Print Friendly HOUSE BILL NO. 688
– Sales tax, local option
HOUSE BILL NO. 688
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H0688...............................................by REVENUE AND TAXATION
SALES TAX - LOCAL OPTION - Adds to existing law to provide that a local
option sales and use tax may be imposed by cities or counties if House
Joint Resolution No. 4 is approved by the electorate.
03/25 House intro - 1st rdg - to printing
03/26 Rpt prt - to Rev/Tax
03/27 Rpt out - rec d/p - to 2nd rdg
03/28 2nd rdg - to 3rd rdg
Rls susp - PASSED - 66-0-4
AYES -- Anderson, Andrus, Barrett, Bayer, Bedke, Bell, Bilbao, Black,
Block, Bock, Boe, Bolz, Bowers, Brackett, Bradford, Chadderdon,
Chavez, Chew, Clark, Collins, Crane, Durst, Eskridge, Hagedorn, Hart,
Harwood, Henbest, Henderson, Jaquet, Killen, Kren, Lake, LeFavour,
Loertscher, Luker, Marriott, Mathews, Mortimer, Moyle, Nielsen,
Nonini, Pasley-Stuart, Patrick, Pence, Raybould, Ringo, Roberts,
Ruchti, Rusche, Sayler, Schaefer, Shepherd(02), Shepherd(08),
Shirley, Shively, Smith(30), Smith(24), Snodgrass, Stevenson, Thayn,
Thomas, Trail, Vander Woude, Wood(27), Wood(35), Mr. Speaker
NAYS -- None
Absent and excused -- King, Labrador, McGeachin, Wills
Floor Sponsor - Lake
Title apvd - to Senate
03/28 Senate intro - 1st rdg - to Loc Gov
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-ninth Legislature Second Regular Session - 2008
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 688
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO A LOCAL OPTION SALES AND USE TAX; AMENDING TITLE 63, IDAHO CODE,
3 BY THE ADDITION OF A NEW CHAPTER 46, TITLE 63, IDAHO CODE, TO PROVIDE A
4 SHORT TITLE, TO DEFINE TERMS, TO PROVIDE PURPOSE, TO PROVIDE A LOCAL
5 OPTION SALES AND USE TAX, TO PROVIDE FOR A PLAN, TO PROVIDE FOR ADOPTION
6 OF PLAN; TO PROVIDE FOR AN ELECTION TO AUTHORIZE THE TAX, TO PROVIDE FOR
7 COLLECTION AND ADMINISTRATION OF THE TAX BY THE STATE TAX COMMISSION, TO
8 ESTABLISH A LOCAL OPTION SALES AND USE TAX FUND AND TO PROVIDE DISTRIBU-
9 TION OF MONEYS FROM THE FUND, TO PROVIDE COOPERATIVE AGREEMENTS, TO PRO-
10 VIDE FOR REPEAL OR REAUTHORIZATION OF THE TAX AND TO PROVIDE FOR SEVER-
11 ABILITY; AND PROVIDING AN EFFECTIVE DATE.
12 Be It Enacted by the Legislature of the State of Idaho:
13 SECTION 1. That Title 63, Idaho Code, be, and the same is hereby amended
14 by the addition thereto of a NEW CHAPTER, to be known and designated as Chap-
15 ter 46, Title 63, Idaho Code, and to read as follows:
16 CHAPTER 46
17 LOCAL OPTION SALES AND USE TAX ACT
18 63-4601. SHORT TITLE. This chapter is known and shall be cited as the
19 "Local Option Sales and Use Tax Act."
20 63-4602. DEFINITIONS. As used in this chapter:
21 (1) "Board" means the board of county commissioners of a county.
22 (2) "City" means an incorporated city of this state.
23 (3) "Commission" means the state tax commission.
24 (4) "Council" means the city council of a city.
25 (5) "County" means a county of this state.
26 (6) "Tax" means a local option sales and use tax authorized under this
28 63-4603. PURPOSE. The purpose of this chapter is to authorize a city or
29 county to impose a tax as an additional source of revenue and to thereby
30 assist them to meet their growing financial needs.
31 63-4604. LOCAL OPTION SALES AND USE TAX. A city or county may levy a tax
32 within its authorized jurisdiction as provided in this section.
33 (1) The qualified electors of a city or county shall have the legal
34 authority to authorize the council or board to adopt, implement and collect a
35 tax upon all taxable sales and use sold, received or delivered within the city
36 or county, including cities within the county, which taxable sales or use are
37 subject to taxation under chapter 36, title 63, Idaho Code, for the purposes
38 described herein. In accordance with applicable destination-based sourcing
39 rules adopted by the state tax commission, the council or board shall have the
1 power and authority to adopt and collect a tax if approved by two-thirds (2/3)
2 of all votes cast by the qualified electors of the city or county voting in an
3 election conducted for that purpose at an election held in any year on the
4 November election date specified in section 34-106, Idaho Code.
5 (2) The rate of the tax shall not exceed one percent (1%) of the sales
6 price of an item subject to the tax.
