BOISE - An Idaho state legislator is fighting the state Tax Commission over $53,000 in back taxes, interest and penalties, claiming in part that because he’s a legislator, he’s exempt from the deadlines for tax appeals that apply to all other taxpayers.
Rep. Phil Hart, R-Athol, who also argued unsuccessfully to the Tax Commission that Idaho’s state income tax is unconstitutional, was notified on Oct. 2, 2009, that he owed the money and had 91 days to appeal. But Hart argued that time frame would run out 10 days before the start of the 2010 legislative session.
“As a member of the Legislature, I can defer filing an appeal and all the work that that entails while the Legislature is in session and 10 days prior to the beginning of the session,” he wrote in a Dec. 31 letter to the Tax Commission.
Asked why he didn’t file his appeal during October, November or December, Hart said, “I don’t know. We were putting our game plan together.”
On March 31, two days after the legislative session ended, Hart filed a notice of appeal, but he didn’t pay the full required prepayment of 20 percent of the amount owed until April 13. The state has now moved to dismiss Hart’s appeal for failing to file on time and failing to pay the required deposit on time.
Hart, the Tax Commission argues in legal documents, “is seeking to use his status as a legislator to relieve himself of having to comply with the statute of limitations.”
The case is prompting debate about Idaho’s state constitutional provision that exempts lawmakers from “civil process” during the legislative session. “The concept is that the legislator should focus on the business of the Legislature and the business of the state while he’s in that time period,” Hart said. “So it’s not some kind of a privilege, it’s really more of a focusing the energy of that man where it should be, and not having a distraction.”
The Tax Commission strongly disagrees, and cited cases finding otherwise including a 2006 Arizona Supreme Court decision; that state has a similar constitutional protection for lawmakers.
“In this case, the taxpayer … is not defending himself from civil process. It is the taxpayer who is filing this action,” wrote Deputy Attorney General Bill von Tagen on behalf of the Tax Commission.
Political scientist Jasper LiCalzi of the College of Idaho said, “The issue is you can’t be bringing any kind of legal claims against legislators while they’re in session. The idea would be, OK, we don’t want this guy voting on this, let’s arrest him, then he can’t vote.”
But LiCalzi said Hart’s tax appeal doesn’t sound like that kind of situation. “If he didn’t want to be distracted, he should get all his business lined up before the session starts,” he said.
Idaho House Minority Leader John Rusche, D-Lewiston, said, “I don’t know the details of the case, but I do not believe that being a legislator exempts you from the ordinary duties that you have as a citizen. What it does say is that you cannot be arrested when you’re traveling to and from session. But it doesn’t say that you don’t have to pay your taxes and you don’t have to follow the Tax Commission rules and laws, at least I don’t read it that way. And I am bothered any time a public official uses a position to have an advantage over the ordinary citizen.”
House Speaker Lawerence Denney, R-Midvale, sides with Hart and said he’s planning to ask the Attorney General’s office if there’s a way to give Hart more time for his appeal. On May 4, Hart’s attorney, Starr Kelso, filed a motion with the Board of Tax Appeals for a time extension, writing, “This issue is being considered by Idaho’s legislative leaders at this time and their input into this question is necessary.”
Said Denney, “It just so happened that a legislative session got in the way. And I can tell you that when we’re in session, it’s not easy to take on some other appeal.”
Rep. Dennis Lake, R-Blackfoot, who chairs the House Revenue and Taxation Committee - on which Hart serves - said, “I know other legislators have claimed similar exemption in years past. I know of one that claimed he was not subject to traffic fines while he was in session - that was proved to be erroneous, he ended up being liable for them. They can have those fights. They’re entitled to their own opinion, but when they’re proven wrong, they need to step up to the plate and pay the bill.”
Hart, who also has had nearly $300,000 in federal tax liens filed against him by the IRS in Kootenai County in the past year, has had state tax problems stretching back to 1996, though he didn’t publicly acknowledge his state tax woes until Friday.
In 1996, Hart stopped filing both state and federal income tax returns while he filed an unsuccessful lawsuit challenging the federal income tax as unconstitutional. He filed no Idaho state tax returns from 1996 to 1998, then filed returns from 1999 to 2004, but the IRS and the state Tax Commission contend he underpaid for those years.
“Mr. Hart without question is defending himself from the overreach of the Idaho State Tax Commission,” Kelso wrote in Hart’s formal appeal to the state Board of Tax Appeals.
Hart’s appeal made his case public record; prior to his filing the appeal, all filings were confidential except the Tax Commission’s published decision on his case. In that published decision, filed Sept. 30,. 2009, however, his name was removed.
Kelso also contends the 20 percent prepayment provision “violates Mr. Hart’s constitutional and due process rights.”
Hart said he thinks he’s right on his constitutional challenge to both state and federal income taxes, despite his lack of legal success so far. But he said he wouldn’t tell others to stop paying their taxes if they feel the same way.
“I think you should take it to court,” he said. “After having my life experiences, I do not recommend to anybody they not pay it.”