Search Category: Sales Tax

Laws and Rules for Wholesalers

Learn more about wholesalers:

Learn more about Idaho tax statutes 

Learn more about our Rules 

Coupons, Vouchers and Gift Cards – Food, Meals and Drinks

Customers often use coupons, vouchers or gift cards to pay for all or part of the bill. Tax these payment types as follows.

Coupons

Does a third party reimburse you?Charge sales tax on:Example
YesTotal sales price before you subtract the discount amountManufacturer’s coupon
NoSales price after you subtract the discount amountCoupon you distribute in a newspaper or online

Vouchers

Vouchers are something that a customer can use for a discount on a product or service, such as a two-for-one dinner or a manicure at a reduced price. The customer buys the voucher in advance from a third-party provider, such as Groupon.

Do you know how much the customer paid for the voucher?Charge sales tax on:
YesAmount the customer paid for the voucher
NoFace value of the voucher

Keep documentation to support the tax calculation on all discounted sales.

Gift cards and certificates

Don’t charge tax when a customer buys gift cards or certificates because they’re a form of payment. Charge sales tax on the price of the goods that someone buys using the gift cards or certificates.

You can’t treat a gift card redemption like it’s a retailer’s discount coupon, even if you sold the gift card or certificate at less than its face value.

Buying Goods for Resale – Food, Meals, and Drinks

Some of the things you use to sell or serve food, meals and drinks are exempt.

Exempt goods when buying for resale

You can buy goods without paying tax if the goods are all of the following:

  • For resale to customers
  • Included in the fee charged to customers
  • Single-use items used by the customers

You must give your vendor a completed pdf Form ST-101 – Sales Tax Resale or Exemption Certificate, to buy these goods exempt.

Taxable goods

You must pay tax on items that you don’t intend to sell, aren’t included in the price to your customer or that your customers don’t directly use up.

Food, Meals, and Drinks Guide

This guide explains Idaho sales and use tax law for furnishing, preparing, or serving food, meals or drinks. It describes how you should charge your customers tax and when to pay tax on what you buy to operate your business.

Many types of businesses sell food, meals or drinks, including:

  • Full-service restaurants
  • Casual dining (e.g., fast food and food courts)
  • Bars
  • Coffee shops
  • Private clubs
  • Cafeterias
  • Food Trucks
  • Sidewalk vendors
  • Caterers
  • Meal delivery services
  • Grocery and convenience stores
  • Personal chefs (e.g., preparing and serving food or drinks for customers who supply the ingredients)
  • Meal kit retailers (e.g., meals that require the buyer to prepare the food)

Sales Price – Food, Meals, and Drinks

Taxable parts of a customer’s bill

  • Charges for food or drinks served
  • Cover charges
  • Service charges other than tips
  • Charges to prepare or serve food, drinks and meals for customers who supply the ingredients

Nontaxable parts of a customer’s bill

  • Tips that are all of these:
    • Separately stated on the receipt
    • Paid to the service provider as additional income
    • Not used to avoid sales tax on the actual meal price
  • Delivery charge that is both of these:
    • Separately stated on the receipt
    • Not used to avoid sales tax on the actual meal price
  • Charges for playing games on tablets or similar devices.
    Note: You don’t charge customers sales tax, but you do need to purchase amusement device decals.

Separate statement of sales tax

You must separately list the amount of tax on the receipt even if you want whole-dollar transaction amounts.

Example

If the final amount you charge for a drink is $3.00, the receipt would show:

Drink$2.83
Sales Tax$0.17
Total$3.00

Note: If you don’t separately state the tax, you charge tax on the whole-dollar amount (i.e, $3.00 x current sales tax rate = sales price).

Sometimes businesses with high-volume or even-dollar sales don’t automatically give receipts. But you must give your customers a receipt if they ask for it. A receipt, showing the amount of tax you charged, is the only proof they have to show they properly paid sales tax.

When you collect sales tax from customers for the State of Idaho, you must accurately track the tax you collect and forward it to the Tax Commission.

Food delivery fees and other charges

There are different types of meal delivery models, and the fees charged vary. Taxability depends on who the retailer is, what is charged, and how charges are shown on the invoice.

