‘The number will always be wrong’
Dan John, tax policy manager for the Idaho State Tax Commission, told a legislative task force that it'd be very difficult, under Idaho's current sales tax categories, to define specific categories of products subject to the sales tax in order to shift the taxes paid on those to road repairs or other purposes. Idaho uses six pages of categories for sales taxes, he said. "They are very broad." He said, "If there is a move to take the sales tax from a particular product, the number will always be wrong. We'll get it as close as we can." The Tax Commission is planning a survey of retailers to get more info on that, John said. Rep. Raul Labrador, R-Eagle, said he's estimating there could be as much as $200 million a year in sales taxes being paid on cars, car parts, and other auto-related items. "I could start out with $25 million," he said, by writing a bill to "put it to roads." John said that could be done. "You could take a fixed amount or percentage, yes."
Lawmakers could also decide to impose a new excise tax on certain items, he said. "If you wanted to, you could do that. ... It doesn't come cheap." There would be significant startup costs for programming, John noted. Rep. Shirley Ringo, D-Moscow, asked about eliminating tax exemptions. John said some are more doable than others. The "casual sales exemption," for example, which exempts yard sales from sales tax, appears to hold lots of potential revenue, he said, but, "There are not enough mini-vans on this earth for us to enforce a sales tax on yard sales."
John also detailed how Idaho used to give refunds to off-road users for the gas tax they paid on gas used off-road, but stopped doing that when the funds from those taxes were directed to the state Parks Department for trails. Now, the Legislature has decided to shift them back to the Transportation Department, effective July 1, 2010. Rep. Maxine Bell, R-Jerome, after hearing John's presentation, said, "It seems like where we were with off-road vehicles and the gas tax that wasn't going on the roads, it was going on the trails, was a pretty good place to be. It was easy to administer."
