12 min read

Idaho Sales Tax Guide

Idaho Sales Tax Guide

🥔🥔🥔 It is simply unavoidable that Idaho, our 43rd state, is famous for its most significant agricultural contribution to the world: (french-fried) potatoes. While a third of our country’s taters may come from this locale, Idaho also produces more lentils than anywhere in the US. Idaho is also known for its expansive range of gemstones, with as many as 72 varieties naturally found there. You might go so far as to say Idaho is a gem of a state to run a business in, if you didn’t fear inducing groans with such a terrible pun.

If you are now or plan on running a small business in Idaho and need clarity on the issue of sales tax:

Don’t Fret! We have put together this comprehensive guide so your company can prepare to meet all tax requirements for small businesses in Idaho.

Once through with this guide, you will have the answers to some of the most common questions we hear from our clients:

  • How to contact the Idaho State Tax Commission.
  • How to be prepared for your call with the Idaho State Tax Commission.
  • When to charge sales tax in Idaho.
  • What goods, products, and services are taxable in Idaho.
  • When you establish a sales tax nexus with the state of Idaho, and the nuances of various thresholds.
  • How to register for a sales tax license in Idaho.
  • How to collect sales tax in Idaho.
  • How to file and pay sales tax in Idaho.

If, after reading, you still have any questions, or need help determining your tax sales obligations in Idaho, we are here for your small business bookkeeping needs!

 

 

Idaho Sales Tax Contacts

 

Idaho Sales Tax Contacts

✅ Do you need to contact the Idaho State Tax Commission?

✅ Are you unsure if you should visit, call them, or contact them through their website?

✅ Do you wonder what information you should have ready before you contact them?

 

Yes? If so, read on, as we have just the information you need! :)

The Idaho State Tax Commission is available by phone at 800-972-7660.

Alternatively, you may also send an email to taxrep@tax.idaho.gov or visit one of their offices between 8am and 5pm M-F. If you are looking for help quickly, we highly suggest you call rather than send a message or wait in line in an office.

When you call the Idaho State Tax Commission, you will need to have certain information on hand. It will expedite your call if you have the following handy when you contact them:

  • Taxpayer Name
  • EIN
  • Sales & Use Tax ID Number

If you are calling on behalf of an individual or a business, or having a third party call on your behalf, you must have an Idaho Power of Attorney (PDF) signed before you call or else you will be wasting your time; they can only .

If you have any more questions, please feel free to contact us so we can assist you with your sales tax needs.

 

 

Idaho Sales Tax Registration

 

Idaho Sales Tax Registration

 

Does your business sell tangible property in the state of Idaho? If so, you probably need to register your business to meet Idaho’s compliance requirements.

Luckily, there is no reason to worry as you only need to do this once and we’re about to fully prepare you. As long as there are no major changes (such as a change in ownership or structure) to your business, you will not be required to renew or make changes to your sales tax permit.

We are going to detail the steps below so you are ready to register for your sales license.

Here we go! Don’t forget...

Preparation is key.

Let’s get started!

 

 

How do I register to collect sales tax in Idaho?

You can apply or register for an Idaho sales and use tax permit by visiting the Idaho State Tax Commission and following the instructions provided (you will need to have already registered your business with the Idaho Secretary of State).

Technically speaking, there may be two options to sign up a new business for an Idaho sales tax permit, but we always recommend going with the second option:

  1. Complete paper form IBR-1 Application (PDF) and mail it to the address on the form OR;
  2. Complete the online version of form IBR-1 here (in your PJs if you like!).

Obviously we are biased towards the expediency of the web and thus recommend that you use the online form. It will allow your business to get set up faster, and with less potential headache.

 

 

What information do I need to register for an Idaho sales tax permit?

Ooh, excellent question!

Before you sign up for Idaho sales tax permit you want to have the following information easily accessible:

  • Business name
  • Business entity type
  • Description of business activities
  • Date business activities began or will begin
  • Business address and mailing address
  • Business contact information
  • Associated business entities
  • NAICS code that best matches the business
  • Federal Employer Identification Number (FEIN)
  • List of business officers, partners, managing members, and/or trustees
  • Information on your expected employee count, first paycheck date, hire date, etc.

Preparation is paramount! Once you have gathered information, you are ready to go online and register for your permit at the Idaho IBR website website.

 

 

How much does it cost to register for an Idaho sales tax permit?

Registering a new business entity in Idaho costs zero, zilch, nada, $0.00! This is our favorite kind to give and sure to bring a smile to your face :)

 

 

Do I need a Federal Tax ID Number or EIN to register for an Idaho sales tax permit?

