Search Category: Sales Tax

Retailers: Basics Guide

If you’re a retailer who does business in Idaho, you must do all of these:

Also see what goes into the Sales Price. 

Retailer defined

Any individual, business, nonprofit organization, or government agency can be a retailer. Retailers do any of these:

  • Sell to a consumer who won’t resell or lease the product
  • Make more than two retail sales during any 12-month period
  • Have no more than two sales, but make it known they sell taxable products or services
  • Both sell goods, and improve real property (e.g., a contractor/retailer)

If you’re a retailer, you must get a seller’s permit to:

  • Sell, lease, or rent tangible personal property
  • Rent hotel, motel, lodging, and campground accommodations
  • Sell magazine or newspaper subscriptions
  • Charge fees for admissions or recreation
  • Make sales using vending machines

Doing business in Idaho

You’re doing business in Idaho if you, your company, or your related company:

  • Owns property in Idaho
  • Has an office, warehouse, sales room, or employees in Idaho
  • Has sales representatives or agents in Idaho
  • Keeps goods in Idaho that will be sold

Recordkeeping

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

You must keep the following records

  • Normal books of account (books of account can include information stored on computers)
  • Documents that support entries in the books of account. Examples: 
    • Bills
    • Receipts
    • Invoices
    • Cash register tapes
    • Job or work orders
    • Contracts
    • All schedules or working papers used to prepare your tax returns
  • Copies of sales tax resale or exemption certificates

Your records must show

  • Gross receipts from sales and services made in Idaho – even sales that you or your customer may 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 was 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 at least four years. You may need to keep them for seven years if you don’t file returns.

Keep all records for transactions involving sales or use tax, including these items:

  • Sales (and credit granted for returned items)
  • Purchases
  • Tax returns
  • Tax payments

Keep resale/exemption certificates as long as you do business with buyers, plus four years.

Laws and rules

Learn more about retailers:

Regular Seller’s Permit

You need a regular seller’s permit if all of these are true:

  • You make any Idaho sales of taxable goods or services (see Who needs a permit).
  • You sell anywhere other than registered marketplace facilitators or short-term rental marketplaces that collect and send in Idaho taxes for all your sales.
  • You don’t qualify for the occasional sales exemption, small seller exemption, or temporary seller’s permits.

Aren’t sure if you need a temporary or regular seller’s permit? See Who needs a permit.

Getting a regular seller’s permit

Before you apply for a regular seller’s permit, register your business with the State of Idaho. See Getting Tax Permits for more information about registering your business and getting your tax permits. When you get your permit, display it in a visible location at your business.

If you’re buying an existing business

You can’t use the seller’s permit for a previous owner of your business. Before you buy the business:

  1. Ask us for a Successors’ Liability Clearance Letter to see if the business owes sales tax that you could be responsible for paying.
  2. Withhold any sales or use tax due from the purchase price.
  3. Apply for a new seller’s permit (and any other tax permits you need) when the sale is final.

Remind the seller you’re buying the business from to cancel the tax permits for the business in their name.

Multiple locations

If you have more than one business location, you’ll receive a seller’s permit for each one. We’ll assign the same permit number to all locations that have the same business name. If your business locations have different business names, you must fill out a separate Idaho Business Registration application and get a separate permit for each one.

Filing and paying

With a regular seller’s permit, your schedule to file and send in tax is based on how much you sell. See Sales and Use Taxes: Filing and Paying.

More you should know

Every seller in Idaho who needs a seller’s permit is a retailer. See:

Laws and rules

Collecting Sales Tax in Idaho

Retailers must collect tax correctly on all Idaho sales. It’s important for retailers to understand:

  • What is a taxable sale?
  • How does a taxable sale become exempt?
  • Which sales aren’t taxable?

