Idaho State Tax Commission

Idaho State Tax Commission

Vending Machines

A vending machine is any automated or electronic device that dispenses goods (tangible personal property) when the buyer inserts payment into the machine.

An amusement device isn't a vending machine. Read more on our Amusement Device webpage.

Examples of vending machine goods include:

  • Food/drinks
  • Photographs
  • Photocopies
  • Newspapers

You don't collect tax on sales from automated machines that don't dispense taxable goods or services. Examples include:

  • Blood pressure machines
  • Washers and dryers
  • Car washes and vacuums
  • Air compressors
  • Cell phone chargers

Getting a seller's permit

To collect and submit the tax from a vending machine, you need to get a seller's permit. Anyone with a sales tax permit must file sales tax reports and submit the appropriate sales tax. You can apply for a seller's permit online.

You need only one seller's permit for all your machines. However, you must visibly display your name, address, and seller's permit number at each place where you have machines. To do this, post the required information on the front of one or more vending machines in each group of machines.

Calculating sales tax

Calculate and collect the sales tax using the following formulas:

  • Items sold for 11¢ or less: Don't tax.
  • Items sold for 12¢ through $1: Tax at 117% of the seller's cost of the goods.
  • Items sold for $1.01 or more: Tax on the full retail sales price.

Example #1 (Items sold for 12¢ through $1)

You buy candy bars for 30¢ each and sell through a vending machine for 75¢ a bar. In June, you sell 100 candy bars and you collect $75 from your machine. You report and submit $2.10 in sales tax. Follow this formula when you file your sales tax return:

Line # on Form 850 
Line 1Total sales$35.10
Line 2Less nontaxable sales0
Line 3Net taxable sales$35.10
Line 7Tax due$2.11

Line 1 calculation:
30¢ x 100 = $30 (the price you paid for the goods)
$30 x 117% = $35.10 (117% of your cost)

Line 7 calculation:
$35.10 x 6% (total sales x current tax rate)

Example #2 (Items sold for $1.01 or more)

You sell sodas through a vending machine for $2 each. In July, you sell 100 sodas and collect $200 from your machine. You report and submit $11.32 in sales tax. Follow this formula when you file your sales tax return:

Line # on Form 850 
Line 1Total sales$188.68
Line 2Less nontaxable sales0
Line 3Net taxable sales$188.68
Line 7Tax due$11.32

Line 1 calculation:
$100/1.06 (total receipts divided by (1 + current tax rate of .06))

Line 7 calculation:
$188.68 x 6% (total sales x current tax rate)

Buying goods for your vending machines

When you buy goods to resell in your machines, don't pay sales tax. Give your supplier a completed ST-101, Sales Tax Resale or Exemption Certificate, to buy your goods exempt from sales tax.

Paying sales tax when you buy, sell, or lease vending machines

Exempt vending machines

Machines that sell only taxable goods and accept only legal money are exempt from sales tax. This means the machines can accept only coins, bills, debit cards, or credit cards.

Taxable vending machines

You must pay sales tax on the following machines:

  • Machines that accept only legal money, but sell nontaxable goods.
  • Machines that accept only legal money, but sell only goods for 11 cents or less.
  • Machines that use tokens or prepaid card readers (such as those reloadable with credits that can be redeemed to make a purchase), even if they also accept coins, bills, and debit or credit cards.
Note: If you buy a machine that is not set up to accept only legal money or change a machine that sells taxable goods to accept only legal money after you buy it, the device remains taxable; you can't get a sales tax refund on the purchase.

Splitting income between retailer and machine's owner

When revenues from a vending machine are split between a retailer and the owner of the machine, the one having the key to the coin box is usually responsible for reporting and submitting sales tax.

For example, if the owner of the machine has the key to the coin box and control of the proceeds, the owner is responsible for the sales tax. However, if the retailer is given control of the proceeds under a written or verbal agreement, the retailer is responsible for the sales tax.

Buying repair parts and supplies for your vending machine

You must pay sales tax on repair parts and supplies for all vending machines, even if the machine itself isn't taxed. This includes parts used in refurbishing or upgrading devices.

Laws and rules

Learn more about vending machines.

Laws and rules are housed on an external website.

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Page last updated Nov. 16, 2017. Last full review of page: Nov. 16, 2017.