When you buy a new shirt at your local department store or a new drill from a local hardware store, part of the sales tax you pay is shared with your city and county. Sharing sales tax revenue with Idaho cities and counties helps fund essential local government services like police and fire protection and road maintenance. It also reduces your city and county’s reliance on property taxes which, in turn, reduces the amount of property taxes you pay.
Just like when you buy something in person from a local business, you also pay sales tax when you buy the same shirt or drill from an online retailer without a physical presence in Idaho (like from Ebay or Etsy), but did you know that the sales tax collected from those sales is treated differently? The sales tax revenue collected from some online retailers is deposited into a separate, legislatively created “Tax Relief Fund.” In 2021, the Tax Relief Fund received over $135 million in online sales tax revenue. Funds distributed to the Tax Relief Fund are dedicated for one purpose: to fund future tax relief.
One way online sales tax collections could provide tax relief would be to share it with cities and counties like other sales tax sources. Providing additional online sales tax resources to cities and counties would allow your city and county to invest these funds in road maintenance, law enforcement, and firefighting services. This would allow cities and counties to in turn reduce the amount of property taxes they annually levy to fund essential services.
The secret is out about Idaho: it’s a great place to live, work, and play. As Idaho’s population booms, local governments face unprecedented service delivery demands. Meanwhile, online shopping has entrenched itself as a fundamental channel by which goods and services travel throughout our state, impacting local roads and public safety. There is little doubt that online sales tax revenues will continue to be a reliable revenue source for years to come. Ask your legislature to leverage online sales tax revenues to reduce your property taxes by sharing them with cities and counties.