Taxable sales

Retail sales of the following goods and services are taxable in Idaho:

Tangible personal property

Anything you can feel, see, touch, weigh, or measure, other than real property

Admission charges

Examples

  • Tickets to a movie
  • Cover charges at a club
  • The price to see an entertainer

Fees charged for use of a facility or for use of tangible personal property for recreation

Examples

  • Membership fees to health clubs
  • Renting a park for a picnic
  • Greens fees at golf clubs
  • Participation in a recreational sports league

Providing hotel, motel, lodging, or campground accommodations

Examples

  • Renting a room for 30 days or less, including personal homes as well as commercial hotels
  • Renting a banquet room at a hotel
  • Renting a campsite

Custom-made tangible personal property

Examples

  • Materials and labor for a custom-built desk
  • Materials and labor for a made-to-order suit or dress
  • Materials and labor for a commissioned piece of art

Labor to produce, process, or fabricate tangible personal property

Examples

  • The labor fee to make a table from a customer’s lumber
  • The fee to cut or form a customer’s metal
  • The fee to embroider a logo on customer-owned clothing
  • The labor fee to assemble a bicycle, either by the seller or a third party

Any publication, or labor to print or imprint

Examples

  • A subscription to a newspaper or magazine
  • A newspaper bought at a grocery store
  • The fee to have business cards printed
  • The fee to engrave a customer’s trophy

Food, meals, and drinks and the labor to prepare or serve them

Examples

  • A hamburger and soda at a drive-in
  • A cocktail at a lounge
  • The price to cater food for a party
  • Personal chef service

Renting or leasing tangible personal property

Examples

  • Renting a boat
  • Leasing a car
  • Renting bowling shoes at a bowling center
  • Leasing a copy machine
  • Renting clothing

Exempt sales

Some goods and services can be exempt from tax if the buyer gives the seller a completed resale/exemption certificate. These sales usually fall into one of the following categories:

The buyer is exempt from all sales tax

Examples

  • Idaho Foodbank Warehouse, Inc.
  • State and federal credit unions

The buyer’s industry is exempt from all sales tax

Examples

  • Nonprofit hospital
  • Nonprofit canal company incorporated solely for farm irrigation

The buyer will use the goods in an exempt activity

Examples

  • Manufacturing company that will use the goods more than 50% of the time to produce tangible personal property for sale to others. The goods must be directly used in and necessary to the production process.
  • Church that buys food for its food bank

The buyer will resell the goods or services

Examples

  • Registered Idaho retailer
  • Wholesaler that doesn’t make retail sales

Accepting a resale/exemption certificate from your customer:

  • Your customer must give you a completed form pdf ST-101, Sales Tax Resale or Exemption Certificate
  • The exemption certificate must have all applicable questions answered, and be signed and dated
  • Keep the certificate and don’t charge tax on future qualifying sales to the customer

Note: A few items are exempt for all taxpayers (no exemption certificate is required):

Examples

  • Bullion
  • Membership fees in a nonprofit hunting or shooting sports organization
  • Official documents (e.g., deeds, licenses)
  • Electricity, water, and natural gas delivered to a consumer through pipes or mains

Nontaxable sales

Sales of the following goods and services aren’t taxable in Idaho:

Real property sales, rentals, or leases

Examples

  • Office space
  • Living space
    But motel or hotel rooms rented for 30 days or less are taxable
  • Lockers, such as those used at amusement parks, gyms, and airports
  • Boat docks
  • Billboards
  • Parking spaces
    But campground or trailer park accommodations of 30 days or less are taxable
  • Storage space
  • Booth space at fairs
    But renting personal property for use in the booth is taxable
  • Facilities rented for recreation if:
    • There’s a charge for admission to the facility, and
    • Tax is collected on the admission charge

Telephone tolls and utility charges

Transit fees

Examples

  • Taxicab fares
  • Bus tolls
  • Airplane tickets on chartered or regularly scheduled flights

Software that isn’t tangible personal property

Examples

  • Custom computer software
  • Software delivered electronically
  • Software loaded by the seller and left on the buyer’s device
    No discs, drives, etc. left with buyer
  • Some remotely accessed computer software

Sales Price – Retailers

“Sales price” and “purchase price” mean the same thing. They mean the price a buyer pays. Tax is due on the sales price or purchase price no matter how the buyer pays the seller:

  • Cash, check, credit card, PayPal, electronic payment methods
  • Financing agreement – including I.O.U., or other promise to pay
  • Barter – paying with goods the buyer owns

What the sales price includes

Charge tax on the following even if you list them separately on the invoice:

