Idaho State Tax Commission

Retailers

tax.idaho.gov/retailers

Sales price

"Sales price" and "purchase price" mean the same thing. They mean the price a buyer pays. Tax is due on the sales price or purchase price no matter how the buyer pays the seller:

  • Cash, check, credit card, PayPal, electronic payment methods
  • Financing agreement – including I.O.U., or other promise to pay
  • Barter – paying with goods the buyer owns

What the sales price includes

Charge tax on the following even if you list them separately on the invoice:

  • Inbound transportation – fees charged for shipping the goods to the retailer
  • Manufacturer's or importer's excise tax – U.S. federal taxes that are charged to the retailer before the retail sale, but may still be a separate item on the bill to the buyer
    Examples: Taxes on cars, beer, wine, and cigarettes
  • Services performed by the seller as part of the sale
    Examples: Fee to assemble an item; clothing alteration charge
  • Surcharge for paying with a credit card or gift card
  • Prompt payment discounts encouraging the buyer to pay the bill on time, such as a 2% discount if a bill is paid within a certain number of days. Charge tax on the amount before the discount is given.
  • Manufacturer's coupon or rebate deduction amounts are included in the amount tax is calculated on if the manufacturer reimburses the retailer or the buyer for the discount given to the customer.

Example #1: You sell cereal for $4.50 to a customer who gives you a manufacturer's coupon for 50¢.

Sales price for cereal$4.50
Manufacturer's coupon – doesn't reduce sales price.50
Charge tax on$4.50

Example #2: You sell a computer for $800 that's eligible for a $50 rebate* from the manufacturer.

Sales price for computer$800
Manufacturer's rebate* – doesn't reduce sales price50
Charge tax on$800

* Both mail-in and instant manufacturer's rebates are part of sales price.

Special rules apply to rebates for motor vehicles.

What the sales price doesn't include

Don't charge tax on the following if you list them separately on the invoice:

Trade-in allowances

This is the value of goods traded in on other goods, whether in part payment, full payment, or more than full payment. The item accepted in trade must become part of the seller's inventory.

Example: You sell a stove for $800, and accept $250 as trade-in allowance on an old stove. You deliver the stove to your customer for $25.

Sales price for stove$800
Trade-in allowance – reduces sales price(250)
Delivery to the buyer – not taxed if separately stated25
Charge tax on$550
Trade discounts offered by a retailer

This discount can be a retailer's coupon, a marked-down price, or a customer discount offered to a good customer.

Example: You sell lumber for $2,000 to a customer who's a contractor with a $50 retailer coupon. You give a 15% contractor discount of $300 and an early payment discount of 2%. The customer pays within the early payment discount period.

Sales price for lumber$2,000
Good customer discount – reduces sales price(300)
Retailer coupon – reduces sales price(50)
Early payment discount – doesn't reduce sales price34
Charge tax on$1,650

The retailer can't receive money or reimbursement from a third party for a discount on the purchased item. A prompt payment discount offered by a manufacturer can't reduce the taxable sale price.

Interest, carrying charges, service charges, or financing charges on goods sold

Example: You sell a diamond ring for $1,000 to a customer who will pay the bill over six months with 18% interest. The customer is late on a payment and you charge a $5 late fee.

Sales price for ring$1,000
Interest – not taxed if separately stated90
Late fee – not taxed if separately stated5
Charge tax on$1,000

Special rules apply to interest, service, and financing charges on leases — see our guide, Renting and Leasing Tangible Personal Property.

Other examples of what the sales price doesn't include:
  • U.S. federal excise taxes that are charged to the customer at the time of the retail sale. The retailer pays the supplier the tax when buying the items for resale, then charges and separately states the excise tax on the invoice
    Example: New large tractor-trailer units
  • Shipping and handling charges for shipping the goods directly to the consumer. You must separately state the charges.
  • Installation labor, such as the labor to install a television in a home. You must separately state the labor.
  • Repair labor to repair a customer's goods isn't taxable when separately stated, but the parts sold to make the repair are taxable.
  • Insurance charges on goods rented or sold – when separately stated

Separately state sales tax on the invoice

You must separately list the amount of tax on the sales invoice. Customers must know how much tax was charged and be able to show they paid tax.

You can't offer to pay the tax yourself or advertise that you won't charge tax.

How to calculate the tax

Calculate the sales tax by either:

  • Using the sales tax "bracket card" that we mail to you with your permit, or
  • Multiplying the total taxable sales amount by the tax rate in effect.

Tax is calculated on the total of taxable items in a sale. For example, if you sell three taxable items totaling $10.50 together, tax is calculated on the total, rather than the individual prices of the three items in the sale.

Page last updated November 21, 2019. Last full review of page: March 26, 2018.

This information is for general guidance only. Tax laws are complex and change regularly. We can't cover every circumstance in our guides. This guidance may not apply to your situation. Please contact us with any questions. We work to provide current and accurate information. But some information could have technical inaccuracies or typographical errors. If there's a conflict between current tax law and this information, current tax law will govern.