New internet sales tax bill from Clow, Siddoway targets retailers with substantial sales operations in state

Internet sales tax legislation co-sponsored by Rep. Lance Clow, R-Twin Falls, and Senate Tax Chairman Jeff Siddoway, R-Terreton, was introduced this morning by a unanimous vote of the House Revenue & Taxation Committee. The new bill takes a new approach, simply amending the definition of which businesses have a legal “nexus” with the state of Idaho that requires them to collect and remit sales taxes on their sales in the state.

Currently, that nexus, under a 1992 court decision known as the Quill decision, requires a brick-and-mortar presence in the state. The new Clow/Siddoway bill expands the definition to also include businesses that have distribution facilities, marketing, advertising, fulfillment and other operations in the state. Clow told the House panel that 31 states have or are considering similar legislation.

“Basically, it redefines what it is to be a retailer engaged in business in Idaho,” Clow said. That wouldn’t require all online sellers to collect and remit Idaho sales taxes, but it would expand the list of those who do to include major businesses with substantial sales operations in the state.

Idaho already requires taxes to be paid online purchases; Idahoans are supposed to keep track of their purchases and report and pay the tax on their state income tax returns. But that’s tougher to enforce than just having the businesses collect and remit the taxes.

Rep. Mat Erpelding, D-Boise, moved to introduce the bill, saying, “I’d love to see this come up for a full hearing.” His motion carried.