Idaho — Sales & Use Tax

Idaho imposes a 6% excise tax on each sale at retail of tangible personal property and specified services. The tax applies to the sales price and is computed monthly on all retail sales within the preceding month. "Sale at retail" means a sale for any purpose other than resale in the regular course of business or lease or rental of property in the regular course of business where such rental or lease is taxable.

Taxable sales include transfers of tangible personal property, custom production of property for consumers, furnishing and preparing food or meals, hotel and motel accommodations for less than 30 days, admission to places or events, recreational facilities, and other transactions enumerated in statute. The retailer must collect the tax from the consumer.

Source: Idaho Code § 63-3619; Idaho Code § 63-3609; Idaho Code § 63-3612

A retailer without physical presence in Idaho is "engaged in business in this state" if it has cumulative gross receipts from sales delivered into Idaho exceeding $100,000 in the previous or current calendar year. This economic nexus provision took effect June 1, 2019. Retailers meeting this threshold must collect and remit Idaho state sales tax but are not required to collect local sales tax.

Source: Idaho Code § 63-3611(3)(h); Idaho State Tax Commission, Online Sellers Guide

Idaho imposes a state sales tax at a rate of 6% on the sales price of retail sales. Certain resort cities—defined as cities with a population not exceeding 10,000 that derive the major portion of their economic well-being from businesses catering to recreational and visitor needs—may levy additional local option sales taxes of up to 3%, subject to voter approval. Combined maximum rate in those resort cities is 9%. Most jurisdictions in Idaho impose only the 6% state rate.

Source: Idaho Code § 63-3619; Idaho Code § 50-1044

Idaho exempts from sales and use tax tangible personal property used in manufacturing, processing, mining, farming, or fabricating operations. The exemption covers: (1) property that becomes an ingredient or component part of goods manufactured for sale; (2) property primarily and directly used or consumed in production, including repair parts, lubricants, and coolants; (3) chemicals and catalysts used to induce physical or chemical changes in products; and (4) required safety equipment. Businesses must be primarily devoted to producing tangible personal property for sale. Excluded are motor vehicles under 8,000 pounds, hand tools under $1,000, real property improvements, and administrative equipment.

Source: Idaho Code § 63-3622D

Idaho permits purchases for resale without payment of sales tax when the buyer provides a properly executed resale certificate to the seller. A valid resale certificate must be signed and dated by the purchaser or agent, bear the purchaser's name and address, show a federal employer identification number or driver's license number with state of issue, indicate the number of the seller's permit issued to the purchaser (or state that the purchaser is an out-of-state retailer), and indicate the general character of tangible personal property sold or rented by the purchaser in the regular course of business.

When a properly executed resale certificate is presented to or on file with the seller, the seller has no duty or obligation to collect sales or use tax on that transaction, regardless of whether the purchaser properly or improperly claimed the exemption. The seller is relieved of all liability, and the purchaser bears all responsibility for any subsequent audit. A seller need not accept a resale certificate that is not readable, legible, or copyable.

Source: Idaho Code § 63-3622

Idaho imposes a 6% excise tax on the storage, use, or other consumption of tangible personal property in the state when the property was acquired for such use on or after October 1, 2006. The use tax applies at the same rate as the sales tax and is calculated on the value of the property, with a recent sales price serving as presumptive evidence of value.

Who owes use tax

Use tax liability falls on the purchaser who stores, uses, or consumes tangible personal property in Idaho. The purchaser's liability is not extinguished until the tax has been paid to Idaho, except that a receipt from a retailer maintaining a place of business in Idaho or engaged in business in Idaho given to the purchaser relieves the purchaser from further liability for the tax to which that receipt refers.

Retailer collection obligation

Every retailer engaged in business in Idaho and making sales of tangible personal property for storage, use, or other consumption in Idaho must collect use tax from the purchaser at the time of sale (or, if the storage, use, or consumption is not then taxable, at the time it becomes taxable). Retailers meeting the economic nexus threshold under Idaho Code § 63-3611(3)(h)—cumulative gross receipts exceeding $100,000 from sales delivered into Idaho in the current or previous calendar year—are engaged in business and must collect use tax on taxable sales.

