Rep. Lance Clow, R-Twin Falls, says it’s about his sixth try, but this time his legislation requiring out-of-state retailers to collect and remit Idaho sales taxes on sales they make to Idaho has cleared the House Revenue & Taxation Committee – and this time, he’s co-sponsoring the bill with House Majority Leader Mike Moyle, R-Star, long an opponent of the move. The Lewiston Tribune reports that the committee passed the bill on a voice vote, sending it to the full House.
Clow said HB 578 is simpler than some of his earlier proposals, in part because U.S. Supreme Court decisions in recent years have made it easier for states to go after internet sellers for sales taxes. It redefines when a retailer is engaged in business in Idaho to include those with affiliated sellers in Idaho who sell at least $10,000 in gross receipts per year.
Clow estimated the bill could bring Idaho $22 million to $37 million a year more in sales taxes.
Idahoans already owe state taxes on purchases they make over the internet or through remote sellers, but with the far-off retailers not collecting them, the purchasers are expected to report and pay those sales taxes on their income tax returns. That leaves millions in purchases unreported and untaxed.
“It is not a new tax,” Clow told the committee. “It is a change in the law to collect taxes that are due.”
Idaho retailers and chambers of commerce backed the bill, reports Tribune reporter Bill Spence, saying currently, Idaho retailers are at a disadvantage because they must collect and remit sales taxes on all purchases, while out-of-state retailers don’t have to do the same.