has completed a resale certificate for the seller's 31 records are not taxable and the seller need not collect sales or use taxes 32 unless the tangible personal property purchased is taxable to the purchaser as 33 a matter of law in the particular instance claimed on the resale certificate. 34 A seller may accept a resale certificate from a purchaser prior to the 35 time of sale, at the time of sale, or at any reasonable time after the sale 36 when necessary to establish the privilege of the exemption. The resale certif- 37 icate relieves the person selling the property from the burden of proof only 38 if taken from a person who is engaged in the business of selling or renting 39 tangible personal property and who holds the permit provided for by section 40 63-3620, Idaho Code, or who is a retailer not engaged in business in this 41 state, and who, at the time of purchasing the tangible personal property, 42 intends to sell or rent it in the regular course of business or is unable to 43 ascertain at the time of purchase whether the property will be sold or will be 44 used for some other purpose. Other than as provided elsewhere in this section, 45 when a resale certificate, properly executed, is presented to the seller, the 46 seller has no duty or obligation to collect sales or use taxes in regard to 47 any sales transaction so documented regardless of whether the purchaser prop- 48 erly or improperly claimed an exemption. A seller so relieved of the obliga- 49 tion to collect tax is also relieved of any liability to the purchaser for 50 failure to collect tax or for making any report or disclosure of information 51 required or permitted under this chapter. 52 The resale certificate shall bear the name and address of the purchaser, 53 shall be signed by the purchaser or his agent, shall indicate the number of 54 the permit issued to the purchaser, or that the purchaser is an out-of-state 55 retailer, and shall indicate the general character of the tangible personal 5 1 property sold by the purchaser in the regular course of business. The certifi- 2 cate shall be substantially in such form as the state tax commission may pre- 3 scribe. 4 (f) If a purchaser who gives a resale certificate makes any storage or 5 use of the property other than retention, demonstration or display while hold- 6 ing it for sale in the regular course of business, the storage or use is tax- 7 able as of the time the property is first so stored or used. 8 (g) Any person violating any provision of this section is guilty of a 9 misdemeanor and punishable by a fine not in excess of one hundred dollars 10 ($100), and each violation shall constitute a separate offense. 11 (h) It shall be presumed that tangible personal property shipped or 12 brought to this state by the purchaser was purchased from a retailer, for 13 storage, use or other consumption in this state. 14 (i) It shall be presumed that tangible personal property delivered out- 15 side this state to a purchaser known by the retailer to be a resident of this 16 state was purchased from a retailer for storage, use, or other consumption in 17 this state. This presumption may be controverted by evidence satisfactory to 18 the state tax commission that the property was not purchased for storage, use, 19 or other consumption in this state. 20 (j) When the tangible personal property subject to use tax has been sub- 21 jected to a general retail sales or use tax by another state of the United 22 States in an amount equal to or greater than the amount of the Idaho tax, and 23 evidence can be given of such payment, the property will not be subject to 24 Idaho use tax. If the amount paid the other state was less, the property will 25 be subject to use tax to the extent that the Idaho tax exceeds the tax paid to 26 the other state. For the purposes of this subsection, a registration certifi- 27 cate or title issued by another state or subdivision thereof for a vehicle or 28 trailer or a vessel as defined in section 67-7003, Idaho Code, shall be suffi- 29 cient evidence of payment of a general retail sales or use tax. 30 (k) The use tax herein imposed shall not apply to the use by a nonresi- 31 dent of this state of a motor vehicle which is registered or licensed under 32 the laws of the state of his residence and is not used in this state more than 33 a cumulative period of time totaling ninety (90) days in any consecutive 34 twelve (12) months, and which is not required to be registered or licensed 35 under the laws of this state. 