Credit for tax paid to another state

When tangible personal property subject to Idaho use tax has already been subjected to a general retail sales or use tax by another U.S. state, Idaho grants a credit if the amount paid to the other state equals or exceeds Idaho's tax and the taxpayer provides evidence of payment. If the tax paid to another state was less than Idaho's 6%, the property remains subject to Idaho use tax to the extent that Idaho's tax exceeds the tax paid to the other state. For vehicles, trailers, or vessels, a registration certificate or title issued by another state or subdivision serves as sufficient evidence of payment of a general retail sales or use tax.

Out-of-state purchases and self-assessment

Purchasers who acquire property outside Idaho or from a retailer not engaged in business in Idaho and subsequently use, store, or consume the property in Idaho owe use tax directly to the state. The buyer must report and remit the use tax by filing a use tax return on forms prescribed by the Idaho State Tax Commission. Idaho Administrative Rule 35.01.02.072 specifies that if property is purchased outside the state or from a retailer not subject to the Commission's jurisdiction and is subsequently used, stored, or consumed in Idaho, the buyer reports and remits use tax directly by filing a return.

Resale certificate relief

When a purchaser provides a properly executed resale certificate for the seller's records, sales are presumed not taxable and the seller need not collect sales or use tax unless the tangible personal property purchased is taxable to the purchaser as a matter of law in the particular instance claimed on the resale certificate. A seller may accept a resale certificate prior to, at the time of, or at any reasonable time after the sale to establish the exemption privilege. The resale certificate relieves the seller from the burden of proof only if taken from a person engaged in the business of selling or renting tangible personal property who holds a permit under Idaho Code § 63-3620, or who is a retailer not engaged in business in Idaho and intends to sell or rent the property in the regular course of business.

Source: Idaho Code § 63-3621; Idaho Admin. Code r. 35.01.02.072

Idaho sales and use tax returns are generally due monthly on or before the 20th day of the month following the reporting period. The Idaho State Tax Commission assigns each seller's filing frequency based on sales volume and payment history, and may prescribe filing periods other than monthly when necessary for efficient tax administration.

Monthly filing—general rule

Idaho Code § 63-3623(a) establishes that sales and use taxes "are due and payable to the state tax commission monthly on or before the twentieth day of the succeeding month." Idaho Admin. Code r. 35.01.02.105 reiterates that all retailers and persons subject to use tax are required to remit the tax on a monthly basis unless a different reporting period is prescribed by the Commission. Most retailers file monthly. For example, taxes collected in July are due by August 20. If the 20th falls on a weekend or state holiday, the return and payment are due the next business day.

Quarterly and semiannual filing

Retailers or persons who owe seven hundred fifty dollars ($750) or less per quarter and have established a satisfactory record of timely filing and payment may request permission from the Commission to file quarterly or semiannually instead of monthly. Quarterly returns are due within 20 days after the end of each quarter (April 20, July 20, October 20, and January 20). Semiannual returns are due by July 20 and January 20.

Annual filing

Idaho Admin. Code r. 35.01.02.105(02)(e) provides that if the Commission finds it necessary or convenient for the efficient administration of the Sales Tax Act, it may require taxpayers reporting taxable sales of less than twelve thousand dollars ($12,000) per year to file annually. Distributors and wholesalers with only a few sales may apply to file and forward taxes once per year, with annual returns due by January 20.

Commission discretion and zero-return requirement

The State Tax Commission has statutory authority under Idaho Code § 63-3623(h) to require returns for periods other than monthly if it deems such changes necessary to ensure payment or facilitate collection. Every seller must file a return even if the seller made no sales during the reporting period; failure to file zero returns for twelve consecutive months may result in cancellation of the seller's permit.

Temporary seller's permits

Temporary seller's permits have distinct filing deadlines. For permits covering the seller's own sales activities or Idaho events, the return and payment are due within 15 days after the permit's expiration date. For permits issued for a specific event, the return and payment are due within 15 days after the end of the event.