Example 1: Customer orders directly from restaurant

The restaurant sells $30 of food to the customer. It’s the retailer. It collects tax. The delivery company delivers food on behalf of the restaurant.

FoodTaxable$30.00
Delivery feeNot taxable4.99
Tax 1.80
Total $36.79

Example 2: Customer orders directly from delivery service

The delivery company sells $30 of food to the customer and adds a 10% service charge. It’s the retailer. It collects tax. The delivery company buys food for resale from the restaurant.

FoodTaxable$30.00
Service chargeTaxable3.00
Delivery feeNot taxable4.99
Tax 1.98
Total $39.97

Example 3: Customer orders directly from delivery service

The delivery company sells $30 of food to the customer. It adds a 10% service charge and a surge charge because of high delivery demand. It’s the retailer. It collects tax. The delivery company buys food for resale from the restaurant.

FoodTaxable$30.00
Service chargeTaxable3.00
Delivery feeNot taxable4.99
Surge charge*Not taxable2.99
Tax 1.98
Total $42.96

*The surge charge is delivery-related.

Example 4: Customer orders directly from delivery service

The delivery company sells $8 of food to the customer. The food order is small, so the delivery company adds a small-order charge. It’s the retailer. It collects tax. The delivery company buys food for resale from the restaurant.

FoodTaxable$8.00
Small-order fee*Taxable2.00
Service charge**Taxable1.00
Delivery feeNot taxable4.99
Tax .66
Total $16.65

*The small-order charge is food-related. **The service charge is 10% of the food cost.

  • A tip added to a delivery fee isn’t taxable.
  • If you’re a retailer, you must have a valid Idaho seller’s permit. You can’t collect sales tax without one. You can get a permit at no charge. See the Retailers guide.

Exempt Sales – Food, Meals and Drinks

Sales of food, meals and drinks to certain customers, governments and organizations are exempt.

Sales to Idaho or U.S. government agencies

Sales billed to and paid directly by the U.S. federal government or an Idaho government agency (state, county or city) are exempt. They can pay the charges by check, credit card or cash. The qualifying agency must give you a completed pdf Form ST-101 – Sales Tax Resale or Exemption Certificate to buy the food, meals or drinks exempt. Or, when paying with cash, a pdf Form ST-104G – Sales Tax Exemption Claim – for Cash Purchases by Government Agencies, can be used. Traveling government employees can’t use this form to buy meals, drinks or lodging exempt.

Sales to organizations exempt from Idaho sales and use tax

Qualifying organizations can buy food, meals and drinks exempt when they pay or are billed for it directly. Employees can’t pay the charges and be reimbursed. Qualified organizations are listed in Idaho Code section 63-3622O and on pdf Form ST-101 – Sales Tax Resale or Exemption Certificate. The organization must give you a Form ST-101 that’s filled out completely and accurately to buy food, meals or drinks exempt. Otherwise, you could be responsible for paying that tax yourself.

Programs that provide nutritional meals for the aging

Meals that are part of a program to provide nutritional meals for seniors under Title III of the Older Americans Act (OAA) are exempt. The seniors don’t need an exemption certificate to buy the meals. You as the provider of the meals must give your vendor a completed pdf Form ST-101 – Sales Tax Resale or Exemption Certificate, to buy the meal ingredients exempt.

Church meals sold to their members

Food, meals and drinks a religious organization sells at a church function are exempt if the meals are only available to members of the church. Church members don’t need an exemption certificate to buy the meals. You as the seller of the meals must give your vendor a completed pdf Form ST-101 – Sales Tax Resale or Exemption Certificate, to buy the meal ingredients exempt.

Sales of food, meals and drinks by cooperative groups

Cooperative living groups (e.g. fraternities and sororities) that prepare and serve meals to only their members aren’t retailers. They’re consumers and must pay tax on their purchases. These groups don’t charge sales tax on allocated fees to members for meals, even if those fees are separately stated or part of a lump sum for room and board. Cooperative living groups selling to nonmembers are retailers that must get a seller’s permit and charge sales tax.

