S 1440

                    LEGISLATURE OF THE STATE OF IDAHO
 Sixty-eighth Legislature  Second Regular Session - 2026
                                 IN THE SENATE
                             SENATE BILL NO. 1440
                          BY STATE AFFAIRS COMMITTEE
1AN ACT
2  RELATING TO TAXATION; AMENDING CHAPTER 29, TITLE 26, IDAHO CODE, BY THE AD-
3      DITION OF A NEW SECTION 26-2929, IDAHO CODE, TO ESTABLISH PROVISIONS RE-
4      GARDING THE IMPOSITION OF AN EXCISE TAX ON INTERNATIONAL MONEY TRANS-
5      MISSIONS; AMENDING CHAPTER 30, TITLE 63, IDAHO CODE, BY THE ADDITION
6      OF A NEW SECTION 63-3029E, IDAHO CODE, TO PROVIDE FOR AN INTERNATIONAL
7      MONEY TRANSMISSION TAX CREDIT OR REFUND; AND DECLARING AN EMERGENCY AND
8      PROVIDING AN EFFECTIVE DATE.
9  Be It Enacted by the Legislature of the State of Idaho:
10     SECTION 1. That Chapter 29, Title 26, Idaho Code, be, and the same is
11 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
12 ignated as Section 26-2929, Idaho Code, and to read as follows:
13      26-2929. EXCISE TAX ON INTERNATIONAL MONEY TRANSMISSIONS. (1) As used
14 in this section:
15      (a) "International money transmission" means a money transmission to a
16      recipient outside of the boundaries of the United States by any and all
17      means, including but not limited to payment instrument, wire, facsim-
18      ile, or electronic transfer, when such transmission originates within
19      the state of Idaho.
20      (b) "Transaction amount" means the amount intended to be received by
21      the recipient of an international money transmission.
22      (2) An excise tax is hereby imposed on international money transmis-
23 sions as set forth in this section. The excise tax shall be collected by a
24 licensee or its authorized representative pursuant to this chapter in addi-
25 tion to any fee that the licensee or its authorized representative may charge
26 for an international money transmission. The excise tax shall be imposed on
27 the individual sender of every international money transmission at the time
28 of the transaction, whether the individual sender is acting on behalf of the
29 sender or on behalf of any other person or any corporate or legal entity, ex-
30 cept as provided in subsection (8) of this section. The excise tax shall
31 be in the amount of five dollars ($5.00) for the first five hundred dollars
32 ($500) of each transaction plus an amount equal to four percent (4%) of the
33 transaction amount in excess of five hundred dollars ($500).
34      (3) A sender of an international money transmission subject to the tax
35 imposed by this section shall be provided a receipt by the licensee or its au-
36 thorized representative at the time of the transaction that states the tax
37 amount imposed and paid for the transaction. The receipt shall also notify
38 the sender that an individual legally present in the United States may be
39 entitled to an income tax credit or refund for the amount of the interna-
40 tional money transmission excise tax pursuant to the provisions of section
41 63-3029E, Idaho Code, provide information on how such individual may obtain
42 such credit or refund, and state that the receipt should be retained for the
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1  individual's Idaho income tax records. The language of the notice shall be
2  prescribed by the state tax commission and disseminated to every licensee.
3(4) The tax imposed by subsection (2) of this section shall be remitted
4  by the licensee on a quarterly basis to the state tax commission on such forms
5  as the state tax commission may prescribe for such purpose. All of the re-
6  quired forms and records of international money transmissions shall be filed
7  with the state tax commission no later than the twentieth day of the month
8  following the close of each calendar quarter.
9(5) The state tax commission shall distribute the revenues derived from
10 the excise tax as follows:
11      (a) An amount equal to the sum of the income tax credits and refunds
12      granted pursuant to section 63-3029E, Idaho Code, during the previous
13      twelve (12) months shall be distributed to the state refund account of
14      the general fund; and
15      (b) The remaining amount shall be transferred to the general fund.
