Search Category: Sales Tax
Sales of Off-Highway Vehicles by Private Parties
This section applies to sales, transfers, exempt sales, rentals and leases of off-highway vehicles between private parties. Private parties are individuals or businesses who aren’t dealers or retailers.
Sales price
- A sale between private parties must have a bill of sale because it establishes the sale price, and it’s proof of how much the buyer paid.
- Both the buyer and seller should sign the bill of sale.
- If the bill of the sale is far below the expected fair market value, the buyer must have evidence to show why the price was so low.
- Buyers must pay tax on the off-highway vehicle when they register or title it.
- The county assessor or the Idaho Transportation Department (ITD) will collect sales tax when the buyer registers or titles the off-highway vehicle.
Note: Trade-in allowances don’t apply to private party sales.
Exempt sales or transfers of off-highway vehicles by private parties
Certain sales and transfers of off-highway vehicles between a business and its owners or related parties are exempt.
Change in the form of a business
Transfer of off-highway vehicles is exempt if a business changes its entity type and the ultimate ownership of the property is substantially the same.
- A sole proprietor forms a new limited liability corporation (LLC) that the sole proprietor wholly owns. The transfer of off-highway vehicles to the new LLC is exempt.
- A partnership incorporates, and the ownership of the business doesn’t change. The transfer of off-highway vehicles to the new corporation is exempt.
The buyer must provide a completed 
Form ST-133CATS – Sales Tax Exemption Certificate – Capital Asset Transfer Affidavit and Instructions, when registering or titling the off-highway vehicle.
Sale of an ongoing business (bulk sale)
Off-highway 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 existing business has the off-highway vehicles registered or titled in its name at the time of sale and then registered or titled 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 Form ST-133CATS – Sales Tax Exemption Certificate – Capital Asset Transfer Affidavit and Instructions, when registering or titling the off-highway vehicle.
Transfer of capital assets between related parties
Sometimes owners, partners, shareholders and stockholders in related-party businesses transfer title and ownership of off-highway vehicles.
A transfer of an off-highway vehicle between corporations that are related parties is exempt if both of the following are true:
- The corporation transferring the off-highway vehicle has proof that tax was paid when the off-highway 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.
A transfer of an off-highway 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 off-highway vehicle has proof that tax was paid when the off-higway vehicle was acquired.
- The parties exchange nothing of value other than an increase or decrease in equity (e.g., stock or securities).
Note: A sale or lease of an off-highway vehicle between related parties is taxable.
The business that owns the off-highway vehicle after the transfer must provide a completed Form ST-133CATS – Sales Tax Exemption Certificate – Capital Asset Transfer Affidavit and Instructions, when registering or titling the off-highway vehicle.
Leasing Out or Renting Out Your Own Off-Highway Vehicle
Leasing or renting an off-highway vehicle is a taxable sale in Idaho. You’re renting out or leasing out your off-highway vehicle if you allow someone to use it and you receive payment (cash, property, or other financial gain). Whether you’re a business owner or an individual, you’re a retailer if you make one or more sales (including off-highway vehicles) or hold yourself out as being in business.
- You list and lease out or rent out your snowmobile through an internet marketplace.
- You advertise and lease out or rent out your off-highway motorbike through word-of-mouth.
- You make one or more sales (including off-highway vehicles) or hold yourself out as being in business.
Retailers must:
- Get a seller’s permit.
See the Idaho Business Registration guide learn more. - Collect tax on the full amount you charge for the lease or rent.
- Forward the tax with the sales tax return that you file with the Tax Commission.
See the Retailers guide.
Responsibilities
You don’t need to collect tax when you list your off-highway vehicle with a marketplace facilitator and it collects and forwards the tax to the Tax Commission. This table shows tax responsibility in different vehicle leasing scenarios.
| Scenarios: Leasing or renting an individual’s vehicle in Idaho | Who’s responsible for collecting and forwarding tax due? |
|---|---|
The vehicle is in Idaho and both of these apply:
| The owner must register as a retailer to collect, report and forward taxes on the lease or rental price of the vehicle. |
| The vehicle is in Idaho and the owner uses a marketplace facilitator to arrange all leases or rentals of the vehicle. | The marketplace facilitator must register as a retailer, collect, report and forward taxes on the sales price of the vehicle leases or rentals. |
The vehicle is in Idaho and is:
| The owner and the marketplace facilitator are responsible for taxes as follows:
|
You’re responsible for the collection and forwarding of all taxes due on your vehicle. If you rent out your vehicle through a marketplace facilitator, check to see which, if any, taxes it collects and forwards for you.
When you collect tax
The type of lease or rent determines when you collect tax. Off-highway vehicle leases and rents fall into three general categories:
| Type of lease/rental | How the lease/rental works | When to collect sales tax |
|---|---|---|
| Basic lease or rental | The 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 buy | The 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 purchase | The 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). |
Donating or Giving Away an Off-Highway Vehicle
Giving an off-highway vehicle to a person
Transferring ownership of an off-highway vehicle to another person or entity is generally subject to tax, but certain gifts are exempt. An off-highway 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 off-highway 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 owes money on the off-highway vehicle.
