Idaho Sales Tax Rates

Total Range for 2024

6% – 9%

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Why do you need to collect sales tax in Idaho?

If you’re selling goods and services in Idaho then sales tax might apply! To determine your obligation, we need to understand “nexus,” which ties businesses to states for tax purposes.

Two types of nexus exist:

  • Physical Nexus: Having a physical presence, like an office, warehouse, or employees in Idaho, triggers this type. If you do, you likely need to collect sales tax.
  • Economic Nexus: This kicks in when your sales within Idaho exceed a certain economic threshold. Even without a physical presence, surpassing this threshold requires collecting sales tax.

Is what you’re selling taxable in Idaho?

Now that you understand your Idaho sales tax obligations, the next step is to determine if the specific products or services you offer are subject to Idaho sales tax.

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How to register for sales tax in Idaho

Getting your business up and running in Idaho requires a few key steps related to permits and registrations. Here’s a simplified guide:

  1. Apply for Tax Permits: (all at once!)
    • Idaho’s convenient Idaho Business Registration (IBR) process allows you to register for multiple tax permits in a single application. This includes the seller’s permit for sales and use tax.
    • Gather some information beforehand:
      • Your EIN (if you have one)
      • Social Security numbers or EINs of all owners, partners, and officers
      • Business addresses (physical and mailing)
      • Business start date in Idaho and incorporation dates (if applicable)
      • Basic employee details (expected headcount, first paycheck date, etc.)
    • Bonus: Processing is fast! You can expect your permit(s) within 10 business days of submitting your online application.

How to collect sales tax in Idaho

  • Apply the Correct Sales Tax Rate:
    • The base sales tax rate in Idaho is 6%. However, some localities add additional local option taxes. You’ll need to research the specific combined rate for the location where your customer is based.
  • Collect the Tax During Sales:
    • Add the appropriate sales tax to the total price of taxable goods or services sold. Most Point-of-Sale (POS) systems can automate this calculation.
  • Keep Records:
    • Maintain accurate records of all sales transactions, including the amount of sales tax collected.

Example:

Buying a $120 jacket in Boise (7% sales tax):

  • Sales tax: $120 x 7% = $8.40
  • Total price: $120 + $8.40 = $128.40

FAQs

Do you have a physical nexus in Idaho?

A business has physical nexus in Idaho if it has a substantial enough physical presence in the state to create a connection for tax purposes. Here are some ways you can establish physical nexus in Idaho:

  • Having a physical location: This includes owning or leasing a store, office, warehouse, or any other type of commercial space in Idaho.
  • Having employees or agents in Idaho: If you have employees or sales representatives who regularly come to Idaho to perform their duties (even if they don’t live there), this could establish nexus.
  • Storing inventory in Idaho: Owning or leasing storage space to keep products for sale in Idaho can create nexus.
  • Delivering goods with your own vehicles: If you use your own company vehicles to deliver products directly to customers in Idaho, this could establish nexus.
Do you have an economic nexus in Idaho?

If your business makes over $100,000 in sales to Idaho customers in a calendar year (previous or current), you’ve crossed the economic nexus threshold.

What is use tax in Idaho?

In Idaho, use tax applies to tangible personal property that you purchase out-of-state, but store, use, or consume within the state.

The use tax rate in Idaho is the same as the state’s sales tax rate, which is currently 6%.

Do you need a seller/reseller permit?

You will need a seller’s permit in Idaho if your business meets any of the following criteria:

  • Selling taxable goods or services
  • Exceeding the economic nexus threshold

In short:

  • You need a seller’s permit to collect and remit sales tax in Idaho.
  • A resale certificate helps you avoid paying sales tax on purchases intended for resale.
How to get a sales tax permit/license in Idaho?

To get a sales tax permit (seller’s permit) in Idaho:

  1. Register online through the Idaho Business Registration (IBR) system
  2. Gather information on your business beforehand.
  3. Submit the online application.
  4. You’ll receive your permit within 10 business days (usually).

There are no upfront fees.  For complex situations, consult a tax professional like us.

When are Idaho's Returns Due?

Idaho’s sales tax return due dates depend on how often you are required to file them. Here’s a breakdown:

  • Monthly filers: Due by the 20th day of the month following the reporting period.
  • Quarterly filers: Due by the 20th day of the month following the quarter.
  • Annual filers: Due by January 20th of the following year.

Important note: If the due date falls on a weekend or holiday, the return is due on the next business day.

How to file sales tax in Idaho?
  • Idaho offers various options for filing and paying sales tax:
    • Online: File through the Idaho State Tax Commission’s Taxpayer Access Point (TAP) with online payment options.
    • By Mail: Use Form 850 to file and pay by mail.
    • Third-Party Services: Utilize tax software or services that can handle filing and remittance for you.
Is anyone exempt from sales tax in Idaho?

In Idaho, there are two main categories of exemptions for sales tax:

  1. Exempt Products and Services:  Certain types of goods and services are not subject to sales tax, regardless of who purchases them. Here are some common examples:
    • Groceries (excluding prepared food)
    • Prescription drugs and medical equipment
    • Educational materials (textbooks, etc.)
    • Certain agricultural products
    • Most services (except for a few specific ones like admissions or those directly related to producing tangible personal property)
  2. Exempt Customers:  Some types of customers are exempt from paying sales tax, even on taxable goods. However, they typically need to provide documentation to the seller to claim the exemption. Here are some examples:
    • Government agencies: Federal, state, and local governments don’t pay sales tax on purchases they make for official use.
    • Certain non-profit organizations: Qualifying non-profits may be exempt from sales tax on purchases used exclusively for their charitable purposes.
    • Merchants purchasing for resale: Businesses that buy goods to resell them (without substantial modification) can obtain a resale certificate to avoid paying sales tax on their purchases.

Contact Yonda Tax Today

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