Bill description: HB 259 would require all marketplace facilitators, such as eBay, to remit sales taxes to the state on goods sold into Idaho.
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?
HB 259 would require a marketplace facilitator, such as eBay or Wayfair, to remit sales tax for any purchases it facilitates in Idaho if it sells more than $100,000 into the state. This bill would define a marketplace facilitator as a person or company that contracts with another entity to sell goods or services through a physical or electronic marketplace.
This legislation comes on the heels of the U.S. Supreme Court ruling in Wayfair v. South Dakota, in which the court ruled that states can mandate out-of-state retailers or facilitators to remit taxes on the goods they sell if it is done in a manner that is not overly burdensome. Based on the law under review, in this case, the court established the following as tests for an overly burdensome law:
- That the retailer has a significant presence in the state (defined as $100,000 in sales, 200 transactions, or more), and
- Is not retroactive, so that retailers do not have to remit taxes for any sales prior to the enactment of the law, and
- Takes other steps to reduce administrative costs and the burden of compliance.
The fiscal note for HB 259 estimates that this new law would require marketplace facilitators to remit a total of $30 million in sales tax to the state in FY20, $34.5 million in FY21, and an increasing amount in future years.
Under current state law, out-of-state retailers are required to remit sales taxes to the state if they make more than $10,000 in sales into the state. HB 259, would increase this to $100,000 to put the statute in line with the recent court ruling, and to reduce the administrative burden on small out-of-state retailers.
This analysis reflects the Senate amendments made to the legislation.