Idaho lawmakers will spend more money to go after tax scofflaws. The Joint Finance-Appropriations Committee (JFAC) will spend an additional $3 million above its target budget for auditors and other staff at the State Tax Commission, but expects to bring in $16.4 million in extra tax revenues.
“We’re trying to increase revenue as much as possible, and here’s an opportunity to increase that tax gap,” said Rep. Darrell Bolz, R-Caldwell. The tax commission estimates the state could collect $67 million in unreported taxes if it had enough auditors. The state will pay for 10 temporary auditors a total of $560,000 and is expecting them to bring in $4.5 million. An additional $1.6 million would fund 43 temporary tax specialists, some of them auditors. Those positions are targeted to bring in $11.5 million. JFAC will also maintain $1 million in funding for tax compliance efforts that should prevent the state from losing $17 million.
The tax commission will need to report back to lawmakers and the governor every three months to show that it is collecting enough unpaid taxes to warrant the extra funding. If they come in below expectations, funding for auditors could be stopped. “We need to figure out what that point of diminishing returns is, and then shut it off,” said Rep. Wendy Jaquet, D-Ketchum.
Rep. Jim Patrick, R-Twin Falls, said he worried that the quarterly reporting could create quotas that auditors feel they need to reach. “I hope it doesn’t get out of hand and we have overzealous auditors that are making claims that are untrue,” he said.
The State Tax Commission would receive $25.9 million in state general fund dollars in the next budget, which would be a 3.1 percent increase.
