Search Category: Transportation
Motor Vehicles – Private Parties and Nondealer Retailers
Sales or use tax is due on the sale, lease, rental, transfer, donation, or use of a motor vehicle in Idaho unless a valid exemption applies.
Exemptions
Rentals
Leasing out or renting out your own motor vehicle
Recordkeeping
Motor Vehicles – Dealers
Sales tax is due on the sale, lease, and rental of motor vehicles when they’re sold in Idaho unless a valid exemption applies.
Basics Guide
Sales Price
What is the motor vehicle sales price for a dealer?
Leasing
Leasing or renting a motor vehicle
Exemptions
Defaults
Defaults and repossessions on motor vehicle loans
Donating
Donating or loaning a motor vehicle
In Your Business
Using motor vehicles in your business
Buying for Resale
Buying motor vehicles for resale
Recordkeeping
Railroad Transportation
Nontaxable charges
The amount a rail transportation company charges to transport people or property isn’t taxable. This includes:
- Freight and service fees
Examples:
- Freight charges on the rail company’s cars
- Charges to move a customer’s railroad stock
- Logistics services
- Charges to transport people
Taxable purchases
Rail transportation companies must pay tax on items they buy to operate the business. These items include:
- Motor vehicles and repair parts for motor vehicles
- Warehouse tools and supplies
- Safety equipment and supplies
- Office furniture and supplies
- Packing and shipping materials
- Food to give away to passengers; see Complimentary items for more information
- Logo merchandise and promotional items given away
- Items that become part of real property
- Locomotives and other rolling stock
- Parts used in Idaho to repair rolling stock
- Fuel, when it’s not necessary to or primarily used in:
- Testing remanufactured or rebuilding rolling stock engines
- Equipment in the remanufacturing or rebuilding of rolling stock engines
Exemption for railroad rolling stock
A rail transportation company can buy certain equipment tax exempt.
Qualifying railroad rolling stock
Railroad rolling stock that qualifies for the exemption is property that’s both:
- Rebuilt or remanufactured in Idaho
- Used in interstate commerce for at least three consecutive months before being rebuilt or remanufactured in Idaho
Examples:
- Flanged-wheel locomotives
- Railroad cars
- Maintenance-of-way equipment
- Other flanged-wheel vehicles designed and manufactured specifically for use on railroad tracks and railroad systems
- Component parts of these locomotives, cars, equipment and vehicles
Qualifying parts, materials and equipment
Parts, materials and equipment for rebuilding and remanufacturing railroad rolling stock in Idaho that qualify for the exemptions are:
- Property that becomes:
- Part of the rolling stock
- Part of the equipment used in rebuilding or remanufacturing the rolling stock
- Materials used or consumed in the process of remanufacturing or rebuilding railroad stock
- Equipment necessary to, and primarily used in, the process of remanufacturing or rebuilding railroad stock
- Fuel used in:
- Testing remanufactured or rebuilt railroad stock engines
- Equipment that’s necessary to, and primarily used in, the process of remanufacturing or rebuilding railroad stock
Laws and Rules for Ground, Air, and Rail
Learn more about common carriers:
- Motor Vehicles and Trailers Used in Interstate Commerce — Sales Tax Rule 101
- Motor Vehicles, Used Manufactured Homes, Vessels, All-Terrain Vehicles, Trailers, Utility Type Vehicles, Specialty Off-Highway Vehicles, Off-Road Motorcycles, Snowmobiles and Glider Kits — Idaho code section 63-3622R
- Purchases Shipped Out-Of-State by a Common Carrier — Idaho code section 63-3622P
- 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
- Aircraft — Idaho code section 63-3622GG, Sales Tax Rule 010
- Flying Clubs — Sales Tax Rule 038
- Railroad Rolling Stock — Idaho code section 63-3622CC
- Parts for Railroad Rolling Stock — Idaho code section 63-3622DD
- Railroad Rolling Stock, Parts, Materials and Equipment — Sales Tax Rule 104
- Airline, Buses, and Railway Dining Cars — Sales Tax Rule 017
- Transporation, Freight, and Handling Charges — Sales Tax Rule 061
Recordkeeping for Ground, Air, and Rail
As a transportation provider, you must keep records of all the purchases and sales that your business makes. Your records must show that you properly collected, reported and paid or forwarded taxes to Idaho.
Records to keep
- Normal books of account
- Documents that support entries in the books of account
Examples:
- Sales records
- Bills
- Receipts
- Invoices
- Credits granted
- Job, work orders, or bills of lading
- Contracts
- All schedules or working papers used to prepare your tax returns
- Tax returns; see Filing a return and forwarding tax to the state
- Copies of sales tax resale or exemption certificates (Form ST-101)
Note: Keep a buyer’s exemption certificate for as long as you do business with that buyer, plus four years. We’ll bill you for tax due if you don’t have completed exemption certificates for buyers you sell exempt to.
What records must show
- Gross receipts showing sales and services were made or received in Idaho, even those sales that you or your customer think are 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.
- Copies of properly completed exemption forms showing 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 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 should keep records for seven years if you don’t file returns.
