[Vision2020] Statesman on Tax Lawsuit

[Ron Force]

June 09, 2010
Our View: A system that benefits cronies and companies?
 - Idaho Statesman

Rep. Shirley Ringo has leveled some explosive allegations about the way Idaho collects taxes.They might or might not be true. And that is the fundamental problem with defending an inherently secret tax system. Who knows what to believe?

Since it's your money, you deserve to know.

Ringo, a Moscow legislator, took the unusual step Monday of suing the Legislature and the State Tax Commission over confidential tax settlements between the commission and multistate corporations.

The settlements are supposed to resolve tax protests, but the lawsuit describes a system that favors the cronies and the corporations. Among the unsavory allegations:

- A wealthy Idaho resident received a $1.6 million break before commission auditors could issue their report on the protest.

- A tax commissioner went against the advice of auditors, siding with a friend who is "prominent in Idaho politics."

- During a hearing, a company official mentioned that he has the governor's ear on reappointments to the commission, a full-time state job. One commissioner happened to be a few months away from reappointment. Ultimately, the taxpayer happened to receive a $100,000 discount.

Ringo doesn't name names, save for one: Stan Howland, the career commission auditor who filed a 2008 whistleblower complaint over the state's tax settlements.

Here's why you should care whether Ringo and Howland have their facts straight. When corporations "game the system," as the lawsuit pointedly puts it, the burden falls unfairly on all taxpayers who lack the savvy or the political pull to cut a deal with the commission.

The lawsuit represents only one side of the story, of course. Attorney General Lawrence Wasden has the job of defending the Legislature and the Tax Commission, and Wasden's office had no immediate response to the lawsuit.

That is standard procedure. But the bigger problem is the Tax Commission's troubling history of placing secrecy ahead of accountability.

In 2005, the commission exempted outdoor retailer Cabela's from collecting sales taxes from Idaho online and catalog consumers. Cabela's sought this break while opening retail stores in Idaho - even though state law requires retailers with a substantial in-state presence to collect sales taxes on catalog and Internet sales. The Statesman requested documents explaining the commission's call. The commission said no and went to court, on the taxpayers' dime, to keep from releasing the records.

In short, the commission isn't very public about how it collects dollars on the public's behalf.

It may be tempting to swat aside Monday's lawsuit as partisan posturing, since Ringo, a Democratic lawmaker, enlisted former Democratic gubernatorial candidate and Supreme Court Justice Robert Huntley to take on the case. But all Idahoans have a stake here. If the tax system doesn't function, everyone pays the price - regardless of political persuasion.

"Our View" is the editorial position of the Idaho Statesman. It is an unsigned opinion expressing the consensus of the Statesman's editorial board. To comment on an editorial or suggest a topic, e-mail editorial at idahostatesman.com.



      
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