Search Category: Sales Tax
Aircraft
If you’re thinking of buying or selling an aircraft in Idaho, you may have some questions about registration and taxes. The Idaho State Tax Commission and the Idaho Division of Aeronautics have partnered to provide you the information you need to help make your aircraft transaction (sale, lease, or purchase) and registration a success.
When aircraft can be sold or purchased tax exempt
There are some cases in which the sale of an aircraft may be exempt.
- The customer is exempt from all taxes (like the U.S. government).
- The aircraft will be used primarily to transport passengers or freight for hire.
In this case the exemption applies to:- Commercial airlines,
- Air ambulance services, and
- Charter flight businesses.
The exemption doesn’t apply to:
- Hot air balloons,
- Gliders, and
- Other recreational craft.
- The aircraft will be used primarily for agricultural spraying, dusting, seeding, livestock and predatory animal control, or forest and wildlife conservation.
- Aircraft sold to nonresidents — even if delivery is taken in Idaho — if the buyer certifies that the aircraft:
- Will be taken directly out of Idaho and immediately registered in another state or nation, and
- Won’t be required to be registered under Idaho laws, and
- Won’t be used or stored in Idaho more than 90 days in any 12-month period.
- Aircraft purchased by aircraft dealers for resale (see Resale Exemption).
To buy tax exempt, the customer must complete and sign 
Form ST-134AC – Sales Tax Exemption Certificate Aircraft – Exempt Use or Form ST-134NR – Sales Tax Exemption Certificate Aircraft – Nonresidents. See our Retailers and Wholesalers guides.
What you can buy tax exempt
Registered dealer
If you’re a registered dealer making a purchase for resale, you must give your supplier a completed form ST-101. Once the supplier has your ST-101 on file, you can buy aircraft and any parts needed for their repair exempt from tax, as long as the items are held in inventory for resale.
Retail sales
As a retailer, you can sell an aircraft, its repair parts, and oil exempt from sales tax if your customer is holding the aircraft for resale, rental, or lease in the normal course of business. In this case, your customer must provide you a completed form ST-101.
When use tax is due
Use tax is a tax on goods that you put to use or store in Idaho. If you haven’t paid sales tax on these goods, you owe use tax (unless the items are held for resale or an Idaho exemption applies). If you’ve paid the correct sales tax to another state — at least equal to or greater than Idaho’s tax — you don’t owe use tax. The sales tax must be separately stated on your receipt. The use tax rate is the same as the sales tax rate. Use tax is paid to the state using Form 850-U – Self-Assessed Use Tax Return and Instructions.
Purchases by aircraft dealers
You must pay tax when you buy items that will be used by your business rather than being held for resale. If your vendor didn’t charge sales tax, you owe Idaho a use tax. Any item you originally purchased for resale but withdrew from inventory for business or personal use is also subject to use tax. You pay use tax to the state using your regular sales tax return.
Aircraft leases
If the sale of the aircraft is considered taxable, then the lease of the aircraft is also taxable. For more information on leases, see our Renting and Leasing Tangible Personal Property guide.
How tax applies to aircraft used for flight instruction
Aircraft used primarily for flight instruction aren’t considered to be held for resale, so their purchase is taxable (as are their parts and oil). When aircraft held for resale are used for flight instruction, a reasonable fair rental value must be established for the aircraft use, and the business giving the instruction must pay use tax on that value.
The purchase of the flight instruction by a student isn’t subject to sales tax.
How tax applies to aircraft used for flying services
The purchase of aircraft used primarily for flying services, such as recreational flights, is taxable (as are the aircraft parts and oil). Recreational flights include balloon rides, sightseeing, wildlife viewing, and similar activities.
Applying tax to runways (instead of roads)
For more information
- Idaho Code sections 63-3608, 63-3609, 63-3610, 63-3611, 63-3622GG, 36-6312, 36-3614
- Sales Tax Administrative Rule 037: Aircraft and Flying Services
- Sales Tax Administrative Rule 038: Flying Clubs
Boats, Trailers, and Other Watercraft
This guide explains sales and use tax requirements for buyers and sellers of boats and trailers.
Basics Guide
Brought into Idaho
Boats and trailers bought in another state and brought into Idaho
Dealer Sales
Sales of boats and trailers by dealers and retailers
Dealer Leases
Leases and rentals of boats and trailers by dealers and retailers
Private Party Sales
Sales of boats and trailers by private parties
Private Party Rentals
Leasing out or renting out your own boat or trailer
Donating
Donating or giving away a boat or trailer
Repairs
Boat repair, including winterization fees
Sales on Water
Sales and services provided on navigable waters
Boat Docks
Boat dock installation or repair
Recordkeeping
Laws and Rules
Ground, Air, and Railroad Businesses
Basics Guide
Ground
For ground transportation companies
Air
For air transportation companies
Rail
For railroad transportation companies
Sales to Passengers
Sales to passengers are taxable
Complimentary Items
Complimentary items are taxable
Motor Vehicles
Dealers
For motor vehicle dealers
Nondealers
For nondealer retailers and private parties
Off-Highway Vehicles
Basics Guide
Dealer Sales
Sales of off-highway vehicles by dealers and retailers
Dealer Leases
Leases and rentals of off-highway vehicles by dealers and retailers
Private Party Sales
Sales of off-highway vehicles by private parties
Private Party Rentals
Leasing out or renting out your own off-highway vehicle
Donating
Donating or giving away an off-highway vehicle
International Registration Plan (IRP) Vehicles
This guide explains Idaho’s sales and use taxes for IRP vehicles.
