Schools and Sales Tax
This guide explains how Idaho sales tax laws apply to schools like yours. It includes how Idaho taxes sales and purchases by schools. The guide also covers donations you receive, requirements for keeping records, and filing returns.
A school that Idaho law defines as an educational institution can buy everything exempt from sales tax. Educational institutions are non-profit, offering a diversified course of study in the usual branches of learning. Their income is devoted only to education and they're one of the following:
- Nonprofit colleges and universities (both public and private)
- Nonprofit primary and secondary schools (both public and private)
- Idaho public charter schools
- The Idaho Digital Learning Academy
A non-Idaho college, university, primary or secondary school also can buy everything exempt if it's a qualifying educational institution.
Can't buy exempt
For this exemption, educational institution does not include:
- Schools that primarily teach:
- Other special skills
- Parent-teacher associations, parent groups, alumni and other auxiliary groups whose purpose is to help an exempt school
- For-profit schools, colleges and universities, even when offering a full and diverse curriculum
How schools can buy exempt
Purchases must be billed to and paid directly by the school for them to be exempt.
A purchase is billed directly to a school if any of the following applies:
- The school has a contract with the seller for the item.
- The seller bills the school for the purchase.
- A school employee pays with a credit card issued to the school.
A school is paying directly for a purchase if it gives the seller a payment such as:
- A check from the school
- Electronic payment from the school
- Payment of charges on a qualifying credit card held by a school employee that's in the school's name
Note: The school isn't paying for the sale directly if it reimburses the employee. An employee's personal check, credit card or cash is not direct payment from the school.
As the school, you must give the seller a completed Form ST-101, Sales Tax Resale or Exemption Certificate, on exempt purchases. The seller must keep the certificate and any other documentation. The seller shouldn't charge tax on future qualifying sales to you.
Note: If you're a teacher buying supplies for your classroom using your own funds, you can't use your school's exemption.
Purchases by student activity groups
Purchases that student activity groups make are exempt only if all the following apply:
- The associated "student body fund" pays the bill.
- The school is responsible for the funds.
- The school gives a completed Form ST-101, Sales Tax Resale or Exemption Certificate, to the seller.
Purchases by school-affiliated organizations
There's a difference between a school and an organization affiliated with the school. Affiliates such as a PTA or an alumni association aren't exempt from paying sales tax.
Affiliates must pay tax on all purchases, even if the purchase is on behalf of the school. This includes supplies and equipment.
Exception: They can buy products for resale (such as for fundraisers) tax exempt, The organization is then operating as a retailer and must have a valid seller's permit, collect sales tax, file a sales tax return, and forward the tax to the state. They can't use the school's sellers permit.
Sales by schools
Schools that make taxable sales are retailers. They must get an Idaho seller's permit, collect sales tax on taxable sales, and forward the tax to the Tax Commission.
Rental of facilities
You must collect tax when you rent out your school facilities for recreational or entertainment uses.
Exempt use – resale
You don't have to charge tax to anyone paying to use your school facility for recreation or entertainment if they'll charge admission to their event. Since this is a purchase for resale, they must provide you with a properly completed Form ST-101, Sales Tax Resale or Exemption Certificate. They'll collect sales tax on their admission charges and forward that tax to us.
Exempt use – educational purposes
You shouldn't collect tax if you rent out your school facilities to anyone who will use it for an educational purpose, even if they'll charge admission.
Read our Recreation and Admissions guide for more information on recreational and educational uses.
You must collect sales tax on sales you make at concession stands. You must separately list the amount of tax on the receipt. This is true even if you want whole-dollar transaction amounts.
You charge $3.00 plus tax for a drink. The current sales tax rate is 6%. The receipt would show:
The total amount you charge for a drink is $3.00. The receipt would show:
Note: If you don't separately state the tax, you must charge tax on the whole-dollar amount (e.g., $3.00 + $0.18 = $3.18).
Provide a receipt
Sometimes schools 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.
As a school, you must collect sales tax on admission charges to such events as sporting events, games, dances, plays, carnivals, and reunions.
- If you suggest a price for an admission, even if you call it a donation, you must collect sales tax.
- If you don't set or suggest a price (or donation amount) and admission is allowed, don't collect sales tax.
School fundraiser auctions
A bidder typically will pay more than an item is worth at a fundraiser so they can give a cash donation. If you follow the right procedures, you won't have to charge tax on this donation amount.
An item sold at a fundraiser auction can be taxed on the fair market value of the item. Fair market value is what an informed and reasonable buyer would expect to pay. There are several ways to determine fair market value:
- Price paid as recorded on a printed receipt
- Current price advertised by a major retailer
- Value as appraised by an expert
- Replacement cost
If you don't properly document the fair market value, you could be held responsible for sales tax on the full bid amount. Keep clear and complete records showing what you sold, how much you sold it for, the amount donated, and the amount of tax charged.
Not everything is taxable. Don't tax auctioned services (e.g., washing a car, mowing a lawn).
School fundraisers (charitable gaming, e.g., raffles, bingo)
The Idaho Lottery Commission regulates games of chance, including raffles and bingo. Check with its website to ensure you meet the requirements, such as license applications, fees, background checks and confirming that a certain percentage of proceeds goes to charitable causes.
Don't charge sales tax on sales of raffle tickets. Raffles are games of chance; there's no guaranteed prize.
Carnivals include a variety of activities and events. Not all items and activities are taxable.
Taxable items include sales of merchandise and games with guaranteed prizes.
- Merchandise examples: student-designed T-shirts, calendars, school souvenirs, recipe books, baked goods, art and craft items, concessions
- Games with guaranteed prizes examples: fishing booth, wheel of fortune, pick-a-duck
Nontaxable items include sales of services and games of chance.
