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Story published at magicvalley.com on Thursday, January 17, 2008
Last modified on Thursday, January 17, 2008 8:47 AM MST
Possible tax hikes for plane fuel, cigarettes
House panel dismisses interstate tax project
BOISE - It might soon cost private pilots a bit more to fly their planes into the sky - and smoke any victory cigars when they land.

The House Revenue and Taxation Committee approved printing separate pieces of legislation that could increase taxes on gas for airplanes and tax customers buying tobacco products on the Internet. The committee narrowly defeated revisiting the concept of an interstate taxing coalition.

A 1.5 percent increase in plane fuel would raise aviation gasoline to 7 cents per gallon, and jet fuel to 6 cents per gallon. The increases would raise about $429,000 to be distributed among Idaho airports, said Rodger Sorensen, chairman of the Idaho Transportation Department Aeronautics Advisory Board. Aviation fuel taxes have not increased since 1991.

The money would contribute to a shortfall in funds that are withheld from seven airports in Idaho, including those in Hailey and Twin Falls. Hailey's airport, for example, could gain $15,000 in grants, Sorensen said. He noted that fuel cost $3.99 a gallon in Arco but less than 50 miles north in Hailey runs $5.95.

That comparison drew criticism from anti-tax hawk Rep. Lenore Barrett, R-Challis, who, along with Rep. Mike Moyle, R-Star, voted against printing the legislation. Barrett said the taxes will adversely affect rural parts of Idaho.

"Sun Valley can take of itself," she said. "It might not hurt Sun Valley but it might hurt Arco."

A second proposal that is expected to receive a hearing would raise $250,000 from modifying tax structures on tobacco products, according to the state tax commission. The bill would, among other things, add a "use-tax" on products bought from unlicensed sellers in catalogs and on the Internet - which the tax commission would be paid by the consumer.

Minutes earlier, the committee voted 10-8 not to print legislation that would allow Idaho's state tax commission join with 45 other states in the Streamlined Sales Tax Project. Entering the program would ultimately require companies doing business in Idaho to collect sales-tax on items to out-of-state customers.

Not joining the group is costing Idaho $75 million annually, said Dan John of the commission. But some committee members viewed the measure as more taxing and said Idaho should wait for a similar measure to pass Congress.

"Whenever a government agency says they are missing out on money, those are funds in citizens' pockets," said Assistant House Majority Leader Scott Bedke, R-Oakley.

Although commission officials said they do not legally need legislative approval to participate in the SSTP, the commission said the "political" nature of the matter made it the proper thing to do.

Last year, a similar bill was killed on the House floor by a handful of votes. Rep. Leon Smith, R-Twin Falls, carried that bill.

"I can't understand the reasoning at all right now," he said after Wednesday's meeting.

Jared S. Hopkins may be reached at 631-793-5717 or jhopkins@magicvalley.com

Taxes on airplanes in surrounding states

Aviation Fuels

Washington 11 percent

Utah 9 percent

Oregon 9 percent

Nevada 1 percent (local-option)

Idaho 5.5 percent

Jet fuels

Washington 11 percent

Utah 9 percent

Oregon 1 percent

Nevada 2 percent

Idaho 4.5 percent

Source: Idaho Transportation Department






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