Search Category: Sales Tax
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
Outfitters
This information is based on the sales tax laws and rules in effect on April 1, 2007.
Should I charge tax on the fees customers pay for my outfitting services?
It depends on the service you provide. Idaho law imposes a sales tax on charges for using tangible personal property or other facilities for recreation. Some fees charged by outfitters fall into this category. It doesn’t matter where your office is located, or where the billing and payment takes place. If the charge is for services performed in Idaho, sales tax applies unless a specific exemption exists.
How much of the fee is taxable?
With the exception of the items discussed next, your entire fee is taxable. Also, if you house your customers in a lodge you own in Idaho, you must get a travel and convention tax permit and charge an additional travel and convention tax on that portion of the bill.
How much of the fee is not taxable?
If you list the following items separately on your customer’s invoice, you don’t have to charge sales tax on:
- Any fees for services performed outside of Idaho.
- River or lake activities in Idaho. The charge for these activities is not subject to Idaho sales tax because it is preempted by federal law as of November 25, 2002. However, this exemption doesn’t apply to the selling and leasing of boats. These sales are taxable. Also, the charges for guided trips on land in Idaho for any recreational purpose are still subject to tax.
- The Government Use Fee charged by the U.S. Forest Service or other government agencies for the right to use public land or water for outfitting.
- Expenses you pay to airlines, bus companies, motels, etc. for your customer. You pay the tax to the service provider and shouldn’t charge tax when you bill the expense to your customer.
- Meals you serve, but only if you paid tax when you bought the food.
When do I have to send the tax to the state?
You must send the tax to the state on your sales tax return for the month that the services or sales take place. For example, if you receive a deposit on a float, hunting, or hiking trip in March, but the trip is taken in September, report the taxable portion on the September return rather than the March return.
What can I buy without paying tax?
You can buy the items listed below without paying sales tax to the vendor.
- Food. When you furnish meals as part of the charge for a trip, you may buy the food without paying tax if you list the meal charges separately and collect tax on them. Another option is to pay tax to the vendor when you buy food; in this case you wouldn’t collect a tax when you charge your customers for meals. If you buy food for your customers without paying tax and then you consume it, or your family or guides consume it, you must pay use tax on the food by reporting it on your sales tax return.
- Rental gear. When you keep a supply of gear that you rent to customers for an extra charge, these items are considered to be purchased for resale. You can buy these items without paying tax. When you rent the items to your customer, you must collect sales tax. Examples of “rental gear” include ground sheets, sleeping bags, boots, rain gear, and dry bags. Rental gear does not include supplies and equipment used in the business. Nor does it include items you require the customer to rent from you or items you provide to all customers. These items are considered equipment used in the business, and you must pay tax when you buy them.
- Intrastate charter services. When you hire a charter aircraft to transport your customers within Idaho, no tax is due. List the fee for the air service separately on the customer’s bill, but don’t charge tax on the service. Federal law prohibits states from taxing any air charter transportation of passengers or freight, as well as recreational flights.
- Taxidermy and meat processing services. When you hire a taxidermist or meat processor on behalf of your customer, you can purchase this service without paying sales tax. You must charge sales tax when you bill your customer for the service.
How do I make tax-exempt purchases?
To buy items tax free, you must give your supplier a completed form ST-101, Sales Tax Resale or Exemption Certificate. Once it is on file with a vendor, this form is valid for all future exempt purchases.
When do I have to pay tax on my purchases?
You must pay tax when buying equipment and supplies for use in your business. These items include boats, rafts, oars, motors, horses, tack, llamas, transportation equipment, camping and cooking gear, animal feed, brochures, and promotional give-away items.
What about travel agency charges?
When your outfitter services are purchased by a customer through a travel agency and you bill your fees to the agency, you must charge tax on the amount billed. Any difference between the amount you charge and the amount paid to the travel agency by the customer is a payment for services and is not taxable.
However, if the travel agency arranges for your services, but you bill the customer and pay the travel agency a fee, you must charge tax on the total amount charged to the customer. You can’t deduct the fee paid to the travel agency for its services when determining the amount of tax to charge the customer
What if I hire another outfitter to serve my customer?
If you hire another outfitter to serve a customer, your use of the other outfitter’s services is considered a purchase for resale. You can purchase the services of the other outfitter without paying tax by giving him a completed form ST-101, and then collecting tax from your customer.
Who can purchase my services without paying sales tax?
