Search Category: Sales Tax

Types of Sales – Motor Vehicles – Private and Nondealer

Buying from Idaho retailers that aren’t motor vehicle dealers

Motor vehicle dealers sell or lease five or more motor vehicles in a calendar year. See Motor Vehicles – Dealers if you’re buying from a dealer.

Some Idaho retailers occasionally sell motor vehicles even if they’re not a dealer. Retailers include businesses or individuals that meet one of the following criteria:

  • They make more than two retail sales during any 12-month period.
  • They make one or more sales (including motor vehicles) and hold themselves out as being in business.

You must do all of the following when you buy a new or used motor vehicle from a retailer that’s not also a dealer.

  • Pay the Idaho retailer tax on the sales price of the motor vehicle. The retailer will forward the tax to the Tax Commission.
  • Make sure the retailer gives you a completed title to the motor vehicle and a detailed bill of sale* showing you paid tax.
  • Make sure the retailer writes its seller’s permit number on the title.
  • Provide proof you paid tax to the retailer when you register the motor vehicle.

* A “detailed bill of sale” must include date of sale, name and address of the seller, complete vehicle description (i.e., color, year, make, model), vehicle identification number (VIN), buyer’s name, sale amount, and amount of tax charged.

Idaho retailers must have a seller’s permit and must collect sales tax. To find out if you’re a retailer, read more about retailers.

Trade-ins

  • Trade-ins only apply when you buy a motor vehicle from a retailer (or dealer). A trade-in is the amount that a retailer allows on merchandise it accepts as payment for other merchandise. A retailer can accept merchandise as full or partial payment of a motor vehicle you buy only if the merchandise is something they’ll place in their inventory for resale.
  • The value of your qualifying trade item can reduce the taxable sales price.
  • The trade-in must take place at the same time as the sale, or the allowance doesn’t reduce the taxable price.
  • Your paperwork must show that the trade-in occurred at the same time as the sale.
  • Manufactured homes and park model recreational vehicles aren’t allowed as trade-ins.

Buying from individuals

  • The motor vehicle must first be titled in the seller’s name for the sale to take place.
  • The seller must enter the total sales price on the bill of sale and sign the title.
  • The bill of sale establishes the sales price, and it’s proof of how much you paid for the motor vehicle.
  • Both you and the seller must sign the bill of sale. You’ll need to show an original bill of sale as proof of sales price.
  • The county assessor (DMV) or the Idaho Transportation Department (ITD) will collect sales tax when you apply for an Idaho title.

Note: There are no trade-in allowances in private party sales.

Buying a motor vehicle from a family member

You can buy a motor vehicle from a family member without paying sales tax only if that family member is your:

  • Parent or child
  • Grandparent or grandchild
  • Brother or sister

and

  • The family member paid sales or use tax when buying the motor vehicle.

You must provide a completed pdf Form ST-133 – Sales Tax Exemption Certificate – Family or American Indian Sales, when you register the motor vehicle.

Buying from financial institutions

Financial institutions permitted in Idaho must collect sales tax on the sales price of a motor vehicle you buy or finance, if the seller didn’t collect the tax. See Sales Price. The financial institution must forward the tax to the Tax Commission under its permit number. If you lease a motor vehicle from a financial institution, see the vehicle leasing section that explains when tax is due on a lease.

Bartering goods or services

The recipient of a motor vehicle in a barter transaction owes sales or use tax on the full value of the motor vehicle.

  • You must have a bill of sale that states the value of goods and services bartered to get the motor vehicle. You need this to register the motor vehicle.
  • When people barter two or more motor vehicles, each vehicle must have its own bill of sale that states the value of goods or services bartered to get the motor vehicle.

Bringing a motor vehicle into Idaho

Individuals

You might need to pay use tax on a motor vehicle that you bought outside of Idaho but intend to use inside the state.

