I decided to head east from Oregon and that means this week’s Sales Tax Tuesday is devoted to Idaho. Once the land of potato growers, Idaho is becoming a Mecca of Information Technology, and one of those hubs of technology is Boise which is home to TSheets. Of course, TSheets is now ‘TSheets by QuickBooks’ ever since Intuit purchased it at the end of 2017. Alright, TSheets is actually in ‘Eagle, Idaho,’ a suburb of Boise, but you get my drift. There are a lot of technology companies that have been moving from ‘all over,’ including Silicon Valley, to Idaho. Boise is not only the state capital, but also the largest city in Idaho.
Idaho is located between Oregon and Washington on the west and Wyoming and Montana on the East. It essentially ‘sits atop’ Nevada and Utah, and a portion of Idaho has a border with British Columbia, Canada. Idaho is the 7th least populated of the 50 U.S. states, although it is growing fast as a result of business growth. But still, most people think of Idaho as ‘The Potato State’ because the wonderful volcanically rich soil is just perfect for growing ‘Idaho Potatoes.’
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So, by now you have figured out that this is ‘Sales Tax Tuesday 2019,’ a joint venture between Insightful Accountant and Avalara, the Sales Tax People, and one in a series of articles about each and every state tax jurisdiction in the United States. This series actually started last year (2018), but we got so busy with breaking sales tax news about Nexus and all the various changes to sales tax practices and policies that we couldn't get all the states covered during 2018. As a result, we have still been traveling around since the start of 2019 in our Sales Tax RV visiting states that we haven't yet fully covered.
In Idaho, sales tax applies to the sale, rental, or lease of tangible personal property and some services. Food is taxed in Idaho, but prescription drugs are not. Temporary lodging (30 days or less), including vacation rentals by owner, are taxable. When buying goods in Idaho, the retailer should charge the applicable sales taxes. But if a local Idaho resident purchases goods on the Internet or via the telephone, or from a mail-order catalog, the retailer may not charge sales tax if he's not an Idaho retailer. In those case, the purchaser owes Idaho use tax, the use tax rate and sales tax rates are the same. But we will come back to the subject of sales tax a little later in this article, as for now, let's look as some of the places you might have to pay some sales tax, starting with dinner in Boise. I think I am going to wish that 'Intuit' was paying the tab.
From what I have been told, when it comes to Boise, there is only one place to go for steak... and that’s Chandlers. A class restaurant that specializes in prime organic, grass-fed beef from the Painted Hills in Oregon as well as American Kobe from Snake River Farms. The picture speaks for itself…
All I can say is that I sure don’t remember eating anything like that when I was camping out in Idaho way back in the late 1960’s and early 1970s’ for Scouts. In 1967, the World Scout Jamboree was at Farragut State Park (in Northern Idaho), then the National Scout Jamboree of 1969 was also at Farragut State Park, and in 1973 the National Scout Jamboree was split between Farragut State Park and Moraine State Park (Pennsylvania).
But of those three scouting trips to Idaho, the most memorable of the three had to be the 1969 National Scout Jamboree. 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, the entire Jamboree assembled before what seemed like a ‘drive-in theater screen’ and watched, along with the rest of the world, Neil Armstrong take that ‘one small step for man, one giant leap for mankind’ as he set foot on the moon for the very first time. After that, how could I ever ‘forget Idaho,’ no matter what we had for chow.Actually though, as I recall, we ate a lot of Rainbow-trout and, you guessed it, Idaho Potatoes, both fried up campfire style along with brown beans and corn. We probably had some canned peaches and pears thrown in there for good measure. We almost certainly had some of those Idaho fruit favorites, the Huckleberry, provided us by the commissary in one form or another.
And while I can’t remember if we ate them whole with our cereal, or had them in our pancakes, or maybe they were mixed up with some other fresh fruit, I am quite confident that on at least one occasion we had the infamous favorite ‘PB and Huckleberry Jam’ sandwich served during one of our mid-assembly lunches. In Idaho, some people may leave the crusts on their bread, and some may cut their crusts off their bread when they have a peanut butter sandwich, but they all have huckleberry jam instead of grape jelly or strawberry jam.
And do you know what sticks together like peanut butter and huckleberry jam on a sandwich? Sales and sales tax, that's what! 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. Idaho is no exception.
Sales and Use Tax in Idaho are administered by the Idaho State Tax Commission, and they do their best to make sales tax compliance as 'fundamental as possible' by providing as many beneficial resources as possible. Still the same, a lot of paperwork and resources doesn't always help when there are so many options surrounding you that you simply get lost in the paperwork. With that said, we still want you to know that The Idaho State Tax Commission's Sales/Use Tax Hub contains several resources including a PDF of Sales and Use Tax Rules along with very specific ‘Guides’ for businesses such as ‘Businesses & Sales/Use Tax,’ ‘Food, Meals & Drinks,’ ‘Grocers,’ ‘Retailers’ and many more. This ‘hub’ also contains forms, instructions and other documents a business may need regarding sales and use tax.
Sales Tax Facts:
- Idaho is not a member of the Streamlined sales tax (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 16th 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 three auditorium districts have a local tax and only a handful of resort cities qualify and impose a local 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. And if it's Idaho 'Nexus' you're concerned about then check-out the Avalara Idaho 'Click-through nexus webpage.
- Idaho taxes food, admissions, photography, florists, 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.
Manual sales and use tax management is prone to error and consumes staff time in pass-through rather than revenue-generating activities. No matter how many cities, counties or sales tax jurisdictions you collect and remit tax for, nor how many oddities, you can get automated, cloud-based solutions for transaction tax compliance across the U.S. and throughout the world — no matter your business size or industry, Avalara has the solution for you. AvaTax calculates sales and use tax in real time and integrates with your existing business applications to make certain your sales and use tax is right every time.
But just calculating your tax isn't all there is to sales tax. Avalara offers more like a filing service so seamless, you'll barely lift a finger as they tally what you owe in the jurisdictions you designate, prepare and file your returns, and remit payments for you. And the extra services don't stop there...you need certificate management if you are going to make certain you are in complete compliance with the 'sales tax man,' that's why Avalara also offers CertCapature to manage tax documents in the cloud for tidy, audit-ready records, best of all these records sync with your tax software to automatically apply exemptions at checkout.