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H0360...............................................by REVENUE AND TAXATION
SALES TAX - Adds to and amends existing law to revise the definition of
"retailer engaged in business in this state"; to provide conditions when a
retailer has substantial nexus with the state of Idaho; and to provide
application of the definition of "Internal Revenue Code."
01/17 House intro - 1st rdg - to printing
01/18 Rpt prt - to Rev/Tax
01/28 Rpt out - rec d/p - to 2nd rdg
01/29 2nd rdg - to 3rd rdg
02/04 3rd rdg - PASSED - 67-0-3
AYES -- Anderson, Andrus, Barrett, Bayer, Bedke, Bell, Bilbao, Black,
Block, Bock, Boe, Bolz, Bowers, Brackett, Bradford, Chavez, Chew,
Clark, Collins, Crane, Durst, Hagedorn, Hart, Harwood, Henbest,
Henderson, Jaquet, Killen, King, Kren, Labrador, Lake, LeFavour,
Loertscher, Luker, Marriott, Mathews, McGeachin, Mortimer, 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, Wills, Wood(27), Wood(35), Mr. Speaker
NAYS -- None
Absent and excused -- Chadderdon, Eskridge, Moyle
Floor Sponsor - Ruchti
Title apvd - to Senate
02/05 Senate intro - 1st rdg - to Loc Gov
02/13 Rpt out - rec d/p - to 2nd rdg
02/14 2nd rdg - to 3rd rdg
02/25 3rd rdg - PASSED - 33-0-2
AYES -- Andreason, Bair, Bastian, Bilyeu, Broadsword, Burkett,
Cameron, Corder, Darrington, Davis, Fulcher, Geddes, Goedde, Hammond,
Heinrich, Hill, Jorgenson, Kelly, Keough, Langhorst, Little, Lodge,
Malepeai(Sagness), McGee, McKague, McKenzie, Pearce, Richardson,
Schroeder, Siddoway, Stegner, Stennett, Werk
NAYS -- None
Absent and excused -- Coiner, Gannon
Floor Sponsor - Little
Title apvd - to House
02/26 To enrol
02/27 Rpt enrol - Sp signed
02/28 Pres signed
02/29 To Governor
03/03 Governor signed
Session Law Chapter 49
Effective: 07/01/08
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]] Fifty-ninth Legislature Second Regular Session - 2008IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 360 BY REVENUE AND TAXATION COMMITTEE 1 AN ACT 2 RELATING TO SALES AND USE TAXES; AMENDING SECTION 63-3611, IDAHO CODE, TO 3 REVISE THE DEFINITION OF A "RETAILER ENGAGED IN BUSINESS IN THIS STATE"; 4 AMENDING CHAPTER 36, TITLE 63, IDAHO CODE, BY THE ADDITION OF A NEW SEC- 5 TION 63-3615A, IDAHO CODE, TO PROVIDE CONDITIONS WHEN A RETAILER HAS SUB- 6 STANTIAL NEXUS WITH THE STATE OF IDAHO, WITH EXCEPTIONS, AND TO PROVIDE 7 APPLICATION OF THE DEFINITION OF "INTERNAL REVENUE CODE." 8 Be It Enacted by the Legislature of the State of Idaho: 9 SECTION 1. That Section 63-3611, Idaho Code, be, and the same is hereby 10 amended to read as follows: 11 63-3611. RETAILER ENGAGED IN BUSINESS IN THIS STATE. "Retailer engaged in 12 business in this state" as used in this chapter means any retailer who: 13 (1) Engages in recurring solicitation of purchases from residents of this 14 state or otherwise purposefully directs its business activities at residents 15 of this state; and 16 (2) Has sufficient contact with this state, in accordance with the con- 17 stitution of the United States, to allow the state to require the seller to 18 collect and remit use tax on sales of tangible personal property or services 19 made to customers in this state. 20 (3) The term includes any of the following: 21 (a) Any retailer maintaining, occupying or using, permanently or tempo- 22 rarily, directly or indirectly, or through a subsidiary or agent, by what- 23 ever name called, an office, place of distribution, sales or sample room 24 or place, warehouse or storage place, or other place of business or main- 25 taining a stock of goods. 26 (b) Any retailer having any representative, agent, salesman, canvasser or 27 solicitor operating in this state under the authority of the retailer or 28 its subsidiary for the purpose of selling, delivering, installing or the 29 taking of orders for any tangible personal property. 