Recreation and Admissions Equipment

You must pay sales tax on any equipment and supplies you buy to run your facility.

Example You own a bowling alley. You must pay sales tax on all your bowling equipment and supplies.

The Idaho Supreme Court has ruled that when recreation providers buy equipment for their customers to use as part of the paid recreation fees, they're not buying this equipment for resale, rental or lease. These recreation providers are buying an item that they use to further their business. (Compare with "Items you rent to customers," below.)

Examples of recreation providers:

Health clubs
Racquetball clubs
Bowling alleys
Pool halls
Carnivals
Carnival-type rides
Outfitters
Batting cages
Skating rinks
Golf courses
Miniature golf courses

Items you rent to customers

The law treats equipment (e.g., skates, golf carts, bowling shoes) that you rent to customers for an additional charge as items you’re buying for resale. You can buy these items without paying sales or use tax if you give your supplier a completed Form ST-101, Sales Tax Resale or Exemption Certificate.

Example You own a bowling alley and you're buying shoes to rent to bowlers for a fee separate from the bowling fee. You'll charge the bowlers a shoe rental fee plus tax that's separate from the taxable bowling or lane fee. You don't have to pay sales or use tax when you buy the shoes. You must give the shoe vendor a properly completed

Form ST-101 for the shoes.

Recreation and Admissions Laws and Rules

Learn more about Recreation and Admissions:

Sale (Idaho Code section 63-3612 – (2)(e) and (f))
Mixed Transactions (Sales Tax Rule 011)
Admissions Defined (Sales Tax Rule 030)
Food, Meals, Or Drinks (Sales Tax Rule 041)
Outfitters, Guides, And Like Operations (Sales Tax Rule 047)
Sales To And Purchases By Nonprofit Organizations (Sales Tax Rule 085)
Sales And Purchases By Religious Organizations (Sales Tax Rule 086)
Lease Or Rental Of Motion Picture Television Film (Sales Tax Rule 087)
Exemptions On Purchases By Political Subdivisions, Sales By The State Of Idaho, Its Departments, Institutions, And All Other Political Subdivisions (Sales Tax Rule 094)
Use Of A Recreational Facility, Instructional Fees, And Pari-Mutuel Betting (Sales Tax Rule 129)

Recreation and Admissions Basics Guide

This area of sales tax is very complex and constantly developing. The industry is continually inventing new ways to do business and even reinventing itself. The taxability of any transaction is highly dependent on the facts involved. This reference provides general guidance. Please contact the Tax Commission with questions or seek the advice of a competent tax professional.

Do you charge admission to a place or event? Do you charge for using, or privilege of using, recreational equipment, meeting rooms or facilities? This guide can help you understand sales tax requirements for your business as they relate to recreation and admissions in Idaho.

Recreation

Recreation is defined* as the “refreshment in body or mind, as after work, by some form of play, amusement or relaxation or any form of play, amusement, or relaxation used for this purpose such as games, sports, or hobbies.”

Consider the following when determining the taxability of a recreational activity:

Taxable

Charges for the use of a facility for recreational purposes
- Example: Charges to use a swimming pool
Charges to participate in a recreational program or event
- Example: Charges to participate in sports leagues

Not Taxable

Separately stated charges for instruction
- Example: Instructional fees for jazzercise, aerobics, dance, and swimming aren’t taxable when they’re separately stated from the facility and participation fee.

NOTE: Monitoring activities, such as a lifeguard at a swimming pool, aren’t considered instruction.

* Webster’s New World College Dictionary, 4th Edition, Ed. Michael Agnes, New York: Macmillan USA, 1999.

Taxable Sales – Recreation and Admissions

Taxable sales include:

Fees paid to gain admission to a place or event.
Fees paid to use, or to have the privilege of using, tangible personal property or facilities for recreation. Tangible personal property is property that you can feel or touch and that isn’t “real property” (e.g., real estate).