Yes indeedy! You will definitely will need an EIN to complete IBR-1. If you don’t already have one and need to register an EIN, take comfort in knowing it’s a quick and painless process. You can easily register for a Federal EIN here :).

 

 

Which agencies in Idaho do I need to additionally register with?

Since every business is unique, you’ll want to give this some thought and do a little research or investigating; there are such different rules, regulations, and laws that may apply depending on your specific company. Idaho does have a new business guide

You may need to apply to some of the following agencies:

We suggest checking out the Idaho Biz Help website to explore which government agencies you may be required to register with.

 

*****

 

You are now prepared to register for your Idaho sales tax permit in Idaho.

Let’s review what we covered:

  • Have all the required information easily accessible before registering online.
  • Acquire a tax ID or EIN before registering for an Idaho sales tax permit.
  • Register online at the Idaho State Tax Commission website.
  • Look into what other agencies you may have to additionally register with.

Registering for your Idaho sales tax permit will be stress free as long as you adequately prepare. We recommend organizing all the essential information in a folder, preferably using a system like Box.com or Dropbox.

 

 

 

Idaho Sales Tax FAQ

 

Idaho Sales Tax FAQ

By now, you may have already contacted the Idaho State Tax Commission and applied for an Idaho sales tax permit.

Let’s go over some common questions that our clients ask. We believe these questions will help you appreciate the nuances of taxable goods so you can be confident in fulfilling your tax obligations.

 

 

What goods and services are considered taxable in Idaho?

The following items are all taxable in the state of Idaho:

  • Sales of tangible goods at retail.
  • Repairs or alterations of tangible personal property.
  • Property rentals, leases, or licenses [e.g. commercial, mini-warehouse]
  • Selling service warranty contracts.
  • Rental/lease of goods w/o an operator (e.g.: vehicles, equipment, or other property).
  • Charges for admission to any place of amusement, sport, or recreation.
  • Manufacturing or producing goods for retail sales.
  • Operating vending machines or amusement rides

 

The bottom line is …

Your business is responsible for taxes on all sales of tangible goods.

*****

 

 

Let’s now review some of our clients’ other frequently asked questions:

  • Is Idaho an Origin or Destination sales tax State?
  • What creates a sales tax nexus in Idaho?
  • What is the economic threshold in Idaho?
  • Does Amazon have fulfillment centers in Idaho?
  • Does Idaho have a Click-Thru Nexus?

To better understand your tax obligations, new businesses need to consider how they are doing business and the type of relationships they have with buyers and any third parties to their transactions.

Let’s discuss some questions that will help you understand the nature of your own business and the subsequent tax implications.

 

 

Is Idaho an origin or destination sales tax state?

Idaho is a Destination-Based sales tax state, with a potential additional discretionary sales surtax based off the locality the buyer lives in. This means you’ll need to have a Point-of-Sales system configured to track tax based off the buyer’s location.

 

 

Protip: Charge Idaho Sales Tax based on the location of the buyer.

 

 

What creates a tax nexus with the state of Idaho?

Having nexus, also known as "sufficient business presence,” with Idaho means your business has established a taxing connection with a state. When this happens, you are required to collect and remit sales tax in Idaho because you created a sales tax Nexus.

Even if your business maintains its main headquarters in another state, you may still have to charge and pay sales tax to the Idaho State Tax Commission even if you never step foot in Idaho.

So, how do you create a sales tax Nexus in Idaho?

 

A business establishes a nexus in Idaho by:

  • having a business location in Idaho;
  • having property stored in Idaho;
  • employing any person in Idaho;
  • contracting with a salesperson or other agent in Idaho;
  • leasing equipment used in Idaho;
  • performing services in Idaho;
  • licensing the use of intangible property in Idaho, or transporting property in Idaho using the taxpayer’s vehicles.

 

 

Does Amazon have fulfillment centers in Idaho?

No, there are no Amazon fulfillment centers in Idaho at this time.

 

 

Does Idaho have economic nexus?

Sure does! In a response to the Supreme Court’s Wayfair ruling, starting June 1st, 2019, Idaho will require out-of-state companies which otherwise lack nexus to register and pay sales tax should their sales exceed $100,000 in a year.

 

Affiliate marketing sales tax

 

 

 

Does Idaho have click-through nexus?

Yes, Idaho now has click-through nexus laws. From their website:

“You must have a valid Idaho seller's permit, collect sales tax, file sales tax returns, and forward the tax to the state if you meet all these criteria:

  • You have no physical presence in Idaho.
  • You entered into an agreement with one or more Idaho retailers.
  • The agreement is for the Idaho retailer to refer customers to your business.
  • You made retail sales to Idaho customers exceeding $10,000 during the preceding 12 months.
  • You meet the criteria described in House Bill 578: Out-of-State Retailers.”

