Direct pay authority allows businesses to buy all items exempt from tax. The businesses pay any tax due directly to the Tax Commission instead of to a vendor.
You might be approved for direct pay authority if all of these are true:
- You qualify for sales tax exemptions.
- You buy many items from different vendors.
- You’ve demonstrated proper accounting and technical internal controls to comply with the Idaho Sales Tax Act.
- The vendors you buy from have trouble tracking which items you buy are exempt and which aren’t (even though you supply them with an exemption certificate).
To apply
Your request must be in writing.
- Send it to:
- Mail address: Sales Tax Audit Bureau, Idaho State Tax Commission, PO Box 36, Boise ID 83722-0410.
- Email: Submit a question. You should receive a response within 5 to 7 business days.
- Write “Direct Pay Authority Request” at the top of your letter or email
- Describe your reasons for needing direct pay authority and how it would benefit both you and the Tax Commission.
- Include this information in your letter:
- The name of your business
- What goods or services you produce (what your business does)
- What goods or services you typically need to buy exempt from sales tax
- What percentage of your purchases in Idaho are exempt from sales tax
- The sales price for these purchases in the past 12 months
- Your anticipated sales price for these purchases in the next 12 months
- Which exemption certificate you use (e.g.,
Form ST-101 – Sales Tax Resale or Exemption Certificate) to buy exempt from your vendors - How you buy exempt from vendors without an exemption certificate (e.g., Optional short version of Form ST-101)
After you apply
Our Sales Tax Audit Bureau will review your request. If we need additional information, we’ll contact you. Please allow four to six weeks to hear from us.
Using your Direct Pay Authorization
Your direct pay authorization is valid for a defined period. Check the document for its expiration date.
- Provide your vendors with a copy of your direct pay authority certificate to keep on file.
- Contact us 45 to 60 days before your authorization’s expiration date to request a renewal.
- Please contact us to cancel your authorization if it’s no longer is needed. Use a mail or email address in the “To apply” section above.
- Let your vendors know if you cancel your authorization.
Remember:
Your direct pay authority is no longer valid if it expires. Your vendor won’t honor it. Make sure you renew before the expiration date if you want to keep your direct pay authority.