Navigating Idaho’s sales tax system can feel complicated, especially for small business owners and retailers juggling day-to-day operations. From understanding who needs to register for a permit to knowing which products and services are taxable, it’s important to stay compliant to avoid penalties and interest. This guide breaks down what Idaho businesses need to know about sales tax: how to register, file, and pay, plus how DAVO by Avalara can help simplify the process so you can focus on running your business.
Does Idaho have sales tax?
Yes. Idaho imposes a state sales tax on most retail sales of tangible personal property and certain services. In addition to the state tax, some Idaho cities are authorized to charge a local option sales tax, which can increase the total rate for customers in those areas. Visit the Idaho State Tax Commission’s website for a current list of cities that impose a local sales tax.
What is the Idaho sales tax rate?
The statewide sales tax rate in Idaho is 6%, which applies to most retail sales of tangible goods and certain services.
Some cities in Idaho also impose a local option sales tax on top of the state rate. For example, Sun Valley adds an additional 3% on general sales and an extra 4% on prepared foods, whereas McCall adds 1%. In contrast, Boise does not impose a local sales tax, so purchases there are only subject to the 6% state rate.
Local taxes are typically used to support community projects and tourism-related services, so the total rate you pay can vary depending on where the sale occurs. DAVO by Avalara can simplify this process by automatically setting aside, filing, and paying the correct amount of sales tax for your business, even if you operate in multiple Idaho cities with varying rates.
How to calculate sales tax in Idaho?
To calculate sales tax in Idaho, multiply the taxable sales amount by the state sales tax rate of 6%, and then add any applicable local option tax.
For example, if you own a retail shop in Boise, a $100 sale would include $6 in sales tax (6%), for a total of $106. But if your business operates in Sun Valley, where an additional 3% local tax applies, you’d collect $9 in tax for a total of $109.
Use our sales tax calculator
Our reverse sales tax calculator works in the opposite direction. It helps you figure out how much sales tax is included in a total price when you already know the final amount you charged.
For example, let’s say a restaurant owner in Boise wants to charge an even $50 for a meal (tax included). By using the reverse calculator, you can see that $2.83 of that total goes to sales tax, and $47.17 is the actual sale amount.
This tool is especially useful for businesses like restaurants, salons, or retail shops that prefer to price items with tax already built in.
What is subject to Idaho sales tax?
Idaho’s 6% sales tax applies to nearly all retail sales of tangible goods and certain services within the state. This includes both physical products and some digital items. Common examples of taxable sales include:
- Retail goods – The sale, lease, or rental of tangible personal property like furniture, electronics, or equipment.
- Digital products – Downloads such as eBooks, movies, music, and games, when the buyer receives a permanent right to use them.
- Prepared food and beverages – Restaurants, cafés, and caterers must collect sales tax on meals, snacks, and drinks.
- Short-term lodging – Hotels, motels, and vacation rentals.
- Admissions and recreation – Tickets to events or attractions, as well as the use of facilities for recreation, such as golf courses or amusement parks.
- Custom labor – Charges for production, fabrication, printing, or imprinting services are also taxable.
If you’re selling taxable goods or services in Idaho, you’re required to collect and remit sales tax to the Idaho State Tax Commission. Always refer to the Idaho State Tax Commission’s website for the latest sales and use tax information.
Does Idaho have sales tax on food?
Yes. Unlike many states where groceries for home consumption are exempt, Idaho applies sales tax to all food items, including groceries and prepared meals. That means whether you’re shopping for household staples or dining at a restaurant, sales tax applies at the same 6% state rate.
In addition to the state rate, local jurisdictions also impose an additional tax on prepared meals, beverages, or restaurant sales, which can make compliance more complex for food and beverage businesses. For example, certain resort towns or cities may charge an extra local tax on top of the state rate.
That’s where DAVO can help. Grocery stores and restaurants often deal with multiple tax rates depending on location and product type. DAVO automatically tracks, collects, and sets aside the right amount of sales tax daily, ensuring that when it’s time to file, your payments are made on time and in full. No matter how complicated your tax mix might be.
What are Idaho state sales tax exemptions?
While most retail sales in Idaho are subject to sales tax, the state does provide exemptions for certain goods and services considered essential or non-tangible. These include:
- Food assistance purchases made with food stamps, EBT cards, or WIC checks
- Prescription drugs and refills
- Sales, rentals, or leases of real property (such as homes, apartments, and land)
- Utility charges and telephone tolls
- Public transit fares
- Non-tangible software (such as cloud-based or electronically accessed programs)
Even if your business sells mostly taxable goods, it’s important to know when exemptions apply so you can collect and report tax correctly.
Businesses should also keep proper documentation, like exemption certificates or customer records, when making exempt sales. This helps avoid errors or penalties during a sales tax audit. Refer to the Idaho State Tax Commission’s site for more sales tax exemption information.
Does Idaho charge sales tax on services?
In most cases, Idaho does not charge sales tax on services. Personal and professional services such as accounting, legal, and salon services are generally exempt.
However, some services connected to tangible goods can become taxable depending on how they’re billed. For example, shipping and handling, installation labor, or repair labor are not subject to sales tax as long as these charges are clearly listed separately on the invoice.
If these charges are bundled into the total sale price of a taxable item, the entire amount becomes taxable. For businesses, it’s a best practice to itemize service charges to stay compliant and avoid overcollecting or undercollecting tax.
How to manage tax-exempt sales in Idaho?
