Court denies Statesman’s bid for Cabela’s documents

Newspaper plans to appeal decision; judge says state law clearly exempts tax information from disclosure

By Ken Dey

From the Idaho Statesman

A judge has denied the Idaho Statesman’s request for documents about the state’s decision to allow Cabela’s not to collect sales taxes from the outdoor retailer’s online and catalog customers in Idaho.

District Judge Michael McLaughlin in Boise sided with the Idaho Tax Commission, saying he couldn’t ignore the “plain and obvious” language of state law that exempts tax information from public disclosure.

“The policy reasons for this exemption are obvious,” McLaughlin said in his ruling Thursday. “Taxpayers want to know what their tax liability will be before they engage in an enterprise or action that would subject them to unknown tax consequences.”

The Statesman was disappointed and plans to appeal, Editor Vicki S. Gowler said.

“We aren’t interested in their private tax information,” Gowler said. “But when government decides who or what to tax, that process needs to be open.”

Before opening its Boise store, the Nebraska-based company requested a declaratory ruling from the tax commission to determine whether Idaho would require the company to collect taxes.

Idaho law says companies that have a substantial presence or “nexus” in the state must collect sales tax from their Idaho online and catalog customers. Cabela’s maintains that its retail operations and online operations are two separate companies, so the nexus provision doesn’t apply.

On Dec. 12, 2005, the tax commission issued a ruling granting Cabela’s the tax exemption.

McLaughlin said the declaratory ruling process required the company to disclose sensitive information to the commission. Opening such information to the public would make Cabela’s and other taxpayers “extremely reluctant” to participate in the process, he said.

Other states where Cabela’s has built stores have granted similar exemptions, but some states have fought the company.

From the Idaho Statesman

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