The Idaho legislature is in a killing mood. Last week, happily the bill to close Idaho Republican Primaries to Independents and democratic leaning voters died in committee before even getting a bill number. Yesterday the House Revenue & Taxation Committee killed major legislation before it was even introduced. That bill would have let the state tax commission join an interstate compact just to LOOK AT collecting internet sales tax (we call it a "use tax" because the item actually isn’t sold in Idaho… only used here.) The bill would make sure that internet businesses compete on a level playing field with Idaho storefront retailers and small businesses. Roughly $50 to $75 million in taxes simply are not being collected, giving internet companies an advantage that potentially hurts Idaho’s local economies.
Today, after a summer of work to craft criteria to re-examine the validity of Idaho’s many tax exemptions, Republicans on the Rev & Tax Committee killed draft after draft of legislation to consider actually holding hearings on these exemptions. The few of us who served on the interim summer committee were divided very much as we were this summer, with the exception of Chairman Lake, who a few times didn’t even vote to print his own bills.
Rep.Lake is caught in the middle of the tension between the House and Senate’s philosophy of taxation. What looks like a party line divide is not entirely that, since it was largely the members of both parties in the Senate, working with Democrats in the House who pushed to look at how we approve tax exemptions in the first place.
Today I put my legislation in two piles, "consistent" and "inconsistent," as we talked through seven randomly chosen tax exemptions and heard from the tax commission whether other similar entities were being taxed similarly or if the exemption we were considering stood out as an exception to an otherwise rational system of taxation.
What does this killing spree today mean for average Idahoans? It means a continuation of arbitrary tax policy. It means we keep a system of tax exemptions passed largely on emotion and the power and influence of industry — rather than on the merits of each policy’s contribution to a predictable, fair and constructive system of taxation.
So far this year we will consider only one of the over 100 tax
exemptions on the books in Idaho: a partial exemption to sales tax on items sold in vending
machines.