Companies will need to bear this in mind if they employ any affiliate marketers or provide affiliate marketing services to retailers in Idaho.

 

 

Is Idaho a streamlined sales tax state?

Nope! When this article was written, Idaho wasn’t yet participating in the multistate tax simplification program.

Here’s hoping that they might join up with this organization in the future 🤞!

 

 

Manage your tax needs more effectively by keeping this guide handy.

You and your business can be better-equipped to avoid situations like paying fines, paying back taxes that you did know you had to pay in the first place, or facing an audit by the tax authorities in Idaho.

 

 

Collecting Sales Tax in Idaho

Collecting Sales Tax in Idaho

If you are a business that has established a nexus with Idaho, you are required to collect sales tax. Knowing this is just half the battle! Now, we are going to help you with the next half of the battle: how to navigate the process of collecting taxes.

Let’s review some common questions our clients have asked regarding their Idaho Sales Tax obligations.

  • How do I collect Idaho Sales Tax?
  • Who is eligible for Idaho Sales Tax exemptions?
  • What should I do if my customer is exempt from sales tax in Idaho?
  • What happens if I lose an Idaho nontaxable transaction certificate?

After reading this, you will be better equipped to determine when --and when not-- to collect sales tax in Idaho.

 

 

How do I collect Idaho Sales Tax?

Remember when we noted that Idaho is a destination-based sales tax state? This means that the ultimate rate to charge will vary in accordance with the local sales surtax for the locality in which the buyer is located.

Any Point-of-Sales software worth its price should have this capability baked in. If the one you’re using does not, we can always recommend a superior solution. That’s the kind of nerding out that we love to do for our clients! 🤓🤩

 

 

What are the current Idaho Sales Tax rates?

As of June 2019, the tax rate in Idaho is 6%. However, because sales tax rates change frequently --and may vary by what is being sold-- we are going to refer you to check out the Idaho State Tax Commission site here for the most up to date information.

It can’t hurt to double check the sales tax rates to be sure.

 

 

What is exempt from Idaho Sales Tax?

Sales Tax exemptions in Idaho

 

Here are some examples of exemptions:

  • Purchases for resale
  • Livestock sold at market
  • Prescription drugs

For more information, see a complete list here for more details.

 

 

Who are eligible for Idaho Sales Tax exemptions?

At this point, you should know what products are exempt from sales tax in Idaho. You will also want to know who may be exempt.

Under Idaho law, the type of buyer or the way the goods will be used can qualify can buyer for a sales tax exemption. A good example of this is a merchant purchasing goods for resale, aka a wholesaler.

Other common examples of an exempt buyer may include:

  • Government agencies
  • Non-profit organizations
  • Religious groups
  • Out-of-state buyers (should their business not have nexus in their home state).

Idaho has a handy dandy list of exempt purchasers here.

 

 

What should I do if my customer is exempt from sales tax in Idaho?

As a business owner, you will most likely have a buyer who qualifies for a sales tax exemption.

It is up to you to collect a completed Idaho sales tax exemption certificate (Form ST-101, PDF) at the point of sale and to keep it on file.

An inability to produce the tax exemption certificate later may result in the outstanding tax being passed on to the seller, potentially with fees and penalties. No bueno, and very avoidable!

 

 

PROTIP: Tax exempt certificates must be produced upon request in the event of an audit to justify tax-exempt sales.

 

 

What happens if I lose an Idaho Sales Tax exemption certificate?

Youch! Obviously this issue is best to be avoided. Finding out you’ll be audited and learning you cannot produce an exemption certificate for a buyer would mean you could be held liable to pay all taxes on behalf of the buyer. This is a bad scene and can be avoided by being careful with your paperwork… which happens to be one of our specialties! :)

 

 

Does Idaho have a sales tax holiday?

Negative! 365 days of steady taxin’ :(

 

*****

 

We have now covered who you need to collect sales taxes from, how to determine whether goods for sale are deemed taxable, what goods and services fall under tax exemptions, who is eligible for tax exemption certificates, and, finally, the process of collecting sales tax in Idaho state.

Now that we’re this far down the rabbit hole there’s only one thing we need to learn about next… how to pay the piper!

 

 

Filing and Paying Sales Tax in Idaho

 

Filing and Paying Sales Tax in Idaho

It is time to talk about filing and paying your sales taxes in Idaho. In this section, We are going to cover the following frequently asked questions from our clients:

  • When is Idaho Sales Tax due?
  • What are the Idaho Sales Tax thresholds?
  • What if an Idaho Sales Tax filing date falls on a weekend or holiday?
  • How do I file an Idaho Sales Tax Return?
  • How do I correct an Idaho Sales Tax return?
  • What happens if I don’t collect sales tax?
  • What happens if I file or pay my sales tax return late?
  • Do I need to file a return if I don’t collect any sales tax in Idaho?
  • If I close my business, do I need to file a final sales tax return?
  • Does the Idaho State Tax Commission offer a discount for filing on time?