36 (l) The use tax herein imposed shall not apply to the use of household 37 goods, personal effects and personally owned motor vehicles by a resident of 38 this state, if such articles were acquired by such person in another state 39 while a resident of that state and primarily for use outside this state and if 40 such use was actual and substantial, but if an article was acquired less than 41 three (3) months prior to the time he entered this state, it will be presumed 42 that the article was acquired for use in this state and that its use outside 43 this state was not actual and substantial. For purposes of this subsection, 44 "resident" shall be as defined in section 63-3013 or 63-3013A, Idaho Code. 45 (m) The use tax herein imposed shall not apply to the storage, use or 46 other consumption of tangible personal property which is or will be incorpo- 47 rated into real property and which has been donated to and has become the 48 property of: 49 (1) A nonprofit organization as defined in section 63-3622O, Idaho Code; 50 or 51 (2) The state of Idaho; or 52 (3) Any political subdivision of the state. 53 This exemption applies whether the tangible personal property is incorporated 54 in real property by the donee, a contractor or subcontractor of the donee, or 55 any other person. 6 1 SECTION 5. That Section 63-3638, Idaho Code, be, and the same is hereby 2 amended to read as follows: 3 63-3638. SALES TAX -- DISTRIBUTION. All moneys collected under this chap- 4 ter, except as may otherwise be required in sections 63-3203 and 63-3709, 5 Idaho Code, shall be distributed by the tax commission as follows: 6 (1) An amount of money shall be distributed to the state refund account 7 sufficient to pay current refund claims. All refunds authorized under this 8 chapter by the commission shall be paid through the state refund account, and 9 those moneys are continuously appropriated. 10 (2) Five million dollars ($5,000,000) per year is continuously appropri- 11 ated and shall be distributed to the permanent building fund, provided by sec- 12 tion 57-1108, Idaho Code. 13 (3) Four million eight hundred thousand dollars ($4,800,000) per year is 14 continuously appropriated and shall be distributed to the water pollution con- 15 trol account established by section 39-3605, Idaho Code. 16 (4) An amount equal to the sum required to be certified by the chairman 17 of the Idaho housing and finance association to the state tax commission pur- 18 suant to section 67-6211, Idaho Code, in each year is continuously appropri- 19 ated and shall be paid to any capital reserve fund, established by the Idaho 20 housing and finance association pursuant to section 67-6211, Idaho Code. Such 21 amounts, if any, as may be appropriated hereunder to the capital reserve fund 22 of the Idaho housing and finance association shall be repaid for distribution 23 under the provisions of this section, subject to the provisions of section 24 67-6215, Idaho Code, by the Idaho housing and finance association, as soon as 25 possible, from any moneys available therefor and in excess of the amounts 26 which the association determines will keep it self-supporting. 27 (5) An amount equal to the sum required by the provisions of sections 28 63-709 and 63-717, Idaho Code, after allowance for the amount appropriated by 29 section 63-718(3), Idaho Code, is continuously appropriated and shall be paid 30 as provided by sections 63-709 and 63-717, Idaho Code. 31 (6) An amount required by the provisions of chapter 53, title 33, Idaho 32 Code. 33 (7) An amount required by the provisions of chapter 87, title 67, Idaho 34 Code. 35 (8) One dollar ($1.00) on each application for certificate of title or 36 initial application for registration of a motor vehicle, snowmobile, all- 37 terrain vehicle or other vehicle processed by the county assessor or the Idaho 38 transportation department excepting those applications in which any sales or 39 use taxes due have been previously collected by a retailer, shall be a fee for 40 the services of the assessor of the county or the Idaho transportation depart- 41 ment in collecting such taxes, and shall be paid into the current expense fund 42 of the county or state highway account established in section 40-702, Idaho 43 Code. 44 (9)Eleven and five-tenths percent (11.5%) is continuouslyBeginning 45 August 1, 2007, twelve and five-tenths percent (12.5%) shall be appropriated 46 and shall be distributed to the revenue sharing account which is created in 47 the state treasury, and the moneys in the revenue sharing account will be paid 48 in installments each calendar quarter by the tax commission as follows: 49 (a) Twenty-eight and two-tenths percent (28.2%) shall be paid to the var- 50 ious cities as follows: 51 (i) Fifty percent (50%) of such amount shall be paid to the various 52 cities, and each city shall be entitled to an amount in the propor- 53 tion that the population of that city bears to the population of all 54 cities within the state; and 7 1 (ii) Fifty percent (50%) of such amount shall be paid to the various 2 cities, and each city shall be entitled to an amount in the propor- 3 tion that the preceding year's market value for assessment purposes 4 for that city bears to the preceding year's market value for assess- 5 ment purposes for all cities within the state. 