The National Taxpayers Union says it’s conducted a poll in Idaho that shows Idahoans oppose taxes on online sales, with questions such as, “Please tell me if you agree or disagree with the following statement. Out-of-state tax collectors, such as those from the state of New York, should not gain new power to audit and take into New York courts, online retailers who operate from Idaho. Do you strongly agree/disagree with it, or just somewhat agree/disagree with it?” Fifty-seven percent of respondents said they agreed.
But the debate in Idaho has been about national and out-of-state retailers selling their products in Idaho without collecting Idaho’s sales tax – putting local retailers at a price disadvantage. “Currently, a legal loophole, created before the Internet even existed, is encouraging customers to make purchases from online out-of-state retailers so they can avoid paying sales tax,” said Pat Nagel, owner of Idaho Camera and a member of the Idaho Retailers Association. “Our government has put Idaho stores at a six percent price disadvantage. We want to continue serving the customers in our community for years to come but in order for that to happen something has to change – Congress has to pass e-Fairness legislation.”
That’s the legislation the National Taxpayers Union opposes. In announcing its poll today, which the group said was conducted June 3-4, included 400 likely Idaho voters and has a margin of error of 4.9 percent, the group said, “When it comes to a federal law allowing out-of-state tax collectors to reach into the pockets of Idaho’s online merchants, by a 52-32 percent margin Gem State voters have a resounding and simple answer: Just, no!” The poll results were announced today by the NTU and the R Street Institute, a Washington, D.C.-based “free-market think tank” that’s in the midst of a 20-state tour to announce similar poll results.
The group strongly opposes the bill pending in Congress that’s dubbed the “Marketplace Fairness Act” and would allow states that participate in the multi-state streamlined sales tax project to require online retailers who make sales to their states to collect and remit sales taxes. Idaho initially was part of the project, but then dropped out, and lawmakers have been resisting legislation to rejoin, though Idaho retailers have been pushing for the move, saying they’re losing more and more of their business to untaxed online retailers. Idaho law already requires Idahoans who make online purchases from out of state to pay the taxes; they're supposed to report and pay them on their state income tax returns, though few do.
Rep. Lance Clow, R-Twin Falls, who has sponsored legislation on the issue, issued a statement today noting that Idaho passed a new law this year creating a savings account for any future online sales taxes it collects, to be put toward tax relief. “The National Taxpayers Union wants to continue incentivizing Idahoans to shop outside of our state by keeping an outdated tax loophole intact,” Clow said.
You can read Clow’s statement here; and the R Street/NTU press release here. Pam Eaton, head of the Idaho Retailers Association, said, “There are two sides to every story. If Idahoans are going to have an accurate discussion on e-Fairness, all the information has to be laid out on the table.” Her press release was headed, “Don’t let poll fool you – eFairness is good for Idaho.”