7 (3) The revenues, after the necessary costs of collection and administra-
8 tion and any refund or credits authorized by law, generated by a tax under
9 this chapter may be used for any city or county purpose under a plan approved
10 pursuant to this chapter.
11 63-4605. PLAN. Prior to seeking authorization from the qualified elec-
12 tors, a city or county intending to impose a tax shall:
13 (1) Adopt an ordinance, approved by the council or board, to impose the
14 tax following adoption of a plan and authorization by two-thirds (2/3) of all
15 votes cast by the qualified electors of the county or city voting to impose
16 the tax; and
17 (2) Develop a plan that includes, at a minimum, a detailed explanation of
18 the proposed use of revenues derived from the tax.
19 63-4606. ADOPTION OF PLAN. (1) Prior to the adoption of a plan, the city
20 or county shall conduct a public hearing.
21 (2) Notice of the hearing shall be posted at least thirty (30) days prior
22 to the hearing at a conspicuous place within the city or county. A copy of the
23 notice shall also be published pursuant to the provisions of section 40-206,
24 Idaho Code. The place, hour and date of the hearing shall be specified in the
25 notice, as well as the place where the draft plan may be examined prior to the
26 hearing. A summary of the plan shall be published with and as a part of the
27 notice of publication of the notice of hearing.
28 (3) Nothing in this chapter shall be interpreted to limit the authority
29 of the city or county to adopt the plan.
30 63-4607. ELECTION TO AUTHORIZE TAX. (1) In an election, the question pre-
31 sented to the qualified electors of the city or county shall:
32 (a) Provide a description and general explanation of the tax to be
34 (b) Provide a detailed summary of the plan adopted by the council or
35 board following the public hearing;
36 (c) State that the rate of the tax to be assessed shall be set by the
37 city or county as set forth in the plan, but that the rate shall be at
38 least one-tenth of one percent (0.10%) but not more than one percent (1%)
39 of the sales price of an item subject to taxation;
40 (d) State that the revenues derived from the tax shall be used only for
41 purposes specified in the plan; and
42 (e) State the estimated term of the tax.
43 (2) Upon voter approval of the tax, the city or county shall provide by
44 resolution the methods for reporting and collecting the taxes due. The resolu-
45 tion shall also state the rate to be assessed, established as follows:
46 (a) The city or county, pursuant to an estimate based upon the voter
47 authorized plan and anticipated reserve or other monetary requirements,
48 shall impose a tax of at least one-tenth of one percent (0.10%) but not
49 more than one percent (1%) of the sales price of an item subject to taxa-
51 (b) The city or county shall comply with the filing and recording
52 requirements of section 63-215, Idaho Code, and shall cause a copy of a
1 resolution, or amendment thereto, to be forwarded to the state treasurer,
2 the chairman of the state tax commission and the chairman of the state
3 board of tax appeals.
4 (3) Taxes collected shall constitute revenue of the city or county avail-
5 able for purposes of implementing the plan. Tax collection shall commence on a
6 date set forth in the resolution, but not earlier than the next quarter that
7 commences at least sixty (60) days after the date of the election.
8 63-4608. COLLECTION AND ADMINISTRATION OF TAX BY THE STATE TAX COMMISSION
9 -- DISTRIBUTION. (1) A city or county that has levied a tax pursuant to this
10 chapter shall contract with the state tax commission for the collection and
11 administration of the tax in like manner and under definitions and rules of
12 the state tax commission for the collection and administration of the state
13 sales and use tax under chapter 36, title 63, Idaho Code. The state tax com-
14 mission is authorized to adopt additional rules as may be necessary for effi-
15 cient and effective tax collection and administration under this chapter,
16 including, without limitation, destination-based sourcing rules as are compat-
17 ible with chapter 36, title 63, Idaho Code, and use tax credit rules as are
18 compatible with section 1, article V, section 63-3701, Idaho Code.
19 (2) The city or county shall contract with the state tax commission for
20 the collection and administration of such taxes. Additional services, such as
21 audit, appeals, compliance or legal representation, may be contracted with the
22 state tax commission as determined appropriate by the council or board. The
23 costs of such contracted services shall be paid from the tax receipts subject
24 to subsection (3)(b) of this section.
25 (3) All revenues collected by the state tax commission pursuant to this
26 chapter shall be distributed as follows:
27 (a) An amount of money shall be distributed to the state refund fund suf-
28 ficient to pay current refund claims. All refunds authorized by the state
29 tax commission to be paid shall be paid through the state refund fund and
30 those moneys are continuously appropriated.
