Amends existing law to revise provisions regarding a sales and use tax rebate for certain developers of certain retail complexes.

LEGISLATURE OF THE STATE OF IDAHO Sixty-eighth Legislature Second Regular Session - 2026 IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 671 BY REVENUE AND TAXATION COMMITTEE AN ACT1 RELATING TO TAXATION; AMENDING SECTION 63-3641, IDAHO CODE, TO REVISE PRO-2 VISIONS REGARDING THE REBATE OF SALES TAX COLLECTED; AND DECLARING AN3 EMERGENCY AND PROVIDING RETROACTIVE APPLICATION.4

Be It Enacted by the Legislature of the State of Idaho:5

SECTION 1. That Section 63-3641, Idaho Code, be, and the same is hereby6 amended to read as follows:7 63-3641. REBATE OF SALES TAXES COLLECTED. (1) As provided in and sub-8 ject to the limitations of this section, a developer of a retail complex9 shall receive a rebate of sales taxes collected and remitted to the state10 tax commission under this chapter by qualified retailers within the retail11 complex to reimburse the developer for project expenses incurred for the12 installation of approved transportation improvements.13 (2) As used in this section:14 (a) "Approved transportation improvements" means a highway project the15 cost of which is in excess of six million dollars ($6,000,000) for the16 installation of an interchange from an interstate highway or expended17 on for the improvement of a highway as defined in section 40-109(5),18 Idaho Code, the cost of which is in excess of five million dollars19 ($5,000,000). To qualify as an approved highway improvement the de-20 veloper of a retail complex must enter into an agreement with the Idaho21 transportation board and/or or a political subdivision. An approved22 highway improvement shall include those costs directly associated with23 the highway project but shall not include any improvement not within the24 right-of-way of the proposed public highway improvement, improvements25 not specifically authorized in the agreement entered into, or developer26 financed improvements required by state or local agencies as part of27 the permitting and development process not within the public highway28 right-of-way.29 (b) "Political subdivision" means a city, county or highway district30 that receives highway funding pursuant to section 40-709, Idaho Code.31 (c) "Qualified retailer" means a specific location within a retail com-32 plex operated by a retailer in regard to which the retailer:33 (i) Has obtained a separate seller's permit pursuant to section34 63-3620, Idaho Code, applicable only to that location and has col-35 lected sales or use taxes in regard to retail sales made at that lo-36 cation and has remitted all such taxes to the state tax commission37 with returns related to that permit;38 (ii) Has been identified in the manner required by rules of the39 state tax commission as associated with the specific retail com-40 plex; and41

2 (iii) Did not directly or by any related party, (as defined in sec-1 tion 63-3615A(2), Idaho Code), operate a retail business in the2 same location before construction of the retail complex.3 (d) "Retail complex" means:4 (i) One (1) or more buildings in a single location constructed by5 a developer applying for a rebate under this section;6 (ii) Facilities reasonably related to the buildings, such as7 parking lots, sidewalks, lighting, traffic signs and accessory8 equipment; and9 (iii) For which the developer has expended a minimum of four mil-10 lion dollars ($4,000,000).11 (e) "Retailer" has the same meaning as provided in section 63-3610,12 Idaho Code;13 (f) "Retail sales" has the same meaning as that term is defined in sec-14 tion 63-3609, Idaho Code.15 (3) To obtain the rebate provided by this section, the developer of a16 retail complex shall file a written claim with the state tax commission.17 (a) The claim shall:18 (i) Identify the location and boundaries of the retail complex;19 (ii) Identify the qualified retailers making retail sales within20 the complex;21 (iii) Include verification that the developer has met the expendi-22 ture requirements of paragraph (2)(d)(iii) of this section;23 (iv) Include certification from the Idaho transportation depart-24 ment or political subdivision of the amount expended on the ap-25 proved transportation improvements related to the retail complex;26 (v) Contain such additional information as the state tax commis-27 sion may require by rule.28 (b) The claim shall be subject to such reasonable documentation and29 verification as the state tax commission may require.30 (c) A developer of a retail complex must submit a claim under this sub-31 section within two (2) years of the developer's last expenditure on ap-32 proved transportation improvements.33 (4)(a) Upon approval by the state tax commission, the developer is en-34 titled to receive a rebate of sixty percent (60%) of all sales and use35 taxes imposed by this chapter and remitted to the state tax commission36 after the date of approval by qualified retailers in the retail complex37 but not to exceed the lesser of:38 (i) The amount certified pursuant to subsection (3)(a)(iv) of39 this section; or40 (ii) The limitation imposed by subsection (5)(c) of this section.41 (b) No interest shall be paid on the amounts rebated.42 (c) All sales and use tax information remitted by retailers shall be43 deemed a trade secret, shall be confidential and shall not be disclosed44 by the state tax commission.45 (5)(a) When a retailer certifies to the state tax commission and the46 commission determines that the requirements of subsection (3)(a)(i),47 (ii) and (iii) of this section have been met, sixty percent (60%) of all48 sales and use taxes imposed by this chapter and remitted to the state tax49 commission after the date of approval by qualified retailers in the re-50

3 tail complex, shall be deposited into the demonstration pilot project1 fund, which is hereby created in the state treasury.2 (b) All moneys rebated shall be paid by the state tax commission from3 the demonstration pilot project fund in a timely manner not to exceed4 sixty (60) calendar days after receipt as funds are available in the5 demonstration pilot project fund. Payments shall be specific to and6 accounted for by each project.7 (c) Once a total of thirty-five million dollars ($35,000,000) one hun-8 dred million dollars ($100,000,000) has been paid in as a rebate on a9 particular approved transportation improvement, no additional rebates10 shall be paid in regard to that approved transportation improvement.11

SECTION 2. An emergency existing therefor, which emergency is hereby12 declared to exist, this act shall be in full force and effect on and after its13 passage and approval, and retroactively to January 1, 2026.14