  • Inbound transportation – fees charged for shipping the goods to the retailer.
  • Manufacturer’s or importer’s excise tax – U.S. federal taxes that are charged to the retailer before the retail sale, but may still be a separate item on the bill to the buyer.
    • Examples: Taxes on cars, beer, wine, and cigarettes.
  • Services performed by the seller as part of the sale.
    • Examples: Fee to assemble an item; clothing alteration charge.
  • Service fee or surcharge for paying with a credit card or gift card.
  • Prompt payment discounts encouraging the buyer to pay the bill on time, such as a 2% discount if a bill is paid within a certain number of days. Charge tax on the amount before the discount is given.
  • Manufacturer’s coupons or rebate deduction amounts don’t lower the taxable price. Charge tax on the full amount before you give the discount. Manufacturer coupons are those where the manufacturer reimburses the retailer for the discount given to the customer. This doesn’t apply to motor vehicles.

Special rules apply to rebates for motor vehicles.

What the sales price doesn’t include

Don’t charge tax on the following if you list them separately on the invoice:

Trade-in allowances

This is the value of goods traded in on other goods, whether in part payment, full payment, or more than full payment. The item accepted in trade must become part of the seller’s inventory.

Trade discounts offered by a retailer

This discount can be a retailer’s coupon, a marked-down price, or a customer discount offered to a good customer.

The retailer can’t receive money or reimbursement from a third party for a discount on the purchased item. A prompt payment discount offered by a manufacturer can’t reduce the taxable sale price.

Interest, carrying charges, service charges, or financing charges on goods sold

Special rules apply to interest, service, and financing charges on leases — see our guide, Renting and Leasing Tangible Personal Property.

Other examples of what the sales price doesn’t include:

  • U.S. federal excise taxes that are charged to the customer at the time of the retail sale. The retailer pays the supplier the tax when buying the items for resale, then charges and separately states the excise tax on the invoice
    Example: New large tractor-trailer units
  • Shipping and handling charges for shipping the goods directly to the consumer. You must separately state the charges.
  • Installation labor, such as the labor to install a television in a home. You must separately state the labor.
  • Repair labor to repair a customer’s goods isn’t taxable when separately stated, but the parts sold to make the repair are taxable.
  • Insurance charges on goods rented or sold – when separately stated

Separately state sales tax on the invoice

You must separately list the amount of tax on the sales invoice. Customers must know how much tax was charged and be able to show they paid tax.

You can’t offer to pay the tax yourself or advertise that you won’t charge tax.

How to calculate the tax

Calculate the sales tax by either:

  • Using the sales tax “bracket card” that we mail to you with your permit, or
  • Multiplying the total taxable sales amount by the tax rate in effect.

Tax is calculated on the total of taxable items in a sale. For example, if you sell three taxable items totaling $10.50 together, tax is calculated on the total, rather than the individual prices of the three items in the sale.

Buying Exempt for Resale

Goods retailers buy for resale might qualify for an exemption. Goods retailers buy that aren’t for resale are generally taxable. 

Resale or exemption certificates

ST-101

If you buy goods 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. The seller should keep this form on file and not charge tax on your future qualifying purchases.

To complete the form:

  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 a — 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).

Out-of-state businesses

If you buy goods 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.

To complete the form:

  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.

Items retailers pay tax on

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

Mining Activities that Qualify for the Production Exemption

Businesses that qualify for the exemption

To be eligible for this exemption, your business must:

  • Engage in a qualifying mining activity. This includes:
    • Developing a mine that has known deposits
    • Operating a mine — underground; aboveground, open pit (including gravel pits when the gravel will be sold at retail)
    • Drilling holes to help move the ore
    • Blasting
    • Breaking ore for easier removal from the mine
    • Removing ore from the mine
    • Backfilling mined-out areas
    • Further processing ore for sale
  • Be primarily devoted to mining. One way many businesses satisfy this requirement is that they devote the majority of their business operations to qualifying mining activities. Example: Spending more than 50% of the business’ working time and activities mining ore.
  • Own the ore you mine and process.
  • Sell the ore you mine and process. Either your business or someone else must sell the ore at retail.
  • Report your business’ profit or loss on an income tax return.

Note: Exploring for ore isn’t a qualifying activity.