31 (b) An amount of money shall be distributed to the state tax commission
32 equal to the fee as may be agreed upon between the state tax commission
33 and the city or county for the actual cost of the collection and adminis-
34 tration of the tax. The amount retained by the state tax commission shall
35 not exceed the amount authorized to be expended by appropriation by the
36 legislature. Any unencumbered balance in excess of the actual cost at the
37 end of the fiscal year shall be distributed as provided in subsection
38 (3)(c) of this section.
39 (c) All remaining moneys shall be placed in the local option sales and
40 use tax fund established in section 63-4609, Idaho Code, and distributed
41 as provided in that section.
42 63-4609. LOCAL OPTION SALES AND USE TAX FUND ESTABLISHED -- DISTRIBUTION
43 OF MONEYS. (1) There is hereby established in the state treasury a fund known
44 as the local option sales and use tax fund, to which shall be credited moneys
45 as provided in section 63-4608, Idaho Code.
46 (2) Interest earned on the investment of idle moneys in the fund shall be
47 paid to the fund.
48 (3) Distributions from the fund shall be made to the appropriate city or
49 county, upon demand of the city or county, to be spent, pledged or accumulated
50 for any purpose in furtherance of the plan.
51 (4) By providing written notice to the state tax commission, a city or
52 county may request that the commission transfer a portion of the revenues to
53 designated governmental entities in implementation of the plan.
1 (5) An audit shall be conducted of the financial affairs of the fund and
2 of distributions from the fund associated with the plan as required by section
3 67-450B, Idaho Code, within sixty (60) days after the end of the fiscal year
4 of a county. Any governmental entity that receives moneys from the fund shall
5 cooperate with the city or county in conducting the annual audit and provide
6 all financial information associated with the plan.
7 63-4610. COOPERATIVE AGREEMENTS. Cities and counties may enter into coop-
8 erative agreements with the state, other authorities, counties, cities and
9 highway districts under the provisions of section 67-2328, Idaho Code, includ-
10 ing, without limitation, cooperative agreements for the distributions from the
11 fund and to carry out the provisions of this chapter.
12 63-4611. TAX REPEAL OR REAUTHORIZATION. The tax or the rate of tax in
13 effect may be changed, repealed or extended, but only if approved by two-
14 thirds (2/3) of all votes cast by the qualified electors voting in a repeal,
15 reauthorization or rate change election conducted for such purpose. This elec-
16 tion may be held in any year prior to the expiration of the term of the tax
17 then in effect on the November election date specified in section 34-106,
18 Idaho Code. A summary of the plan adopted by the council or board with respect
19 to the extension of the term of the tax in question shall be included. If the
20 extension of the term of the tax is reauthorized, a copy of the council or
21 board resolution authorizing an extension of the term of the tax shall be pro-
22 vided to the state treasurer, the chairman of the state tax commission and the
23 chairman of the state board of tax appeals.
24 63-4612. SEVERABILITY. The provisions of this chapter are hereby declared
25 to be severable and if any provision of this chapter or the application of
26 such provision to any person or circumstance is declared invalid for any rea-
27 son, such declaration shall not affect the validity of the remaining portions
28 of this chapter.
29 SECTION 2. This act shall be in full force and effect on and after the
30 date of adoption of House Joint Resolution No. 4 by the electorate of the
31 state of Idaho as required by law.
STATEMENT OF PURPOSE
This legislation provides authority to Idaho cities and counties to
levy a local option sales and use tax in an amount between .10% and 1% on
all taxable use and sales sold within a city or county in the same manner
as provided by Idaho's existing statewide sales and use tax. The revenues
from the tax may be used for any city or county purpose.
A city or county may impose a local option sales tax subject to the
following requirements: (1) a city council or county commission seeking to
levy the tax develops and approves, by ordinance, a plan that provides a
detailed explanation of the purposed use of the revenues derived from the
tax; (2) the plan is adopted only after a properly noticed public hearing
is held on it, and (3) 66 2/3 of the qualified electors of such city or
county voting at an election held in November of any year approve the tax.
Cities and counties who levy such a tax may enter into cooperative
agreements with the state of Idaho, other authorities, such as Regional
Public Transportation Authorities, counties, city and highway districts,
for distributions of tax revenues to such entities for use within such
cities and counties.
The State Tax Commission shall enter into agreements with cities and
counties levying the tax to collect the tax and remit it back, minus the
costs of administration, to any city or county levying the tax.
This legislation only becomes effective upon approval by the people at
the November election of House Joint Resolution No. 4.
No impact to the General Fund.
Name: Representative Lake
Phone: 208. 332.1000
STATEMENT OF PURPOSE/FISCAL NOTE H 688