Here’s my full story on today’s House debate and vote on HB 449, the bill to remove Idaho’s sales tax from Girl Scout cookies and food sales by the Boy Scouts. The bill passed on a 35-31 vote; it now moves to the Senate side, where its fate is uncertain – a 2013 bill that sailed through the House with just 11 no votes, which was limited to Girl Scout cookie sales, died there without a hearing.
BOISE – The Idaho House narrowly passed legislation Wednesday to remove the state’s distinction as one of just two states that imposes sales taxes on Girl Scout cookies, after North Idaho Rep. Heather Scott argued the exemption would be unconstitutional.
Scott, R-Blanchard, debated twice against the bill, saying the state would be better off to remove sales taxes from all food. “I would just like to say that we have started down a road that’s obviously not constitutional, because it’s not equal exemptions across the board,” she told the House.
“Do we continue down this road of voting against the Constitution, or do we stop it now and write a bill that affects everyone equal, all these nonprofits equal?” Scott asked. “Do we continue down the road of breaking the Constitution or do we stop that and fix it now?”
The bill barely passed the House on a 35-31 vote, though similar legislation sailed through with just 11 no votes in 2013. It died in the Senate, however, without a hearing. This year’s bill, which adds food sales by Boy Scouts as well, also faces an uncertain fate in the Senate, which has been leery of most new sales tax exemptions in recent years.
Idaho law already includes an array of sales tax exemptions for specific entities. Though the Idaho Constitution requires “taxes to be uniform,” that clause deals with property taxes, according to a 1936 Idaho Supreme Court decision, not excise taxes like the sales tax, and it also provides for exemptions.
“The Idaho Legislature is granted authority to grant exemptions,” said state Tax Commission Chairman Ken Roberts, a former state lawmaker. “And if you look in statute, there are multiple exemptions for entities that are listed by name.”
Among them: Idaho exempts “sales of animals by any 4-H club or FFA club held in conjunction with a fair or the western Idaho spring lamb sale,” and “the renting of a place to sleep to an individual by the Idaho Ronald McDonald House.” Numerous specific organizations, from the Blind Services Foundation to Special Olympics Idaho, are exempted from paying sales tax on their purchases.
Rep. Ron Nate, R-Rexburg, said he’s a backer of Boy Scouts and has been a Boy Scout leader, but said, “We in this bill are singling out two individual organizations by name … to the exclusion of other similar organizations. I think that’s a horrible precedent to be setting in our tax policy. It begs for more special interest types of legislation.”
Nate, who like Scott is in his first House term, said a broader bill for all organizations of that type would be “more in line with our Idaho Constitution, which recognizes that taxes should be general and uniform, rather than singling out special interests.”
The exemption would cost the state general fund an estimated $185,900 a year in lost sales taxes.
Roberts said, “The power to exempt is a plenary power of the Legislature.”
“A lot of times when people look at the Constitution, they’ll pull things out of there,” he said. “But remember that it was written at a time that gave the foundation for property tax. Property tax was the tax that was in place at the founding of the state.” Income taxes didn’t follow until 1933, and the sales and use tax in 1965.
Rep. Janet Trujillo, R-Idaho Falls, who sponsored the bill along with a bipartisan group of six other lawmakers, including House Speaker Scott Bedke, told the House, “Today, only two states tax Girl Scout cookies, Idaho and Hawaii. Forty-eight other states have seen the benefit that these organizations bring to their states.”
The 2013 bill sought to exempt only Girl Scout cookie sales.
Rep. Neil Anderson, R-Blackfoot, said, “We’ve seen this bill for three years now. … It started out just Girl Scouts, now they want Boy Scouts too, and that was the concern previously, that it would expand.”
Rep. Greg Chaney, R-Caldwell, argued against “keeping the Boy Scouts and Girl Scouts from this exemption just because we can’t figure out how to fix the rest of the process.”