Bill Description: House Bill 755 would require an annual review of sales tax exemptions by LSO, and implement automatic sunsetting for most sales tax exemptions. 

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Does it directly or indirectly create or increase any taxes, fees, or other assessments? Conversely, does it eliminate or reduce any taxes, fees, or other assessments?

House Bill 755 would create Section 63-3643, Idaho Code, to require LSO to conduct an annual review of sales tax exemptions, and provide the information to the Legislature. Among the factors LSO would be instructed to consider are “the amount of revenue that the state would collect each year if the tax exemption were repealed” and “whether the exemption has out-of-state beneficiaries”.

Additionally, the bill would require that all sales tax exemptions (other than the general exemption for resale) automatically sunset unless the legislature takes affirmative action to extend or reenact the exemption prior to its expiration.

While sunset provisions for taxes, regulations, or other limitations on freedom can be helpful in protecting liberty, applying them uniquely to tax exemptions is clearly intended to transfer more wealth from the people to the state. The bill’s fiscal note claims the state “loses over $2 billion in revenue from sales tax exemptions” and the bill could “result in the return of hundreds of millions of dollars in revenue” to the state. 

Claiming that money not taxed away from people is “lost” and needs to be “returned” embraces a flawed presumption that the state is the rightful owner of people’s wealth.

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