Oregon Businesses Asked To Voluntarily Ring Up Idaho Sales Tax

Facing the likely need for more tax revenue, Idaho tax collectors are calling on businessmen in the border town of Ontario, Ore., to begin voluntarily collecting Idaho’s 5 percent sales tax on sales to Idaho residents.

Idaho Deputy Attorney General Ted Spangler said a study, apparently prompted by Idaho businessmen in border counties, indicated that enough Idaho residents cross the border to buy in a state that has no sales tax to warrant the effort to collect the levy.

“Right now, we are contacting these places and trying to educate them and ask them to voluntarily register with the Idaho Tax Commission, get a seller’s permit and begin collecting and remitting the tax,” Spangler said.

“If we see this is not working, then we will have to take more stringent action,” he said.

Oregon tax officials acknowledged Idaho’s right under federal principles to launch the campaign against sometimes hostile Oregon merchants.

Idaho sales tax law has required residents making purchases outside the state to declare them and pay a use tax - the equivalent of the sales tax. But compliance, except for vehicles, has been minimal.

State officials have estimated that Idaho loses millions of dollars a year in sales tax on out-of-state purchases, and that cash has become more and more important to the state in the face of a pending initiative to shift $228 million in property taxes for school operations to general state taxes.

Spangler said the state has targeted Ontario businesses that have large sales volumes with Idaho residents, deliver goods to Idaho residents, send salesmen into Idaho to deal with customers or provide follow-up service on sales.

He declined to say what businesses have been contacted or the deadline they have been given to begin voluntarily collecting Idaho sales tax. But businessmen have indicated Oct. 1 is the compliance date.

Blackers furniture store manager John Dyer said he did not know how much business he did with Idaho residents and objects to Idaho crossing the border to put the arm on him. But he grudgingly conceded that he will comply this fall.

“I’m a tax collector now and should get paid by the state for collecting its money,” Dyer said. “I also think if they are going to look at volume, then the Idaho tax people should go after the two biggies - Kmart and Wal-Mart who do 30 times more business with Idahoans than I do or probably anyone else here in town.”

The alternative to voluntary tax collection by Oregon merchants would be setting up a checkpoint at the border where Idaho residents returning from Ontario are stopped and assessed the tax on their purchases.

But, Spangler admitted, “it would be pretty hard to do that.”