What did the Idaho Attorney General's October 2015 Certificate of Review identify as remaining problems with a revised proposed initiative to broaden Idaho's sales tax base by taxing services?
Subject
Certificate of Review under Idaho Code § 34-1809 of a revised proposed initiative amending the Idaho sales tax statutes. The revised petition, filed October 7, 2015, was nearly identical to a petition the same petitioners filed on May 15, 2015, with modifications to a few sections; the AG's earlier June 10, 2015 Certificate of Review remained applicable to most of the revised text and was incorporated by reference.
Currency note
This opinion was issued in 2015. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context describing the 2015 advisory review, not as a current statement of Idaho law.
Plain-English summary
Idaho's sales tax in 2015 applied to retail sales of tangible personal property at a 6% rate. The League of Women Voters of Idaho proposed a comprehensive overhaul: lower the overall rate, broaden the base by taxing services, restructure exemptions, and reorganize the appropriation of resulting revenue. The original initiative (filed May 15, 2015) drew a long Certificate of Review on June 10, 2015. The League submitted a revised version in October 2015 with modifications to a handful of sections. This October 30, 2015 Certificate of Review addresses what changed and what remained.
Most concerns from the June review still applied. The October 30 letter expressly incorporated the June 10 review by reference and noted that two should be read together.
Updates the petitioners still needed to make:
- The petitioners had drafted using prior versions of several statutes. Three sections (Section 7, modified since the June review but still incomplete for Idaho Code § 63-3613; Section 25's incomplete Idaho Code § 63-3622O; Section 12's missing subsection (p) of Idaho Code § 63-3621) still failed to use the most recent version of the Idaho Code.
New issue with Section 8 ("services" definition). The revised proposal added a new list of services included within the meaning of "services" under proposed Idaho Code § 63-3614A. The list named "Information Services," "Social Services," and "Transportation Services" with capital letters that suggested they were defined terms. But none of those terms were actually defined within the proposal. Section 24, where they appeared again as part of a longer list, contained no statutory language for adoption (a problem flagged in June). The AG recommended defining the terms.
Repeated repeal of § 63-3621. Section 22 of the initiative listed Idaho Code § 63-3621 in its entirety as a statute to be repealed. But § 63-3621 was the section imposing the Idaho use tax; repealing it entirely would eliminate the use tax. The petitioners' supplemental material made clear that the actual intent was to repeal only the food and beverage sample exemptions in subsections (n), (o), and (p). The AG recommended limiting Section 22's repeal language accordingly. Section 12 should also be revised in parallel to strike subsections (n), (o), and (p) directly within § 63-3621.
On the whole. The AG closed with: "the changes to the initiative are modifications to existing Idaho sales and use tax exemptions" and reaffirmed the substantive concerns raised in the June review.
Common questions
Q: Why did the petitioners file twice?
Petitioners often revise initiatives in response to a Certificate of Review's recommendations and re-file. The revised filing triggers a new Certificate of Review on the changes, with the prior review applied by reference where the text is unchanged.
Q: Does this opinion stand alone, or do I need to read the June 10 review too?
Read both. The October 30 review explicitly says: "The two Certificates of Review should be read together."
Q: Does taxing services require constitutional changes?
No. The proposed initiative would have done it through statutory amendment to title 63, chapter 36 of the Idaho Code. The Constitution does not bar a sales tax on services. The drafting and structural concerns were what the AG flagged, not a constitutional bar.
Background and statutory framework
Idaho Code § 34-1809 governs the Certificate of Review process. Idaho's sales and use tax structure is in Idaho Code title 63, chapter 36, with the use tax imposed by Idaho Code § 63-3621.
The petitioners' broader project (lowering the rate, taxing services, repealing exemptions) is described in detail in the companion Certificate of Review issued June 10, 2015.
