Sales Tax Exemptions

[Tom Trail <ttrail@moscow.com>]

Visionaires:    This is a followup to my e mail yesterday concerning sales
tax exemptions.  Much of
the overall issue is ensuring that the State has enough revenue to
adequately fund K-12, Higher
Education and other state services.

The state currently grants about $300,000,000 in sales tax exemptions/year.
There is some
discussion that some of these exemptions should be eliminate and this would
increase those
lost funds to the state revenue stream.   I'm working on legislation that
would review all
sales exemptions over a 5 year period.  Remember that a sales tax exemption
is a privilege granted
by the state and not a right as many organizations appear to feel after
having the exemption over
time.   Organizations should be able to show benefit to the state and
justify further extension
of their exemptions.   This review approach is consistent with
accountabilty and responsibility
in evaluating each exemption.

There is also discussion concerning the possible taxation of services.
We've shifted from
from a taxation on goods to a service economy since the sales tax was
implem ented in 1965.
The State Tax Commission estimates there is about $660 million worth of
services that could
be taxed in the state.   Several unsuccessful attempts have been made in
the past to place
a tax on selected services.   One idea is to place a sales tax on certain
services and reduce the
sales tax.   This would generate an additional $100,000,000.

There are still several other initiatives that I feel are still viable in
raising funds.

 1) employ more tax auditors to go after the estimated 40,000 non-filers
who owe more than
     $90,000,000 million.   each auditor will return about 7 times the
amount of his/her salary
     and benefits.    This is the treasure lode that we can go after
without raising taxes.

 2) place a two year moratorium on the personal income tax cut passed by
the legislature last
     year.   This would yield an estimated $80 million/year.   The impact
per year on an individual
     earning $75,000 net would be about $80 in a year.   The Dist. 5
Legislative delegation
     personally requested the Governor to support placing a moratorium on
the personal tax
     cut to support education.   The moratorium could be taken off when the
economy recovers.
     There has been much criticism concerning the passage of the tax cuts
last year.  Looking
     back it certainly was a mistake.   I voted for the final package of
cuts which was the lowest
     total figure that came out of the rev and tax committee.   It is
interesting to note that there
     was only one legislator who voted against the tax cuts  (several
legislators were conveniently
     absent for the final vote)

Just about all of the states are faced with similar budget problems.   I've
received assurance from
a number of conservatives that they realize that education has been cut to
the bone and would
consider a tax increase to support education.    I know the Leg. 5
legislators will continue to
press forward as we have in the past to try and convince decision makers
that the level of
support for public and Higher Education must be maintained and increased.

Rep.Tom Trail/Dist. 5

Dr. Tom Trail
International Trails
1375 Mt. View Rd.
Moscow, Id. 83843
Tel:  (208) 882-6077
Fax:  (208) 882-0896
e mail ttrail@moscow.com