Basics Guide
Buying Exempt
Buying exempt for an IRP fleet
Taxing
Taxing an IRP fleet and the items you use in business
Firearms Transfer Fees and Taxes
If an Idaho citizen buys a firearm from an out-of-state dealer or private citizen, federal law prohibits the firearm from being shipped directly to the purchaser. Instead, it must be sent to a Federal Firearms Licensee (FFL) in Idaho. Over 1,200 FFLs in Idaho carry licenses issued by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), including gun shops and sporting goods stores.
As directed by the ATF, the FFL is responsible for running the required background checks before releasing firearms to the buyer. A fee is normally charged for this service, typically called a firearm transfer fee or gun transfer fee.
An Idaho citizen who wants to buy a firearm from an out-of-state dealer or private citizen must first confirm that a local FFL will accept the shipment.
If the FFL is only performing a service by accepting the shipment and performing the required background checks, no sales tax should be charged on the firearm transfer fee.
Wholesalers
If you’re a wholesaler and only sell to resellers, you can buy goods you’ll sell without paying sales tax.
Basics Guide
Buying Goods
Need an exemption to buy goods for resale?
Selling Goods
Are you selling to resellers or as a retailer?
Renting and Leasing Tangible Personal Property
Basics Guide
Renting
Renting tangible personal property is a taxable sale
Leasing
Leasing tangible personal property is a taxable sale
Buying
Buying property that you’ll rent out or lease out
Trading In
Trading in property to rent or lease other property
Recordkeeping
Repair Shops
Tangible personal property
The repair of tangible personal property includes repairs to:
- Appliances
- Automobiles
- Bicycles
- Computers and other office electronics
- Electric motors
- Farm equipment
- Furniture
- Recreational equipment
- Saws (including sharpening)
- Shoes
- Televisions and other home electronics
- Watches
- Any other tangible personal property
(See Idaho code section 63-3616.)
If you sell tangible personal property as part of a repair, you must apply for a seller’s permit and file regular sales tax returns.
However, repairs made to real property – by plumbers, carpet layers, electricians, roofers, etc. – don’t fall into this category (see Idaho Code section 63-201(23)). Businesses that repair real property are considered contractors. See Contractors Working in Idaho for more information.
Labor, fabrication, and repairs
Repair labor isn’t taxable if you list the repair labor and parts separately on your customer’s invoice. In that case, only the parts are taxable. But if parts and labor are combined on the invoice, you must calculate sales tax on the entire amount.
- Repaired – When an item is “repaired,” it’s restored to working condition so it can be used as originally intended.
- Fabricated – When an item is “fabricated,” it’s manufactured and designed to be used for a different purpose than that of the original components and raw materials used in the fabrication process. (When a coating is applied to new tangible personal property or used tangible personal property that wasn’t previously coated, that’s fabrication labor, and tax applies to the total charge, including materials and labor.)
Fabrication labor is taxable, even if it’s listed separately from the parts.
Example #1
Tom’s Repair Shop fixes a customer’s broken trailer hitch. Tom bills the customer $25 for materials plus $40 for repair labor. Tax applies to the $25 for materials. The trailer hitch has been repaired – restored to working condition.
| Materials | $25.00 | |
| Repair labor | $40.00 | |
| Sales tax on materials | $1.50 | (if the tax rate is 6%) |
| Total | $66.50 |
Example #2
Tom’s Repair Shop makes a trailer hitch for a customer because the customer’s trailer hitch is broken beyond repair. Tom bills the customer $120 for materials plus $125 for fabrication labor. Tax applies to the full $245. The trailer hitch has been fabricated – manufactured from components and raw materials.
| Materials | $120.00 | |
| Fabrication labor | $125.00 | |
| Sales tax on full price | $14.70 | (if the tax rate is 6%) |
| Total | $259.70 |
Example #3
Jim’s Lawn Mower Repair replaces two wheels, does a tune-up, and replaces an axle in the drive mechanism of a customer’s self-propelled mower. The wheels, mounting bolts, and spark plug are taken from Jim’s inventory. Jim has no axles, so he has a machine shop fabricate one. The machine shop bills Jim $58 ($18 for materials and $40 for labor). When Jim bills his customer, he itemizes the bill to include the parts from his inventory ($35), a new axle ($58), and his repair labor to tune up and install parts ($70). The separately listed repair labor charge is the only item on the bill that’s not taxable.
| Parts | $35.00 | |
| Fabricated axle | $58.00 | |
| Repair labor | $70.00 | Tune-up & install |
| Sales tax on parts and fabricated axle | $5.58 | (if the tax rate is 6%) |
| Total | $168.58 |
When covered by insurance
Repair bills paid by an insurance company, in whole or in part, are treated like any other repair bill.
