November 1, 2010 in Idaho

Hart goes to court to fight state income taxes

By The Spokesman-Review
 

BOISE - Idaho state Rep. Phil Hart is going to court over his back state income taxes, filing an appeal in 1st District Court in Kootenai County charging that Idaho’s state income tax is unconstitutional.

On Monday, the state of Idaho filed a motion to dismiss the appeal; the court set a Dec. 7 hearing on the motion.

Hart’s seven-page appeal raises an array of issues, including whether Idaho’s state income tax “as a graduated tax, fails the uniformity requirement” of Idaho’s state Constitution; and whether the state Board of Tax Appeals, in Hart’s case, “upheld the sanctity” of Idaho’s constitutional privilege protecting state legislators from civil action during legislative sessions.

Those were among the issues Hart raised in appealing an order to pay $53,523 in back state income taxes, penalties and interest last spring, but the state Board of Tax Appeals rejected his appeal. It also rejected a motion for reconsideration Hart filed in September.

In late September, a special House Ethics Committee voted unanimously to recommend that Hart, a three-term Republican state representative from Athol, be removed from the House Revenue and Taxation Committee while he continues his personal fights against back state and federal income taxes. Hart refused to step down from the committee voluntarily, maintaining that he has no conflict of interest.

House Speaker Lawerence Denney, R-Midvale, said recently that he plans to wait until after Tuesday’s election to decide whether to remove Hart from the tax committee. Hart is seeking a fourth term; he is unopposed on the ballot, facing only a write-in opponent, fellow Republican Howard Griffiths of Hayden.

Hart stopped filing both federal and state income tax returns in 1996 while he pressed an unsuccessful lawsuit claiming the federal income tax was unconstitutional. He’s since been wrangling with both federal and state authorities over back payments; according to public records including IRS liens, Hart owes more than $500,000 in back federal and state taxes, penalties and interest. Hart says he’s paid $120,000 in state and federal taxes since 2005.

The state Board of Tax Appeals rejected Hart’s appeal, saying it wasn’t filed in time. Hart’s 91-day appeal period ran out on Jan. 1, 2010; he argued that because that was within 10 days of the start of the legislative session, he should have months longer to file, under Idaho’s constitutional privilege for legislators.

The board rejected that argument, saying even if the privilege applied, Hart still filed too late, and also paid a required fee even later.

In his motion for reconsideration to the Board of Tax Appeals, Hart’s Coeur d’Alene attorney, Starr Kelso, contended that his tax problems are “entirely the result of political persecution of Mr. Hart by the IRS.”

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