Bill description: This bill is a clever attempt to apply the state’s sales tax to more out-of-state transactions by changing what is considered among the sales nexus.
Analyst’s note: For the last several years, Idaho has toyed with ways to tax Internet sales to state residents. This bill is the latest such attempt. Some argue that sales to Idahoans are already subject to the use tax, requiring them to report on their income tax returns. Few people, however, do that. Recent court cases suggest states can collect a tax on out-of-state sales when a business engaging in Idaho’s economy has some physical presence, or nexus, as defined in 63-3311, Idaho Code.
Does it give government any new, additional, or expanded power to prohibit, restrict, or regulate activities in the free market?
This bill grants to the State Tax Commission new powers to monitor sales transactions in Idaho. Specifically, the Tax Commission would have the power to determine whether a sale meets the specifications defined in this bill. This would include deciding on whether or not a commission is offered on a sale or whether a website from an Idaho seller links to a company outside of Idaho, and so on. Idaho retailers would be subject to taxation for sales of more than $10,000 a year. (-1)
Does it directly or indirectly create or increase any taxes, fees, or other assessments?
Sponsors say the bill raises state revenues, which means the measure increases taxes. (-1)
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