The League of Women Voters of Idaho is launching a ballot initiative drive to lower Idaho’s sales tax from 6 percent to 5 percent and eliminate some exemptions.
The changes would raise $424 million more a year that could be spent on schools, the Spokesman Review in Spokane reports.
If the measure makes the 2016 ballot, it would give voters a chance to restructure Idaho’s exemption-riddled sales tax system. Idaho’s 6 percent sales tax raises about $1.5 billion a year in gross collections, while the amount of exemptions is more than $2 billion, according to the state Division of Financial Management.
The group could have a tough sell in expanding the sales tax to the broad range of services, including construction, legal advice and haircuts, and big-money interests may fight the loss of their existing exemptions.
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Boise State University political scientist emeritus Gary Moncrief, an expert on elections and initiatives, said he applauds the group, but said “I think it’s going to be a really hard sell.”
“We’ve had a lot of trouble in this state getting exemptions closed in the past,” Moncrief said.
Repeated attempts by the state Legislature to review sales tax exemptions have failed. Instead, lawmakers enact new ones each year.
Moncrief said the initiative process made more sense than asking the Legislature for tax changes.
The League’s initiative, entitled “Fair Share Idaho,” would eliminate 22 current sales tax exemptions on July 1, 2017, and subject 12 services to sales taxes. Targeted exemptions include sales of funeral caskets, which would generate $1.6 million a year in sales taxes, and Idaho National Laboratory research and development purchases, at $6.2 million a year.
The initiative also would remove the sales tax exemption for lottery tickets; apply the tax to construction labor; and impose it on vending machine sales, auto manufacturer rebates and purchases by senior centers.
To qualify for the November 2016 ballot, the League must collect at least 47,623 valid voters’ signatures by April 30.