Source: Idaho Code § 63-3623; Idaho Admin. Code r. 35.01.02.105; Idaho State Tax Commission, Sales Tax: Filing and Paying

Idaho applies destination-based sourcing for sales tax purposes, meaning that the applicable sales tax rate is generally determined by the location where the purchaser receives the goods or services, rather than the seller's location. This sourcing framework affects how sellers—both those with physical presence in Idaho and remote sellers with only economic nexus—calculate and collect sales tax, particularly when local option taxes apply in certain resort cities.

Destination-based sourcing principle

Although Idaho statutes do not contain a single provision explicitly labeling the state's sourcing regime as "destination-based," the structure of Idaho's sales tax provisions, Idaho State Tax Commission administrative practice, and official guidance all implement destination sourcing. Idaho sales tax returns instruct sellers to report "sales originating in Idaho with an Idaho destination," "sales originating in Idaho with an out-of-state destination," and "sales originating outside Idaho with an Idaho destination," which reflects a destination focus for determining taxability and the applicable rate. For in-state sellers, the applicable combined state and local rate is determined by the location where the customer takes delivery of the property or receives the service.

Local option taxes—resort cities only

Idaho authorizes certain qualifying resort cities to impose local option sales taxes of up to 3 percent in addition to the 6 percent state rate. Idaho Code § 50-1044 defines a resort city as a city with a population not exceeding 10,000 that derives the major portion of its economic well-being from businesses catering to recreational and visitor needs, and permits such cities to levy the local tax subject to voter approval. Combined maximum rate in resort cities is therefore 9 percent (6 percent state + up to 3 percent local). Most jurisdictions in Idaho impose only the 6 percent state rate, with resort-city local taxes the exception rather than the rule.

Remote sellers—state tax only

Idaho Code § 63-3611(3)(h) defines "retailer engaged in business in this state" to include, effective June 1, 2019, "any retailer without a physical presence in Idaho that has, in the previous calendar year or the current calendar year, cumulative gross receipts from sales delivered into Idaho in excess of one hundred thousand dollars ($100,000)." The statute contains a critical proviso: "a retailer described under this paragraph (h) shall not collect or remit any local sales tax or any other tax or assessment that is not imposed by this chapter." Chapter 36 of Title 63 is the Sales Tax chapter, which imposes the state 6 percent rate; local option resort city taxes are authorized under Title 50 and are not "imposed by this chapter."

This statutory language establishes that an out-of-state remote seller meeting Idaho's $100,000 economic nexus threshold is required to collect and remit the 6 percent state sales tax on sales delivered into Idaho, but is prohibited from collecting or remitting any local option sales tax, even if the sale is delivered to a customer located in a resort city with a local tax in effect. In practical terms, a remote seller with economic nexus charges 6 percent on all Idaho sales, regardless of the destination city, while a seller with physical presence in Idaho must apply the combined state and local rate based on the destination address when the destination is a resort city with a local tax.

Physical-presence sellers and destination rate

Sellers that maintain a physical presence in Idaho—through a warehouse, office, inventory, employees, or other contacts enumerated in Idaho Code § 63-3611(3)(a)–(g)—are engaged in business under the general nexus provisions and are not limited by the paragraph (h) proviso. These sellers must collect both the 6 percent state rate and any applicable local option tax based on the destination of the sale. For example, a sale shipped to a customer in Sun Valley (Blaine County), which imposes a 3 percent local option tax, is subject to a combined 9 percent rate; the same seller shipping to a customer in Boise (no local tax) collects only the 6 percent state rate.

Why the distinction exists

Idaho's statutory framework creates a compliance simplification for remote sellers: by limiting their collection obligation to the single statewide 6 percent rate, Idaho reduces the administrative burden of rate lookup and apportionment for sellers with only economic presence. The trade-off is that resort cities do not receive local option tax revenue from remote sales, even when the buyer is located within the city. Physical-presence sellers, by contrast, are subject to the full destination-based regime, including local taxes.

Official guidance

The Idaho State Tax Commission's Online Sellers Guide confirms that remote sellers meeting the economic nexus threshold "must collect and remit Idaho state sales tax but are not required to collect local sales tax."

