Tax Commission News Release
Holiday shoppers may owe use tax on Internet purchases
BOISE, IDAHO — Nov. 25, 2014 — With Black Friday and Cyber Monday just a few days away, the Idaho State Tax Commission is reminding online holiday shoppers and others that they may owe use tax to the state if the seller doesn’t charge them sales tax.
When shoppers buy goods on the Internet, by telephone, or from a mail-order catalog, sellers won’t charge sales tax if they’re not Idaho retailers. In that case, the shoppers owe use tax if the goods are used, given away, stored, or consumed in Idaho. The shoppers are responsible for paying the tax directly to the Tax Commission.
The use tax has been in effect since 1965 and is the same rate as the sales tax (6 percent). “Many people don’t know about the use tax,” said Randy Tilley, the Tax Commission’s Audit Division Administrator. “But it’s an important tool to make sure that Idaho retailers can compete fairly with out-of-state companies that don’t charge tax.”
The tax also helps fund state and local services throughout Idaho. And it ensures that all consumers in the state contribute fairly to the funding of these services, whether they choose to make purchases in Idaho, online, or outside the state.
Tilley said Idahoans can report and pay use tax on their Idaho individual income tax returns. “We advise shoppers to keep track of their untaxed purchases, total them up at the end of the year, and pay what they owe when they file their income taxes next year,” he said.
Taxpayers can also fill out Form 850-U, (Idaho Self-Assessed Use Tax Worksheet and Return), available at tax.idaho.gov, and pay use tax at any time during the year.
The Tax Commission has seen a slight upturn in shoppers who are paying the tax. More than 10,000 Idahoans paid use tax totaling more than $631,000 on their 2013 income tax returns, a 5 percent increase over the previous year.
“As more people shop online and more sales go untaxed, we’ll continue to remind people of their use tax obligation,” said Tilley.
For more information about use tax, visit tax.idaho.gov, watch the Tax Commission’s Use Tax video on YouTube, or call the Tax Commission at 334-7660 in the Boise area or toll free at (800) 972-7660.