Search Category: Sales Tax

Laws and Rules for Schools

Learn more about schools and sales tax:

Schools Buying 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 pdf 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.

Teachers

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:

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.

Idaho or Federal Governments Buying Exempt

To be tax exempt, the sale must be billed to and paid directly by the qualified government agency.

Billed to government

A sale is billed to qualified federal and Idaho government agencies if any of the following applies:

  • The government agency has a contract with the seller.
  • The seller will bill the government agency for the sale.
  • The buyer pays with a qualifying credit card issued to the government agency.

Qualifying credit card

Qualifying credit cards include:

  • Federal government – GSA SmartPay cards
  • Idaho state government – Visa cards issued by US Bank labeled “Tax Exempt”
  • Idaho local government – Credit card bills the agency pays directly. Charges that an employee is responsible for or reimbursed for don’t qualify.

Paid directly by government

A sale is paid directly by a government if the seller receives payment directly from the government agency. These payment types include:

  • A check from the government agency
  • Electronic payment from the government agency
  • Payment of charges on a qualifying credit card the government agency provides
  • A government agency’s purchase order to the seller (only for cash sales)

Charges to credit cards issued to employees of government agencies don’t qualify if the agency will reimburse the employee. In such cases, the seller isn’t billing the sale directly to the government because the employee is responsible for paying the credit card company.

Documenting sales to governments

The buyer must properly complete the appropriate exemption certificate and give it to the seller:

Form ST-104HM

Buyers complete pdf Form ST-104HM – Sales Tax Exemption on Lodging Accommodations and Instructions, for hotel and other lodging purchases when the buyer pays with a qualifying credit card that’s both billed to and paid by the government agency.

Form ST-104G

Buyers complete pdf Form ST-104G – Sales Tax Exemption Claim – for Cash Purchases by Government Agencies, for cash purchases.

  • The buyer must complete and give the seller a separate Form ST-104G for each cash transaction.
  • This form can’t be used for a traveling government employee’s lodging, meals or private car expenses.
  • Other states’ governments can’t use this form.

Sellers can accept a government purchase order in place of a completed Form ST-104G to prove the sale is both billed to and paid by the government agency.

Form ST-101

Buyers should complete pdf Form ST-101 – Sales Tax Resale or Exemption Certificate, for most other exempt purchases of goods or services. In section 3, the seller should check the box for “Government Entity (U.S./Idaho).”

Foreign Diplomats Buying Exempt

The U.S. Diplomatic Tax Exemption Program provides diplomatic tax exemption cards (DTEC) to eligible foreign diplomats, consular officers and staff members. The U.S. Office of Foreign Missions sets the levels of tax exemption, and the levels can vary based on international reciprocity.

DTECs provide a point-of-sale exemption from Idaho sales tax and other similar taxes. Cards contain text on the front and back showing the level of exemption authorized, including degrees of restriction such as a minimum purchase requirement.

“Mission Tax Exemption – Official Purchases Only”

DTECs labeled with this text allow foreign missions to buy items necessary for the mission’s operations and functions exempt from sales and other similar taxes. Cardholders must pay for all purchases with a check, credit card or wire transfer in the name of the foreign mission.

“Personal Tax Exemption”

DTECs labeled with this text allow eligible foreign mission members and their dependents to make personal purchases in the United States exempt from sales and other similar taxes. Sellers can only sell tax-exempt to the individual identified and pictured on the card. The cardholder can’t transfer or loan the card to any other person, even if that person also is eligible to buy exempt. The cardholder can use any form of payment.

Documenting sales to foreign diplomats

The cardholder must present the card in person at the time of purchase. The seller can verify the card’s validity at https://egov.ofm.state.gov/tecv or by calling the federal government’s Office of Foreign Missions during business hours.

