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e-Fairness at issue: Good, bad for Idaho?

Con: Idaho voters reject sales tax law

When it comes to a federal law allowing out-of-state tax collectors to reach into the pockets of Idaho’s online merchants, by a 52-32 percent margin Gem State voters have a resounding and simple answer: Just, no! That’s just one of several findings from a statewide poll released by National Taxpayers Union and R Street Institute.

In the survey of likely 2014 general election voters in Idaho, strong majorities across many ideological and partisan persuasions also indicated their belief that the Internet should remain as free from regulation and taxation as possible (by a 48-point margin). One of the most lopsided results concerned federal legislation in Congress called the “Marketplace Fairness Act” – when told (factually) the plan “would allow tax enforcement agents from one state to collect taxes from online retailers based in a different state,” 68 percent of respondents were opposed with just 20 percent in favor.

“When it comes to Internet tax schemes like the Marketplace Fairness Act, Idaho overwhelmingly supports the commonsense position that the Internet should exist to improve their lives and their communities, rather than plug the budgets of other states,” said Andrew Moylan, Executive Director and Senior Fellow at the R Street Institute. “While Idaho conservatives are strongly against such a law, it’s striking that opposition crosses political divides as independents and Democrats join them in forcefully rejecting new state tax enforcement powers over the Internet. Clearly, elected officials like Congressman Raul Labrador are representing the views of their constituents when they oppose this legislation.”

“Our poll is designed to explore the specific – and sophisticated – opinions of Idaho voters on this critical issue,” said Lee Schalk, State Government Affairs Manager of National Taxpayers Union. “Idaho politicians of all persuasions and philosophies should take note of the results. Any candidate who had numbers like this Internet tax collection scheme would have to seriously reconsider his or her political future.”

A statewide survey of 400 likely voters in Idaho was conducted June 3-4, 2014, by live telephone interviewing. Thirty percent of the interviews were conducted using a cell phone sample. The margin of error is ±4.9 percent at the 95 percent confidence level.

— press release

Pro: Idaho business on level playing field

Idaho businesses are warning people not to be misled by a poll being released by the National Taxpayers Union and R Street in Boise regarding online sales tax. The groups say their data indicates Idaho voters oppose out-of-state online sales tax collection. Idaho business leaders are concerned this poll only tells one side of the story.

“Idaho is in a unique situation and I, along with other business leaders, am not sure this poll takes that into account,” said Pam Eaton, president of the Idaho Retailers Association. “Idahoans will see tax relief once Congress passes e-Fairness legislation thanks to a bill passed during this year’s legislative session. E-Fairness legislation can put Idaho business on a level playing field and provide a tax cut for our citizens – a win-win for everyone.”

Idaho’s House Bill 593, which was signed by Governor C.L. “Butch” Otter in April, creates a statewide savings account where all future revenue Idaho brings in from online sales tax will be collected and directed toward local tax relief. The account will sit empty until Congress passes e-Fairness legislation.

Idahoans are supposed to report untaxed online purchases, however, in 2012, less than 10,000 Idahoans actually reported purchases they made online when they filed their income tax returns. The Idaho State Tax Commission estimates Idaho is losing $46.4 million a year in lost revenue from unpaid online sales tax.

“Currently, a legal loophole, created before the Internet even existed, is encouraging customers to make purchases from online out-of-state retailers so they can avoid paying sales tax,” said Pat Nagel, owner of Idaho Camera. “Our government has put Idaho stores at a six percent price disadvantage. We want to continue serving the customers in our community for years to come but in order for that to happen something has to change – Congress has to pass e-Fairness legislation.”

Former economic advisor to Ronald Reagan, Dr. Art Laffer, conducted a study last summer to show the impacts e-Fairness legislation would have on the economy. He found growing taxes can be offset with e-Fairness and determined Idaho would be able to create 7,633 jobs once federal e-Fairness legislation is passed.

“There are two sides to every story,” said Eaton. “If Idahoans are going to have an accurate discussion on e-Fairness all the information has to be laid out on the table.”

— press release

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