Examples of taxable fees:

Axe throwing fees
Escape room fees
Greens fees to a golf course
Membership or initiation fees paid before using the facility
Bowling fees
Outfitter and guide fees
Miniature golf course fees
Fees paid to fitness and health clubs, racquet clubs
Charges for using a suntan booth, flotation chambers, deprivation chambers
Renting a facility to someone for a recreational activity (unless admission will be charged)

Fees paid to participate in recreational activities

Fees paid to participate in recreation activities are generally taxable.

Examples

Sports leagues
Youth sport camps
Bowling tournaments
Fishing derbies
Amateur sporting events (e.g., amateur auto racing and golf tournaments); see Tournaments and events

Admission charges

Admissions charges are generally taxable.

Examples

Movie tickets
Nightclub cover charges
Charges for reserved seats
Minimum drink charges paid to a nightclub
Convenience fees
Admission charges to sports or entertainment events (e.g., club, school or professional basketball games; race car events; club, school or professional plays or drama performances; and music concerts)
Season tickets to sports or entertainment events
Lifetime admissions to sports or entertainment events
Student activity tickets or cards that allow for free or reduced-price admissions to sports or other events

Charging a whole-dollar amount

You must separately state the tax on the receipt, invoice or ticket you give to your customer, even if you want to charge a whole-dollar amount for the price of admission, plus tax.

Example You want to charge a whole dollar amount for an admission ticket that includes both the selling price and the tax for $5. The ticket or receipt should show: $4.72 (admission) + $0.28 (tax) = $5

“Suggested” donations

If you suggest a price for an admission, even if you call it a donation, you must collect sales tax.
If you don’t set or suggest a price (or donation) and admission is allowed, don’t collect sales tax.

Example Your nonprofit group holds a dance and posts a sign reading “$2 suggested donation.” You must charge sales tax on the total amount someone gave you because you suggested an admission price.

If the sign instead read “admission free – donations accepted,” you wouldn’t charge sales tax because you didn’t set or suggest an admission price.

Admissions that nonprofit groups charge

You don’t need to collect sales tax on sale of admissions if you’re an organization conducting an exempt function as defined in section 527 or nonprofit organization registered as a 501(c)(3) with the Internal Revenue Service (IRS) and all of these are true:

The event is not predominantly recreational or commercial.
Any included entertainment value is minimal when compared to the price for attendance.
Your nonprofit organization paid sales or use tax on taxable property or services used during the event.

See Nonprofit and Religious Groups for additional information.

Fees for instruction

Instruction fees for swimming, jazzercise, dance, yoga, karate or tennis lessons aren’t taxable if you separately state the instruction fees from the facility fee.

The whole fee is taxable if you don’t separately state the instruction fees from the facility fee on a sales receipt.

Renting Out Tangible Personal Property

For tax purposes, rental of tangible personal property is considered a sale. There are two types of rentals:

Bare equipment rentals. These are taxable.
Fully operated equipment rentals. These aren’t taxable.

Bare equipment rentals

A bare equipment rental is when the owner rents out only the property, and the person who rents that property will operate it. The owner charges tax on:

The rental charge, no matter how it’s determined (e.g., by the hour, by the week, by mileage)
Any charges related to using the property
Examples:
- Tire wear
- Blade sharpening
- Mandatory damage waiver
- Mandatory warranty
- Supplies provided with the rental
- Cleaning charges agreed to as part of the rental
- Labor charges to prepare the equipment for the customer’s specifications
- Environmental fees, except those a federal government agency imposes
- Fuel sold to the customer when motor vehicle tax is not paid on the fuel (e.g., dyed diesel)
- Damage charges when the customer returns the property

Owners sometimes add personal property tax to the rental or lease fee. It’s taxable unless all of the following apply:

The owner separately stated the property tax in the charge to the lessee.
The lease agreement is for an initial period of one year or more.
The amount the owner charged isn’t more than the property tax the lessor pays.

Bare rental with service fee

Some rentals include both a bare rental charge and a nontaxable service fee. In these rentals, tax is due on the personal property. The services might not be taxable if they’re a significant portion of the cost of the rental contract and are separately stated. Nontaxable services must be personal or professional, and not related to creating or altering the property rented.