If your business makes tax-exempt sales in Idaho, it’s important to maintain detailed records to document why sales tax wasn’t collected. Both the buyer and seller share responsibility for keeping accurate documentation.
Buyers claiming an exemption must provide the seller with a completed Form ST-101 Sales Tax Resale or Exemption Certificate. The buyer should check the applicable exemption box(es), sign, date, and submit the form. In some cases, additional documentation may be required, and sellers should keep a copy for their records.
Once a valid exemption certificate is on file, sellers don’t need to charge tax on future qualifying sales to that buyer. However, it’s critical to keep these certificates up to date and easily accessible. If the Idaho State Tax Commission finds incomplete or missing records, the seller or buyer may be billed for the tax due.
How to register for an Idaho sales tax license?
In Idaho, businesses must register with the state using the Idaho Business Wizard before applying for a sales and use tax permit. When you begin the registration, have the following information ready:
- Employer Identification Number (EIN), if available, or Social Security numbers/EINs for all owners, partners, and officers
- Physical and mailing addresses of the business
- Date your business began in Idaho and any incorporation dates (if applicable)
- Information about your expected employees, including the first paycheck date and the hire date
Once your information is ready, you can apply for your tax permits online through the Idaho Business Registration (IBR) portal. If you apply online, you can expect your permit to arrive within 10–15 business days. Paper applications may take up to four weeks to process. Additional information and assistance can be found on the Idaho State Tax Commission site for getting tax permits, including classes.
Make your sales tax less taxing with DAVO.
How to file Idaho sales tax?
If you hold a seller’s permit in Idaho, your filing schedule will depend on your total sales volume. You’re still required to file a return even if you didn’t make any sales during the reporting period. However, if you report zero sales for 12 consecutive months, your seller’s permit will be automatically canceled.
Before your due date, the Tax Commission will mail you a customized Form 850, or you can log into Idaho’s Taxpayer Access Point (TAP) account to access your return online.
You can file online through TAP or by paper form. If you choose to file by mail, send your completed return to Idaho State Tax Commission, PO Box 36, Boise, ID 83722. You can also file in person at one of the Tax Commission’s local offices.
How to pay Idaho sales tax?
Once you’ve filed your return, you must send in any sales tax you’ve collected by your filing date to avoid penalties and interest. Idaho offers several convenient payment options depending on how you manage your business finances. You can pay:
- Online through TAP: Log in to your TAP account and make an ACH debit payment at no charge. You can also pay by credit card (American Express, Discover, Mastercard, or Visa), but note there’s a 2.5% service fee.
- Online through Quick Pay: If you don’t have a TAP account, you can still pay online using Quick Pay, which also allows ACH debit (no fee) or credit card payments (2.5% service fee).
- By mail: Send your payment along with your return or payment voucher to the Idaho State Tax Commission.
- In person: Drop off your payment at one of the Tax Commission’s office locations
- By ACH credit: Initiate payment directly through your bank if you prefer managing transactions from your financial institution.
No matter which method you choose, make sure your payment is submitted on or before your filing due date to stay compliant and avoid additional costs.
Idaho sales tax due dates
Your filing frequency in Idaho depends on how much sales tax your business collects. The Idaho State Tax Commission will assign you a monthly, quarterly, semiannual, or annual filing schedule when you register.
Monthly filers:
Most retailers file monthly returns. You must file and pay by the 20th of the following month. For example, taxes collected in July are due by August 20. If the 20th falls on a weekend or holiday, your return and payment are due the next business day.
Quarterly filers:
If your business owes less than $750 in sales tax per quarter, you can file quarterly. Returns and payments are due within 20 days after the end of the quarter.
Semiannual and annual filers:
If you have a few taxable sales, you may qualify to file less frequently. For semiannual filers, returns are due by July 20 and January 20. For annual filers, returns are due by January 20.
Unlike some states, Idaho does not offer vendor compensation for collecting and remitting sales tax on behalf of the state. However, if your business operates in other states, check our sales tax discount guide to see whether you may qualify for vendor compensation elsewhere.
Idaho sales tax penalties and interest
If you miss a filing or payment deadline, Idaho charges both interest and penalties on overdue sales tax. If you don’t file your return on time, you’ll owe a penalty equal to 5% of the tax due for each month the return is late, up to a maximum of 25%. If you file on time but fail to pay the tax, the penalty is 0.5% of the tax due per month, also capped at 25%.
Interest accrues from the original due date of the return until the tax is paid in full. The current rate is around 6% and is updated annually. Refer to the Idaho State Tax Commission’s website for the most current interest rates.
If you owed $1,000 in sales tax and filed your return one month late, you’d owe a $50 late filing penalty plus approximately $5 in interest for that month. Keep in mind that Idaho enforces a minimum penalty of $10, and even if your return or payment is just one day late, the entire month’s penalty applies.
How DAVO can help manage Idaho sales tax
Managing sales tax in Idaho can be time-consuming, especially with varying filing frequencies and strict deadlines. DAVO takes the stress out of sales tax compliance by automatically setting aside the sales tax you collect daily, filing your returns, and making payments on time, every time, guaranteed. Whether you operate a restaurant in Boise, a boutique in Coeur d’Alene, or a grocery store in Twin Falls, DAVO helps ensure your Idaho sales tax is always accurate and paid on schedule, so you can stay focused on running your business.
Choose your POS system to get started with DAVO.
Idaho State Tax Commission Information:
https://tax.idaho.gov/
(800) 972-7660
