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H 381

An Act relative to retailer-backed coupons

194th Legislature (2025-2026) Introduced by Ken Gordon

Idaho H381 requires the Tax Commission to notify taxpayers in audits that credit/debit card records can substantiate deductions, with notice kept on file.

Hearing scheduled for 07/07/2025 from 10:00 AM-01:00 PM in A-2
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Bill Summary · H 381

Summary of Idaho H 381 (2025)

Purpose and intent

  • Updates Idaho tax law to ensure taxpayers are notified about the option to substantiating deductible expenses with credit/debit card or other electronic transaction records.
  • Builds on a prior change (H 30, 2023) that allows credit card or bank statements to be allowable evidence for expenditures during a tax audit.

Key provisions

  • amends Idaho Code Section 63-3042A (Evidence of Expenditures)
    • Under this bill, in documenting an expenditure as a deduction or credit:
    • Absent clear and convincing evidence of fraud, a taxpayer’s statement or an invoice from a credit card company or other financial institution reflecting the expenditure shall conclusively establish that the expenditure was made by the taxpayer.
    • The taxpayer’s sworn statement that the expenditure was made for a deductible purpose shall conclusively establish the taxpayer’s right to the deduction or credit.
  • In any audit, deficiency assertion, or other proceeding where substantiation of a deductible expense paid by credit/debit card or other electronic means is in question:
    • The State Tax Commission must notify the taxpayer in writing of the provisions of this section.
    • The Commission must retain proof that such notice has been provided.

Who is affected

  • Taxpayers undergoing audits, deficiency proceedings, or other tax-related challenges regarding deductible expenses paid by electronic means (credit/debit cards, etc.).
  • The Idaho State Tax Commission, which must implement the notice requirement and maintain records of notices.

Procedural and timeline aspects

  • Effective date: July 1, 2025.
  • Emergency clause: The act declares an emergency and provides for immediate full force and effect on that date.
  • Legislative history indicates rapid passage in March 2025, with final enactment as Session Law Chapter 224, signed by the Governor March 31, 2025.

Fiscal impact

  • Based on the fiscal note, the legislation has no anticipated net fiscal impact:
    • No additional state or local expenditures.
    • No change in state or local revenue.

Additional context

  • The “evidence” framework remains contingent on the absence of fraud; in cases of fraud, the conclusive effect does not apply.
  • The change emphasizes formal written notice by the Tax Commission to taxpayers about the allowed substantiation method and requires the Commission to keep proof of such notice.

Bottom line

H 381 strengthens and clarifies the substantiation process for deductible expenses paid via credit/debit cards or electronic means by ensuring taxpayers are explicitly informed about these options during audits, while maintaining the current evidentiary standards and adding a documentation requirement for notices. The measure takes effect on July 1, 2025, and carries no identified fiscal cost.

Compiled from official sources — confirm details with the bill’s official record.

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