Example #4
Universal Insurance Company pays the bill to repair the broken windshield of a customer’s car. Sales tax is charged on the parts billed for the repair. However, if the repair labor is listed separately on the bill, it isn’t taxed.
Supplies used during repairs
Don’t charge sales tax on shop supplies used during a repair, even if you list the supplies separately on the customer’s invoice. Shop supplies include: spray bottles, buffer pads, towels, masking tape, solvents, sandpaper, and other materials that don’t become part of the item being repaired. These supplies are taxable when you buy them and shouldn’t be included in the taxable portion of your customer’s bill.
Some repairs use very small amounts of materials. The value of the material is insignificant when compared with the entire repair cost, such as when repairing a flat tire, mending clothing, repairing a watch, or stitching a shoe. The shop owner should pay tax when buying these materials. There is no need to bill your customer and collect sales tax on these insignificant material amounts.
Coatings
When used in the repair of tangible personal property, parts, materials, and coatings that have a significant value to the repair (e.g., paint coating, powder coating, spray-on bedliners applied to surfaces on which a coating has already been applied) are subject to tax. The coating material must be separately stated on the billing invoice and tax charged. If the exact amount of material can’t be determined, a reasonable estimation is acceptable.
Motor oil and tire disposal fees
Charges to recoup the overhead associated with the transfer of tangible personal property (e.g., motor oil, tires) are part of the sale of that property and should be taxed even if they’re separately stated on the billing invoice.
Discounts
In general, rebates and discounts provided by the retailer can be used to reduce the taxable sales price (except cash discounts for early or prompt payments). However, rebates and discounts provided by the manufacturer can’t be used to adjust the taxable sales price (except rebates on sales of motor vehicles). If the retailer is reimbursed by the manufacturer, the taxable sales price can’t be reduced by the value of the discount or rebate.
Example #5
Sally takes her laptop into Computer Repair Store. She purchases a new Acme hard drive from the store and has them install it. The invoice shows a $300 charge for the hard drive and a $50 charge for the installation. Sally gives the cashier a $100 manufacturer’s coupon from Acme Hard Drives. Computer Repair Store charges Sally tax on the $300 charge for the hard drive. The total invoice is then reduced by $100.
| Hard drive | $300.00 | |
| Install | $50.00 | |
| Sales tax on hard drive | $18.00 | (if the tax rate is 6%) |
| Manufacturer’s coupon | -$100.00 | |
| Total | $268.00 |
A coupon can be used for a mixed transaction that includes both taxable and nontaxable components (parts and labor). If the coupon terms don’t specify the amount of discount that applies for each component, and each component is separately stated on the invoice, the amount of discount can be proportionately allocated between the taxable and nontaxable portion.
Example #6
Bill takes his bike in for repairs at Ace Bike Shop. The total invoice is $160. The $115 charge for parts and the $45 charge for labor are separately stated. Bill has a coupon for 10% off the total $160 purchase price ($16). In this case, an $11.50 discount is allocated to parts ($115/$160 x $16) and a $4.50 discount is allocated to labor ($45/$160 x $16). Tax is due on the reduced parts price of $103.50 ($115 – $11.50).
| Parts | $115.00 | |
| Labor | $45.00 | |
| 10% off parts | -$11.50 | |
| 10% off labor | -$4.50 | |
| Sales tax on reduced parts price | $6.21 | (if the tax rate is 6%) |
| Total | $150.21 |
Sales tax exemptions
Form ST-101 – Sales Tax Resale or Exemption Certificate. Keep this completed form in your files; it also applies to future exempt sales to these customers. Buying parts and materials
When you buy parts and materials to resell, you can buy them without paying tax if you give the vendor a completed Form ST-101 – Sales Tax Resale or Exemption Certificate.
However, when you buy goods that you won’t resell, such as shop supplies, insignificant amounts of material used in repairs, and tools, you must pay sales tax. (See the “Supplies used during repairs” section above.) You must also pay tax on your office supplies, things you give away to your customers (calendars, etc.), and any other goods you buy that you don’t resell.
If you do more fabrication work than repair work, you may qualify for the production exemption.
Laws and rules
- Sales Tax Rule 029 – Producing, Fabricating And Processing
- Sales Tax Rule 046 – Coatings On Tangible Personal Property
- Sales Tax Rule 062 – Repairs Sale Of Parts And Material
- Sales Tax Rule 065 – Tires Balancing, Studding, And Siping
- Sales Tax Rule 128 – Certificates For Resale And Other Exemption Claims