OR

Be a custom miner. Your business performs a qualifying mining activity for a miner and receives money or other compensation for the work.

Examples:

  • Drilling
  • Blasting
  • Breaking ore
  • Removing ore from the mine
  • Backfilling mined-out areas
  • Further processing ore for sale

Custom mining doesn’t include:

  • Services performed on real property
  • Clearing land
  • Transporting ore
  • Exploring for ore

A custom miner doesn’t have to own the ore that’s mined or processed as long as the owner of the ore sells it.

Separately operated business segment

A separately operated business segment can also qualify. It can be a division, branch, or even a cost center. You must keep separate accounting records for the business segment to qualify as a separately operated business segment. This includes recording income, expenses, wages, and assets of the business segment separately. You must also have employees dedicated to operating the separate business segment.

Businesses that don’t qualify for the exemption

This exemption is only for businesses that devote the majority of their business operations to qualifying mining activities trying to make a profit. Operations that aren’t eligible for the exemption include:

  • Mining as a hobby
  • Mining ore for personal use
  • Mining ore for use by your business

Purchases that Qualify for the Mining Exemption

Purchase Requirements

An item qualifies for the exemption, if it meets all of the following requirements:

  • Primarily used in the mining process. (See Idaho Code section 63-3607A.)
  • Necessary or essential – you can’t remove or process ore without it.
  • Directly used in or consumed during mining or ore processing – after the beginning and before the end of the process:
    • The mining process begins when you start to develop a known ore deposit
    • The process ends when the ore is at the later point of
      – When you place it in storage, even temporarily, to be prepared for shipment or
      – When the ore’s ready to be sold in its final form
  • Tangible personal property – must not become real property
  • Allowable by law – must not be specifically excluded from the mining production exemption by law or rule

Exempt Purchases — Mining

The production exemption lists items that are exempt from tax. Qualifying miners can also buy the following items exempt:

Note: There are separate sections for underground mining and for above-ground and open pit mining.

 

Underground mining

Equipment and supplies used to develop a mine with known ore deposits

  • Diamond drills and attachments
  • Levels, laterals, crosscuts, drifts, stopes, raises, and shafts

Note: Equipment, supplies, and materials used in exploration activities aren’t exempt.

Mine support materials

Timbers, rock bolts, concrete, matting

Slushing and mucking equipment

Used to convey broken ore and waste to passes and chutes

  • Slushers, muckers, scrapers
  • Loaders, hoists
  • Backhoes used to recover ore and waste

Equipment used for drilling blast holes

  • Pneumatic rock drills
  • Air compressors that supply compressed air to operate pneumatic drills

Extraction and retrieval equipment

Used to extract the minerals and ore from the mine

  • Blasting supplies: explosives, caps, fuses
  • Loaders, backhoes, and similar earthmoving equipment

Equipment used to move ore, waste, and people from the mine to the surface

  • Haulage equipment
    • Locomotives, cars, batteries
    • Tracks and supplies
    • Ore dumps and bins
  • Electrical distribution systems, including light signals
  • Vertical and horizontal support and transport
    • Skips, hoists, hoist cables
    • Shafts, shaft timbers, shaft pockets, shaft guides
    • Concrete

Backfilling equipment used to backfill mined-out areas

  • Pumps, including sumps
  • Pipes
  • Concrete
  • Supplies

Quality control equipment and supplies

  • Assaying
  • Sampling

Safety equipment and supplies

If required by a state or federal agency and if used in the production area

  • Hard hats
  • Miners’ lights
  • Belts
  • Batteries

Pollution control equipment, supplies, and materials

If they:

  • Are required* to meet air and water quality standards
  • Become part of the pollution control equipment, or
  • Are used to operate the pollution control equipment, or
  • Are used to treat the effluent from the mining process.

* The standards must be set by a state or federal agency that has authority to set them.

Note: Pollution control materials or equipment that become part of real property may also be exempt for mining companies that qualify for the production exemption. (See Idaho Code section 63-3622X.)

