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House rebels over ‘radiator cap’, keeps tax loophole

The House has voted 53-17 against concurring in Senate amendments to HB 74, which originally was an innocuous tax break for a specific charity on airplanes it uses overseas in charitable missions, but had been remade in the Senate into a bill to stop Cabela’s and other big, multistate retailers from evading Idaho sales tax on online sales after they’ve built stores in the state. Legislation to do away with the tax loophole that allows retailers who set up separate corporate entities for their online and brick-and-mortar operations to evade the tax earlier died in the House Rev & Tax Committee without a hearing.

So senators took the tax-break bill – one of many they’re sitting on this year until a more complete look is taken at tax exemptions – and “radiator capped” it. That’s the term for treating the bill like a car on which they’ve unscrewed the radiator cap, and then driven it off and driven an entirely different car in, screwed the cap back on and called it the same vehicle. That process left HB 74 no longer addressing anything about charitable airplanes, and instead focusing on closing the sales tax loophole for online sales.

Rep. Phil Hart, R-Athol, said, “I think it was inappropriate for the bill that this body passed and sent over to the Senate to be stripped out the way it was and sent back as an entirely different bill.” Rep. Lenore Barrett, R-Challis, referred to the amended bill as “stinky cheese.” House Minority Leader Wendy Jaquet, D-Ketchum, urged against the move, saying the House should debate the sales tax loophole issue. But House Rev & Tax Chair Dennis Lake, R-Blackfoot, told the House, “That bill was held for particular reasons and it was felt that it was better to not have that come forward.”


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Betsy Z. Russell covers Idaho news from The Spokesman-Review's bureau in Boise.

Named best state-based political blog in Idaho for 2013 by The Fix

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