Tax Commission News Release
Internet shoppers already owe tax, says Idaho State Tax Commission
BOISE, Idaho — March 7, 2012 — A lot has been said recently about whether Internet sales should be taxed. But many Idaho consumers who shop online may not know that under Idaho law they already owe use tax, according to the Idaho State Tax Commission.
“Use tax” is a companion to the sales tax, which is normally paid at the point of purchase. Use tax applies when someone buys items on the Internet, by phone, or through mail-order catalogs, and the seller doesn’t collect sales tax on the purchase. Unless a purchase is specifically exempt by law, it must be taxed.
“The use tax has been a part of Idaho law since 1965, when the sales tax went into effect,” said Randy Tilley, the Tax Commission’s Audit and Collections administrator. “Every state with a sales tax also has a use tax, to make sure that all sales are taxed equally and fairly.”
Tilley said it’s the Tax Commission’s job to administer current Idaho tax law as written. “The law does not exempt Internet purchases from tax,” he said, adding, “When Idaho citizens make untaxed purchases online, it creates an uneven playing field for local businesses that have to charge tax on their sales.”
There are several ways Idahoans can pay use tax on their Internet and other untaxed purchases:
- On their annual income tax return (Line 28 of the 2011 Form 40)
- Using a Form 850-U (Self-Assessed Use Tax Worksheet and Return)
- Paying it in person at a Tax Commission office
Businesses with a sales tax permit can either pay use tax on their sales tax return or report their untaxed purchases on their corporate income tax return.