Sales Tax Fundamentals
Get up to speed on the basics of sales tax
Do you need to collect sales tax in Idaho?
You’ll need to collect sales tax in Idaho if you have nexus there. There are two ways that sellers can be tied to a state when it comes to nexus: physical or economic. Physical nexus means having enough tangible presence or activity in a state to merit paying sales tax in that state. Economic nexus means passing a states’ economic threshold for total revenue or the number of transactions in that state.
Do you have physical nexus in Idaho?
Idaho considers a seller to have physical nexus if you have any of the following in the state:
- an office, warehouse, sales or sample room, or storage place
- a stock of goods
- renting or leasing property (other than real property) to a customer who uses the property in Idaho
- business servicing tangible personal property in Idaho
- a salesman, agent, or representative who comes to Idaho to sell, deliver, install, or take orders. (It doesn’t matter whether the salesman, agent, or representative is your employee, or whether he lives in Idaho or another state.)
You can click here to read exactly what the Idaho Department of Revenue (Idaho’s taxing authority) has to say about what constitutes sales tax nexus in Idaho.
Do you have economic nexus in Idaho?
Effective June 1, 2019, Idaho considers businesses who make over $100,000 in sales to customers in Idaho to have economic nexus. This means the state considers these vendors obligated to collect sales tax from buyers in the state. You can read Idaho’s economic nexus guidance for businesses here, and you can read more about economic nexus in every state here.
Is what you’re selling taxable?
Services in Idaho are generally not taxable. However – if the service you provide includes creating or manufacturing a product, you may have to deal with the sales tax on products.
Tangible products are taxable in Idaho, with a few exceptions such as prescription drugs.
Is SaaS taxable in Idaho?
SaaS is non-taxable in Idaho. Remotely accessed computer software is not taxable, and digital subscriptions are not taxable. (Source – Rule 27)
How to get a sales tax permit in Idaho
Register online with the Idaho Business Registration (IBR) application.
You can also print out this paper IBR-1 form and mail it to:
Idaho Business Registration
PO Box 36
Boise, ID 83722-0410
You need this information to register for a sales tax permit in Idaho:
- Personal identification information (Name, SSN, etc.)
- Business identification information (Business Name, Owners, Address, Date of Incorporation, EIN, etc.)
- Business entity type
- Purpose for applying
- Date you’ll begin collecting sales tax in Idaho
Registering for a sales and use tax license in Idaho is free, but you may be required to pay other business registration fees. For example, Idaho instructs businesses applying for a sales tax license to also apply with the Idaho Secretary of State.
Collecting Sales Tax
Idaho is a destination-based sales tax state for in-state sellers. So if you live and run your business in Idaho you would charge sales tax at the rate of your buyer’s ship-to location.
Fortunately, the sales tax rate in Idaho is generally just the state rate of 6%, even though certain resort towns and jurisdictions are allowed to add on an additional local sales tax rate.
If you are not based in Idaho but have sales tax nexus in Idaho, then you are only required to charge the 6% “use tax” rate to your Idaho buyers. (“Use tax” is very similar to sales tax but charged by sellers based out-of-state.)
You can look up your local Idaho sales tax rates by using the TaxJar’s Sales Tax Calculator.
Should you collect sales tax on shipping charges in Idaho?
As long as you separately state the shipping charges on your bill to your customer, you do not have to charge sales tax on shipping.
But if you include shipping in the price of the product you sell the customer, then shipping is considered part of the taxable transaction and Idaho declares that you must collect sales tax on shipping.
Read a full explanation of sales tax on shipping in Idaho here.
When are Returns Due?
When you file and pay Idaho sales tax depends on two things: your assigned filing frequency and your state’s due dates.
How often will you file sales tax returns in Idaho?
States assign you a filing frequency when you register for your sales tax permit. In most states, how often you file sales tax is based on the amount of sales tax you collect from buyers in the state.
In Idaho, you will be required to file and remit sales tax either monthly, quarterly or annually.
Idaho sales tax returns are always due the 20th of the month following the reporting period. If the filing due date falls on a weekend or holiday, sales tax is generally due the next business day.
Filing Sales Tax
When it comes time to file sales tax in Idaho you must do three things:
- Calculate how much sales tax you owe
- File a sales tax return
- Make a payment
How to Calculate How Much Sales Tax You Owe in Idaho
Calculating how much sales tax you should remit to the state of Idaho is easy with TaxJar’s Idaho sales tax report.
All you do is connect the channels through which you sell – including Amazon, eBay, Shopify, Square and more – and we’ll calculate exactly how much sales tax you collected. All the information you need to file your Idaho sales tax return will be waiting for you in TaxJar. All you have to do is login.
How to File and Pay Sales Tax in Idaho
You have three options for filing and paying your Idaho sales tax:
- File online – File online at the Idaho State Tax Commission’s Taxpayer Access Point (TAP). You can remit your payment through their online system.
- File by mail – You can use Form 850 and file and pay through the mail. Idaho will mail you a personalized Form 850.
- AutoFile – Let TaxJar file your sales tax for you. We take care of the payments, too. You’ll never have to worry about spreadsheets, calculations or filling out complex sales tax returns, streamlining your sales tax compliance.