Examples

Renting out a garbage container and providing a service to empty the container
Renting out portable toilets and providing a service to clean the units

In these situations, the customer uses the property between servicing, so it’s a bare rental of the property. Owners shouldn’t charge tax on service charges if they’re separately stated on the invoice.

Collecting tax

You’re a retailer if you make bare rentals. You must collect tax unless your customer qualifies for an exemption and provides a completed Form ST-101 – Sales Tax Resale or Exemption Certificate. Read more about requirements in our Retailers guide.

Fully operated equipment rentals

With fully operated equipment rentals, the owner of the property rents the equipment out and supplies someone to operate it throughout the rental period. This is a service and isn’t taxable.

Examples

A crane and operator to lift wood into place
A calibrator and technician to perform the calibration

Leasing Out Tangible Personal Property

Leases of tangible personal property are considered taxable sales. The person leasing out the property (lessor) is a retailer. The lessor must collect tax unless the customer qualifies for an exemption and provides a completed Form ST-101 – Sales Tax Resale or Exemption Certificate. Lessees of qualifying interstate commerce vehicles can rent tax exempt if they provide a completed Form ST-104IC – Sales Tax Exemption Certificate – Interstate Commerce Vehicles.

If lessors don’t charge sales tax when they rent out or lease out property used in Idaho, the customer owes use tax unless an exemption applies. See “Use Tax – How to report, file and pay use tax.”

Lessors can buy property exempt for resale if they’ll lease it out. They must give the vendor a completed Form ST-101.

There are three types of leases of tangible personal property.

Basic Lease

The customer returns the property to the lessor at the end of the lease term.

The lessor charges sales tax on each lease payment.

Lease with Option to Buy

The customer has the option of buying the property during the lease term or at the end of the lease term at fair market value.

The lessor charges sales tax on each lease payment and on the price the customer pays when buying the property.

Lease-Purchase

The customer makes regular payments during the lease term. At the end of the term, title to the property passes to the customer for $0 or an amount that’s less than fair market value.

The customer owns the property at the end of the lease term, so this is a sale and a financing arrangement. Collect sales tax at the beginning of the lease term on all the payments the customer will make during the lease term. At the end of the lease term, collect sales tax on any additional amount you charge then for the purchase of the property.

Out-of-state companies leasing out property in Idaho

Out-of-state companies that lease out property to others in Idaho must follow all these requirements:

Get an Idaho seller’s permit before leasing property in the state. Learn more about getting an Idaho seller’s permit.
Collect and forward sales tax on the leased property to us. Any entity that can lease the property tax exempt must give you a completed Form ST-101 – Sales Tax Resale or Exemption Certificate.
Report income from Idaho leases on your Idaho income tax return.

Idaho companies that lease out property in another state

Lessors collect Idaho tax on the first month’s lease payment for property used outside Idaho if the customer receives the property in Idaho.

No Idaho tax: The lessor delivers the property to the customer outside of Idaho and the customer doesn’t use it in Idaho during the lease term.
Idaho tax on the first lease payment only: The lessor delivers the property to the customer in Idaho and the customer uses it outside the state for the remainder of the lease term.

Note: When lessors don’t collect and forward Idaho tax, they must keep records documenting the point of delivery and place of use during the lease term.

Buying Tangible Personal Property for Renting and Leasing

This section covers buying property that you’ll rent out or lease out.

Bare rentals

Any entity that makes bare rentals can buy the property exempt for resale using Form ST-101 – Sales Tax Resale or Exemption Certificate.

Fully operated rentals

Owners that make fully operated rentals are the users of the property. They must pay sales tax on the property when they buy it.

Used in both bare and fully operated rentals

You’ll need to determine how you’ll primarily be renting out your property when you buy it. You must pay sales tax on the property based on your primary rental activity.

Property you buy primarily for bare equipment rentals isn’t taxable.
Property you buy primarily for fully operated rentals is taxable.

