Search Category: Sales Tax
Local Sales Tax
City Sales Tax
Some Idaho resort cities have a local sales tax
Auditorium Districts
Some Idaho areas have established auditorium districts
Organizations and Sales Tax
Nonprofit and Religious Groups
Organizations and Entities that can buy Everything Exempt
Schools
Transportation
This guide explains how Idaho sales and use tax laws apply to the transportation industry. It includes how Idaho taxes apply to sales and purchases that transportation companies make. This guide also covers exemptions, requirements for keeping records for sales and use taxes, and filing returns.
Motor Vehicles
For motor vehicle dealers and private party sales
Off-Highway Vehicles
For snowmobiles, ATVs, UTVs, SOHVs, and motorbikes
Watercraft
For boats, trailers, and other watercraft
Aircraft
For aircraft registration and taxes
Ground, Air, Rail
For ground, air, and railroad businesses
IRP
For vehicles registered under the International Registration Plan (IRP)
Sales Tax Exemptions
Sales and Use Taxes: Basics Guide
Idaho has a sales tax and a use tax.
Sales and use taxes apply to the sale of goods and services, unless an exemption applies. (See Sales and Use and Idaho Code 63-3612 for more information.)
Tax rates
Idaho’s sales tax rate is 6%. Idaho’s use tax rate is also 6%.
Basics of sales tax
Sales tax applies to every retail sale. Examples of sales include:
- The sale, lease, or rental of tangible personal property (goods)
- Digital books, videos, music, or games with a permanent right for the buyer to use
- Short-term rental accommodations for 30 days or less
- Furnishing meals or drinks
- Admissions to events or places in Idaho
- The privilege to use personal property or facilities for recreation
- Production, fabrication, printing, or imprinting labor
Basics of use tax
Use tax applies to goods used or stored in Idaho if:
- The seller didn’t charge sales tax.
- The buyer didn’t pay at least 6% sales tax (such as on goods bought while in another state).
- The buyer bought something online and didn’t pay 6% Idaho
- The purchase doesn’t qualify for an exemption. Or, the goods are used in a way that no longer qualifies for the original exemption claimed.
See Use Tax for more information.
Buyers
Buyers owe sales tax on goods they use or store in Idaho. This includes goods they buy in person, out-of-state, online, by telephone, or from a mail-order catalog.
Buyers owe use tax if they didn’t correctly pay sales tax – or didn’t pay at least 6% sales tax – on taxable goods, and they don’t qualify for an exemption. See Use Tax for more information.
Idaho offers some exemptions from sales and use taxes when buying goods. See Sales Tax Exemptions for more information.
Sellers
Almost everyone selling goods or offering taxable services in Idaho must:
- Have a seller’s permit
- Collect sales tax
- File a return for sales and use taxes
- Forward the tax they collected to the Tax Commission
See Who Needs a Seller’s Permit for more information. Also see Sales and Use Taxes for more about specific sellers, permits, and exemptions that apply to sellers.
You might not need a seller’s permit if you only make a couple of sales per year. See Occasional Sellers for more information.
What's in the taxable purchase price
You owe sales or use tax on the following items, even if they’re separately stated on the invoice:
Freight-in to the retailer
Fees charged for shipping goods to the retailer, who then passes the charges to the buyer
Manufacturer’s or importer’s excise tax
U.S. federal taxes that are charged to the retailer before the retail sale, but might still be a separate item on the invoice to the buyer
Example: Taxes on cars, gasoline, beer, wine, and cigarettes
Certain services the seller performs as part of the sale
Certain services
Example: Assembling an item for a fee; Clothing alterations charged at the time of the sale
Certain fees
Certain surcharges or fees
- Fees for paying with a credit card, debit card, or gift card
- Environmental or disposal fees (except those that a government agency directly imposes)
- Fuel surcharges that aren’t tied to delivery
What's not in the taxable purchase price
You don’t owe sales or use tax on the following items, if they’re separately stated on the invoice:
Shipping and handling
Shipping and handling charges for shipping the goods directly to the buyer
Installation labor
Installation labor, such as the labor to install a television in a home at the time of the sale
Repair labor
Repair labor, such as the labor to fix a customer’s television
- Parts used to make repairs are taxable.
- Labor to install parts isn’t taxable (e.g., installing parts in a car after the sale of the car).
- Labor to repair goods you own isn’t taxable. (See the Repair Shops guide.)
Insurance charges
Charges for optional insurance on goods rented or sold.
Certain interest charges
Interest, carrying charges, service charges or financing charges on goods sold
Note: Special rules apply to interest, service, and financing charges on leases. See Renting and Leasing Tangible Personal Property.
U.S. federal excise taxes
U.S. federal excise taxes that the retailer charges the customer at the time of the retail sale. The retailer pays the supplier the tax when the retailer buys the items for resale. The retailer then charges and separately states the excise tax on the invoice.
Example: New, large tractor-trailer units
Trade-in allowances
Trade-in allowances on merchandise traded in for other goods
- Can cover all or part of the purchase price.
- Goods traded in must be added to the seller’s inventory.
Example: Donna buys a range from Sam’s Appliances for $800. Sam’s agrees to give Donna a $250 trade-in allowance on her old range. Sam’s agrees to deliver the range for an additional $25. Sam’s doesn’t charge Donna sales tax. Donna owes use tax on $550 ($800 minus the $250 trade-in; the $25 delivery fee isn’t taxable).
Taxable purchase price and discounts and rebates
The following table explains how discounts or rebates can affect the taxable purchase price.
Type of discount allowed
How the discount or allowance works
Does it reduce the taxable purchase price?
Manufacturer’s rebate
Reduction of the buyer’s cost that a third party offers. The rebate is only valid if there’s proof of purchase.
No, except motor vehicle rebates paid to the seller. See Motor Vehicles – Dealers
Retailer’s coupon
Electronic or paper coupon or other price reduction that the retailer gives but receives no reimbursement for.
Yes
Retailer’s trade discount
Discount given to good customers or customers in a certain industry (e.g., a lumber yard that gives contractors a 3% discount).
Yes
Prompt-payment discount
Discount that encourages the buyer to pay the bill on time (e.g., a 2% discount if the customer pays the bill within a certain number of days).
No
Laws and rules
Sales Tax
- Sales Tax (Idaho Code section Title 63, Chapter 36)
- Sales and Use Tax Rules
- Decisions: Sales & Use
- Sales Tax Rules Committee
Use Tax
Learn more about use tax:
- Retailer Engaged in Business in This State (Idaho Code section 63-3611)
- Sales Price (Idaho Code section 63-3613)
- Storage (Idaho Code section 63-3615)
- Tangible Personal Property (Idaho Code section 63-3616)
- Imposition and Rate of the Use Tax – Exemptions (Idaho Code section 63-3621)
- Use Tax on Transient Equipment (Idaho Code section 63-3621A)
- Returns and Payments (Idaho Code section 63-3623)
- Retail Sales: Sale at Retail (Sales Tax Rule 011)
- Sales Price or Purchase Price Defined (Sales Tax Rule 043)
- Application and Payment of Use Tax (Sales Tax Rule 072)
- Tangible Personal Property Bought or Shipped to Idaho (Sales Tax Rule 073)
- Time and Imposition of Tax, Returns, Payments and Partial Payments (Sales Tax Rule 105)
- Vehicles and Vessels – Gifts, Military Personnel, Nonresident, New Resident, Tax Paid to Another State, Sales to Family Members, Sales to American Indians, and Other Exemptions (Sales Tax Rule 107)
Seller’s Permits
Who Needs a Seller's Permit?
Temporary Seller's Permits
Regular Seller's Permits
Use Tax
Idaho adopted sales tax and use tax in 1965.
Basics Guide
Reporting
Reporting, filing, and paying
Credit
For paying another state’s sales tax
E911 Prepaid Wireless Fee
Sellers of prepaid wireless telecommunications service must collect a 2.5% fee on the sales price of that service.
This E911 Prepaid Wireless fee (“fee”) helps provide funds to support consolidated emergency communications systems.
Prepaid wireless telecommunications service (PWTS) defined
PWTS is a sale of phone service for a mobile device that’s able to access a 911 system. Customers purchase the phone service in advance for a period of time, such as a month or blocks of months, or in predetermined units or dollars. There isn’t a contract or commitment to ongoing service. This service is also called “pay as you go,” “pay as you talk,” “no contract phone plans,” or “prepaid phone plans.” (See Idaho Code section 31-4813 (1)(c).)
Items subject to the prepaid E911 fee
The fee only applies to sales of PWTS, including:
- Prepaid wireless phone cards
- Recharge or refillable cards for wireless services
- Prepaid phone bundles (see “Prepaid wireless bundles,” below)
The fee doesn’t apply to:
- Sales of prepaid mobile devices or mobile data when you sell them separately from PWTS (see “Prepaid wireless bundles,” below)
- Sales of traditional prepaid telephone cards used for landlines or payphones
- International phone cards used for landlines or payphones
- Fixed-line telephone service
- Contract-based wireless service
- Voice over internet protocol (VoIP) service
Prepaid wireless bundles
You must charge the prepaid E911 fee on the sales price of mobile devices or mobile data if both these circumstances apply:
- The mobile device, mobile data, or both are bundled with PWTS
- They’re sold for a single price
Exceptions
Don’t charge the fee on the total value of the bundled sale in any of these situations:
- If you separately state the dollar value of the PWTS on the customer invoice. In this case, the fee only applies to the invoiced or otherwise disclosed value of the PWTS.
- If you document the value of the PWTS alone. In this case, the fee only applies to the value of the PWTS.
- If you choose not to charge the fee because the PWTS amount is minimal, meaning 10 minutes or less, or $5 or less.
When the prepaid E911 fee applies
You must charge the prepaid E911 fee on each retail transaction for PWTS you sell to anyone, even if selling PWTS isn’t your primary business. You also must either separately state on an invoice or else disclose the prepaid E911 fee amount so the customer knows you charged it. (See “Retailers must register,” below.)
A retail transaction occurs in Idaho when any of the following apply:
- The transaction happens in person at your Idaho location.
- The PWTS is delivered to your customer at an Idaho address.
These are some indicators that it’s an Idaho retail transaction:
- The customer’s address is in Idaho.
- The customer gives you an Idaho address at the time of sale (e.g Idaho address on a personal check; credit card billing address in Idaho).
- The customer’s mobile phone number is associated with an Idaho location.
If you sell the PWTS in Idaho, you’ll need to charge the fee, even if your customer has a phone number from outside Idaho.
Out-of-state sales
The fee doesn’t apply to sales you make to customers outside Idaho. These sales are either of these:
- Prepaid wireless service cards you mail to a customer with an out-of-state shipping address
- Sales of PWTS you make by phone or internet to customers with an out-of-state billing address
You must keep documentation to prove your customer was out of state. If you don’t, we’ll hold you responsible for the fee.
Out-of-state retailers
If you’re an out-of-state retailer, you don’t have to collect the fee if either of these applies:
- You don’t have an Idaho sales tax permit and aren’t legally required to have one.
- You don’t have Idaho nexus.
Retailers that must register
Retailers should already have an Idaho seller’s permit. Read more about retailers.
All businesses that sell PWTS must also do all of these:
- Register with the Tax Commission using the Idaho Business Registration (IBR) application.
- Collect the prepaid E911 fee (as well as appropriate sales tax) on all sales of PWTS.
- File Form 3950, E911 Prepaid Wireless Fee Return, to report sales.
- Forward the Idaho E911 Prepaid Wireless fees you collect to the Tax Commission.
Note: Businesses that only sell other types of phone services don’t need to do these four tasks. These other phone services include:
- International phone cards
- Fixed-line telephone service
- Contract-based wireless service
- Voice over internet protocol (VoIP) service
How to file
After you register, we’ll mail you a permit for each Idaho location. We’ll also send you personalized returns — Form 3950s — so you can report and forward the E911 prepaid wireless fee.
By default, your filing cycle for the fee will match the filing cycle for your sales and use tax account. For example, if you file your Form 850 (sales and use tax) quarterly, you’ll file your Form 3950 (E911 prepaid wireless fee) quarterly, too. You must file both forms by their due date, even if you don’t have sales for that period.
You can file online using TAP or use the forms we’ll mail you.
Laws and rules
Learn more about the E911 prepaid wireless fee:
- Prepaid Wireless Telecommunications Service Emergency Communications Fee (Idaho Code section 31-4813)
- Idaho Emergency Communications Fund – Establishment and Administration (Idaho Code section 31-4818)
- Prepaid Wireless E911 Fee Administrative rules in the Sales and Use Tax Administrative Rules