When tax is due

  • You’re an Idaho resident and buy a motor vehicle out of state: Idaho presumes you bought the vehicle for use in Idaho.
    • Make sure you ask about sales tax exemptions for out-of-state buyers when you buy a motor vehicle in another state. You must use the exemption if the state where you buy the motor vehicle has one and you qualify for it. Otherwise, you’ll pay tax you don’t properly owe in the other state, and you’ll still owe use tax in Idaho.
    • The tax you properly pay to the other state can offset tax you owe in Idaho. This applies if you paid sales tax in the other state because you didn’t qualify for an exemption there. You must have the receipt that shows you paid sales tax due to the other state.
  • You owned a motor vehicle for less than 90 days before moving to Idaho. Idaho presumes you bought the vehicle for use in Idaho.
  • You’re military personnel, temporarily stationed in Idaho, and purchase a motor vehicle. (See exceptions in “When Tax Isn’t Due,” directly below.)

When tax isn’t due

  • You’re a new Idaho resident and you owned or acquired the motor vehicle more than 90 days before moving to the state.
  • You’re an active member of the military who either:
    • Owned or acquired the vehicle before you received orders to transfer to Idaho
    • Owned or acquired the vehicle for three months before moving to Idaho
      Note: The shorter time period applies.

You must provide a completed pdf Use Tax Exemption Certificate – New Resident or Nonresident Military, when you register the motor vehicle in Idaho.

Businesses

As a business owner, you owe tax on motor vehicles you move into Idaho if you didn’t pay sales tax on them in another state at a rate equal to Idaho’s or greater. This is true even if you owned the motor vehicles longer than three months. You owe tax on the fair market value of the motor vehicle when you first use it in Idaho. Note: Tax you properly paid to another state can offset the tax you owe in Idaho. Special rules apply to transient equipment (see Rule 073).

Donating or giving a motor vehicle, or receiving one, as a gift or prize

Giving a motor vehicle to a person

Transferring ownership of a motor vehicle to another person or entity is generally subject to tax, but certain gifts are exempt. A motor vehicle qualifies as an exempt gift if all of the following apply:

  • You, as the giver, don’t receive services or anything of value for the motor vehicle.
  • Your relationship with the recipient supports the basis for a gift.
  • The recipient doesn’t assume any of your debts or liabilities.
  • Neither you nor the recipient owe money on the motor vehicle.

Note:

  • If you transfer a car to someone else and allow them to “take over payments,” the recipient has assumed a debt. The transfer isn’t a gift.
  • You might be required to provide more information if you have a business relationship with the recipient.

When you give away a motor vehicle that qualifies as an exempt gift, give the recipient a completed pdf Form ST-133GT – Use Tax Exemption Certificate – Gift Transfer Affidavit, with your signature. The recipient must also sign the form.

Donating a motor vehicle

You must pay sales or use tax on the purchase of any motor vehicle, even if you intend to give it as an exempt gift.

  • You must pay sales or use tax if you buy a motor vehicle specifically to donate.
  • You don’t owe use tax if you donate a motor vehicle you already own and have paid tax on.

Donations like those in the examples above might be a gift if all of the following apply.

  • The recipient isn’t performing any services to get the donation.
  • The recipient isn’t giving you anything of value for the donation.
  • The recipient isn’t assuming any of your debts.

Note: You might be required to provide more information if you have a business relationship with the recipient.

When you give away a motor vehicle that qualifies as an exempt gift:

Receiving a motor vehicle as a gift or prize

You don’t owe use tax when you receive a motor vehicle that qualifies as a gift or is a prize.

You and the donor must complete and sign a pdf Form ST-133GT – Use Tax Exemption Certificate – Gift Transfer Affidavit.

  • Present the completed Form ST-133GT when you register the motor vehicle.
  • If the donor can’t sign the affidavit, you can do one of the following.
    • Provide a signed letter from the donor stating that the motor vehicle is a gift.
    • The donor can sign and mark the title as a gift.

Prize winnings are subject to income tax even if they qualify for a use tax exemption.

