Use tax is a tax on goods you use or store in Idaho that haven’t been properly taxed. You owe Idaho use tax if you didn’t pay sales tax on goods that aren’t exempt. The use tax rate is the same as the sales tax rate.
You probably owe use tax if you’re an individual or if you operate a business that:
- Shops online or buys items from sellers that don’t collect Idaho sales tax
- Buys from out-of-state sellers that don’t collect sales tax
- Takes items out of sales inventory to give away or use
- Uses untaxed goods in a taxable activity
- Gets a refund of Idaho tax paid on fuels
- Uses goods when performing a nontaxable service
- Is a multi-level marketing business or buys from multi-level sellers
- Provides free samples or giveaways
- Repairs goods covered under an optional warranty or maintenance agreement
- Brings equipment, supplies or vehicles into Idaho for permanent use
- Brings business assets into Idaho for temporary use
- Does contracting work on real property in Idaho
Calculating use tax due
You owe use tax based on the taxable price of an item. The Idaho use tax rate is the same as the Idaho sales tax rate.
The amount of use tax you owe is based on a recent sales price of the item, or when the item first becomes taxable. Without proof of a recent purchase price, you owe tax on the item based on its fair market value.
- Charlotte visits her family in Oregon. She buys some furniture while she’s there and brings it back to Idaho to use. The Oregon company assembles the furniture, and she brings it back in her trailer. She owes use tax on the taxable portion of the purchase price, which consists of the furniture and the assembly fee. A month later, she buys clothes from an online store based in New York that doesn’t collect Idaho sales tax. Charlotte owes use tax on the clothing.
- Raj buys a used pickup in Montana and brings it home to Idaho where he uses it in qualifying production activities on his farm. The pickup is not registered and is used strictly in the feedlot. He doesn’t owe use tax on the pickup because it qualifies for the production exemption. After using the pickup in the feedlot for two years, Raj registers the pickup to use on public roads. Raj owes use tax on the fair market value of the pickup when it first becomes taxable, which is when he registers it.
Also see the Sales and Use Taxes Basics Guide for what the taxable purchase price includes, what it doesn’t, and how discounts and rebates affect the taxable purchase price.
Individuals can use the worksheet format in Form 850-U – Self-Assessed Use Tax Return and Instructions, to track their untaxed purchases.
Businesses and organizations
Many businesses keep a use-tax accrual account to post tax due when they post purchases on which tax is due. Some businesses keep a use tax worksheet that lists purchases and inventory withdrawals on which use tax is due.
Whatever method your business uses, you must keep the records at least four years if you have a use tax permit. Businesses that don’t have a permit must keep records for at least seven years.
Laws and rules
Learn more about use tax:
- Retailer Engaged in Business in This State (Idaho Code section 63-3611)
- Sales Price (Idaho Code section 63-3613)
- Storage (Idaho Code section 63-3615)
- Tangible Personal Property (Idaho Code section 63-3616)
- Imposition and Rate of the Use Tax – Exemptions (Idaho Code section 63-3621)
- Use Tax on Transient Equipment (Idaho Code section 63-3621A)
- Returns and Payments (Idaho Code section 63-3623)
- Retail Sales: Sale at Retail (Sales Tax Rule 011)
- Sales Price or Purchase Price Defined (Sales Tax Rule 043)
- Application and Payment of Use Tax (Sales Tax Rule 072)
- Tangible Personal Property Bought or Shipped to Idaho (Sales Tax Rule 073)
- Time and Imposition of Tax, Returns, Payments and Partial Payments (Sales Tax Rule 105)
- 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)