Idaho Sales Tax
Idaho Sales Tax At a Glance
State rate: 6%Maximum combined rate: 9%
Sourcing: Destination
Tax Holidays: None
Governing Body: Idaho State Tax Commission
Sales and use tax in the State of Idaho can include both State and Local rates depending on where you are and 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 rates are charged, how you determine if you should be collecting sales tax 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 60% majority approves the taxation – this can apply as well to hotel and liquor taxes.
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 tax. There are a number of factors that may require you to collect sales tax in Idaho including:
- Any goods or physical items 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 sales people who does business in Idaho.
- Any location in the state such as an office or store room.
For a more detailed breakdown of how Idaho establishes nexus for sales tax, read their regulations here.
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.
- Personal Property – All physical goods 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 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 tax. 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.
Before assuming exception to any of the sales tax applied in Idaho, be sure to review the documentation 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 for 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 by:
- 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. Few towns in the state have 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 sales tax 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:
| Period | Due Date |
|---|---|
| January – March (Q1) | April 20 |
| April – June (Q2) | July 20 |
| July – September (Q3) | October 20 |
| October – December (Q4) | January 20 |
Monthly: For those required to file monthly, the following due dates apply:
| Period | Due Date |
|---|---|
| January | February 20 |
| February | March 20 |
| March | April 20 |
| April | May 20 |
| May | June 20 |
| June | July 20 |
| July | August 20 |
| August | September 20 |
| September | October 20 |
| October | November 20 |
| November | December 20 |
| December | January 20 |
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, you will pay the greater of either 5% of the tax due per month (with a maximum fine of 25%) or $10. This applies for those with zero returns as well – there will be a $10 fee for not filing your zero return.
For those that pay their sales and use tax remittance late, you will be charged 0.5% of the tax due per month late with a maximum penalty of 25%.
Resources:
- Idaho State Tax Commission Sales/Use Tax Information
- Taxpayer Access Point for Online Payments
- Form 850 for offline filing
- 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 TaxTools. The TaxTools software offers a range of features such as sorting, data reviewing, and rate calculation 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.