Idaho taxability of coupons, fees, and other basis-modifying components Idaho: Sales Tax Handbook

Idaho:

What is included in Idaho's sales tax basis?

Many times, an otherwise-taxable transaction will include bundled fees like excise taxes, installation fees, or finance charges or be modified with coupons, installment payment plans, etc. One question that will often arise is whether or not a certain payment or fee is included in a transaction's taxable basis.

The taxable basis refers to the portion of an entire transaction that is subject to Idaho's sales tax. This page answers common questions about which common fees are included in the sales tax basis in Idaho, and which are excluded.

Inclusion in Sales Tax Basis

Are coupons and cash discounts included in the Idaho sales tax basis?

What is not included are retailer discounts (only to the extent in which they represent price adjustments), trade discounts, discounts offered as inducement to continue telecommunications services, retailers coupons, retailers rebates, and also manufacturers rebates on motor vehicle sales. However, manufacturers coupons, manufacturers rebates (excluding any motor vehicle rebates), and cash discounts which are offered as inducements for prompt payment are included.

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Are excise taxes included in the Idaho sales tax basis?

Excise taxes are separate levies added by many states to the price of commodity items such as alcohol, gasoline, etc. What is included are federal importers and manufacturers excise taxes, while federal taxes on retail salesare not included.

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How are installment-based sales taxed?

Many businesses offer customers payment plans that allow them to pay the full price for a product over time in installments, often leading to confusion about when and how much sales tax is collected and remitted to Idaho. The state has implemented the following provisions regarding installment sales:

Total sales price reported at time of sale

Note: Lay-away sales taxable at transfer of title

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Are installation charges included in the Idaho sales tax basis?

While the taxation of tangible goods is relatively straightforward, some states consider the installation costs associated with a tangible object (like carpeting, a home or vehicle fixture, etc) to be taxable. Idaho policy states:

Installation charges are generally included in the taxable price of a tangible product.

Note: Must be separately stated

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Are finance charges included in the Idaho sales tax basis?

Many businesses offer customers financing on higher-value products, and include financing charges in the overall cost of the item. These finance charges may also be subject to sales taxes. Idaho policy states:

Finance charges are generally included in the taxable price of a tangible product.

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How can I get reimbursed for sales taxes paid on items that are returned or repossessed?

If a taxable good for which sales tax has been collected is returned or reposessed by the merchant, the state may allow the amount of sales tax collected to be either deducted from the merchant's current sales tax balance or refunded to the merchant by the state. Idaho's policies state that returns and repossessions are:

Deductible, if the sale price is refunded, and the purchaser is not required to purchase other merchandise at a greater price

Note: A bad debt adjustment is allowed for property that is repossessed and seasonably resold

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How can I get reimbursed for sales taxes paid on bad debts?

If a merchant offers goods to a consumer on credit and the payment for those goods becomes delinquent, the merchant may be eligible to be reimbursed any sales tax they paid to the state on the consumer's behalf when the transaction was made. The method of reimbursement varies state by state.

Tax paid on bad debts can generally be recovered by the merchant as a refund or credit.



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