Leasing or renting an off-highway vehicle is a taxable sale in Idaho. You’re renting out or leasing out your off-highway vehicle if you allow someone to use it and you receive payment (cash, property, or other financial gain). Whether you’re a business owner or an individual, you’re a retailer if you make one or more sales (including off-highway vehicles) or hold yourself out as being in business.
- You list and lease out or rent out your snowmobile through an internet marketplace.
- You advertise and lease out or rent out your off-highway motorbike through word-of-mouth.
- You make one or more sales (including off-highway vehicles) or hold yourself out as being in business.
Retailers must:
- Get a seller’s permit.
See the Idaho Business Registration guide learn more. - Collect tax on the full amount you charge for the lease or rent.
- Forward the tax with the sales tax return that you file with the Tax Commission.
See the Retailers guide.
Responsibilities
You don’t need to collect tax when you list your off-highway vehicle with a marketplace facilitator and it collects and forwards the tax to the Tax Commission. This table shows tax responsibility in different vehicle leasing scenarios.
| Scenarios: Leasing or renting an individual’s vehicle in Idaho | Who’s responsible for collecting and forwarding tax due? |
|---|---|
The vehicle is in Idaho and both of these apply:
| The owner must register as a retailer to collect, report and forward taxes on the lease or rental price of the vehicle. |
| The vehicle is in Idaho and the owner uses a marketplace facilitator to arrange all leases or rentals of the vehicle. | The marketplace facilitator must register as a retailer, collect, report and forward taxes on the sales price of the vehicle leases or rentals. |
The vehicle is in Idaho and is:
| The owner and the marketplace facilitator are responsible for taxes as follows:
|
You’re responsible for the collection and forwarding of all taxes due on your vehicle. If you rent out your vehicle through a marketplace facilitator, check to see which, if any, taxes it collects and forwards for you.
When you collect tax
The type of lease or rent determines when you collect tax. Off-highway vehicle leases and rents fall into three general categories:
| Type of lease/rental | How the lease/rental works | When to collect sales tax |
|---|---|---|
| Basic lease or rental | The customer returns the motor vehicle to the lessor at the end of the lease or rental term. | Collect sales tax on each lease or rental payment. |
| Lease or rent with option to buy | The customer has the option of buying the motor vehicle during the lease or rental term or at the end of the term at fair market value. | Collect sales tax on each lease or rental payment and on the price the customer pays when buying the motor vehicle. |
| Lease/rent and purchase | The customer makes regular payments during the lease or rental term. At the end of the term, title to the motor vehicle passes to the customer for $0 or an amount that’s less than fair market value. | The customer will own the motor vehicle at the end of the lease or rental term, so this is a sale and a financing arrangement. Collect sales tax on the sales price of the vehicle at the beginning of the term, when the sale is made (the contract is completed). |