If you buy property primarily for bare rentals

You could owe use tax if you buy property for bare rental then use it in a fully operated rental. You’ll owe use tax on the fair market rental value of the property purchased for resale for the period you use it to provide a fully operated rental service.

Example You have an inventory of small tractor loaders you rent out to DIY landscapers. You bought the tractors exempt for resale because they’re primarily rented bare.

Occasionally, a customer asks you to provide an operator along with the tractor. This is a fully operated rental service, and you owe use tax on the property’s use. You didn’t pay sales tax on the property, so you owe use tax on the amount you charge DIY customers for the rental period your operator uses it.

If you buy property primarily for fully operated rentals

You can’t apply for a refund of sales tax if you pay tax on property to use in fully operated equipment rentals, but you then rent it out as bare equipment.

Trading In – Renting and Leasing Tangible Personal Property

Trading in property to rent or lease other property

Lessees of property can trade in other property as partial payment for property they’ll lease. Retailers can reduce the taxable sales price by a trade-in allowance. Trade-in allowances can’t reduce the taxable sales price on rentals or leases between anyone else, such as private parties.

There are three methods to apply the trade-in allowance and calculate tax due.

Option A: Subtract the trade-in allowance from the cost of the leased or rented property to reduce all monthly payments. The retailer charges tax on each payment.
Option B: Use the trade-in allowance as the initial payments for the leased or rented property until the unapplied trade-in allowance is zero. The retailer doesn’t charge tax on those payments.
Option C: A combination of these two methods.

Example to apply the three methods: Kelly of Beth's Best Parties leases a van from OK Vans for 36 months. The value of the van plus interest for 36 months is $12,000. Kelly trades in a car worth $4,000 and receives that amount from OK Vans as a trade-in allowance.

Calculate tax on the three methods described above as follows:

Option A

Reducing all monthly payments. Kelly and OK Vans use the trade-in allowance to reduce the lease value from $12,000 to $8,000. The payments are $222.22 per month for 36 months. OK Vans charges sales tax on each $222.22 payment.

Value of van	Trade-in allowance	Financed amount	Lease term in months	Payment amount subject to tax
$12,000	$4,000	$8,000	36	$222.22

Option B

Eliminating initial payments. Kelly and OK Vans apply the $4,000 trade-in allowance as full payment for the first 12 months of the lease. OK Vans doesn’t charge tax on the $0 payments. At the end of 12 months, the remaining lease value is $8,000. Kelly pays $333 per month plus tax for the final 24 months of the lease.

Value of van	Trade-in allowance	Financed amount	Lease term in months	Number of months with $0 payment	Remaining months subject to tax	Payment amount subject to tax (for remaining 24 months)
$12,000	$4,000	$12,000	36	12	24	$333.33

Option C

Combining the two methods. Kelly and OK Vans apply $3,000 of the trade-in allowance as a down payment to reduce the lease value to $9,000. The payments are $250 per month for 36 months. They apply the remaining $1,000 of the trade-in allowance to the first four monthly payments of $250. OK Vans charges tax on each $250 payment for the remaining 32 months.

Value of van	Trade-in allowance taken initially	Financed amount	Lease term in months	Number of months with $0 payment	Remaining months subject to tax	Payment amount subject to tax (for remaining 32 months)
$12,000	$3,000	$9,000	36	4	32	$250

Trading in leased property to buy other property

Lessees of property can assign the residual buyout amount of the property as a trade-in allowance on property they buy. Retailers can reduce the taxable sales price by a trade-in allowance if the residual buyout value is more than the trade-in allowance:

If the residual buyout amount of the leased property is more than the trade-in allowance the retailer offers, the taxable sales price is reduced by the difference.
If the residual buyout amount of the leased property is equal to or less than the trade-in allowance the retailer offers, the trade-in allowance doesn’t reduce the taxable sales price.