6 (b) Twenty-eight and two-tenths percent (28.2%) shall be paid to the var- 7 ious counties as follows: 8 (i) One million three hundred twenty thousand dollars ($1,320,000) 9 annually shall be distributed one forty-fourth (1/44) to each of the 10 various counties; and 11 (ii) The balance of such amount shall be paid to the various coun- 12 ties, and each county shall be entitled to an amount in the propor- 13 tion that the population of that county bears to the population of 14 the state; 15 (c) Thirty-five and nine-tenths percent (35.9%) of the amount appropri- 16 ated in this subsection (9) shall be paid to the several counties for dis- 17 tribution to the cities and counties as follows: 18 (i) Each city and county which received a payment under the provi- 19 sions of section 63-3638(e), Idaho Code, during the fourth quarter of 20 calendar year 1999, shall be entitled to a like amount during suc- 21 ceeding calendar quarters. 22 (ii) If the dollar amount of money available under this subsection 23 (9)(c) in any quarter does not equal the amount paid in the fourth 24 quarter of calendar year 1999, each city's and county's payment shall 25 be reduced proportionately. 26 (iii) If the dollar amount of money available under this subsection 27 (9)(c) in any quarter exceeds the amount paid in the fourth quarter 28 of calendar year 1999, each city and county shall be entitled to a 29 proportionately increased payment, but such increase shall not exceed 30 one hundred five percent (105%) of the total payment made in the 31 fourth quarter of calendar year 1999. 32 (iv) If the dollar amount of money available under this subsection 33 (9)(c) in any quarter exceeds one hundred five percent (105%) of the 34 total payment made in the fourth quarter of calendar year 1999, any 35 amount over and above such one hundred five percent (105%) shall be 36 paid fifty percent (50%) to the various cities in the proportion that 37 the population of the city bears to the population of all cities 38 within the state, and fifty percent (50%) to the various counties in 39 the proportion that the population of a county bears to the popula- 40 tion of the state; and 41 (d) Seven and seven-tenths percent (7.7%) of the amount appropriated in 42 this subsection (9) shall be paid to the several counties for distribution 43 to special purpose taxing districts as follows: 44 (i) Each such district which received a payment under the provi- 45 sions of section 63-3638(e), Idaho Code, during the fourth quarter of 46 calendar year 1999, shall be entitled to a like amount during suc- 47 ceeding calendar quarters. 48 (ii) If the dollar amount of money available under this subsection 49 (9)(d) in any quarter does not equal the amount paid in the fourth 50 quarter of calendar year 1999, each special purpose taxing district's 51 payment shall be reduced proportionately. 52 (iii) If the dollar amount of money available under this subsection 53 (9)(d) in any quarter exceeds the amount distributed under paragraph 54 (i) of this subsection (9)(d), each special purpose taxing district 55 shall be entitled to a share of the excess based on the proportion 8 1 each such district's current property tax budget bears to the sum of 2 the current property tax budgets of all such districts in the state. 3 The state tax commission shall calculate district current property 4 tax budgets to include any unrecovered foregone amounts as determined 5 under section 63-802(1)(e), Idaho Code. When a special purpose taxing 6 district is situated in more than one (1) county, the tax commission 7 shall determine the portion attributable to the special purpose tax- 8 ing district from each county in which it is situated. 9 (iv) If special purpose taxing districts are consolidated, the 10 resulting district is entitled to a base amount equal to the sum of 11 the base amounts which were received in the last calendar quarter by 12 each district prior to the consolidation. 13 (v) If a special purpose taxing district is dissolved or 14 disincorporated, the state tax commission shall continuously distrib- 15 ute to the board of county commissioners an amount equal to the last 16 quarter's distribution prior to dissolution or disincorporation. The 17 board of county commissioners shall determine any redistribution of 18 moneys so received. 19 (vi) Taxing districts formed after January 1, 2001, are not entitled 20 to a payment under the provisions of this subsection (9)(d). 