Complimentary Items – Ground, Air, and Rail
The transportation company must pay tax on items it gives passengers as part of the ticket price. The company must:
- Pay Idaho sales or use tax on the sales price of items it buys in Idaho, even if the items aren’t distributed to passengers in Idaho
- Pay Idaho use tax on the cost of items distributed in Idaho if both of the following apply:
- The company didn’t pay sales tax in the state where it bought the items
- Passengers receive the items during trips that begin or end in Idaho
If Idaho use tax is due on complimentary items, it’s calculated in either of these ways:
- On the actual cost of the items distributed in Idaho
- If records aren’t accurate, the company should multiply the cost of items it gave passengers by the percentage of Idaho miles in the trip
Sales to Passengers – Ground, Air, and Rail
When transportation companies like buses, airlines or railways sell passengers property that isn’t included in the price of a ticket, the property is taxable.
- Food and drinks
- Souvenirs
- Reading materials
Transportation companies making taxable sales are retailers who must have an Idaho seller’s permit. They must collect sales tax on items they sell, unless the passenger is exempt. They must then forward any sales tax they collect to the Tax Commission. See “Retailers.”
The transportation company can buy the items exempt. They must collect tax when they sell to passengers.
The transportation company must charge Idaho sales tax when it sells products during a trip that starts or ends in Idaho.
- If the company’s records show where products sold are ordered and delivered during a trip that starts or ends in Idaho, the company must charge Idaho sales tax on 100 percent of the sales price of the products ordered or delivered in the state.
- If the company’s records don’t show where products were ordered or delivered during a trip that starts or ends in Idaho, it can prorate the sales tax due to Idaho. The company should multiply the total sales in a trip by the percentage of Idaho miles in the trip. The company must charge Idaho sales tax on the proportionate total of sales it made in Idaho during the trip.
Note: Passengers can buy products exempt if they qualify for a valid exemption and give the transportation company a completed 
Form ST-101 – Sales Tax Resale or Exemption Certificate.
Air Transportation
Nontaxable charges
The amount an air transportation company charges to fly people or property isn’t taxable. Nontaxable services include:
- Transporting freight from one point to another
- Transporting passengers from one point to another
- Aerial contracting services (e.g., applying farm chemicals or aerial logging)
- Air ambulance services
Taxable purchases
Air transportation companies pay tax on items they buy to operate the business. This includes:
- Sales and leases of aircraft and parts unless an exemption applies. See “Exemptions for air transportation companies” below.
- Hangar equipment and supplies.
- Safety equipment and supplies.
- Food to give away to passengers. See Complimentary items for more information.
- Logo merchandise and promotional items given away.
- Office furniture and supplies.
- Tools and equipment used in aircraft repair, remodeling and maintenance.
Exemptions for air transportation companies
Aircraft and parts are exempt for some transportation companies and aircraft maintenance companies including:
- Aircraft that transport passengers or freight for hire for more than half their flight hours. The aircraft must:
- Be operated under authority of Idaho, the United States or a foreign government
- Be used to provide services to the public without discrimination
- Transport people or property from one location to another on the ground or water
- Aircraft used for air ambulance services
- Fixed-wing aircraft that spend more than half their flight hours as an air tactical group supervisor platform under contract with a governmental entity for wildfire activity
- Repair or replacement materials and parts installed, affixed or applied to these aircraft in connection with remodeling, repairing or maintaining them
- Certain materials, parts and components installed on nonresident, privately owned aircraft at an FAA-approved repair station in Idaho
Ground Transportation
Ground transportation companies include common carriers such as limousines, bus companies, trucking companies and ride-sharing services that transport people, freight, and other items using roads and highways.
Nontaxable charges
The amount that a ground transportation company charges to move people or property isn’t taxable. These charges include:
- A trucking company’s freight charges to its customers
Examples:
- Moving residential or commercial furnishings
- Moving packages or commodities
- A company’s charges to transport people (e.g., bus, taxi, limousine)
- Ride-sharing services (e.g., Uber, Lyft)
This guide explains sales and use tax that ground transportation companies charge their customers on their purchases. Shipping fees are explained in Retailers – Sales price.
Taxable purchases
Items a ground transportation company buys to operate the business are generally taxable. Taxable items include:
- Trucks, buses and other motor vehicles except motor vehicles in an International Registration Plan (IRP); see Interstate Commerce Vehicles
- Vehicle parts and supplies
- Warehouse tools and supplies
- Office furniture and supplies
- Packing and shipping materials
- Food to give away to passengers; see Complimentary items for more information
- Logo merchandise and promotional items given away
Exemption for purchases common carriers ship out of state
Goods a customer buys must be shipped directly to a location outside of Idaho to be exempt. For example, when customers buy goods that a common carrier ships directly out of state, those goods aren’t taxable in Idaho. But, when a common carrier buys goods and uses itself as the shipper, the goods are exempt in Idaho only if all of these apply:
- It uses its own vehicles to ship the goods outside Idaho.
- It uses the goods outside Idaho in their business as a common carrier.
Examples:- Shipping materials used by common carriers that move household goods
- Shipping materials used by common carriers that ship packages
- They have a bill of lading showing delivery outside of Idaho.
Ground, Air, and Railroad Businesses Basics Guide
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.