Examples of pollution control equipment that aren’t exempt:

  • A building or other structure that merely houses the equipment
  • Construction equipment used to build or install pollution control equipment

Aboveground, open pit mining

Blasting and drilling equipment

Used to loosen or remove ore and overburden

  • Track drills, rotary drills
  • Drill rods, drill bits
  • Compressors to operate drills

Extraction and removal equipment

Used to remove loosened ore and overburden from the pit

  • Loaders
  • Excavators
  • Backhoes
  • Power shovels

Haulage equipment

Used to move ore and overburden to stockpiles, loading sites, or disposal sites at the mine

  • Heavy equipment
  • Transport equipment
    • Scrapers, carryalls
    • Off-highway trucks and trailers
    • Conveyors

Equipment used for sorting, grading, sizing, and crushing ore and overburden

  • Bulldozers
  • Loaders
  • Crushers
  • Conveyors
    • Grading
    • Sorting
    • Sizing
    • Crushing

Pollution control equipment, supplies, and materials

If they:

  • Are required* to meet air and water quality standards
  • Become part of the pollution control equipment, or
  • Are used to operate the pollution control equipment, or
  • Are used to treat the effluent from the mining process.

* The standards must be set by a state or federal agency that has authority to set them.

Note: Pollution control materials or equipment that become part of real property may also be exempt for mining companies that qualify for the production exemption. (See Idaho Code section 63-3622X.)

Examples of pollution control equipment that aren’t exempt:

  • A building or other structure that merely houses the equipment
  • Construction equipment used to build or install pollution control equipment

Taxable Items – Mining

The production exemption guide lists items that are always taxable. Taxable items that are specific to miners include:

Underground mining taxable purchases

  • Equipment used in exploration activities
  • Equipment used for venting or conditioning the air of the mine – if it becomes a part of the real property
  • Equipment used for drainage of the mine if part of the real property
  • Maintenance and equipment used to maintain and clean up mining equipment
  • Equipment and supplies used for sampling and assaying, other than for quality control

Aboveground, open pit mining taxable purchases

  • Equipment used in exploration and discovery activities
  • Equipment, materials, and supplies used in real property improvements
  • Equipment and supplies used to maintain and clean up the mine and mine equipment
  • Equipment and materials used in land reclamation activities
  • Equipment and vehicles used to transport people
  • Equipment and supplies used to transport finished products
  • Equipment and supplies used to transport ore and overburden between geographically separated sites, processing plants, or displosal sites if:
    • A substantial break in the production process occurs, and
    • The activity doesn’t further the processing of the ore by sorting, sizing, or grading
  • Equipment and supplies used in personnel support activities

Note: If the equipment is primarily used for ore extraction purposes, it isn’t taxable.

Other taxable mining purchases

  • Office, maintenance, or janitorial equipment and supplies
  • Marketing, promotional, sales, or distribution equipment and supplies
  • Equipment and supplies to analyze or model financial results

Motor vehicles

Motor vehicles that are required to be licensed are almost always taxable. This includes vehicles with restricted-use plates and recreational-use stickers.

Change Use of Exempt Item – Mining

If you change the primary use of an item

If you buy an item exempt to use in a mining activity, it becomes taxable if you stop using it in a mining activity. You must then pay tax on the fair market value of the item.

Note: The opposite isn’t true. If you pay tax on an item because you use it in a non-mining activity, you can’t claim a tax credit if you begin to use it in a mining activity.

Buyer’s Responsibility – Mining

Buyer’s responsibility when making exempt purchases

You must keep records of all your purchases and show whether you paid tax on them.

  • Records must show what you bought, when you bought it, how much you paid for the goods, and how much tax you paid.
  • Your accounting records must include the standard books and records maintained in a business.
  • Keep all your records for at least four years. (You may need to keep them for seven years if you don’t file sales tax returns).

Use tax

When you buy, use, or store taxable goods in Idaho, but don’t pay sales tax when you buy them, you owe use tax.

You may owe use tax if:

  • You buy goods from an internet retailer that doesn’t collect tax
  • You buy a taxable item from a seller that didn’t charge sales tax because the seller has your exemption certificate on file
  • You buy an item in a state that doesn’t have sales tax, then bring the item to Idaho
  • You change how you use an exempt item. (See If you change the primary use of an item.)
  • You take ore from your resale inventory (e.g., gravel) and use it in your business

Learn more about use tax on our Sales/Use Tax page.