Adds to existing law to provide for the review and expiration of sales tax exemptions.

LEGISLATURE OF THE STATE OF IDAHO Sixty-eighth Legislature Second Regular Session - 2026 IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 755 BY REVENUE AND TAXATION COMMITTEE AN ACT1 RELATING TO TAXATION; AMENDING CHAPTER 36, TITLE 63, IDAHO CODE, BY THE ADDI-2 TION OF A NEW SECTION 63-3643, IDAHO CODE, TO PROVIDE FOR THE ANNUAL RE-3 VIEW OF SALES TAX EXEMPTIONS AND FOR THE EXPIRATION OF SALES TAX EXEMP-4 TIONS; AND DECLARING AN EMERGENCY AND PROVIDING AN EFFECTIVE DATE.5

Be It Enacted by the Legislature of the State of Idaho:6

SECTION 1. That Chapter 36, Title 63, Idaho Code, be, and the same is7 hereby amended by the addition thereto of a NEW SECTION, to be known and des-8 ignated as Section 63-3643, Idaho Code, and to read as follows:9 63-3643. ANNUAL REVIEW OF SALES TAX EXEMPTIONS -- EXPIRATION OF EXEMP-10 TIONS. (1) The legislative services office shall conduct an annual review11 of the exemptions provided in this chapter from the taxes imposed pursuant12 to this chapter and prepare a report making recommendations to the legisla-13 ture concerning whether to eliminate or revise such exemptions. The annual14 review may be conducted in such a manner that fewer than all exemptions pro-15 vided in this chapter are reviewed in any single year, provided that all ex-16 emptions pursuant to this chapter shall be reviewed during any five (5) year17 period. In conducting the annual review, the legislative services office18 shall first review those exemptions scheduled to expire pursuant to subsec-19 tion (4) of this section, proceeding in order from the earliest expiration20 date to the latest. Such annual review and report shall include a detailed21 analysis of the following criteria:22 (a) The public purpose gained by the original enactment of the tax ex-23 emption;24 (b) The amount of revenue that the state would collect each year if the25 tax exemption were repealed;26 (c) The affected taxpayers who would pay additional taxes if the exemp-27 tion were repealed;28 (d) The nature of any public benefits or detriments that would occur if29 the exemption were repealed;30 (e) Whether the exemption has out-of-state beneficiaries;31 (f) How long the exemption is effective;32 (g) Any adverse impacts of the exemption or its elimination and whether33 the benefits of continuance or elimination outweigh adverse impacts;34 and35 (h) Any other criteria that the legislative services office deems rele-36 vant.37 (2) The legislative services office shall file the report with the sen-38 ate local government and taxation committee, the house revenue and taxation39 committee, and the joint finance-appropriations committee no later than40 February 1 of each year.41

2 (3) The state tax commission and the Idaho department of commerce shall1 provide all necessary non-privileged information requested by the legisla-2 tive services office that relates to any sales tax exemption managed by each3 agency.4 (4)(a) Except as otherwise expressly provided in this chapter, and ex-5 cept for the exemption provided in section 63-3622C, Idaho Code, each6 exemption from the taxes imposed pursuant to this chapter that is en-7 acted on or after January 1, 2026, shall expire on the later of ten (10)8 years after its effective date or July 1, 2027, unless the legislature9 acts by law to extend or reenact the exemption prior to its expiration.10 (b) Except as otherwise expressly provided in this chapter, and except11 for the exemption provided in section 63-3622C, Idaho Code, each exemp-12 tion from the taxes imposed pursuant to this chapter that was enacted13 before January 1, 2026, shall expire on the later of ten (10) years after14 its effective date or July 1, 2031, unless the legislature acts by law to15 extend or reenact the exemption prior to its expiration.16

SECTION 2. An emergency existing therefor, which emergency is hereby17 declared to exist, this act shall be in full force and effect on and after18 July 1, 2026.19