Idaho, the 14th largest state in the US, is a mountainous state larger than all of New England. While Idaho is the 39th most populous state it is also the 7th least densely populated. Idaho is one of only two places in the world where star garnets can be found in any significant quantities, this is one reason that Idaho is known as the ‘gem state’. Of course not nearly as many people in the rest of the United States know Idaho by that name, because it is most probably most famous for ‘the Idaho Potato’, and thus is frequently referred to as ‘The Potato State’.
Personally I have fond memories of Idaho, especially Farragut State Park located in far north Idaho. During 1967 I attended the World Scouting Jamboree there, and then in 1969 the National Scout Jamboree. That ‘69 Jamboree was especially memorable because on his way to the moon, Astronaut Neil Armstrong, who himself was an Eagle Scout, broadcast a greeting to all of us attending the Jamboree from the Apollo Command Module.
A few days later, we, along with the rest of the world, watched him on what seemed like a ‘drive-in-theater sized screen’ take that ‘one small step for man, one giant leap for mankind’ as he set foot on the moon for the very first time.
Idaho Sales tax applies to the sale, rental or lease of tangible personal property and some services. The state sales tax, administered by the Idaho State Tax Commission, is 6% with a very limited, selective local option up to 6.5%. Food is taxed, but prescription drugs are not. Hotel, motel, and campground accommodations are taxed at a higher rate (7% to 11%).
Fees charged for recreation in Idaho, including lift tickets (including season ski passes), greens fees, fees for bowling, health club membership fees, and admissions to amusement parks, water parks, theaters, and movies are subject to sales tax. Of course some of the best Idaho recreation outside of winter sports are fishing and hunting.
Given that it 'snakes' through Idaho offering numerous great locations for fishing, the Snake River is one of the best 'fly fishing' destinations in the world.
Some jurisdictions impose local option sales tax. Use tax is a tax on goods that you put to use or store in Idaho, if you didn't pay sales tax when you bought the goods and no exemption applies.
Thanks to Avalara, the 'tax people', this article is one in a 50 part series covering sales tax issues associated with each and every state tax jurisdiction in the United States. We will be publishing a "Sales Tax Tuesday" article every week during 2015. By the end of this year there could be sufficient changes to warrant starting over with updated information.
Sales tax provides critical revenue for states as well as many counties and cities. Other than property and income tax, sales tax is the largest source of tax revenue in the majority of the 46 states that collect it. From a government perspective, making sure every sales tax dollar is collected, through audits, fines, penalties rates and rules, is an exercise for income. It’s easy to be lured into a false sense of compliance when it comes to sales tax, this series is intended to insure that you are aware of the key sales tax facts for YOUR state.
Note: For sales tax definitions and essentials check out the opening article to this series.
Idaho Tax Facts1:
- Sales and Use tax managed by the Idaho State Tax Commission.
- Idaho is not a member of the SST.
- Idaho has only 9 different active sales tax jurisdictions. The state rate is 6% and the total rate can range as high as 9% when including local jurisdictions. The average is 6.03% making it the 36th highest average sales tax rate.
- Local taxes can be imposed at a county or resort city (city deriving most its revenue from tourist activities) if approved by a 60% vote. Currently, only one county has a local tax and only a handful of resort cities qualify and impose a local tax. Sun Valley, home to a major ski resort, imposes a 3% local tax on top of the state tax.
- Sales tax is sourced at the destination address.
- Some common nexus creating activities are: place of business, employees, inventory, renting or leasing property, services on tangible personal property or any salesman, agent, or representative there for the purpose of sales, delivery, or installation.
- Idaho will tax food, admissions, photography, florist, coffee, various types of software, but not the training, support, or installation on software (maintenance contracts can be partially taxable).
- Idaho does not tax prescription drugs, facility maintenance, and only occasionally services depending on how they are sold with tangible property.
- Idaho has a standard certificate that can be applied for purpose of a resale certificate or an exemption certificate. Some common use exemptions are research and development, production, lumber, mining, and to certain non-profits but not all.
- Sales tax returns can be filed either in paper or online, and are required quarterly, monthly, or in some cases semi-monthly.
How could I possibly pass up this sales tax tidbit. While other states are going after sales tax dollars from the likes of Amazon, Expedia and other huge entities, Idaho is going after the kids. In 2013 the Idaho State Tax Commission put a 12-year-old on notice: he had until October 15 to start charging tax on sales of raspberries at his road-side fruit stand. Hypothetically, if the boy refused to collect tax, standard practice would be to charge him penalties and interest on his back taxes. Who knows, the ISTC might decide to audit the little fruit stand. We can only imagine how horrific this could be for a 12-year-old simply trying to make a few dollars selling home grown fruit. We withheld the name in this matter from publication but you can read more on the story here. It would make for a good laugh if it really wasn't so shocking.
Manual sales and use tax management is prone to error, especially if it involves your 'home grown fruit stand' and consumes too much of your time in collecting, remitting and reporting rather than revenue-generating activities, like selling a little fruit. Avalara provides solutions for sales tax automation, including tax calculation, exemption certificate management, returns processing and 1099 filing and reporting. Automation via Avalara allows businesses, even a 12-year-old's fruit stand, to be fully sales tax compliant without sacrificing productivity.
1- Patrick Neu, Avalara, "Idaho Sales Tax Facts", 3/09/2015.