Sunday, September 15, 2013
About two weeks ago, George Prentice of the Boise Weekly posted an article discussing a couple situations where the Idaho Tax Commission has strictly enforced the state’s six percent sales tax. The article explained the commission demanded that a twelve year old boy pay the six percent sales tax on his earnings from the roadside stand he set up to sell raspberries grown on his father’s farm. The commission also stopped by a local fundraiser event to make sure that the people who made purchases at the charity auction were paying Idaho’s six percent sale tax.
The little boy was saving for a small pit bike and the fundraiser was for a woman who was injured in attack at a local Boise mall.
What are the similarities, if any, between the Idaho Tax Commission methods of enforcing the state’s sales tax in these situations and the IRS’ treatment of nonprofits? What are the differences? Is there something troublesome about strictly enforcing a sales tax in either or both of these situations? Could the IRS adopt a similar approach to regulate nonprofit tax-exemption?