2008 Legislation
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HOUSE BILL NO. 688<br /> – 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

Bill Text




                                                                       
  ]]]]              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
 27    chapter.

 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

                                       2

  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
 33        approved;
 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-
 50        tion.
 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

                                       3

  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.

                                       4

  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 / Fiscal Impact


                       STATEMENT OF PURPOSE

                            RS 18139C1

     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.


                            FISCAL NOTE

     No impact to the General Fund.






Contact
Name: Representative Lake 
Phone: 208.  332.1000


STATEMENT OF PURPOSE/FISCAL NOTE                                    H 688