Sales of Off-Highway Vehicles by Dealers and Retailers

Sales price

Dealers and retailers must collect sales tax on the sales price of off-highway vehicles at the time of sale unless an exemption applies. Items that are nontaxable aren’t part of the sales price. The final amount you charge your customer can include both taxable and nontaxable items.

What sales price includes

Sales price includes the following items, even if you don’t separately state them on the invoice:

  • Freight or shipping charges to transport the off-highway vehicle before the sale
  • U.S. federal excise tax imposed on the manufacturer, wholesaler or importer before the sale
  • All options and accessories (e.g., GPS systems, upgraded features, theft-deterrent systems)
  • Services, including charges for labor the dealer or retailer provides as part of the sale agreement (e.g., painting, coating, rust proofing; washing, waxing, cleaning; lettering)
    Note: See exemption for service charges on certain new vehicles sold by dealers as of July 1, 2019, below.
  • Labor charges before the sale (e.g., installation, fabrication, repairs required by the buyer including both parts and labor)
    Note: See exemption for labor charges on certain new vehicles sold by dealers as of July 1, 2019, below.
  • Mandatory service and warranty agreements
  • Dealer document, credit card and other service fees
  • Insurance settlements
  • Manufacturer’s rebates
  • Auction fees (e.g., gate fees, buyer’s fees)

What sales price doesn’t include

The sales price doesn’t include the following items if you separately state them on the invoice:

  • Title and registration fees a government agency imposes
  • Optional service and warranty agreements
  • Finance charges (e.g., loan origination fees, interest)
  • Optional insurance (e.g., GAP insurance)

Note: A customer down payment doesn’t reduce the taxable sales price.

Exemption for labor and service charges to install accessories on new vehicles

Effective July 1, 2019, dealers’ labor or service charges to install accessories on certain new factory-delivered vehicles are exempt.

The exemption includes the following off-highway vehicles:

  • All-terrain vehicles (ATVs)
  • Utility-type vehicles (UTVs)
  • Specialty off-highway vehicles (SOHVs)
  • Motorbikes
  • Snowmobiles

Examples of accessories on new factory-delivered vehicles that qualify for the exemption are:

  • Saddlebags
  • Truck storage racks
  • Sealant, rustproofing, undercoating
  • Sound systems
  • Anti-theft devices
  • Wheel locks
  • Splashguards

Note: “Accessories” doesn’t include service or maintenance contracts.

Reference: Idaho Code section 63-3622OO, effective July 1, 2019.

Trade-in allowances

You can accept merchandise as full or partial payment of an off-highway vehicle you sell. The amount allowed on the traded-in merchandise reduces the taxable sales price, which is the amount you charge tax on.

  • You must put the merchandise you take in trade into your inventory for resale.
  • The trade-in and all documentation must take place at the time of the sale, or the allowance doesn’t reduce the taxable price.
  • You can’t accept manufactured homes and modified park model recreational vehicles as trade-ins.

A leased off-highway vehicle you accept as a trade-in for a new purchase reduces the sales price only if both these criteria are met:

  • The customer has paid the lease in full.
  • The customer paid sales tax on the buyout of the lease.

Read this chart to see pdf what is and isn’t included in the calculation of taxable sales price.