Idaho State Tax Commission

Idaho State Tax Commission

Sales Tax Rules Committee

This committee is responsible for sales and use tax rules as well as hotel/motel and campground sales tax rules, wine tax rules, cigarette and tobacco tax rules, beer tax rules, illegal drug tax rules, and prepaid wireless E911 fee administrative rules.

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Next meeting(s)

  • Location: 800 Park Blvd., Plaza IV, Boise ID 83712-7742

List of all meetings (with available documents) »

Rules under discussion (status board)

Rule, description Current status
Sales and Use (35.01.02)
012 CONTRACTORS IMPROVING REAL PROPERTY - There are two issues that need to be addressed. First, the language in subsection 13 regarding the exemption for materials incorporated into real property in a state that does not impose a use tax on those materials (Idaho Code Section 63-3622B in statute) needs to state more explicitly what is covered by the exemption and what is not. Second, there has been an increase in projects in which the general contractor hires a subcontractor to fabricate and install materials into real property but ultimately the general does the installation work itself (usually through a second contract between the sub and the general). The language in subsections 08-10 needs to be updated to address this scenario and the resulting tax consequences. Draft 1 was discussed at the 07/17 meeting; proposed rule will be published in the October bulletin
022 DROP SHIPMENTS - a drop shipment is a transaction in which a purchaser buys a product from a retailer but the product is shipped directly to the purchaser from the manufacturer or wholesaler. There has been feedback from the public over time that the rule as written can be confusing. The purpose of amending the rule is to clarify the responsibilities of both in-state and out-of-state retailers, wholesalers, and manufacturers in a drop shipment situation. Proposed rule will be published in the October bulletin
024 RENTALS OR LEASES OF TANGIBLE PERSONAL PROPERTY - The two types of leases described in subsection 012 have long been administered as mutually exclusive types of leases (i.e. a given lease contract would only fit in one of the categories, not both). It seems as though that was always the intent as well. However, in careful reading, there has been discussion that the differing language of “fair market value” in 12.a and “full remaining purchase price, the residual” in 12.b inadvertently allow for some overlap where it was not intended. The subsection will be reviewed to see how the descriptions can be cleaned up to achieve the original goal of only one lease type applying to a particular lease contract. Poposed rule will be published in the October bulletin
027 COMPUTER EQUIPMENT, SOFTWARE, & DATA SERVICES - addresses changes arising from the passage of HB 598 during the 2014 legislative session. HB 598 exempted software delivered through any method other than tangible storage media transferred to the user. The only exception is for digital videos, music, books, and games, which remained taxable regardless of delivery method. Some of the key issues include the taxability of digital subscriptions (i.e. Netflix streaming), the definition of a digital book, and the various charges associated with digital games. Draft 2 was discussed in the 07/24 meeting; the proposed rule will be published in the October bulletin
049 WARRANTIES AND SERVICE AGREEMENTS - there has been confusion expressed by taxpayers on how to tax certain aspects of extended service agreements. Of particular concern are agreements in which consumables are provided on a routine basis (i.e. toner cartridge for a leased copier) and overage charges when the customer exceeds a certain amount of usage of the property in question. Draft 2 was discussed in the 08/21 meeting. This rule is being held for more work.
063 BAD DEBTS AND REPOSSESSIONS - when a retailer makes a sale, the sales tax is computed at that time, collected from the customer, and paid to the tax commission. If the sale is made on account, the retailer must still remit the entire amount of tax at the time of the sale. If the purchaser later defaults on some or all of its account, the retailer may claim a refund of the portion of sales tax that has not yet been paid by the purchaser. The complexity of these calculations requires simplification. An alternative method of calculating the refund claim has been proposed and submitted by the owner of Fairly Reliable Bob's, a local motor vehicle dealership. This proposal will be one of the focal points of the discussion. Held for more discussion.
100 PRESCRIPTIONS - addresses concerns from optometrists and eyeglass/contact sellers related to the taxability of various services in the industry, as well as lay out the responsibility of these sellers in collecting tax from the customer when the amount of the future insurance reimbursement is uncertain at the time of the transaction. This rule is still under discussion.
102 LOGGING - The logging exemption set forth in Idaho Code Section 63-3622JJ explicitly applies to certain equipment and materials used in the tree harvesting process alone rather than the whole process of raising and maintaining trees. The production exemption (Section 63-3622D, Idaho Code) is a wholly separate exemption that has applicability in the broader scope of a full tree farm. However, the references to a “tree farm” in subsection 07 of this logging exemption rule do not make this connection to the production exemption clear. In fact, the rule implies that materials and equipment used on a tree farm can qualify for the logging exemption even if they are used outside of the harvesting process. The rule needs to be amended to make it clear that materials and equipment used on a tree farm for a purpose other than harvesting can qualify under the production exemption (if the criteria of that exemption are met) but not the logging exemption. Draft 1 discussed at the 08/21 meeting, proposed rule will be posted in the October bulletin
128 CERTIFICATES FOR RESALE AND OTHER EXEMPTION CLAIMS - When an exempt organization pays for lodging accommodations and wishes to claim an exemption,the current rule allows the purchaser to submit to the vendor either Form ST101,Sales Tax Resale or Exemption Certificate,Form ST104-HM,Sales Tax Exemption on Lodging Accommodations,or Form ST104G Sales Tax Exemption Claim for Cash Purchases by the Government. However, the ST101 does not provide enough information to determine who actually paid the bill, the exempt organization or the nonexempt employee. The ST104HM and the ST104G provide detail and explanations such that the retailer can easily determine whether the sale should be taxed and the tax commission will have enough information to pursue the paying guest for unpaid taxes if necessary. Therefore, the proposed rule change will require the use of the ST104HM or ST104G for exempt sales of lodging accommodations. Draft 1 discussed in the 08/21 meeting, proposed rule will be in the October bulletin.
Hotel/Motel Room and Campground Sales (35.01.06)
No posted activity at this time. 
Beer (35.01.12)
No posted activity at this time. 
Wine (35.01.09)
No posted activity at this time. 
Cigarette and Tobacco Products (35.01.10)
No posted activity at this time. 
Prepaid Wireless E911 Fee (35.01.14)
No posted activity at this time. 
Illegal Drug (35.01.13)
No posted activity at this time. 

Meetings history

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