Monday, Jan. 23, is the official start to the income tax filing season, but many Idahoans will forget to pay part of what they owe.
"If you don't pay sales tax when you buy an item, you owe a six percent use tax if you bring that item into Idaho and you use it and store it in Idaho," Idaho State Tax Commission information officer Renee Eymann says.
Taxpayers owe the state for purchases made online, through a catalog or over the phone when Idaho sales tax isn't charged.
"More than 11,000 people paid almost $800,000 in use tax that they reported on their 2015 tax returns," Eymann says. "It is probably a fraction of what is owed."
Rep. Lance Clow, R-Twin Falls, plans to introduce a bill to the legislature that will take some of the responsibility for that sales tax off the individual taxpayer and place it on businesses doing a high volume of sales in the state.
Currently, only businesses with nexus, or a physical presence in the state, are required to pay Idaho sales tax. This bill would adjust Idaho code to change the definition of nexus to include businesses which use state services through retail partnerships or facilities. For example, companies such as Amazon and Ebay sell Idaho products to Idahoans but are not required to charge the state sales tax.
"This bill just says if you are doing these things in Idaho, then you're a retailer," Clow says. "If you're a retailer, then follow the tax rules."
Passing this bill means Idaho could collect a portion of the millions of dollars owed but not paid in sales tax.
Clow is reluctant to promise big returns through his bill. His focus is on fairness for Idaho businesses competing with the online retailers not required to charge an Idaho sales tax.
"Some people look at the money like, gee, if we have this, maybe we can lower taxes, because we're trying to survive without that money now," he says. "Either way, if it's a reduction in taxes or an increase in education funding, whatever the legislature decides to do with this additional revenue is not as important to me as making sure this is fair and that we level the playing field."
Clow plans to introduce the bill in committee next week.
As for use tax, Idahoans are still required to report and pay for what they purchased in 2016.
Taxes are due Tuesday, April 18.