Sellers should document why they didn’t charge tax on a sale to a foreign diplomat by doing any of the following:

  • Photocopy the front and back of the tax exemption card.
  • Record the diplomat’s name, the mission he or she represents, the federal tax exemption number, the card’s expiration date and what they sold tax exempt.
  • If they sold to someone with a diplomatic tax exemption card labeled as “Mission Tax Exemption – Official Purchases Only,” sellers should document the payment type — check, credit card or wire transfer — in the name of the foreign mission.

Governments and Sales Tax Laws and Rules

Government Projects and Contractors

Many government agencies use contractors to make improvements to real property. Idaho requires contractors to pay tax on materials they use to alter, improve or repair real property in Idaho. This includes materials that contractors use when they work for government agencies.

Government agencies can buy materials for their construction contracts without owing Idaho sales tax. But if the government agency provides those untaxed materials to its contractor, the contractor owes use tax.

Contractors owe tax on the materials they use in a real property project. It doesn’t matter whether the contractor buys or makes the materials, or the government agency provides the materials for the project. Because of this, contractor bids should include:

  • Use tax on materials the government agency bought tax exempt and gave the contractor to use
  • Sales tax on materials the contractor buys for real-property improvement contracts

Contractors should include these taxes in the bid because they’re part of their cost. The government agency will reimburse contractors for the taxes they paid when they bill the agency for those taxes.

Exception: Materials donated to a government agency for incorporation into a real property project aren’t subject to use tax. This is the only exception.

Contractors can read more about their tax responsibilities in our Contractors Working in Idaho guide.

Sales Governments Make

Federal law bars Idaho from requiring federal government agencies to collect Idaho sales tax on their sales.

Idaho state and local governments that make taxable sales must get an Idaho seller’s permit and collect and forward tax to the Tax Commission. (See our Retailers guide.) Taxable sales that Idaho state and local governments make include:

  • Equipment rentals (e.g., sprayers, the container rental portion of trash pick-up service)
  • Gravel, equipment, surplus property, signs
  • Maps, books, forms, reports, photocopies and other documents (unless the fee for the document is set by law or the buyer makes a public records request as defined in Idaho Code section 74-102)
  • Items sold to prison inmates
  • Vending machine sales
  • Library cards
  • Admission charges (e.g., sporting events, swimming pools, concerts, zoos)
  • Fees to use recreation facilities (e.g., parks, gyms)
  • Recreation program fees (e.g., baseball, football, basketball)

Online Sellers Take These Steps

Steps

  1. Register for an Idaho seller’s permit. You can do that online at tax.idaho.gov/ibr.
  2. Forward the tax to the Tax Commission. Collect Idaho sales tax and file a sales tax return. See Filing and Paying.
    1. Register for a free Taxpayer Access Point (TAP) account after you get your Idaho seller’s permit in the mail.
    2. You can file and pay online through TAP.
  3. Keep records of all purchases and sales your business makes. See the Retailers Recordkeeping section for more information.

Third-Party Sellers

As of June 1, 2019, Idaho law requires marketplace facilitators to collect and forward Idaho sales tax on third-party sales in Idaho. Have your marketplace facilitator provide written verification of the sales tax they’re reporting. If your marketplace facilitator isn’t collecting and forwarding tax on your sales, please include it on your own seller’s permit.

Organizations that Can Buy Everything Exempt

Some buyers are exempt from sales tax on everything they buy. The sale must be directly to the exempt buyer, and the buyer must pay the seller directly. If employees, volunteers, or representatives of the exempt buyer use their own money to purchase something for the buyer, the purchase sale is taxable even if the exempt buyer reimburses the person who bought the item.