Source: Idaho Code § 63-3611; Idaho Code § 50-1044; Idaho State Tax Commission, Online Sellers Guide; Idaho State Tax Commission, Form 850 Instructions (Sales and Use Tax Return)

Idaho exempts from sales and use tax a detailed list of prescription drugs, medical devices, and durable medical equipment when purchased under specific circumstances. The exemption applies only to items specifically enumerated in Idaho Code § 63-3622N and only when purchased by qualified buyers.

Exempt items

The statute exempts the following categories when administered or distributed by a practitioner or when purchased by or on behalf of an individual under a prescription or work order:

1. Drugs and related supplies — Drugs, hypodermic syringes, insulin, insulin syringes, artificial eyes, eyeglasses and eyeglass component parts, contact lenses, hearing aids, hearing aid parts and accessories.

1. Dialysis supplies — Drugs and supplies used in hemodialysis and peritoneal dialysis.

1. Oxygen and respiratory equipment — Oxygen, equipment for dispensing oxygen, and respiratory care equipment.

1. Orthopedic and orthodontic items — Orthopedic appliances (braces and external supports prescribed for correction or relief of defects, diseases, or injuries to bones or joints), orthodontic appliances, dental prostheses including crowns, bridges, inlays, and overlays.

1. Prosthetic devices and supplies — Catheters, urinary accessories, colostomy supplies, enteral and parenteral feeding equipment and supplies (tubing, pumps, containers), catheter devices and supplies.

1. Diabetic testing equipment — Equipment, devices, or chemical reagents used to test or monitor blood or urine of a diabetic.

1. Durable medical equipment — Other durable medical equipment and devices and related parts and supplies specifically designed for those products. The statute provides an extensive illustrative list including wheelchairs, crutches, walkers, standing frames, communication aids for the physically impaired, specialized seating, speech and writing aids for the impaired, dressing aids, transcutaneous nerve stimulators, muscle stimulators, bone fracture therapy devices, stethoscopes, sphygmomanometers, otoscopes, patient transport devices, stairglides, home lifts, and many other items.

Who qualifies to purchase exempt

Idaho Admin. Code r. 35.01.02.100 clarifies that sales tax does not apply when the enumerated items are:

(a) Purchased by a practitioner licensed under Title 54, Idaho Code, to be administered or distributed to patients if the practitioner is licensed to administer or distribute such items; or

(b) Purchased by or on behalf of an individual under a prescription or work order issued by a practitioner licensed to practice one of the following professions: physician, physician assistant, surgeon, podiatrist, chiropractor, dentist, optometrist, psychologist, ophthalmologist, nurse practitioner, denturist, orthodontist, audiologist, or hearing aid dealer or fitter.

Documentation required

For practitioners purchasing items they will administer or distribute, the seller must receive and keep on file a completed Form ST-101 (Sales Tax Resale or Exemption Certificate) showing the reason for the exemption.

For patients purchasing items under a prescription or work order, the seller must keep on file the prescription or work order from the practitioner. Idaho Admin. Code r. 35.01.02.100 specifies that the sale is exempt when purchased under a prescription, but taxable when the same item is sold over the counter without a prescription. For example, some drugs may be lawfully sold without a prescription; when sold over the counter without a prescription, the drugs are subject to sales tax, but when sold under a prescription, the drugs are exempt from tax.

For-profit hospitals and nursing homes purchasing medical products to administer to patients under a practitioner's prescription or work order may purchase those items exempt by providing a prescription or work order. However, if a for-profit hospital or nursing home purchases medical equipment for general facility use (not under a prescription for a specific patient), the purchase is taxable.

Limitations on the exemption

The exemption is limited to the specific items enumerated in Idaho Code § 63-3622N. Not everything a practitioner prescribes qualifies for the exemption—only the medical products specifically listed in the statute. For instance, a licensed physician's prescription for a health club membership is taxable because a health club membership is not a listed medical product.

Prescription contact lenses sold on or after July 1, 2016, are exempt from sales tax.

Source: Idaho Code § 63-3622N; Idaho Admin. Code r. 35.01.02.100; Idaho State Tax Commission, Medical Products Exemption