June 21, 2008 in Idaho

Officials to look into allegations of tax deals

Betsy Z. Russell Staff writer
 

BOISE – Legislators and state officials from both parties will review a whistleblower’s allegations that the Idaho State Tax Commission cut secret deals to excuse multistate corporations from paying millions in state taxes.

On Friday, Senate President Pro-Tem Bob Geddes, R-Soda Springs, authorized the Senate Local Government and Taxation Committee to call a special interim meeting this summer to review the charges. Two members of the Democratic legislative leadership had requested a meeting, and committee Chairman Brent Hill, R-Rexburg, said he thought it was a good idea.

Hill said he had been planning to meet next week with state tax commissioners and the whistleblower, longtime state tax auditor Stan Howland. But, Hill said, “it would be better to do it in a public format. … I really think we ought to address it this summer … so that if there is some legislation that is appropriate, that we can consider it in the next session and not drag it out any further than that.”

Meanwhile, Gov. Butch Otter sent a letter to state Tax Commission Chairman Royce Chigbrow on June 3 requesting a “detailed, formal response from the commission” to the concerns Howland raised. Otter asked for the report by last Friday, but Chigbrow said it won’t be completed until next week.

House Tax Chairman Dennis Lake, R-Blackfoot, said he’ll await that response and Otter’s reaction to it before deciding whether to convene the House tax committee this summer as well. “If there’s some legislation we need to do, then yes, I am interested and certainly we would go through the necessary procedures to make it happen,” he said.

On Wednesday, Sen. Kate Kelly, D-Boise, asked Attorney General Lawrence Wasden to investigate whether any state laws were broken. “For me, the report raises two questions: 1. Has the law been broken? 2. Are the policy and practices that underlie the existing law in the best interests of the citizens of this state and a fair and accountable tax system?” Kelly wrote to Wasden.

Kriss Bivens-Cloyd, a spokeswoman for Wasden, said the attorney general, who met with Kelly to discuss her concerns before she submitted the formal request, will comply.

House Assistant Minority Leader George Sayler, D-Coeur d’Alene, said an internal review at the Tax Commission isn’t enough. “It seems to me that these are serious enough allegations that we need an independent investigation,” he said.

Howland, who has worked for the Tax Commission for 28 years, said in his report that in the past year, every tax appeal by a multistate corporation was settled through a confidential settlement agreement. Under such agreements, part of the taxes due are excused, there’s no record of why, and the public never knows about it.

Howland wrote that such agreements have been used increasingly by the Tax Commission for the past 17 years: “The number of corporations receiving these ‘deals’ has increased over the years to a point where most large corporations now automatically protest all audits in anticipation of receiving their ‘Idaho tax break.’ ”


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