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Analysis: Tom Luna’s renewed push for Internet sales taxes

When Tom Luna started talking about new taxes Wednesday, he revisited a recurring theme from his 2010 re-election campaign.

And, perhaps, took a subtle step with an eye to the November 2014 general election.

Tom Luna
Tom Luna

Luna renewed a pitch for collecting sales taxes on Internet purchases. This is one of those perennial ideas that gets noodled around the Statehouse, but an Internet sales tax bill has never found its way out of the House Revenue and Taxation Committee, the conservative panel that gets the first shot at almost every piece of tax legislation.

But speaking not to the Legislature’s tax policymakers — but instead to the Senate and House education committees — Luna tried to tie the Internet tax issue to the $350 million recommendations from Gov. Butch Otter’s education reform task force.

“As we move to create a 21st Century education system, we must have a 21st Century tax code,” said Luna. “We are not going to be able to address the fiscal note of these Task Force recommendations with the current tax structure we have in place.”

(Here’s a link to Luna’s prepared remarks. Scroll to pages 13 and 14 for his comments on Internet taxes.)

At stake, Luna said Wednesday, could be $65 million a year — online sales that now go untaxed. And Luna contends that the gap is only going to get worse. On Nov. 29, Black Friday, sales in brick-and-mortar retailers dropped by 13 percent. The following Monday — “Cyber Monday” — online sales jumped by 16 percent from 2012.

Proponents have long argued that Internet sales are a matter of fairness, a way of correcting a 6 percent price disadvantage that hurts brick-and-mortar retailers. Luna’s argument raises the fairness issue — he described it as a matter of collecting every sales tax penny due to the state — but focuses on funding education programs.

It isn’t a new argument, at least from Luna.

Luna says he has supported Internet sales taxes since 2006, when he was first elected state superintendent. It was certainly a recurring theme when he stood for re-election in 2010 — and as Idaho schools were in the throes of recession-era budget cuts. Luna argued for the Internet tax during a statewide TV debate and in appearances before newspaper editorial boards. His response to an Idaho Press-Tribune online voters’ guide was illustrative, but by no means unique.

“Collecting sales tax on internet sales and making sure that all Idahoans are accurately reporting their income and expenses on their taxes would generate tens of millions of additional revenue that will help assure that our schools are not cut any further,” said Luna at the time.

Luna’s renewed push for Internet taxes is interesting as well, because of the election-year implications.

Luna, who is expected to seek a third term, will be running in May in a closed Republican Party primary. The conventional wisdom, especially in a closed primary, holds that candidates will run to the right on fiscal and social issues.

Gov. Butch Otter already faces a conservative challenge from Meridian Republican Sen. Russ Fulcher, and that dynamic certainly seemed to factor in Otter’s Jan. 6 State of the State address. But at this point, Luna has no announced GOP opponent; his only opponent to date is Democrat Jana Jones. Luna might be unopposed in May. Might, of course, is the key word. Candidates have until March 14 to file.

But by talking about Internet taxes — and by renewing his call for an increase in teacher salaries — Luna is sounding like a candidate gearing up for a general election.

Kevin Richert is a reporter and blogger at Idaho Education News (idahoednews.org). Kevin is a former Statesman editorial page editor, with 27 year's experience in Idaho journalism.

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