Vehicle Sales, Rentals, And Leases

Sections 63-3610, 63-3612, 63-3613, 63-3619, 63-3621, Idaho Code 01. Vehicles Purchased from Idaho Dealers. A title application form completed by the dealer showing Idaho sales tax collected is evidence that the buyer paid sales tax to the dealer. (7-1-26) 02. Vehicles Purchased from Private Parties. (3-31-22) a. Private party sales of vehicles are taxable. The county assessor will collect tax on the gross sales price at the time of titling and registration. (7-1-26) b. The buyer presents a bill of sale or receipt as proof of the gross sales price. Canceled checks won’t be accepted in lieu of a bill of sale. In the absence of a bill of sale or receipt supporting the sales price of the vehicle, tax is collected on the value established as the average condition trade-in value in the most recent J.D. Power Official Used Car Guide for the same make, model, options, year, mileage, and condition. (7-1-26) c. A trade-in allowance isn’t allowed on a private party sale. (7-1-26) d. A barter or exchange of vehicles or other property is taxed on the value of the vehicles and other property involved in the exchange. In the absence of documentation supporting the value of the vehicle(s), tax is collected on the value established as the average condition trade-in value in the most recent J.D. Power Official Used Car Guide for the same make, model, options, year, mileage, and condition. (7-1-26) 03. Vehicles Purchased from Retailers. (3-31-22) a. A retailer obligated to have an Idaho seller’s permit collects sales tax when selling a vehicle, even if they are not licensed as a vehicle dealer. The retailer gives the buyer the title to the vehicle, properly completing title IDAHO ADMINISTRATIVE CODE IDAPA 35.01.02 State Tax Commission Idaho Sales & Use Tax Administrative Rules Section 107 Page 61 transfer information on the title, including the retailer’s seller’s permit number as proof that Idaho sales tax was collected. The retailer will also give the buyer a bill of sale stating: (7-1-26) i. The date of sale; (7-1-26) ii. The name and address of the seller; (7-1-26) iii. The complete vehicle description, including the vehicle identification number (VIN) that agrees with the VIN on the title; (7-1-26) iv. The person to whom the vehicle was sold; (7-1-26) v. The amount for which the vehicle was sold; and (7-1-26) vi. The amount of sales tax charged. (7-1-26) b. If a retailer doesn’t collect sales tax, the retailer will be held liable to pay the tax unless they can provide one (1) of the following to the Tax Commission (7-1-26) i. Satisfactory evidence that the buyer paid tax to the county assessor; (7-1-26) ii. A properly executed exemption certificate. (7-1-26) 04. Vehicles Rented or Leased. (3-31-22) a. A rental or lease of a vehicle is taxable. See Section 024. (7-1-26) b. If a lessor doesn’t collect sales tax on a purchase option, the lessor will be held liable to pay the tax unless they can provide one (1) of the following to the Tax Commission: (7-1-26) i. Satisfactory evidence that the buyer paid tax to the county assessor; or (7-1-26) ii. A properly executed exemption certificate. (7-1-26) c. The lessor collects and remits sales tax on each lease payment received from the renter or lessee. The sales tax is applicable whether the vehicle is leased or rented on an hourly, daily, weekly, monthly, mileage, or any other basis. (3-31-22) d. Out-of-state lessors are to obtain a seller’s permit and comply with this rule. If the county assessor cannot verify that the lessor is properly registered to collect the tax, title and registration could be denied. (7-1-26) 107. VEHICLES AND VESSELS – GIFTS, MILITARY PERSONNEL, NONRESIDENTS, NEW RESIDENTS, TAX PAID TO ANOTHER STATE, SALES TO FAMILY MEMBERS, AND OTHER EXEMPTIONS. Sections 63-3605L, 63-3621, 63-3622K, 63-3622R, Idaho Code 01. Gifts of Vehicles. When the following facts clearly establish that a vehicle is being transferred as a gift from the titleholder to another, the vehicle can be transferred tax exempt if: (3-31-22) a. No money, services, or other consideration is exchanged between the donor and recipient at any time, the recipient assumes no indebtedness, and the relationship of the donor and recipient indicates a basis for a gift. (7-1-26) b. The donor will provide the recipient properly executed exemption certificate. The recipient will submit it to the county assessor along with the title to the vehicle being transferred. If the donor is unable to sign the affidavit, the recipient can submit either: (7-1-26) IDAHO ADMINISTRATIVE CODE IDAPA 35.01.02 State Tax Commission Idaho Sales & Use Tax Administrative Rules Section 108 Page 62 i. A letter stating the vehicle is a gift, and signed by the donor, may be accepted by the county assessor and attached to the affidavit; or (3-31-22) ii. The title may be marked as a gift and signed by the donor. (3-31-22) 02. Purchases Brought into Idaho by Nonresidents. (3-31-22) a. For purposes of the nonresident exemption, a motor vehicle is considered to have been used in Idaho for a day when it is present in this state for more than sixteen (16) hours during any twenty-four (24) hour period. (7-1-26) b. A limited liability company (LLC) or other legal entity formed by an Idaho resident under the laws of another state primarily for the purpose of purchasing and owning one (1) or more vehicles or vessels isn’t a nonresident. The use of a vehicle owned by such an entity will be subject to use tax upon its first use in Idaho. (7-1-26) 03. New Residents. If an owner obtained a registration or title from another state or nation of residence more than ninety (90) days before moving to Idaho, this is proof that it was purchased primarily for use outside Idaho. New residents entering Idaho with a vehicle titled or registered in a state that doesn’t impose a general sales and use tax will be obligated to provide a properly executed