Examples Tom’s Recording Studio has been leasing a console, and wants to buy new equipment that costs $15,000. Tom wants to trade in the console that has a residual buyout amount of $10,000. Tom fiinds two retailers that will accept his leased console as a trade.

The first retailer offers a trade-in allowance of $11,000 for the console. In this situation, the console’s trade-in allowance is $1,000 more than the residual buyout amount. This reduces the taxable sales price by $1,000. The retailer charges tax on $14,000.
The second retailer offers a trade-in allowance of $9,000 for the console. In this situation, the trade-in allowance is $1,000 less than the residual buyout amount, so the trade-in doesn’t reduce the taxable sales price. The retailer charges tax on $15,000.

Note: Trade-in allowances can’t reduce the taxable sales price on rentals or leases between anyone else, such as private parties.

Leasing and renting – specific issues

See the following guides for leasing and renting information on specific issues.

Renting out or leasing out real property: “Hotels, Motels and Short-Term Rentals“
Renting out or leasing out vehicles or aircraft:

Renting and Leasing Tangible Personal Property: Recordkeeping

You must keep records of all your rentals, leases and purchases for at least four years. The records must show that you properly collected, reported and paid or forwarded taxes to Idaho.

Records to keep

Normal books of account
Documents that support entries in the books of account

Examples:
- Bills
- Receipts
- Invoices
- Credits granted
- Lease contracts
- All schedules or working papers used to prepare your tax returns
Copies of sales tax resale or exemption certificates
Keep resale or exemption certificates for as long as the company does business with that buyer, plus four years. We’ll bill you for tax due if you don’t have completed exemption certificates for buyers you sell to tax exempt.
Tax returns
Tax payments

What the records must show

Gross receipts from sales and services made in Idaho, even sales that you or your customer might consider exempt from tax. If you deliver the product or service somewhere other than your place of business, you also must keep records that prove where delivery took place.
The identity of customers claiming an exemption, the type of exemption, and what you sold them tax 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 and exemption certificates for at least four years. You should keep them for seven years if you don’t file returns.

Laws and Rules for Renting and Leasing Tangible Personal Property

Learn more about renting and leasing tangible personal property:

Rentals or Leases of Tangible Personal Property — Sales Tax Rule 024
Retailer — Idaho Code section 63-3610, Sales Tax Rules 018 and 068
Sale — Idaho Code section 63-3612
Retail Sale – Sale at Retail — Idaho Code section 63-3609, Sales Tax Rule 011
Tangible Personal Property — Idaho Code section 63-3616
Promoter Sponsored Events — Idaho Code section 63-3620C, Sales Tax Rule 130
Certificates for Resale and Other Exemption Claims — Idaho Code section 63-3622, Sales Tax Rule 128
Returns and Payments — Idaho Code section 63-3623
Sales Price — Idaho Code section 63-3613, Sales Tax Rules 043 and 049
Trade-Ins, Trade-Downs and Barter — Sales Tax Rule 044
Exemptions On Purchases By Political Subdivisions, Sales By The State Of Idaho, Its Departements, Institutions, And All Other Political Subdivisions — Sales Tax Rule 094

Learn more about Idaho tax statutes

Learn more about our Rules

On This Page

Items you rent to customers

Recreation

Taxable

Not Taxable

Fees paid to participate in recreational activities

Admission charges

Charging a whole-dollar amount

“Suggested” donations

Admissions that nonprofit groups charge

Fees for instruction

Bare equipment rentals

Bare rental with service fee

Examples

Collecting tax

Fully operated equipment rentals

Examples

Basic Lease

Lease with Option to Buy

Lease-Purchase

Out-of-state companies leasing out property in Idaho

Idaho companies that lease out property in another state

Bare rentals

Fully operated rentals

Used in both bare and fully operated rentals

If you buy property primarily for bare rentals

If you buy property primarily for fully operated rentals

Trading in property to rent or lease other property

Calculate tax on the three methods described above as follows:

Option A

Option B

Option C

Trading in leased property to buy other property

Leasing and renting – specific issues

Records to keep

What the records must show