Tire Balancing, Studding, And Siping

Sections 63-3612, 63-3613, Idaho Code 01. Services Subject to Sales Tax. Sales tax applies to the amount charged for services agreed to be performed in conjunction with the sale of a tire. This includes balancing, studding, siping, and similar charges. The total amount charged for the tire, the services, and the materials used to perform the services is taxable. (7-1-26) 02. Services Not Subject to Sales Tax. The person performing nontaxable services owes tax on the value of the materials they use. (7-1-26) a. The amount charged for balancing, studding, or siping a tire owned by the customer is a nontaxable service. (7-1-26) b. A separately stated fee to mount or install a tire is nontaxable whether sold to or owned by the customer. (7-1-26) 03. Materials Used in Performing a Service. Studs, wheel weights, valve stems, cores, patches, and similar items are materials that may be used to perform both a taxable and nontaxable service. The seller may elect to use any consistent method in determining the value and the amount of materials used in performing taxable and nontaxable services. The method selected should represent a reasonable allocation based on their use. (7-1-26) 04. Examples. Available at Sales and Use Tax Examples. (7-1-26) Invoice total $4,908 Amount financed $10,908 Payment to principal after sale ($500) Amount of bad debt $10,408 Amount of down payment used to pay sales tax: ($300 / $5,908) .0508 x $1,000 = = 5.08% $50.80 Amount of sales tax financed: $300 - $50.80 = $249.20 Percentage of loan representing sales tax: $249.20 / $10,908 = 2.28% Sales tax paid by payments to principal: $500 x 0228 = $11.40 Amount of bad debt write-off: $249.20 - $11.40 = $237.80 IDAHO ADMINISTRATIVE CODE IDAPA 35.01.02 State Tax Commission Idaho Sales & Use Tax Administrative Rules Section 067 Page 40 066. (RESERVED)