[Vision2020] Tribune editorial supporting Ringo's suit

[Bill London]

Lewiston Tribune
Ringo invites tax man to fight or join up
Marty Trillhaase
June 10, 2010

Idaho officials can hire lawyers to defend against a lawsuit that says they're too cozy with big corporate taxpayers.

Or they can hire lawyers to take those same corporations to court and force them to pay the taxes they owe.

That's the choice Rep. Shirley Ringo, D-Moscow, has offered her colleagues in the Legislature and the Idaho State Tax Commission. Represented by former Idaho Supreme Court Justice Robert Huntley, Ringo wants the courts to throw out secret settlements tax commission members work out with multi-state corporations that protest their bill.

The arrangement violates constitutional requirements for uniform taxation. Idaho is losing millions because of it at a time when the state's school and higher education budgets are bleeding, she says.

"If we're losing a lot of revenue at the same time we're cutting education, public employee hours and all those things, then I think we should look at it," Ringo says.

Good for her. 

Two years ago, veteran - and now retired - tax auditor Stan Howland challenged the commission's practice of cutting confidential "compromise and closing agreements" with corporations. They reach the deals in lieu of fighting in court.

In 2009, lawmakers toughened up some procedures - any agreement involving at least $50,000 in liability requires two of the four state tax commissioners to sign off on it. The agency reports yearly on its portfolio of compromise and closing agreements. But nothing in the report tells you who got the better end of the bargain. 

Getting lawmakers to act more resolutely is unlikely. They won't dramatically beef up collection against tax cheats or even work toward assessing sales taxes on catalog and online transactions. To some Idaho politicians, simply demanding someone pay his taxes is the same as raising a new tax.

So Ringo is asking the courts to look at the following:

l Even before an auditor had issued his report, a tax commission member gave a "wealthy Idaho resident" a $1.6 million tax break. Among other things, the auditor found the individual lied by claiming he conducted no business in the state "when in fact that investigating auditor did identify that the taxpayer has substantial business operations in the state."

l Several months before a tax commission member's reappointment was due, "a tax manager for a large Idaho company" told that commissioner he had the ear of the governor "on all appointments." The taxpayer got a $100,000 tax break.

l "One commissioner reversed an audit adjustment on a friend and individual who is prominent in Idaho politics."

l Written tax commission decisions - and, of course, records of judicial proceedings - are available to the public. Compromise and closing agreements are not. In the last three years, three-quarters of the corporate tax disputes have been resolved confidentially.

These are only allegations. Still, you have to ask: Why does the state even agree to these closed-door settlements? Why not fight in an open courtroom? Winning cases there would strengthen the tax commission's leverage in negotiating other settlements when disputes do arise. That way, the rules of the game would become transparent for everybody else who pays an Idaho tax without protest. 

One theory holds that the state lacks the confidence or the expertise to go head-to-head with the corporations in a courtroom. 

But off to court they are. Ringo's lawsuit guarantees it. 

Why not wage the battle on behalf of Idaho schoolchildren rather than the corporations trying to shortchange 
them? - M.T.
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