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House Bill 677 — Corporate activities tax

House Bill 677 — Corporate activities tax

by
Parrish Miller
March 1, 2022
Parrish Miller
March 1, 2022

Bill Description: House Bill 677 would clarify that it is unconstitutional for a state other than Idaho to tax an Idaho business for conducting sales or other business within the state of Idaho, with a nonresident customer who is physically present within Idaho. 

Rating: +1

Does it violate the spirit or the letter of either the U.S. Constitution or the Idaho Constitution? Examples include restrictions on speech, public assembly, the press, privacy, private property, or firearms. Conversely, does it restore or uphold the protections guaranteed in the U.S. Constitution or the Idaho Constitution?

House Bill 677 contains several paragraphs of intent language, which explain the reason for this bill. The state of Oregon passed a corporate activity tax, which the Oregon Department of Revenue claims can be imposed on an Idaho business selling an item within the boundaries of the state of Idaho if the purchaser is an Oregon resident physically present in Idaho during the sale.

The bill also says that several other states have passed or are considering passing similar taxes on businesses not located within their borders.

The bill goes on to put forward constitutional and legal arguments against this practice. 

House Bill 677 creates Section 63-4015, Idaho Code, which says, "No out-of-state taxing entity may tax an Idaho business for conducting sales or other business taking place within the state of Idaho between an Idaho business and a nonresident who is physically present within the state of Idaho while engaging in the business transaction. Notwithstanding any provision of chapter 13, title 10, Idaho Code, to the contrary, any attempt to tax an Idaho business in contravention of this section violates the United States constitution, is null and void, and shall not be enforced in the state of Idaho."

(+1)

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