Idaho Sales Tax Guide 2024: Compliance, Rates, and Regulations for Businesses

Sales tax at a glance

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Idaho sales tax rates & calculations in 2023

The Idaho sales tax rate in 2023 is 6% statewide. Additionally, local jurisdictions in Idaho can impose sales taxes up to 3% for total combined rates ranging from 6% to 9%.

To calculate Idaho sales tax, you would apply the state rate of 6% plus any applicable local rates to the taxable purchase price. For example, if an item costs $100 and the local tax rate is 1%, the total sales tax would be $7 ($100 * 7%).

You can look up local sales tax rates on the Idaho State Tax Commission website.

Sales tax nexus in Idaho

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FAQs

Do I need an Idaho seller's permit if I’m only a wholesaler?

You do not need an Idaho seller's permit if you only sell tangible personal property wholesale and make no retail sales. However, you must provide an exempt sale certificate to your suppliers.

Do I need an Idaho seller's permit if I only sell temporarily in the state?

If you make temporary or occasional sales in Idaho, you may qualify for a Temporary seller's permit. This allows you to sell at up to 3 events per calendar year without a regular seller’s permit.

What's taxable and what's exempt

In Idaho, sales tax is charged on the retail sale of most tangible personal property (goods) and some services. Some exemptions include:

• Prescription drugs
• Food purchased with SNAP benefits
• Gas, electricity, heat

Some taxable services include hotel stays, vehicle rentals, production, and recreation services.

Excise taxes in Idaho (alcohol, tobacco, gasoline, fuel, marijuana)

Idaho levies selective excise taxes on the sale or distribution of certain goods like motor vehicle fuels, alcohol, tobacco, and marijuana. These are in addition to the statewide 6% sales tax.

• Motor vehicle fuels - Gasoline and diesel are taxed at $0.32 per gallon. There are no local fuel taxes.
• Alcohol - Beer is taxed at $4.65 per barrel, and wine is taxed at $0.45 per gallon on the retail selling price. Alcohol served at bars/restaurants is also subject to sales tax.
• Tobacco - Cigarettes are taxed at $0.57 per pack of 20 or 0285 cents per stick.

Remote sellers in Idaho

If you are an out-of-state seller shipping taxable goods to Idaho customers, you must register and collect Idaho sales tax once your total sales exceed $100,000 in the current or prior calendar year. This establishes economic nexus.

Use Idaho's online portal to apply for a remote seller's permit. You must charge Idaho's 6% statewide sales tax rate plus any applicable local taxes based on the ship-to location. Sales tax automation software can calculate this for you.

Prepaid sales tax rates for fuel products in Idaho

Oil and gas are taxed at 2.5% of the gross income from selling oil and gas products.

FAQs

Are groceries taxable in Idaho?

While groceries are taxable in Idaho sales tax, including ingredients used to prepare home meals, you can claim grocery credits of up to $100 per person as tax rebates.

Is clothing taxable in Idaho?

Clothing and local sales tax rates are taxable at the regular rate of 6% statewide. 

Are digital products taxable in Idaho?

Idaho sales tax generally applies to digital products like downloaded music, ebooks, streaming services, and software.

Collecting sales tax in Idaho

Let's examine the critical steps for collecting Idaho sales tax, whether you're based in the state or out-of-state.

How to collect Idaho sales tax if you are not based in Idaho (Out-of-State)

Even if you do not have a physical presence in Idaho, you may still be required to register and collect Idaho sales tax if you meet certain economic nexus thresholds. Specifically, if you have over $100,000 in Idaho sales in the current or prior year, you have economic nexus and must register to collect tax.

There are a few ways out-of-state sellers can establish a sales tax nexus and be considered "engaged in business" in Idaho:

• Having a physical business location in Idaho, like an office, warehouse, distribution centre, etc. This automatically creates a nexus.
• Having employees, sales reps, independent contractors, or agents working in the state to promote your business interests. Their presence implicates nexus for your business.
• Owning either real property (land, buildings) or tangible personal property rented out or leased to customers in Idaho. Simply owning such property creates nexus.
• Having a website with Idaho-based affiliate marketers who earn commissions by promoting your products and directing sales your way. This arrangement can trigger nexus once commissions exceed $10,000 in the prior 12 months.
• Meeting the Idaho economic nexus threshold of $100,000 in gross Idaho sales during the current or prior calendar year. Even without a physical presence, this level of sales reaches nexus.

If you meet any of the nexus triggers above, you must register online for an Idaho seller's permit and begin collecting and remitting sales tax. The easiest way to handle multi-state tax compliance is to use sales tax automation software to calculate the correct rates and file returns for you.

Should you collect sales tax on shipping charges in Idaho?

In Idaho, sales tax generally applies to delivery and transportation charges for shipments of taxable goods to customers. So, if you ship an item subject to Idaho sales tax, the associated shipping charge would also be taxable. An exception is when the delivery fees are separately stated on the invoice.