By the time you finish reading this, you will feel confident enough to file and pay your Idaho Sales Tax.

 

 

When is Idaho Sales Tax due?

Idaho sales tax payments are due on the first and no later than the 20th day following the reporting period.

 

 

What are the Idaho Sales Tax thresholds?

While most businesses are setup to pay quarterly, there are thresholds at which you may opt to file differently:

 

  • If you collect $0 - $750.00 in taxes per month, then you must pay quarterly
  • If you collect more than $$750.01 per month, then you must pay monthly
  • Semi-annually or annual filing may be offered at Idaho’s discretion.

 

Not sure how to determine your tax filing frequency?

You can review your eCommerce or Point of Sale Software to see the volume of sales you have generated.

Don't worry though! The state will let you know when your due dates change. :)

Watch your mail for a letter from the State of Idaho so that you don't miss any deadlines.

 

 

What if an Idaho Sales Tax filing date falls on a weekend or holiday?

The deadline is moved to the next business day, typically the Monday following the weekend or the day after the holiday. Where possible, we always suggest filing well before the holiday.

 

 

How do I file an Idaho Sales Tax return?

Paper: Idaho State Tax Commission will mail a personalized form 850, complete and mail to:

Idaho State Tax Commission // PO Box 76 // Boise ID 83707-0076

Electronic: File online at Idaho's TAP site and submit payment via EFT.

 

 

How do I correct an Idaho Sales Tax return?

Amended returns are completed the same way whether filed originally via paper or online.

Get a photocopy of the original or a printout of the e-file version, then:

  1. Write “Amended Return” on the top
  2. Make corrections to form in red ink
  3. If original return overpaid, write “Request Refund” at bottom of tax total page
  4. If original return underpaid, enclose a check for the difference
  5. Mail to:

Idaho State Tax Commission // PO Box 76 // Boise ID 83707-0076

 

 

What happens if I don’t collect sales tax?

If you were required to collect sales taxes (nexus in Idaho and selling taxable goods or services to taxable residents) and failed to do so for whatever reason, you will be held responsible for the tax due. Always collect sales tax at the point of sale. Attempting to collect after the fact will be time consuming and most likely unsuccessful.

 

 

Protip: You are still responsible for remitting sales taxes even if you failed to collect them.

 

 

What happens if I file or pay my sales tax return late?

You’re just asking for academic reasons, right? ;)

 

Returns that are delinquent are subject to penalties of 5% of the outstanding tax due for each delinquent month or portion thereof; with a maximum penalty of 25% and a minimum penalty amount of $10.00. Interest accrues on delinquent sales tax payments from the due date until the balance is paid at a rate of 4% per year.

 

 

Do I need to file a return if I don’t collect any sales tax in Idaho?

Yes, Idaho does require businesses to file a “Zero-Tax” return even if they don't have any sales during a taxing period.

 

 

If I close my business, do I need to file a final sales tax return?

Yupperino, Idaho requires businesses to file a “Final sales tax” return when closing down a business.

 

 

Does the Idaho State Tax Commission offer a discount for filing on time?

That’s a negative on the discount. But we’ll give you a high five and a round of applause! ✋👏

 

*****

 

Now that we covered all our bases for filing and paying sales taxes in the state of Idaho, we hope you feel more at ease about the process.

 

Some things to remember:

  • Due dates are important. If anything, file and pay your taxes early.
  • There are two payment plans for filing and paying your sales taxes depending on how much you collect in sales tax on average in a month.
  • You can file and pay your taxes electronically or by mail
  • If you need to amend a return, you may do so electronically or by paper.
  • If you don’t collect sales tax and you were supposed to, you (not the buyer) is liable to pay the sales tax to the state of Idaho.
  • You will have to pay late fees if you fail to file your tax return on time and/or if you fail to make your tax payment on time.
  • Even if you collect no sales tax, you still need to file a return.
  • You need to file a “Final sales tax report” when you close your business.

 

Now, you are ready to file and pay your sales tax in Idaho. If you have any more questions, feel free to contact us.

 

Click here if you think sales tax is boring. Book a meeting.

 


 

Please note: This blog is for informational purposes only and the information is accurate as of 6/24/2019. If you want legal advice on sales tax law for your business, please contact a Sales Tax professional. Keep in mind that sales tax regulations and laws are subject to change at any time. While we strive to keep our blog current, this blog possibly may be out of date by the time you review it.

 

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