The Idaho Senate voted 34-0 Tuesday for a proposal that could expand sales tax collections for Internet purchases. The backer of the measure said that broadening the tax base could lead to lower tax rates for all Idahoans.
A proposal from Sen. Mike Jorgenson, R-Hayden, would give give State Tax Commission the approval and authority to look into joining the Streamlined Sales Tax Compact, a 23-state effort to simplify sales taxes and collect from sales to businesses located out of state. "This is not a proposal to create a new tax," Jorgenson said. "In fact, it's a proposal to broaden the base where taxes might come from and conceivably lower the tax rate."
"This isn't about generating taxes," said Sen Joe Stegner, R-Lewiston. "This isn't about raising money. This is about fairness to local businesses." The sales tax compact has been around since 2000. Wyoming, Washington, and Utah are already part of the agreement. Gov. Dirk Kempthorne signed an executive order in 2005 to attend meetings for the compact, but that expired last year. Stegner said that the multi-state agreement wouldn't affect state sovereignty. As an example, he said that each state could still choose to tax a Twix candy bar as a cookie, which could have a lower tax rate for food, or as candy.
Sen. John Andreason, R-Boise, said the ultimate goal of the Streamlined Sales Tax Compact is to pressure the federal government to allow states to collect sales tax on Internet sales. He said he served on the National Conference of State Legislatures, which helped form the compact, when the issue of taxing Internet purchases was first being studies. Similar measures to join the sales tax compact have failed in the Legislature in the past. There's some concern that the House may object to Jorgenson introducing the plan in the Senate, since new tax proposals must start in the House.