Sales of food, meals and drinks by boarding houses

  • Meals that boarding houses furnish are taxable if they are separately stated. The boarding house can buy certain items to prepare the meals exempt for resale.
  • When the regular board and room charges include the cost of meals, the boarding house is not selling the meals. Instead, the boarding house is the consumer of items used to prepare the meals and must pay tax on all goods used to prepare and serve the meals.

Exempt Uses – Food, Meals and Drinks

Giving away food, meals and beverages from your resale inventory isn’t subject to use tax in certain situations.

Employee meals

Retailers in the business of selling prepared food and beverages don’t owe use tax on the value of the food or beverages given to their employees.

This exemption applies only to prepared food and beverages given to employees. Prepared food and beverages sold to employees at a discount are taxable on the discounted price.

Prepared food

For this exemption, prepared food means food intended for human consumption that’s one or more of the following:

  • Heated when given away
  • Consists of two or more ingredients that the retailer combines and gives away as a single item
  • Is customarily served with utensils

Prepared beverage

For this exemption, prepared beverage means any beverage intended for human consumption.

Tastings or donations

Food and beverages given away as tasting samples aren’t subject to use tax in either of these cases:
  • The food or nonalcoholic sample you’re giving away is available for sale where you’re handing it out (e.g., grocery stores).
  • The wine or beer sample you’re giving away to a potential customer is the maximum serving allowed by Idaho and U.S. law, at a place that sells such beverages.
You don’t owe use tax on donations of food or beverages to individuals and current Idaho-registered nonprofit organizations.

Food and Drink Sold with Admissions

Sometimes event organizers sell food, drinks and admission to an event for one price. In these cases, the event organizer charges or pays tax based on how the transaction is structured.

Examples

Food, drinks and admission sold at an eventWhat do you charge tax on?What do you pay tax on?
Ticket to a concert includes admission to the concert, an open bar and dinner.Organizer charges tax on the total price of the ticket.Organizer buys food and drinks exempt for resale.
Ticket to an athletic event includes admission to the event only.Organizer charges tax on the price of the ticket.
Food and drinks are available for sale, usually by a vendor.Vendor charges tax on each sale of food and drinks.Vendor buys food and drinks exempt for resale.
Registration fee for a golf tournament at a private club includes a golf shirt, swag bag, drinks and lunch.Organizer charges tax on the total registration fee.Organizer buys all items, including food and drinks, exempt for resale.
Admission to an informational fair that a qualified nonprofit organization presents includes booths, materials, seminars, some live entertainment, drinks and food.Nonprofit doesn’t charge tax on the admission price if all of these apply:

  • The event is not recreational or commercial.

  • The entertainment value is minimal.

  • The nonprofit organization pays tax on all goods it uses or gives away, including food and drinks.


Nonprofit pays tax on the cost of all food and drinks it gives away. Certain nonprofits that are exempt from all sales and use tax in Idaho don’t pay tax on food and drinks (or ingredients).
Additional food and drinks are available for sale.Nonprofit charges tax on additional food and drinks that aren’t part of the admission price.Nonprofit buys food and drinks exempt for resale if they aren’t part of the admission price.
Registration fee for an educational event includes instruction, lunch, snacks and drinks.Organizer doesn’t charge tax on separately-stated instruction.Organizer charges tax on the sale of all food and drinks it sells at the event. Organizer buys food and drinks exempt for resale if they aren’t part of the admission price.

Recordkeeping for Food, Meals, and Drinks

You must keep records of all the purchases and sales that your business makes. Your records must show that you properly collected, reported, and paid or forwarded taxes to Idaho.

Records you must keep

  • Normal books of account
  • Documents that support entries in the books of account
  • Tax returns and payments
  • Copies of sales tax resale or exemption certificates (Form ST-101)
    Note: Keep a buyer’s exemption certificate for as long as you do 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 exempt to. It’s always a good idea to make sure your customer’s exemption certificate is still valid and up-to-date.

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 them 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 four years. You should keep them for seven years if you don’t file returns.

Laws and Rules for Food, Meals and Drinks

Learn more about food, meals and drinks:

Learn more about Idaho tax statutes 

Learn more about our Rules