  • Access for Idaho (Pocatello) ⊛
  • Advocates for Survivors of Domestic Violence and Sexual Assault, Inc.
  • American Cancer Society
  • American Diabetes Association
  • American Heart Association
  • American Indian Tribes
  • American Lung Association of Idaho
  • American Red Cross
  • AMTRAK
  • Arc Inc., The
  • Arthritis Foundation
  • Blind Services Foundation Inc.
  • Camp Rainbow Gold
  • Canal companies – If they’re nonprofit, incorporated for that purpose, and operate and maintain only dams, reservoirs, canals, lateral and draining ditches, pumps or pumping plants
  • Children’s free dental services clinics – If they’re nonprofit
  • Children’s Home Society of Idaho
  • Credit unions (federal or state) – (Not: banks or savings and loan companies)
  • Disability Action Center Northwest (Moscow & Coeur d’Alene) ⊛
  • Easter Seals
  • Eastern Idaho Center for Independence (Blackfoot & Idaho Falls) ⊛
  • Emergency Medical Service (EMS) agencies – If they’re a nonprofit, 501(c)(3) entity that provides emergency medical services to Idaho residents. They must be licensed by the EMS bureau of the Idaho Department of Health and Welfare.
  • Family Services Alliance of Southeast Idaho
  • Forest Protective Associations – If they furnish, operate, and maintain a protective system for detecting, preventing, and suppressing forest or range fires. Only includes associations that have a contract with Idaho or that have Idaho as one of its members.
  • Government – Idaho state, county, and city. If Idaho government agencies buy with cash, they must give the seller a pdf Form ST-104G, Sales Tax Exemption Claim for Cash Purchases by Government Agencies.
  • Government – United States. If U.S. government agencies buy with cash, they should must give the seller a pdf Form ST-104G, Sales Tax Exemption Claim for Cash Purchases by Government Agencies. While federal law states Idaho can’t require the federal government to provide the ST-104G, many federal agencies will provide them. If used, the form must be provided at the time of sale.
  • Hospitals – If they’re a nonprofit hospital licensed by the state for the care of sick persons. (Not: nursing homes, most clinics, or similar institutions)
  • Housing Authority (Created by a city, but not an agency of the city)
  • Idaho Association of Free and Charitable Clinics. This includes its member clinics.
  • Idaho Community Action agencies
    • Community Action Partnership (CAP)
    • El-Ada Community Action Partnership (EL ADA)
    • Metro Community Services (MCS)
    • South Central Community Action Partnership (SCCAP)
    • Community Council of Idaho (CCI)
    • Southeastern Idaho Community Action Agency (SEICAA)
    • Eastern Idaho Community Action Partnership (EICAP)
    • Western Idaho Community Action Partnership (WICAP)
  • Idaho Cystic Fibrosis Foundation
  • Idaho Diabetes Youth
  • Idaho Epilepsy League
  • Idaho Foodbank Warehouse, Inc.
  • Idaho Primary Care Association – and its community health centers
  • Idaho Ronald McDonald House
  • Idaho Women’s and Children’s Alliance
  • Living Independence Network Corp. (Boise & Twin Falls) ⊛
  • March of Dimes
  • Mental Health Association
  • Muscular Dystrophy Foundation
  • Museums – If they’re a nonprofit, 501(c)(3) entity; a museum that collects, preserves, and displays objects and information to help the public interpret the past and present and to explore the future; on a permanent basis; in a building or outdoor location; and provides museum services on a regular basis. Examples include institutions that exhibit science, history, art, and culture as well as zoos and aquariums.
  • National Multiple Sclerosis Society
  • Rocky Mountain Kidney Association
  • Schools – If they’re nonprofit, with their income devoted solely to education, and offer a full curriculum of the usual branches of learning. Nonprofit schools can include: colleges and universities; primary, secondary, and charter schools; and the Idaho Digital Learning Academy.
    Note: Certain schools, and school-related organizations don’t qualify for the exemption:
    • Schools that primarily teach subjects like business, dancing, drama, music, cosmetology, writing, and gymnastics
    • Supporting organizations such as parent-teacher associations and alumni groups
  • Senior Citizen Centers – If they’re a nonprofit, 501(c)(3) entity. The center must provide a wide variety of services, activities, and facilities for older individuals, including health, social opportunities, nutrition, education, and recreation. Long-term care facilities don’t qualify.
  • Special Olympics Idaho
  • United Cerebral Palsy
  • Volunteer Fire Departments – If they’re a nonprofit, 501(c)(3) entity providing fire protection and prevention to surrounding residents.

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