Exemptions – Motor Vehicles – Private and Nondealer

Some sales, transfers, and leases between a business and its owners or related parties are exempt.

Change in the form of a business

Transfer of motor vehicles is exempt if a business changes its entity type and the ultimate ownership of the property is substantially the same.

The buyer must provide a completed pdf Form ST-133CATS – Sales Tax Exemption Certificate – Capital Asset Transfer Affidavit and Instructions, when registering the motor vehicle.

Sale of an ongoing business (bulk sale)

Motor vehicles included in the sale are exempt if a business or its separate segment is sold and all of the following apply:

  • Substantially all the operating assets are included in the sale of the business or its separate segment.
  • The new owner will continue to operate the business in the same manner.
  • The motor vehicles are titled and registered in the name of the existing business at the time of sale and then titled and registered in the new business’ name.

Note: The seller must have separate accounting records if it’s a sale of a separate segment.

The buyer must provide a completed pdf Form ST-133CATS – Sales Tax Exemption Certificate – Capital Asset Transfer Affidavit and Instructions, when registering the motor vehicle.

Transfer of capital assets between related parties

Sometimes owners, partners, shareholders and stockholders in related-party businesses transfer title and ownership of motor vehicles.

A transfer of a motor vehicle to a related-party business that isn’t a corporation is exempt from Idaho tax if both of the following are true:

  • The business transferring the motor vehicle has proof tax was paid when the motor vehicle was acquired.
  • The parties exchange nothing of value other than an increase or decrease in equity (e.g., stock or securities).

A transfer of a motor vehicle between corporations that are related parties is exempt if both of the following are true:

  • The corporation transferring the motor vehicle has proof tax was paid when the motor vehicle was acquired.
  • The two corporations exchange nothing of value other than an increase or decrease in equity (e.g., stock or securities).

For this exemption, “related-party” corporation means the transfer is between one of the following:

  • A corporation and its subsidiary, and the parent owns at least 80 percent of the subsidiary.
  • Two subsidiaries that share a common parent, and the parent owns at least 80 percent of both subsidiaries.

The business that owns the motor vehicle after the transfer must provide a completed pdf Form ST-133CATS – Sales Tax Exemption Certificate – Capital Asset Transfer Affidavit and Instructions, when registering the motor vehicle.

Sale of capital assets to related parties

Sometimes owners, partners, shareholders and stockholders of businesses sell or lease motor vehicles to a business that a related party owns.

Sale of a motor vehicle that’s a capital asset to a related party might be exempt if one of these is true:

  • The seller has proof sales or use tax was paid on the motor vehicle when it was acquired.
  • The seller bought the motor vehicle from a related party, and the related party paid tax when the motor vehicle was acquired.

For this exemption, “related party” means one of the following:

  • The selling business has identical ownership as the buying business.
  • At least one owner of the business that sells the motor vehicle has one of the following relationships with the owner of the buying business:
    • Parent and child
    • Grandparent and grandchild
    • Brother or sister

The buyer must provide a completed pdf Form ST-133CATS – Sales Tax Exemption Certificate – Capital Asset Transfer Affidavit and Instructions, when registering the motor vehicle.

Leases or rentals of capital assets to related parties

A lease or rental of motor vehicles to related parties is exempt if the lease or rental is between related parties.

For this exemption, “related party” means one of the following:

  • The lessor business has identical ownership as the lessee business.
  • At least one owner of the business that sells the motor vehicle has one of the following relationships with the owner of the buying business:
    • Parent and child
    • Grandparent and grandchild
    • Brother or sister

Otherwise, the lease or rental is taxable.

  • Tax is due on a reasonable lease or rental value.
  • The lessor must get a seller’s permit, collect Idaho sales tax on each lease or rental payment, and forward the tax as required. (See the Idaho Business Registration guide to learn more.)

