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Spokane, Washington  Est. May 19, 1883

Eye On Boise

House passes internet sales tax bill on 46-21 vote, sends to Senate

The Idaho House has voted 46-21 in favor of HB 578, Rep. Lance Clow’s internet sales tax bill, which would begin requiring out-of-state sellers to collect and remit Idaho sales tax on their sales to Idahoans if they have affiliate retailers in Idaho who do more than $10,000 a year in business. It wouldn’t cover all remote sellers, but Clow, R-Twin Falls, said the move could bring in $22 million to $37 million a year in currently uncollected sales taxes that already are due – the buyers are supposed to report them on their state income tax returns if the sellers don’t collect them.

“Some would like to tell you this is a new tax, it is not,” Clow told the House. “It is a change in the way we collect taxes. ... It is long overdue to recognize this change in the marketplace that has been created by the internet.”

Idaho retailers have long supported some move like this, saying out-of-state retailers are undercutting them by selling to Idahoans without charging the same 6 percent sales tax that they must collect and remit on every sale.

But Rep. Vito Barbieri, R-Dalton Gardens, railed against the bill. “It’s been reported that times have changed,” he told the House. “Well they certainly have changed – states need more funding.” Barbieri said he owns a retail store that has no online presence, and he just has to compete.

“Today we say, ‘Gee, the trucks are delivering to the houses. There are delivery companies using the roads,’” Barbieri said. “Forget about the fact that the trucking company is paying taxes. … So the idea that we need to find more sources of funding to me is beyond the pale. … Let’s just erode away any discussion of whether there’s a reason to be paying taxes other than the state needs the money.”

House Majority Leader Mike Moyle, R-Star, who is co-sponsoring the bill with Clow, said, “It’s not a new tax. It’s a tax that’s due.” He noted that U.S. Supreme Court decisions are increasingly favoring states’ ability to require online retailers to collect and remit state sales taxes on their sales into a state.

Rep. Ron Nate, R-Rexburg, said he believed the move would violate the U.S. Constitution’s section saying, “No state shall lay any impost or duties on imports or exports,” and said that provision prevents trade wars between states. “When we buy something from Utah, it is an import into our state,” he said. “It is really subverting that.”

Rep. Ilana Rubel, D-Boise, countered, “The U.S. Supreme Court has given every indication that this is constitutional.” She said, “I don’t think it’s fair to be treating businesses that are in Idaho worse than companies that are outside of Idaho. So I think to level the playing field, we need to pass this.”

Rep. Jason Monks, R-Nampa, said many products sold at brick-and-mortar stores in Idaho originate out of state. “I don’t really see a distinction that we’re taxing something off the shelf, or that we’re taxing something that was ordered online,” he said. “This tax is already due.”

The bill, which Clow has been working on for more than five years, still needs passage in the Senate and the governor’s signature to become law.



Betsy Z. Russell
Betsy Z. Russell joined The Spokesman-Review in 1991. She currently is a reporter in the Boise Bureau covering Idaho state government and politics, and other news from Idaho's state capital.

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