21 (vii) For purposes of this subsection (9)(d), a special purpose tax- 22 ing district is any taxing district which is not a city, a county or 23 a school district. 24 (10) Amounts calculated in accordance with section 2, chapter 356, laws of 25 2001, for annual distribution to counties and other taxing districts beginning 26 in October 2001 for replacement of property tax on farm machinery and equip- 27 ment exempted pursuant to section 63-602EE, Idaho Code. For nonschool dis- 28 tricts, the state tax commission shall distribute one-fourth (1/4) of this 29 amount certified quarterly to each county. For school districts, the state tax 30 commission shall distribute one-fourth (1/4) of the amount certified quarterly 31 to each school district. For nonschool districts, the county auditor shall 32 distribute to each district within thirty (30) calendar days from receipt of 33 moneys from the tax commission. Moneys received by each taxing district for 34 replacement shall be utilized in the same manner and in the same proportions 35 as revenues from property taxation. The moneys remitted to the county trea- 36 surer for replacement of property exempt from taxation pursuant to section 37 63-602EE, Idaho Code, may be considered by the counties and other taxing dis- 38 tricts and budgeted at the same time, in the same manner and in the same year 39 as revenues from taxation on personal property which these moneys replace. If 40 taxing districts are consolidated, the resulting district is entitled to an 41 amount equal to the sum of the amounts which were received in the last calen- 42 dar quarter by each district pursuant to this subsection prior to the consoli- 43 dation. If a taxing district is dissolved or disincorporated, the state tax 44 commission shall continuously distribute to the board of county commissioners 45 an amount equal to the last quarter's distribution prior to dissolution or 46 disincorporation. The board of county commissioners shall determine any redis- 47 tribution of moneys so received. If a taxing district annexes territory, the 48 distribution of moneys received pursuant to this subsection shall be unaf- 49 fected. Taxing districts formed after January 1, 2001, are not entitled to a 50 payment under the provisions of this subsection. School districts shall 51 receive an amount determined by multiplying the sum of the year 2000 school 52 district levy minus .004 times the market value on December 31, 2000, in the 53 district of the property exempt from taxation pursuant to section 63-602EE, 54 Idaho Code, provided that the result of these calculations shall not be less 55 than zero (0). The result of these school district calculations shall be fur- 9 1 ther increased by six percent (6%). For purposes of the limitation provided by 2 section 63-802, Idaho Code, moneys received pursuant to this section as prop- 3 erty tax replacement for property exempt from taxation pursuant to section 4 63-602EE, Idaho Code, shall be treated as property tax revenues. 5 (11) Any moneys remaining over and above those necessary to meet and 6 reserve for payments under other subsections of this section shall be distrib- 7 uted to the general fund. 8 SECTION 6. An emergency existing therefor, which emergency is hereby 9 declared to exist, Section 1 of this act shall be in full force and effect on 10 and after its passage and approval, and retroactively to January 1, 2007. Sec- 11 tions 2, 3 and 4 of this act shall be in full force and effect on and after 12 July 1, 2007. Section 5 of this act shall be in full force and effect on and 13 after August 1, 2007.
STATEMENT OF PURPOSE RS 16813 This legislation repeals the current grocery tax credit and reduces the sales tax on food by 50 percent. Food is defined according to definitions provided by the streamlined tax agreement. Idaho is currently one of only a few states taxing food, and one of five providing a grocery tax credit. This legislation is effective July 1, 2007 which will enable retailers time to extend their equipment from food stamp definitions to the streamlined tax definitions. The counties and cities are held harmless from loss of revenue sharing. FISCAL NOTE The fiscal impact of reducing the sales tax on food to three percent as well as eliminating the current grocery tax credit is $90 million to the General Fund. Revenue necessary to mitigate the impact beginning in fiscal year 2008 is as follows: $26 million in captured current grocery tax credit. $8.2 million from the Governor's early bond payment. $22 million from the Governor's grocery tax credit proposal. $48 million remaining ongoing funds from the Governor's proposed budget. This totals to $104.2 million and adequately covers this fiscal note. CONTACT: Name: Representative Jaquet Phone: 332-1130 STATEMENT OF PURPOSE/FISCAL NOTE H 83