The type of lease or rental determines when the lessor collects tax

Motor vehicle leases and rentals fall into three general categories:

Type of lease/rentalHow the lease/rental worksWhen to collect sales tax
Basic lease or rentalThe customer returns the motor vehicle to the lessor at the end of the lease or rental term.Collect sales tax on each lease or rental payment.
Lease or rent with option to buyThe customer has the option of buying the motor vehicle during the lease or rental term or at the end of the term at fair market value.Collect sales tax on each lease or rental payment and on the price the customer pays when buying the motor vehicle.
Lease/rent and purchaseThe customer makes regular payments during the lease or rental term. At the end of the term, title to the motor vehicle passes to the customer for $0 or an amount that’s less than fair market value.The customer will own the motor vehicle at the end of the lease or rental term, so this is a sale and a financing arrangement. Collect sales tax on the sales price of the vehicle at the beginning of the term, when the sale is made (the contract is completed).

Leasing or Renting – Motor Vehicles – Private and Nondealer

Leasing or renting a motor vehicle is a taxable sale in Idaho. You’re renting or leasing your motor vehicle if you allow someone to use it and you receive payment (cash, property, or other financial gain). You’re a retailer, whether you’re a business owner or an individual if you make one or more sales (including motor vehicles) or hold yourself out as being in business.

As a retailer

Note: You don’t need to collect tax when you list your motor vehicle on an internet marketplace and it collects and forwards the tax.

The type of lease or rent determines when you collect tax

Motor vehicle leases and rents fall into three general categories:

Type of lease/rentalHow the lease/rental worksWhen to collect sales tax
Basic lease or rentalThe customer returns the motor vehicle to the lessor at the end of the lease or rental term.Collect sales tax on each lease or rental payment.
Lease or rent with option to buyThe customer has the option of buying the motor vehicle during the lease or rental term or at the end of the term at fair market value.Collect sales tax on each lease or rental payment and on the price the customer pays when buying the motor vehicle.
Lease/rent and purchaseThe customer makes regular payments during the lease or rental term. At the end of the term, title to the motor vehicle passes to the customer for $0 or an amount that’s less than fair market value.The customer will own the motor vehicle at the end of the lease or rental term, so this is a sale and a financing arrangement. Collect sales tax on the sales price of the vehicle at the beginning of the term, when the sale is made (the contract is completed).

Recordkeeping for Motor Vehicle Sales

Retailers that sell or lease motor vehicles

Your records for selling or leasing motor vehicles must be the same as any retailer.

Businesses that sell or transfer a motor vehicle to a related party

Document the sale or transfer. Your records should include all of the following:

Individuals that sell a motor vehicle to a nonfamily member

Document the sale. Your records should include all of the following:

  • Date of sale
  • Identifying information about the motor vehicle (e.g., vehicle identification number, or VIN)
  • Sales price of the motor vehicle
  • Copies of sale documents

Individuals that sell a motor vehicle to a qualifying family member

Document the sale. Your records should include all of the following:

  • Date of sale
  • Identifying information about the motor vehicle (e.g., vehicle identification number, or VIN)
  • Sales price of the motor vehicle
  • Copies of sale documents
  • Registration and title documents that show whether tax was paid when you bought the vehicle

Sign the “Seller’s” section of pdf Form ST-133 – Sales Tax Exemption Certificate – Family or American Indian Sales, and give it to your relative. Your relative needs a completed copy of the form when he or she registers the motor vehicle.

Individuals that give away a motor vehicle (including to a family member)

Document the gift. Your records should include all of the following:

  • Date of gift
  • Identifying information about the motor vehicle (e.g., vehicle identification number, or VIN)
  • Copies of transfer documents

You and the recipient must complete and sign a pdf Form ST-133GT – Use Tax Exemption Certificate Gift Transfer Affidavite. The recipient needs the completed form when he or she registers the motor vehicle.