Citations
Idaho Code:
- § 34-1809
- § 63-3612; § 63-3613; § 63-3621; § 63-3622O
Source
- Landing page: https://www.ag.idaho.gov/office-resources/opinions/
- Original PDF: https://ag.idaho.gov/content/uploads/2018/04/C10302015.pdf
Original opinion text
STATE OF IDAHO
OFFICE OF THE ATTORNEY GENERAL
LAWRENCE G. WASDEN
October 30, 2015
The Honorable Lawerence Denney
Idaho Secretary of State
Statehouse
VIA HAND DELIVERY
RE: Certificate of Review
Proposed Initiative Amending the Idaho Sales Tax Statutes
Dear Secretary of State Denney:
An initiative petition was filed with your office on October 7, 2015. Pursuant to
Idaho Code § 34-1809, this office has reviewed the petition and prepared the
following advisory comments. Given the strict statutory timeframe in which this
office must review the petition, our review can only isolate areas of concern and
cannot provide in-depth analysis of each issue that may present problems. Further,
under the review statute, the Attorney General’s recommendations are “advisory
only.” The petitioners are free to “accept them in whole or in part.” The office offers
no opinion with regard to the policy issues raised by the proposed initiative or the
potential revenue impact to the state budget.
BALLOT TITLE
Following the filing of the proposed initiative, this office will prepare short and
long ballot titles. The ballot titles should impartially and succinctly state the purpose
of the measure without being argumentative and without creating prejudice for or
against the measure. While our office prepares titles for the initiative, the petitioners
may submit proposed titles for consideration. Any proposed titles should be
consistent with the standard set forth above.
P.O. Box 83720, Boise, Idaho 83720-0010
Telephone: (208) 334-2400, FAX: (208) 854-8071
Located at 700 W. Jefferson Street, Suite 210
Secretary of State Denney
October 30, 2015
Page 2 of 3
MATTERS OF SUBSTANTIVE IMPORT
Note: This proposed initiative is nearly identical to an initiative filed with your
office on May 15, 2015, by the same petitioners. Only a few sections in that initiative
have been modified in this initiative. This Office issued its Certificate of Review of
that initiative on June 10, 2015. That review is applicable to the majority of the
present initiative. Accordingly, this review incorporates by reference this Office’s
prior review, available at: —http:/Avww.ag.idaho.gov/publications/op-quide-
cert/2015/C06102015.pdf. The two Certificates of Review should be read together.
On the whole, the changes to the initiative are modifications to existing Idaho
sales and use tax exemptions.
As noted in the prior review, the petitioners will need to revise the proposal to
include the most recent version of the Idaho Code (i.e., Section 7, modified since the
last review, but still not containing the complete code section, Idaho Code § 63-
3613; Section 25 which contains an incomplete version of Idaho Code § 63-36220;
and Section 12 needs to add subsection (p) to Idaho Code § 63-3621).
The proposed amendment in Section 8 raises a question of completeness.
The proposal contains a new term (“services”) and provides its definition (Section 8),
and includes services within the meaning of “sales” in Idaho Code § 63-3612 (see
Section 6). This iteration of Section 8 provides a new list of services that are
included within the meaning of the term “services,” including “Information Services,”
“Social Services,” and “Transportation Services.” They are denominated with capital
letters, as if they are titles. It is noted, however, that terms are nowhere defined
within the proposal. (Those terms are included within a larger list of services
contained in Section 24, but as before, Section 24 contains no actual statutory
language to be adopted.) The petitioners would do well to define these terms.
In Section 22, the petitioners seek to repeal a list of various tax exemptions.
One of the statutes listed in that Section 22 is Idaho Code § 63-3621 in its entirety.
However, section 63-3621 is the section of the Code that provides for the imposition
of the use tax. Apparently, the petitioners’ actual intent as to Idaho Code § 63-3621
is to repeal only the food and beverage sample exemption contained therein (as
evidenced by the supplemental material accompanying their initiative). The portions
pertaining to food and beverage samples in Idaho Code § 63-3621 are subsections
(n), (0) and (p). The petitioners are aware that Section 22 should be revised to
indicate that the repeal in section 63-3621 is limited those subsections. In turn, and
Secretary of State Denney
October 30, 2015
Page 3 of 3
to be consistent, Section 12 should be revised to strike through subsections (nN), (0)
and (p) of Idaho Code § 63-3621.
CERTIFICATION
| HEREBY CERTIFY that the enclosed measure has been reviewed for form,
style, and matters of substantive import. The recommendations set forth above
have been communicated to the Petitioners via a copy of this Certificate of Review,
deposited in the U.S. Mail to Betsy McBride, League of Women Voters of Idaho, P.
O. Box 7018, Boise, Idaho 83714.
Sincerely,
Shee
LAWRENCE G. WASDEN
Attorney General
Analysis by:
David B. Young
Deputy Attorney General