exemption certificate and submit it to the county assessor when applying for a title transfer or registration certificate. (7-1-26) 04. Military Personnel. (3-31-22) a. If a military person and any accompanying spouse who own a vehicle obtained a registration or title from another state or nation of residence prior to receipt of orders to transfer to Idaho or ninety (90) days prior to moving to Idaho, whichever time period is shorter, this is proof that the vehicle was primarily for use outside Idaho. Military personnel and any accompanying spouse entering Idaho with a vehicle titled or registered in a state that doesn’t impose a general sales and use tax will provide a properly executed exemption certificate and submit it to the county assessor when applying for a title transfer or registration certificate. A military person whose home of record is Idaho is a resident of this state and doesn’t qualify for any exemption when bringing their vehicles back to Idaho. Military personnel receive no special exemption from the Idaho sales and use tax for purchases in Idaho of vehicles or other tangible personal property while temporarily assigned in this state. (7-1-26) 05. Tax Paid to Another State. Credit may be given for any general sales or use tax paid to another state. See Section 072. A registration certificate or title issued by another taxing state is sufficient evidence that tax was imposed at the other state’s tax rate. This doesn’t apply to states that don’t have a general sales tax, such as Alaska, Montana, and Oregon, or when a state has exempted the vehicle from tax. (7-1-26) 06. Sales to Family Members. No tax applies to sales of motor vehicles between the following blood or legally adopted relatives: parents, children, grandparents, grandchildren, brothers, and sisters. This doesn’t include persons who are related only by marriage. However, when the motor vehicle sold is community property, and it is sold to a qualifying relative of either spouse, the sale is exempt from tax. The recipient will provide a properly executed exemption certificate and submit it to the county assessor when applying for a title transfer or registration certificate. This exemption doesn’t apply if the seller didn’t pay tax when the vehicle was acquired. (7-1-26) 07. Sales to Nonresidents. To qualify for the nonresident exemption, the buyer needs to be a nonresident of Idaho. An Idaho resident may form an LLC or other legal entity under the laws of another state. If such an LLC or other entity is formed primarily for the purpose of owning one (1) or more vehicles or vessels it isn’t a nonresident. The purchase or use of a vehicle or vessel in Idaho by such an entity is taxable. (7-1-26) 08. Examples. Available at Sales and Use Tax Rules Examples. (7-1-26) 108. PURCHASE OR USE OF VEHICLES BY DEALERS, RENTAL COMPANIES, AND MANUFACTURERS. Sections 49-1627, 49-1628, 63-3612, 63-3613, 63-3622, 63-3623, Idaho Code IDAHO ADMINISTRATIVE CODE IDAPA 35.01.02 State Tax Commission Idaho Sales & Use Tax Administrative Rules Section 109 Page 63 01. Buying for Resale. Licensed vehicle dealers, rental companies, and manufacturers may purchase vehicles without paying sales tax when the vehicles are held for resale or rental and are only used for retention, demonstration, or display while holding the vehicles in the regular course of business. Purchases of parts installed on vehicles held in a resale inventory are exempt from sales tax. (7-1-26) 02. Titling a Vehicle. A vehicle can’t be titled without documentation showing sales or use tax has been correctly paid with the following exceptions for dealers and rental companies: (7-1-26) a. An Idaho dealer may title vehicles held for resale in the dealership name to ensure clear title to the vehicle. However, if the vehicle is registered in the dealership name, they will owe tax. (7-1-26) b. Rental companies may title and register vehicles held in their rental inventory in their company name without paying tax. (7-1-26) 03. Dealer Plates. Any vehicle upon which a dealer’s plate may be lawfully displayed is inventory held for sale and not taxable. If any use of a vehicle displaying a dealer plate requires that the dealer provide the user with a compensation form for federal income tax purposes, the amount reported is subject to use tax. The use tax will be paid by the dealer in the month immediately following the issuance of the compensation form. If a dealer makes unauthorized use or display of a dealer’s plate on a vehicle which is otherwise obligated to be titled or licensed under the laws of the state of Idaho, the dealer owes use tax on the vehicle. (7-1-26) 04. Service Vehicles. Vehicles which are not held in inventory for sale or rental, such as loaner, work, or service vehicles, are taxable at the time of their purchase. Use tax will be reported and paid on the sales tax return. In titling the vehicle, the vehicle dealer reports their seller’s permit number to the county assessor or Department of Transportation as evidence that sales or use tax has been paid. (7-1-26) 05. Inventory Withdrawals. Dealers may withdraw vehicles from inventory and put them to a use for which a dealer’s plate isn’t authorized, creating a requirement for the vehicles to be titled and licensed. Titled and licensed vehicles are taxable. Rental companies that withdraw vehicles from their rental inventory and put them to a taxable use also owe tax. Dealers and rental companies may choose one (1) of the following methods for reporting the tax: (7-1-26) a. Report and pay use tax on their acquisition cost at the time the vehicle is withdrawn from resale inventory; or (7-1-26) b. For each month or part of a month during which a vehicle is held for purposes other than resale, report and pay use tax on a reasonable monthly rental value. A reasonable monthly rental value is fair market rental or lease value for vehicles of similar make and model. (7-1-26)