Filing and paying sales taxes in Idaho

If you have an Idaho seller's permit, you must file regular sales tax returns with the Idaho State Tax Commission (STC) and remit any sales tax collected from customers. Even if you made no taxable sales for a period, you must file a zero return.

Returns and payments are due on the 20th of the month after each reporting period. You can file paper returns electronically through Idaho's Taxpayer Access Point (TAP).

Sales tax return filing schedule and due dates in Idaho

The STC assigns each seller a monthly, quarterly, semi-annual, or annual filing frequency. This is based on your sales volume. Due dates for each period are:

Monthly filing due dates

If you are assigned a monthly filing frequency, returns and payments are due by the 20th of the following month for each reporting period:

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Quarterly filing due dates

If you file quarterly returns, the reporting periods and due dates are:

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Semi-Annual filing due dates

For semi-annual filing, returns are due on the following dates:

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Annual filing due date

If you only need to file annually, the reporting period and due date is:

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As you can see, Idaho sales tax returns and payments are always due on the 20th day of the month after the close of each reporting period. Filing on time is crucial to avoid late penalties.

Audit & Appeals Process

Being selected for a sales and use tax audit by the Idaho State Tax Commission can feel intimidating, but understanding the typical audit progression can help you prepare. Here are the key phases:

• Pre-Audit Phase - You'll receive an initial notice informing you that your business has been chosen for audit. This letter details the audit scope, records needed, start timing, and auditor contact details for planning. Gather several years of tax returns, sales invoices, resale certificates, and proof of out-of-state sales. Tax compliance software can significantly simplify this process. Also, make sure the accounting staff calendar time for the pending audit.
• Fieldwork Phase - During this phase, the auditor will physically visit your location to substantively examine documents, interview staff on policies and internal controls, trace transaction details, and extensively sample data to identify any tax deficiencies. Fieldwork may last two to six weeks, depending on your company size and transaction volume. The auditor typically conducts exit interviews with senior management to review initial findings and impressions before leaving the site.
• Post Audit Phase - Approximately one to three months later, you'll receive a final audit report with assessments outlining any additional tax calculated as due, plus interest and modest penalties where applicable. Ensure that clarification is obtained from the auditor on the rationale behind the disputed findings. You can enter the appeals process if you still disagree after the auditor's explanations.

After the Audit – Appealing Results

If audit findings showing tax deficiencies are deemed unreasonable or incorrect, Idaho allows you to contest the results through the appeal process:

• Protest Letter - File a formal written protest detailing the contested adjustments within 63 days of receiving the Notice of Deficiency Determination (NODD). Explain your rationale and include supporting documentation. Ask for an appeals conference.
• Appeals Conference - Meet virtually or in person with an appeals officer for your conference—present evidence refuting the audit results in dispute and respond to questioning. The appeals officer will issue a decision afterwards.
• Pay Under Protest - If still unsatisfied with the appeal result, you can pay the contested liability “under protest” and then file a petition with the Idaho Board of Tax Appeals within 91 days from the appealed decision.

How to Register for Sales Tax in Idaho

To register for an Idaho seller's permit, visit the Idaho State Tax Commission (STC) Business Registration page. You'll need to provide the following:

• Your details, including SSN
• Business information, such as ownership structure
• Physical and mailing addresses
• Contact phone, website, email
• Estimate monthly and yearly gross sales
• Nature of business activity

The STC does not charge a fee to obtain an Idaho seller’s permit. However, some integrated software solutions do have monthly subscription fees to automate multistate sales tax filing, which can provide immense time savings and accuracy.

Registration Requirements for Online Sellers in Idaho

Due to economic nexus laws, out-of-state online retailers shipping products to Idaho buyers may need to register if annual sales exceed:

• $100,000 in gross Idaho sales
• $10,000 in gross sales via click-through referrals from Idaho websites
• 200 or more separate transactions to Idaho residents

Automated Idaho sales tax software can significantly ease the compliance burden for internet sellers lacking physical presence.

Cost of registration for an Idaho sales tax license

Idaho does not charge any fee to obtain a seller's permit or sales tax license. Registration is accessible through the STC online portal. However, registering through a third-party provider may incur associated software subscription fees.

Agencies to register within Idaho

The Idaho State Tax Commission (STC) is the sole agency business owners register with for a seller's permit to collect/remit the Idaho sales tax. Visit the STC website to start the online application.

More Information & Contacts

For additional questions on Idaho sales tax filing, audits, appeals, registration, or general inquiries:

• Authority Name: Idaho State Tax Commission
• Phone Number: (208) 334-7660
• Website: tax.idaho.gov

The STC website also contains resources on Idaho tax law, recent rate changes, taxpayer guides, contact forms, and instructional videos. 

There you have it—a comprehensive guide on Idaho's sales tax regime. Need help filing taxes for your ecommerce store? Get a demo with Numeral now.