- Service examples: face painting, hair coloring, group art activities (e.g., murals, graffiti)
- Game of chance examples: cakewalk, musical chairs, dunk tank, darts, toss (e.g., water balloon, dime, ring), bingo, guess how many items in jar, casino games
Ball toss. The contestant buys a $5 ticket at the game booth, allowing the contestant five throws — five chances to win a prize. This is a game of chance and isn't taxable. Total: $5.
Pick-A-Duck. The contestant buys a $5 ticket at the game booth, allowing the contestant to choose a duck. This is a guaranteed prize — a sale — and is taxable. Total: $5 plus sales tax.
Ticket can be used at any booth. In this case you shouldn't charge tax on the original sale. You'll need to calculate how many tickets were redeemed at taxable booths. If you had 72 $5 tickets used at taxable booths, you should report $20.37 sales tax.
- 72 x 5 = 360
- $360/1.06 = 339.6226 (sale amount)
- 339.6226 x .06 = $20.37
Admission to a charitable event
A qualified nonprofit school doesn't have to collect tax on sales of admissions to a charitable event when all the following are true:
- The event isn't primarily recreational or commercial
- Any entertainment value is minimal compared with the price of admission
- The event promoter pays tax on all taxable goods or services used during the event
A school hosts a fundraising event that includes dinner served by a local caterer, a performance by a local amateur band, and an auction run by a professional auctioneering service. Tickets are $200 per person.
- The school doesn't have to collect tax on the $200 charge
- The school pays tax on the dinner, including the caterer's service fees
- The auctioneering service will be responsible for collecting sales tax on auctioned items
Summary of taxable and nontaxable sales
These aren't complete lists. But here are examples of the sales on which you should and shouldn't charge tax.
Taxable sales by schools
You should charge tax on these sales:
- Activity tickets or cards
- Admission fees – athletic events, dances, plays, assemblies, movies, carnivals. This includes any additional fees (e.g., cover charges, minimum charges, reserved seats)
- Assets – buses and surplus equipment
- Athletic department sales – tennis balls, bats, knee pads
- Band equipment and uniforms
- Book club and book fair sales
- Bookstore sales
- Class rings
- Clothing sales and rentals – jackets, hats, T-shirts, uniforms, shorts, physical education wear, school spirit wear
- Computer training workbooks
- Concession sales
- Dorm room rentals for short durations. (Other room taxes may apply; see Hotels, Motels and Short-Term Rentals)
- Textbooks and workbooks
- Faculty room coffee and soda pop
- Fund-raiser sales of taxable goods and services
- Magazine subscriptions
- Meals – all sales except those that the federal school lunch program reimburses
- Program sales at games
- Renting school facilities to anyone who will use them for recreational purposes (e.g., a gym or auditorium)
- School store sales
- School supplies – pens, papers, art supplies, book covers
- Vending machine sales
Nontaxable sales by schools
You shouldn't charge tax on these sales:
- Advertising space in annuals, athletic or performing arts programs
- Book replacement fees
- Breakage fees – lab shop
- Car washes
- Discount cards
- Dues – class or club dues
- Meals to students that the federal school lunch program pays for
- Library fines
- Raffle tickets
- Rental of school facilities for recreational purposes when admission will be charged
Note: The renter must provide you with an exemption certificate (Form ST-101), collect sales tax on the admission charge, and forward the tax to us.
- Rental of school facilities for nonrecreational purposes, such as educational or religious programs
- Sales totaling 11 cents or less
- Shared income from events or sales when another person or group, such as a parent-teacher association, collects and pays the tax
- Towel laundry service
- Vending machine commissions, if the vending machine operator pays tax on the sales through the machine
Schools must keep the same records as any retailer. Those requirements are detailed below.
You must keep records of all sales by your school. Your records must show that you properly collected, reported and paid or forwarded taxes to Idaho.
Records you must keep
- Normal books of account
- Documents that support entries in the books of account, such as
- Cash register tapes
- Credit invoices or memos
- Job or work orders
- All schedules or working papers used to prepare your tax returns
- Copies of sales tax resale or exemption certificates (e.g., Form ST-101) given to you when you sell items tax exempt to customers or rent out facilities to them.
Note: Keep resale or exemption certificates for as long you do business with that customer, plus four years. We could bill you for tax due if you don't have completed exemption certificates for buyers you sell (or rent) tax exempt to.
- Tax returns
- Tax payments
What the records must show
- Gross receipts from sales and services made in Idaho, even sales that you might consider exempt from tax. If you deliver the product or service somewhere other than your place of business, you also must keep records that prove where delivery took place.
- The identity of customers claiming an exemption, the type of exemption, and what you sold them tax exempt.
- All deductions claimed in filing returns.
- The total purchase price of anything you bought for sale, rental, lease or your own use.
- The amount of sales tax collected or paid.
You must keep all Idaho sales and use tax records and exemption certificates for at least four years.
Laws and Rules
Learn more about schools and sales tax:
- Exempt Private and Public Organizations (Idaho Code section 63-3622O)
- Exemptions on Purchases by Political Subdivisions, Sales by the State of Idaho, its Departments, Institutions, and All Other Political Subdivisions (Sales Tax Rule 094)
- Imposition and Rate of the Use Tax – Exemptions (Idaho Code section 63-3621; Sales Tax Rule 072)
- Rentals or Leases of Tangible Personal Property (Sales Tax Rule 024)
- Retailer (Idaho Code section 63-3610; Sales Tax Rule 018)
- Sale (Idaho Code section 63-3612)
- Sales Price (Idaho Code section 63-3613; Sales Tax Rule 043)
- Sales Through Vending Machines (Sales Tax Rule 058)