Idaho Sales Tax

Sales and use taxes in the State of Idaho can include both State and Local rates depending on where you are. As such, there are a number of factors to consider when determining the rate you should charge for a transaction made.

In this guide, we will discuss what is required for Idaho sales tax compliance, including what rates are charged, how you determine if you should be collecting sales taxes in Idaho, the process of registering for and acquiring a permit, and how and when to remit payment to the state for the sales tax you collected.

Idaho Sales Tax Rates

The following sales and use tax rates apply in Idaho at the state and local level:

• The state sales tax rate in Idaho is 6.0%.
• Local sales tax is allowed by the state in resort cities if there is a vote and a 60% majority approves the taxation – this can apply as well to hotel and liquor taxes. For example, there is a 3% local sales tax rate in Sun Valley in Blaine County.

Because of the way the system is designed, the sales tax rates can be quite complex and can be charged at the county, city, school, or transportation level depending on the needs of that region.

Determining Sales Tax Nexus in Idaho

For those that do not wholly operate in Idaho, it’s important to determine before proceeding if you have sales tax nexus in the state and will be required to collect sales taxes. There are a number of factors that may require you to collect sales tax in Idaho including:

• If goods or physical items are stored as inventory in the state
• If you rent or lease any property to an individual who in turn uses it in Idaho
• If you do any service or repairs on physical property in the state
• If you have any agents, representatives, or salespeople who do business in Idaho
• If you have any location in the state such as an office or store room.

Idaho passed a law affecting online retailers and marketplace facilitators in June 2019, following the Wayfair decision. Economic nexus thresholds for remote sellers are $100,000 in sales for individual businesses and marketplaces. Additionally, any marketplace facilitators located in Idaho are required to collect on behalf of their third-party sellers for sales into the state.

What Is Eligible for Sales Tax in Idaho?

Idaho charges sales tax on physical goods and some services with only a handful of exemptions based on certain circumstances.

• Tangible Personal Property – All physical goods (tangible personal property) are subject to sales tax if purchased in Idaho with only a small number of exceptions.
• Travel and Convention Tax – Sales of temporary lodging and vacation rentals by owners are taxable by the Travel & Convention tax which is considered part of Idaho’s sales and use tax.
• Bringing Items in from Outside the State – If you purchase an item from outside the state of Idaho and bring it into the state you may be responsible for paying sales tax on that item directly if it was not collected by the merchant.
• Digital Goods – As of 2014, Idaho considers digital goods to be personal property and therefore subject to sales taxes. This includes digital music, videos, books, and games. This tax does not apply to purely remote or non-physical software that doesn’t have a physical medium delivered to the user.

Tax Exemptions exist for manufacturing equipment and machinery, medical devices, and prescription drugs as well. Before assuming an exception to any of the sales tax applied in Idaho, be sure to review the documentation to receive an exemption certificate on the State Tax Commission’s website.

Registration

The State of Idaho requires that all businesses that must collect sales tax register with the state. You can do so through the State Tax Commission’s website using the IBR-1 form. This form is a combined form for the Tax Commission, Industrial Commission, and Idaho Department of Labor and applies to both in-state and out-of-state sellers. If you are out of state and the remainder of the form’s purposes do not apply to you, there are detailed instructions online for how to complete it.

After completing the IBR form, you will receive your account number and permit for payment within 10 days. This will provide you with the Idaho Seller’s Permit needed to do business in the state.

Filing

You will pay Idaho sales and use tax through the following methods:

• For Those in State – Idaho is a destination-based sales tax state so you must determine the local sales tax rate for where your goods are being sent to ensure tax compliance. Few towns in the state have an additional sales tax, so this will only apply if you are doing business in resort towns with rates above 6%.
• Out of State Sellers – If you have economic nexus in the State of Idaho, you will need to complete the same process for determining the sales tax rate based on where you are sending your goods.
• Shipping Charges – Shipping is not subject to sales tax if it is itemized on the customer’s bill. If the shipping is included in the price, the full purchase price is subject to sales tax.
• Filing Your Return – The Idaho State Tax Commission has an online portal through which you can pay your sales tax due here.

Your filing frequency will be determined at the time you receive your permit. It will be related to the total liability you expect to have to the state. The deadlines for each frequency are listed below.

Deadlines

Quarterly: For those required to file quarterly, the following due dates apply:

Monthly: For those required to file monthly, the following due dates apply:

Penalties and Interest for Late Payments

There are penalties for both late filing and late payment of Idaho Sales and Use Tax. If you fail to file on time and are not in tax compliance, you will pay the greater of either 5% of the tax due per month (with a maximum fine of 25%) or $10. This applies to those with zero returns as well – there will be a $10 fee for not filing your zero tax return.

For those that pay their sales and use tax remittance late, you will be charged interest based on the year in which the tax was due. A full table of interest rates is available here.

Resources:

• Idaho State Tax Commission Sales/Use Tax Information
• Taxpayer Access Point for Online Payments
• Form 850 for offline filing (must request, you cannot download blank forms
• Chart of Due Dates for Sales Tax Payments

Idaho Sales Tax Software

If you operate or do business in Idaho and are interested in software or tools to help you reduce the cost and time of calculating sales tax due in the state, consider the TaxTools tax calculator. The TaxTools software offers a range of features such as sorting, data reviewing, and a tax calculator to streamline the process of determining what should be collected and from whom. It can be integrated with your existing eCommerce solution or used as a standalone tool for your site. Contact us today to learn more or to sign up for a free trial.

Last updated March 2024