Idaho State Tax Commission

Food, Meals and Drinks

Sales price

Taxable parts of a customer's bill

• Charges for food or drinks served
• Cover charges
• Service charges other than tips
• Charges to prepare or serve food, drinks and meals for customers who supply the ingredients

Nontaxable parts of a customer's bill

• Tips that are all of these:
  • Separately stated on the receipt
  • Paid to the service provider as additional income
  • Not used to avoid sales tax on the actual meal price
• Delivery charge that is both of these:
  • Separately stated on the receipt
  • Not used to avoid sales tax on the actual meal price
• Charges for playing games on tablets or similar devices.
  Note: You don't charge customers sales tax, but you do need to purchase amusement device decals.

Separate statement of sales tax

You must separately list the amount of tax on the receipt even if you want whole-dollar transaction amounts.

Note: If you don't separately state the tax, you charge tax on the whole-dollar amount (i.e, $3.00 x current sales tax rate = sales price).

Sometimes businesses with high-volume or even-dollar sales don't automatically give receipts. But you must give your customers a receipt if they ask for it. A receipt, showing the amount of tax you charged, is the only proof they have to show they properly paid sales tax.

When you collect sales tax from customers for the State of Idaho, you must accurately track the tax you collect and forward it to the Tax Commission.

Food delivery fees and other charges

There are different types of meal delivery models, and the fees charged vary. Taxability depends on who the retailer is, what is charged, and how charges are shown on the invoice.

• A tip added to a delivery fee isn't taxable.
• If you're a retailer, you must have a valid Idaho seller's permit. You can't collect sales tax without one. You can get a permit at no charge. See the Retailers guide.

Coupons, vouchers and gift cards

Customers often use coupons, vouchers or gift cards to pay for all or part of the bill. Tax these payment types as follows.

Coupons

Does a third party reimburse you?	Charge sales tax on:	Example
Yes	Total sales price before you subtract the discount amount	Manufacturer's coupon
No	Sales price after you subtract the discount amount	Coupon you distribute in a newspaper or online

Vouchers

Vouchers are something that a customer can use for a discount on a product or service, such as a two-for-one dinner or a manicure at a reduced price. The customer buys the voucher in advance from a third-party provider, such as Groupon.

Do you know how much the customer paid for the voucher?	Charge sales tax on:
Yes	Amount the customer paid for the voucher
No	Face value of the voucher

Keep documentation to support the tax calculation on all discounted sales.

Gift cards and certificates

Don't charge tax when a customer buys gift cards or certificates because they're a form of payment. Charge sales tax on the price of the goods that someone buys using the gift cards or certificates.

You can't treat a gift card redemption like it's a retailer's discount coupon, even if you sold the gift card or certificate at less than its face value.

Page last updated March 7, 2019. Last full review of page: February 28, 2019.