Laws and Rules for Motor Vehicle Private and Nondealers

Learn more about taxation of motor vehicles by nondealers:

Learn more about Idaho tax statutes 

Learn more about our Rules 

Motor Vehicles In Your Business – Dealers

Motor vehicles used in operating your business

  • Motor vehicles you buy that aren’t for sale or lease (e.g., service trucks you buy specifically for use in operating the business) are taxable.
  • If federal income tax rules require you to give a compensation form (e.g., Form 1099) to someone who uses a demonstrator vehicle, you must pay use tax on the amount shown on the form.
  • You must pay use tax if you take a motor vehicle from resale inventory and use it for any activity that isn’t authorized for a dealer plate. You can pay tax in one of two ways:
    • On the full purchase price of the motor vehicle
    • On the fair market rental value for the time the motor vehicle is used in the activity

Buying business supplies

You must pay tax on items you buy that aren’t for resale to your customers.

Buying, billing, and taxing repairs parts

Repair work for vehicles takes many forms.

This chart explains how to buy, bill and charge tax on parts used in different types of vehicle repairs in Idaho, including repairs under warranty: pdf Vehicles and Vessels: Repairs

Note: You owe tax on the tools and shop supplies you buy for making repairs.

Buying Motor Vehicles for Resale – Dealers

From in-state businesses

If you buy motor vehicles for resale from a seller doing business in Idaho, you must give the seller a completed pdf Form ST-101 – Sales Tax Resale or Exemption Certificate. Sellers should keep this form on file and not charge tax on your future qualifying purchases.

  1. Write the name and address of both the seller and your business at the top of the form.
  2. In section 1, “Buying for Resale,” line 1 – write the nature of your business and describe the products you sell.
  3. On line b – check the first box and write your Idaho seller’s permit number.
  4. Under “Buyer” at the bottom of the page – sign the form. Fill in the rest of the fields (name, title, EIN or driver’s license information, and date).

From out-of-state businesses

If you buy motor vehicles for resale from out-of-state businesses that are registered Idaho retailers, you can complete the Uniform Sales and Use Tax Certificate – Multijurisdiction instead of Form ST-101.

  1. Write the name and address of both the seller and your business at the top of the form.
  2. Check the box for “Retailer.”
  3. Write your Idaho seller’s permit number in the ID section.
  4. Sign and fill out the bottom of the form.

Recordkeeping – Motor Vehicles – Dealers

You must keep records of all the purchases and sales that your business makes. Your records must show that you collected, reported, and forwarded taxes as required.

Records you must keep

  • Normal books of account (books of account can include information stored on computers)
  • Documents that support entries in the books of account
    • Bank statements
    • Sales documents
      • Examples:
        • Invoices, including any credit invoices
        • Rebates
        • Receipts
        • Trade-ins
        • Contracts
    • Purchase documents
      • Examples:
        • Vehicles you bought to sell
        • Items used in the dealership
  • All schedules or working papers used to prepare your sales tax returns
  • Copies of sales tax resale or exemption certificates
  • Tax returns and payments

What your records must show

  • Gross receipts from sales and services made in Idaho — even sales that you or your customer might consider exempt from tax. You must also keep records that prove where delivery took place when you deliver the product or service somewhere other than your place of business.
  • The identity of customers claiming an exemption, the type of exemption, and what you sold exempt.
  • All deductions claimed in filing returns.
  • The total purchase price of anything bought for sale, rental, lease, or your own use.
  • The amount of sales tax collected from your customer or that you paid to a vendor.

You must keep all sales and use tax records for a minimum of four years.

Laws and Rules for Motor Vehicle Dealers

Learn more about motor vehicle dealers:

Learn more about Idaho tax statutes 

Learn more about our Rules 

Motor Vehicles – Dealers Basics Guide

Sales tax is due on the sale, lease, and rental of motor vehicles when they’re sold in Idaho unless a valid exemption applies.

This guide explains sales and use tax requirements for motor vehicle dealers.

See the separate guides for:

Motor vehicle defined

A motor vehicle is a vehicle that is registered or required to be registered for use on public roads. This includes:

Motor vehicles don’t include: