Search Category: Sellers/Vending
Sales Price – Food, Meals, and Drinks
Taxable parts of a customer’s bill
- Charges for food or drinks served
- Cover charges
- Service charges other than tips
- Charges to prepare or serve food, drinks and meals for customers who supply the ingredients
Nontaxable parts of a customer’s bill
- Tips that are all of these:
- Separately stated on the receipt
- Paid to the service provider as additional income
- Not used to avoid sales tax on the actual meal price
- Delivery charge that is both of these:
- Separately stated on the receipt
- Not used to avoid sales tax on the actual meal price
- Charges for playing games on tablets or similar devices.
Note: You don’t charge customers sales tax, but you do need to purchase amusement device decals.
Separate statement of sales tax
You must separately list the amount of tax on the receipt even if you want whole-dollar transaction amounts.
Example
If the final amount you charge for a drink is $3.00, the receipt would show:
| Drink | $2.83 |
| Sales Tax | $0.17 |
| Total | $3.00 |
Note: If you don’t separately state the tax, you charge tax on the whole-dollar amount (i.e, $3.00 x current sales tax rate = sales price).
Sometimes businesses with high-volume or even-dollar sales don’t automatically give receipts. But you must give your customers a receipt if they ask for it. A receipt, showing the amount of tax you charged, is the only proof they have to show they properly paid sales tax.
When you collect sales tax from customers for the State of Idaho, you must accurately track the tax you collect and forward it to the Tax Commission.
Food delivery fees and other charges
There are different types of meal delivery models, and the fees charged vary. Taxability depends on who the retailer is, what is charged, and how charges are shown on the invoice.
Example 1: Customer orders directly from restaurant
The restaurant sells $30 of food to the customer. It’s the retailer. It collects tax. The delivery company delivers food on behalf of the restaurant.
| Food | Taxable | $30.00 |
| Delivery fee | Not taxable | 4.99 |
| Tax | 1.80 | |
| Total | $36.79 |
Example 2: Customer orders directly from delivery service
The delivery company sells $30 of food to the customer and adds a 10% service charge. It’s the retailer. It collects tax. The delivery company buys food for resale from the restaurant.
| Food | Taxable | $30.00 |
| Service charge | Taxable | 3.00 |
| Delivery fee | Not taxable | 4.99 |
| Tax | 1.98 | |
| Total | $39.97 |
Example 3: Customer orders directly from delivery service
The delivery company sells $30 of food to the customer. It adds a 10% service charge and a surge charge because of high delivery demand. It’s the retailer. It collects tax. The delivery company buys food for resale from the restaurant.
| Food | Taxable | $30.00 |
| Service charge | Taxable | 3.00 |
| Delivery fee | Not taxable | 4.99 |
| Surge charge* | Not taxable | 2.99 |
| Tax | 1.98 | |
| Total | $42.96 |
*The surge charge is delivery-related.
Example 4: Customer orders directly from delivery service
The delivery company sells $8 of food to the customer. The food order is small, so the delivery company adds a small-order charge. It’s the retailer. It collects tax. The delivery company buys food for resale from the restaurant.
| Food | Taxable | $8.00 |
| Small-order fee* | Taxable | 2.00 |
| Service charge** | Taxable | 1.00 |
| Delivery fee | Not taxable | 4.99 |
| Tax | .66 | |
| Total | $16.65 |
*The small-order charge is food-related. **The service charge is 10% of the food cost.
- A tip added to a delivery fee isn’t taxable.
- If you’re a retailer, you must have a valid Idaho seller’s permit. You can’t collect sales tax without one. You can get a permit at no charge. See the Retailers guide.
Food, Meals, and Drinks Guide
This guide explains Idaho sales and use tax law for furnishing, preparing, or serving food, meals or drinks. It describes how you should charge your customers tax and when to pay tax on what you buy to operate your business.
Many types of businesses sell food, meals or drinks, including:
- Full-service restaurants
- Casual dining (e.g., fast food and food courts)
- Bars
- Coffee shops
- Private clubs
- Cafeterias
- Food Trucks
- Sidewalk vendors
- Caterers
- Meal delivery services
- Grocery and convenience stores
- Personal chefs (e.g., preparing and serving food or drinks for customers who supply the ingredients)
- Meal kit retailers (e.g., meals that require the buyer to prepare the food)
- Meal kits delivered to a home or business
- Meals prepared beforehand to be taken home to eat later
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 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.
Laws and Rules for Grocers
Learn more about grocery sales:
- Exempt Private and Public Organizations — Idaho Code section 63-3622O
- Imposition and Rate of the Use Tax – Exemptions — Idaho Code section 63-3621
- Responsibility for Tax — Idaho Code section 63-327; Sales Tax Rule 118
- Returns and Payments — Idaho Code section 63-3623
- Sale — Idaho Code section 63-3612
- Sales Price — Idaho Code section 63-3613; Sales Tax Rules 043
- 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.
Food, Meals, and Drinks
This guide explains Idaho sales and use tax law for furnishing, preparing, or serving food, meals or drinks.
Exempt Sales
Exempt Uses
Food and Admissions
Selling them together