The Senate Local Government and Taxation Committee has endorsed HB 578, Rep. Lance Clow’s legislation to require many remote or internet businesses to collect and remit Idaho sales taxes on their sales to Idahoans. “I just think this is long overdue,” Clow told the senators. “Sales tax is due based upon where the buyer was, not where the seller was, so we know the taxes are due. This is just the timely way to deal with this, and I think it’s a proper role to address the change in the economy and the internet market.”
Members of the Senate panel, including some who long had been resistant to the idea, embraced Clow’s proposal, saying it’s simple and timely.
Sen. Jeff Siddoway, R-Terreton, said, “I always thought this was a fairness deal.”
Idaho retailers have long supported some move like this, saying out-of-state retailers are undercutting them by selling to Idahoans without charging the same 6 percent sales tax that they must collect and remit on every sale. But the state had no mechanism to accomplish it. The tax still was due, but Idahoans have been expected to self-report their remote purchases and pay the 6 percent tax in the form of use taxes on their annual state income tax returns.
Last year, internet retailing Amazon signed a voluntary agreement to begin collecting and remitting Idaho sales taxes. Clow’s bill would require the same of other retailers who have affiliate sellers in Idaho who do more than $10,000 a year in business. It wouldn’t cover all remote sellers, but Clow, R-Twin Falls, said the move could bring in $22 million to $37 million a year in currently uncollected sales taxes.
The bill passed the House on Feb. 23 on a 46-21 vote; to become law, it still needs passage in the full Senate and the governor’s signature. Clow’s bill is co-sponsored by House Majority Leader Mike Moyle, R-Star, who also long opposed past internet sales tax bills.