Search Category: Sales Tax
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 
Form ST-101 – Sales Tax Resale or Exemption Certificate to buy the food, meals or drinks exempt. Or, when paying with cash, a 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 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
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 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
- 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.
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 event | What 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:
| 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
- Bills
- Receipts
- Invoices
- Cash register tapes
- Credits granted
- Job or work orders
- Contracts
- All schedules or working papers used to prepare your sales tax returns
- 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:
- Exempt Private and Public Organizations — Idaho Code section 63-3622O
- Food, Meals, or Drinks — Sales Tax Rule 041
- Imposition and Rate of the Use Tax – Exemptions — Idaho Code section 63-3621
- Responsibility for Tax — Idaho Code section 63-3627; Sales Tax Rule 118
- Returns and Payments — Idaho Code section 63-3623
- Sale — Idaho Code section 63-3612
- Sales and Purchases by Religious Organizations — Sales Tax Rule 086
- Sales Price — Idaho Code section 63-3613; Sales Tax Rules 043
- School, Church and Senior Citizen Meals — Idaho Code section 63-3622J
- Taxes as State Money — Idaho Code section 63-3623A
Grocers Basics Guide
This guide explains sales and use tax laws for grocers. Grocers are retailers who are primarily involved in selling food for home preparation and consumption.
Grocers must have a valid seller’s permit, collect sales tax, file a sales tax return, and forward the tax to the Tax Commission. See our Retailers guide for information about getting an Idaho seller’s permit, doing business in Idaho, and much more.
Sales – Grocers
Taxable sales
You must charge tax on most sales, including:
- Retail sales of food, drink, cosmetics, and household supplies to the final consumer
- Newspapers and magazines sold over a store counter
- Reusable grocery bags
- Sales through vending machines
- Rentals of items such as DVDs, video players and carpet shampooers
Nontaxable sales
Some nontaxable sales include:
- Sales to customers who are buying with food stamps; with electronic benefits transfer cards; or with Women, Infants and Children (WIC) checks.
- Sales of prescription drugs and prescription drug refills.
- Items customers are buying for resale.
- Sales to exempt organizations.
- Sales of lottery tickets.
- Deposits paid on returnable bottles.
- Cylinder sales of liquified propane in units of 15 gallons or less can be sold without getting an exemption certificate. Sales of any other type of heating fuels require a completed exemption certificate from the buyer (e.g., compressed fireplace logs).
Coupons, Vouchers and Gift Cards – Grocers
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 |
|---|---|---|
| Yes | Total sales price before you subtract the discount amount | Manufacturer’s coupon |
| No | Sales price after you subtract the discount amount | Coupon 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: |
|---|---|
| Yes | Amount the customer paid for the voucher |
| No | Face 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 – Grocers
Some of the items you purchase for your business are exempt from sales tax.
Taxable purchases
Examples of items you must pay tax on when you buy them include:
- Fixtures, such as movable coolers, checkout stands, racks and shelving
- Office equipment, furniture, automobiles
- Price labels, stickers, ink, shelf labels (but not product labels that include commodity information)
- Items that aren’t for resale (e.g., office or warehouse supplies)
- Advertising inserts (see Persons Engaged In Printing, Sales Tax Rule 054)
- Goods you take from your resale inventory to use yourself or give away, unless an exemption applies
If you withdraw food or beverages from your resale inventory to donate to individuals or to certain nonprofit organizations, you might not owe use tax. See Idaho Code section 63-3621, see (o) and (p).
However, if you donate any goods to any other organization, you must pay use tax.
Nontaxable purchases
Items you buy for resale, such as grocery items, are exempt from sales tax.
Other examples of resale items include:
- Items you rent at your store (e.g., DVDs , carpet shampooers)
- Merchandise containers sold with the product (e.g., grocery bags, soft drink cups, deli containers)
You must provide your supplier with a completed Form ST-101 – Sales Tax Resale or Exemption Certificate.
Recordkeeping for Grocers
You must keep records of all the purchases and sales your business makes. Your records must show that you properly collected, reported and forwarded taxes to Idaho.
Grocers can ask for relief from keeping detailed invoices of nontaxed sales by completing and mailing us Form ST-110 – Petition for Sales Tax Records Reduction By a Retail Food Store.
We’ll let you know if your request is approved and, if approved, how to use Form ST-111 – Sales Tax Records – Retail Food Stores in documenting your sales.
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.
- Bills
- Receipts
- Invoices
- Cash register tapes
- Job or work orders
- Contracts
- All schedules or working papers used to prepare your tax returns
- All records of sales (and credit granted for returned items).
- Purchases.
- Tax returns.
- Tax payments.
- Copies of sales tax resale or exemption certificates ( Form ST-101).
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 must also keep records that prove where delivery took place.
- 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 you bought for sale, rental, lease, or your own use.
- The amount of sales tax you 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 records for seven years if you don’t file returns.