16      (6) The state tax commission shall have the power and duty to estab-
17 lish necessary procedures to enable licensees to comply with the provisions
18 of this section. Any deficiency in tax and notice of deficiency, as well as
19 the review, audit, collection, and enforcement procedures provided by chap-
20 ter 30, title 63, Idaho Code, not directly conflicting with the provisions
21 of this section shall apply and be available to the state tax commission for
22 enforcement of the provisions of this section and the assessment and collec-
23 tion of any amounts due. Whenever liens or any other proceedings are defined
24 as income tax liens or proceedings, such provisions shall, when applied in
25 enforcement or collection pursuant to this section, be described as inter-
26 national money transmission excise tax liens and proceedings. For the pur-
27 poses of this section, any reference to taxable year in the income tax act
28 shall be considered a calendar quarter.
29      (7) If a licensee fails to file reports or fails to remit the tax imposed
30 by the provisions of this section, the state tax commission shall notify the
31 department of finance, which shall have the authority to suspend the money
32 transmitter license of the licensee and its authorized representatives in
33 accordance with the provisions of this chapter. The licensee and its autho-
34 rized representatives may not reapply for a license until all required re-
35 ports have been filed and all required tax amounts have been remitted. Fur-
36 ther, upon request from the state tax commission, the department of finance
37 may make a claim against the security device required by section 26-2908,
38 Idaho Code, of the licensee on behalf of the state to secure any amounts owing
39 from the tax imposed by the provisions of this section.
40      (8) The excise tax imposed by the provisions of this section shall not
41 apply to transactions where money is debited from the international money
42 transmission sender's own account with a banking institution or other entity
43 licensed by the department of finance or when such banking institution or en-
44 tity has proof of the sender's legal residence in the United States. Such
45 proof shall be in the form of a valid Idaho state-issued identification card
46 or driver's license, United States passport, or birth certificate showing
47 the requester was born in the United States.
48      (9) The department of finance and the state tax commission may each pro-
49 mulgate rules, pursuant to chapter 52, title 67, Idaho Code, to implement the
50 provisions of this section, subject to legislative approval.
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1      SECTION 2. That Chapter 30, Title 63, Idaho Code, be, and the same is
2  hereby amended by the addition thereto of a NEW SECTION, to be known and des-
3  ignated as Section 63-3029E, Idaho Code, and to read as follows:
463-3029E. INCOME TAX CREDIT OR REFUND FOR INTERNATIONAL MONEY TRANS-
5  MISSION. (1) Any taxpayer who is required to file and who has filed an Idaho
6  income tax return shall be allowed a refundable credit in the amount of in-
7  ternational money transmission excise taxes paid by such taxpayer during a
8  tax year pursuant to the provisions of section 26-2929, Idaho Code. The tax-
9  payer shall provide proof of legal residence in the United States with the
10 Idaho income tax return to be eligible to claim the credit. If taxes due are
11 less than the total credit allowed, the taxpayer shall be paid a refund equal
12 to the balance of the unused credit.
13      (2) Any person not required to file an Idaho income tax return shall be
14 entitled to a refund in the amount provided in subsection (1) of this section
15 if the person provides proof of such person's legal residence status in the
16 United States.
17      (3) Any refund shall be paid to such individual only upon application
18 therefor, at such time and in such manner as may be prescribed by the state
19 tax commission. The state tax commission shall prescribe the method by which
20 the refund is to be made to the taxpayer or other applicant. The refunds au-
21 thorized by this section shall be paid from the state refund account in the
22 same manner as the refunds authorized by section 63-3067, Idaho Code.
23      (4) An application for any refund that is due and payable pursuant to
24 the provisions of this section must be filed with the state tax commission
25 within three (3) years of:
26      (a) The due date, including extensions, of the return required pursuant
27      to section 63-3030, Idaho Code, if the applicant is required to file a
28      return; or
29      (b) The fifteenth day of April of the year following the year in which
30      the tax was paid.
31      (5) The state tax commission may audit an application for a refund is-
32 sued pursuant to this section in the same manner as an income tax return au-
33 dit.
34     SECTION 3. An emergency existing therefor, which emergency is hereby
35 declared to exist, this act shall be in full force and effect on and after
36 July 1, 2026.