For taxable services performed in Idaho, the only customers who can purchase your services without paying sales tax are:
- Other outfitters, if they resell the services. They must give you a completed form ST-101 to claim the tax exemption.
- Buyers who are exempt from sales tax on all purchases, such as nonprofit schools and hospitals, and Idaho state and local governments. These buyers must give you a completed form ST-101 for your records to claim the tax exemption.
- The U.S. Government. You can document an exempt sale by keeping a copy of the government purchase order or a copy of the check stub or remittance advice, or by having the agency complete form ST-101.
For more information on documenting exempt sales, see Retailers & Wholesalers: Making Exempt Sales.
How do I get a refund of sales tax I collected in error?
If you collected tax unnecessarily, you can apply for a refund of the tax you paid. First, you must reimburse the tax to your customers, then apply for a refund on Form TCR, Sales Tax Refund Claim, and send it to the Tax Commission with your sales tax return. You must apply for the refund within three years of the date you paid the tax to the state, and provide documents showing that you reimbursed your customers.
Printing and Publishing
This guide explains Idaho sales and use tax for commercial printers. Commercial printers are retailers who produce printed materials that they’ll sell.
Basics Guide
Sales
The total amount you charge for most printed materials is taxable
Exemption
You might qualify to buy some equipment and supplies without paying sales or use tax
Buying Goods
You can buy certain goods exempt if you qualify for the production exemption
Recordkeeping
Laws and Rules
Recreation and Admissions
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.
Events
Sales tax on fees you charge participants
Equipment
Sales tax on it and supplies to run your facility
Laws and Rules
Food – Retailers
Grocers
Sales and use tax information for primarily involved in selling food for home preparation and consumption
Food, Meals, and Drinks
Sales and use tax information for furnishing, preparing, or serving food, meals or drinks
Online Sellers
Should you be collecting sales tax on your Idaho sales? Are you a remote seller or do you operate an online marketplace?
Basics Guide
Business Types
Information for each
Explanation of Terms
Click-Through Nexus
Referral (“click-through”) agreements with Idaho retailers
Laws and Rules
VDA
Voluntary Disclosure Agreement
Hotels, Motels and Short-Term Rentals
This guide explains Idaho sales and use, Travel and Convention, and auditorium district tax laws for hotels, motels and other businesses that provide lodging in Idaho.
Basics Guide
Rental Marketplaces
Includes vacation rentals
Taxes to Charge
Nonlodging Sales
That lodging providers make
Exempt Lodging
For qualifying organizations
Buying Exempt
General
All retail sales in Idaho are taxable unless specifically exempted by Idaho or federal law. A sale is exempt from sales and use tax only if Idaho law specifically allows an exemption. For example:
- The buyer is:
- An organization that can buy all goods and services exempt from sales and use tax
- An organization or person that can buy certain goods or services exempt from sales and use tax
- The goods or services:
- Will be used in a certain way, so they may be exempt from either sales tax, use tax, or both
- Are exempt from sales and use tax for all buyers
- Are for resale, so they’re exempt from sales and use tax
Restrictions can apply to any tax-exempt sale or use. In all cases, the buyer and seller must keep clear and complete records to explain why tax wasn’t charged or paid. Usually, the buyer must complete an exemption certificate.
If the sale is taxable and the buyer doesn’t pay tax to the seller, the buyer owes use tax. The amount of use tax due is the same amount as if the seller had charged Idaho sales tax.
This guide will cover:
- Buyers that aren’t charged tax
- Goods and services that are or can be exempt because:
- They’re exempt from sales tax for all buyers
- The buyer will use them in an exempt way, or
- The buyer will resell them
Documentation
- The buyer must give the seller a completed Form ST-101 – Sales Tax Resale or Exemption Certificate (Read more about exemption certificates.)
- The exempt buyer should check the box(es) that apply. Read the Form ST-101 instructions. In some cases, sellers must keep a copy of the documents the buyer provides.
- Where noted, alternate documents are acceptable or required.
- The seller should keep the certificate and any other documentation and not charge tax on future qualifying sales to the buyer.
- The exemption certificate must be completed, signed, and dated.
- Buyers that are never taxed don’t have to pay use tax.
We may bill sellers or buyers for the tax due if they don’t keep records to explain why sales weren’t taxed.
Medical Products
This guide explains Idaho sales and use tax laws for buying and selling medical supplies and prescriptions.
Production Exemption
Does your business manufacture, process, or fabricate goods that you’ll sell? If so, you might qualify to buy some equipment and supplies without paying sales or use tax. This is called the production exemption.