Notes
- If you transfer an off-highway vehicle to someone else and allow them to “take over payments,” the recipient has assumed a debt. The transfer isn’t a gift, and the buyer owes tax on the value of the remaining payments.
- You might be required to provide more information if you have a business relationship with the recipient.
When you give away an off-highway vehicle that qualifies as an exempt gift, give the recipient a completed Form ST-133GT – Use Tax Exemption Certificate – Gift Transfer Affidavit, with your signature. The recipient also must sign the form.
Donating an off-highway vehicle
You must pay sales or use tax on the purchase of any off-highway vehicle, even if you intend to give it away.
- You must pay sales or use tax if you buy an off-highway vehicle specifically to donate.
- You don’t owe use tax if you donate an off-highway vehicle you already own and have paid tax on.
- You buy a UTV from a dealer to donate for a school raffle. You must pay tax when you buy the UTV.
- You buy an off-highway motorbike from your neighbor to donate to a church youth group. Before donating it to the church, you must title the off-highway motorbike in your name and pay use tax on the amount you paid your neighbor.
- You donate a snowmobile you already own to a nonprofit group that does wilderness activities. You paid tax when you bought the snowmobile, so you don’t owe use tax when you donate it.
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 an off-highway vehicle that qualifies as an exempt gift:
- Give the recipient a completed Form ST-133GT – Use Tax Exemption Certificate – Gift Transfer Affidavit, with your signature.
- The recipient also must sign the form and present it when he or she registers or titles the off-highway vehicle.
Receiving an off-highway vehicle as a gift or prize
You don’t owe use tax when you receive an off-highway vehicle that qualifies as a gift or is a prize.
- Your uncle gives you an off-highway motorbike for your high school graduation.
- You win a UTV in a raffle.
You and the donor must complete and sign a Form ST-133GT – Use Tax Exemption Certificate – Gift Transfer Affidavit.
- Present the completed Form ST-133GT when you register the off-highway 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 off-highway vehicle is a gift.
- The donor can sign and mark the title as a gift.
Recordkeeping for Off-Highway Vehicles
Dealers and retailers that sell or lease off-highway vehicles
Your records for selling or leasing off-highway vehicles must be the same as any retailer.
Businesses that sell or transfer an off-highway vehicle to a related party
Document the sale or transfer. Your records should include all of the following:
- Date of sale or transfer.
- Sales price of the off-highway vehicle.
- Identifying information about the off-highway vehicle (e.g., vehicle identification number).
- Document that tax due was collected and forwarded to the Tax Commission on all sales of off-highway vehicles.
- How the parties are related.
- Registration and title documents showing whether you paid tax when you bought the off-highway vehicle.
- If the sale or transfer is exempt, complete Form ST-133CATS – Sales Tax Exemption Certificate – Capital Asset Transfer Affidavit and Instructions. See requirements for exempt related-party sales and transfers in the Sales of Off-Highway Vehicles by Private Parties page.
Individuals that sell an off-highway vehicle
Document the sale. Your records should include all the following:
- Date of sale
- Identifying information about the off-highway vehicle (e.g., vehicle identification number)
- Sales price of the off-highway vehicle
- Copies of sale documents
Notes:
- If you hold yourself out as a seller and make one or more sales of off-highway vehicles or anything else in a year, you’re a retailer. See Retailers.
- If, in a calendar year, you sell five or more vehicles or vessels that require registration, you must apply for a dealer’s license. See Idaho Transportation Department “Vehicle Dealers.“
Individuals that give away an off-highway vehicle
Document the gift. Your records should include all the following:
- Date of gift
- Identifying information about the off-highway vehicle (e.g., identification number)
- Copies of transfer documents
You and the recipient must complete and sign a Form ST-133GT – Use Tax Exemption Certificate – Gift Transfer Affidavit. The recipient needs the completed form when he or she registers or titles the off-highway vehicle.
Laws and Rules for Off-Highway Vehicles
Learn more about off-highway vehicles:
- Sales Price — Idaho Code section 63-3613, Sales Tax Rules 043 and 044
- Retail Sale – Sale at Retail — Idaho Code section 63-3609, Sales Tax Rule 011
- Certificates for Resale and Other Exemption Claims — Sales Tax Rule 128
- [Recreational Activities] Definitions — Idaho Code section 67-7101 (1), (3), (9), (10), and (17)
- [Highways and Bridges] Definitions — Idaho Code section 49-109
- Motor Vehicles, Used Manufactured Homes, Vessels, All-Terrain Vehicles, Trailers, Utility Type Vehicles, Specialty Off-Highway Vehicles, Off-Road Motorcycles, Snowmobiles and Glider Kits — Idaho Code section 63-3622R, Sales Tax Rules 106 and 107
- Occasional Sales — Idaho Code section 63-3622K, Sales Tax Rule 099
- Exempt Private and Public Organizations — Idaho Code section 63-3622, Sales Tax Rule 085
- Production Exemption Shall Not Apply to Recreation-Related Vehicles — Idaho Code section 63-3622HH
- Production Exemption — Idaho Code section 63-3622D, Sales Tax Rule 079
- Farming and Ranching — Sales Tax Rule 083
- Underground Mining — Sales Tax Rule 081
- Above Ground and Open Pit Mining — Sales Tax Rule 082
- Lumber Manufacturing — Sales Tax Rule 080
Motor Vehicles – Private and Nondealer Basics Guide
Sales or use tax is due on the sale, lease, rental, transfer, donation or use of a motor vehicle in Idaho unless a valid exemption applies.