30 (c) Any retailer, with respect to a lease or rental, deriving rentals 31 from a lease or rental of tangible personal property situated in this 32 state. 33 (d) Any retailer engaging in any activity in connection with servicing or 34 installing tangible personal property in this state. 35 (e) Any retailerowned or controlled by the same interests which own or36control any retailer engaged in business in the same or a similar line of37business in this statewith substantial nexus in this state within the 38 meaning of section 63-3615A, Idaho Code. 39 (f) Any retailer having a franchisee or licensee operating under its 40 trade name if the franchisee or licensee is required to collect the tax 41 under the provisions of this section. 2 1 SECTION 2. That Chapter 36, Title 63, Idaho Code, be, and the same is 2 hereby amended by the addition thereto of a NEW SECTION, to be known and des- 3 ignated as Section 63-3615A, Idaho Code, and to read as follows: 4 63-3615A. SUBSTANTIAL NEXUS. (1) Subject to the limitation in subsection 5 (2) of section 63-3611, Idaho Code, a retailer has substantial nexus with this 6 state if both of the following apply: 7 (a) The retailer and an in-state business maintaining one (1) or more 8 locations within this state are related parties; and 9 (b) The retailer and the in-state business use an identical or substan- 10 tially similar name, trade name, trademark or goodwill to develop, promote 11 or maintain sales, or the in-state business provides services to, or that 12 inure to the benefit of, the out-of-state business related to developing, 13 promoting or maintaining the in-state market. 14 (2) Two (2) entities are related parties under this section if they meet 15 any one (1) of the following tests: 16 (a) Both entities are component members of the same controlled group of 17 corporations under section 1563 of the Internal Revenue Code; 18 (b) One (1) entity is a related taxpayer to the other entity under the 19 provisions of section 267 of the Internal Revenue Code; 20 (c) One (1) entity is a corporation and the other entity and any party, 21 for which section 318 of the Internal Revenue Code requires an attribution 22 of ownership of stock from that party to the entity, own directly, indi- 23 rectly, beneficially, or constructively at least fifty percent (50%) of 24 the value of the outstanding stock of the corporation; or 25 (d) One (1) or both entities is a limited liability company, partnership, 26 estate or trust, none of which is treated as a corporation for federal 27 income tax purposes, and such limited liability company, partnership, 28 estate or trust and its members, partners or beneficiaries own in the 29 aggregate directly, indirectly, beneficially, or constructively at least 30 fifty percent (50%) of the profits, capital, stock or value of the other 31 entity or both entities. 32 (3) The provisions of this section shall not apply to a retailer that had 33 sales in this state in the previous year in an amount of less than one hundred 34 thousand dollars ($100,000). 35 (4) The definition of "Internal Revenue Code" in section 63-3004, Idaho 36 Code, shall apply to this section.
STATEMENT OF PURPOSE
RS 17521
This legislation amends Section 63-3611 of the Idaho Code to
provide that a "retailer engaged in business in this state" be
defined as any retailer with substantial nexus in this state, and
creates a new Section 63-3615A of the Idaho Code, to define
substantial nexus for any retailer having a franchisee or
licensee operating under its tradename or owned by the same
entity or corporation in the State of Idaho be required to
collect taxes from its customers.
FISCAL NOTE
The State Tax Commission's best estimate of the current
revenue gain from passage of RS 17521 is $500,000.
Contact
Name: Senator Brad Little
Phone: 332-1303
STATEMENT OF PURPOSE/FISCAL NOTE H 360