This guide is for individuals, leasing companies, nonprofit organizations, or any other type of business that isn’t a motor vehicle dealer registered in Idaho.
It explains sales and use tax requirements for those who buy or receive a motor vehicle from a private party or retailer that isn’t a dealer (e.g., a furniture store or pizza delivery restaurant). This guide also covers bringing a motor vehicle into Idaho for use here. It explains how sellers and donors must document a motor vehicle sale or gift. And it outlines how a buyer or seller must pay or collect and forward tax if it’s due.
Motor vehicle dealers are individuals or businesses that sell five or more motor vehicles in a 12-month period. See the separate Motor Vehicles – Dealers guide if you’re buying, leasing or renting a motor vehicle from a dealer, or if you’re a motor vehicle dealer.
Types of transactions included
This guide covers the following transactions in which an Idaho motor vehicle dealer isn’t involved in any way:
- Buying, leasing, or renting from anyone who isn’t an Idaho motor vehicle dealer
- Buying from family members
- Buying from financial institutions
- Bartering goods or services for a motor vehicle
- Bringing a motor vehicle into Idaho that you bought in another state
- Giving or receiving ownership of a motor vehicle as a gift or prize
- Selling or transferring ownership between businesses or related parties in a business
- Leasing motor vehicles as nondealer individuals or businesses
Motor vehicle defined
A motor vehicle is a vehicle registered or required to be registered for use on public roads. See Idaho Code section 63-3605L.
Motor vehicles include
- Cars
- Buses
- Trucks
- On-highway motorcycles
- Recreational vehicles required to be registered for use on public roads, such as
- Motor homes
- Fold-down camping trailers
- Fifth-wheel trailers
- Travel trailers
- Park model recreational vehicles (new and used)
Motor vehicles don’t include
- Aren’t required to be registered (See Idaho Code section 49-426)
- Are intended for off-road use
Sales Price – Motor Vehicles – Private and Nondealer
You must pay sales or use tax on the sales price of the motor vehicle unless you have an exemption.
The sales price is the amount you paid for the motor vehicle. You must provide a bill of sale or receipt as proof of the sales price when titling your motor vehicle in Idaho. A canceled check won’t be accepted as proof of the sales price.
The sales price includes services the seller performs before the sale even if they’re separately stated on the invoice:
- Painting, coating, rust-proofing
- Lettering
- Repairing the vehicle, including all parts used
Note: Delivery fees to the buyer aren’t part of the sales price if they’re separately stated.
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 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 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 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.
- You buy a car from a dealer to donate for a school raffle. There isn’t an exemption for this sale, so you must pay tax when you buy the car.
- You buy a van from your neighbor to donate to a church youth group. There isn’t an exemption for this sale, so you must pay tax. Before donating it to the church, you must title the van in your name and pay tax on the amount you paid your neighbor.
- You donate a van you already own to a performing arts group to move their sets. You paid tax when you bought the van, so you don’t owe use tax when you donate it.
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:
- Give the recipient a completed Form ST-133GT – Use Tax Exemption Certificate – Gift Transfer Affidavit, with your signature.
- The recipient must also sign the form and present it when they register the motor vehicle.
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.
- Your aunt gives you a car for your high school graduation.
- You win a motor vehicle in a raffle.
You and the donor must complete and sign a 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.
- A sole proprietor forms a new LLC that the sole proprietor wholly owns. The transfer of motor vehicles to the new LLC is exempt.
- A partnership incorporates, and the ownership of the business doesn’t change. The transfer of motor vehicles to the new corporation is exempt.
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 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 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 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/rental | How the lease/rental works | When to collect sales tax |
|---|---|---|
| Basic lease or rental | The 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 buy | The 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 purchase | The 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.
- You list and lease or rent your car through an internet marketplace.
- You advertise and lease or rent your recreational vehicle through word-of-mouth.
- You make one or more sales (including motor vehicles) or hold yourself out as being in business.
Retailers must have a seller’s permit. Read more about retailers.
As a retailer
- You must get a seller’s permit. (See the Idaho Business Registration guide to learn more.)
- You must collect tax on the full amount you charge for the lease or rent.
- You must forward the tax on your sales tax return filed with the Tax Commission.
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/rental | How the lease/rental works | When to collect sales tax |
|---|---|---|
| Basic lease or rental | The 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 buy | The 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 purchase | The 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). |