Idaho Admin. Code r. 35.01.02.106 - VEHICLE SALES, RENTALS, AND LEASES

Sections 63-3610, 63-3612, 63-3613, 63-3619, 63-3621, 63-3622K, 63-3622R, Idaho Code

01. In General. The sale, lease, rental, or purchase of a vehicle is subject to sales and use tax. Retailers, lessors, and dealers are required to collect the tax. (3-31-22)

02. Vehicles Purchased from Idaho Dealers. When a dealer of new or used vehicles sells any motor vehicle for delivery in Idaho, the dealer collects sales or use tax at the rate in effect on the date the vehicle is delivered to the buyer, unless an exemption applies. A title application form which is completed by the dealer and displays Idaho sales tax collected is evidence that the buyer paid sales tax to the dealer. (3-31-22)

03. Vehicles Purchased from Out-of-State Dealers. Any trade-in allowance is to be shown on the original bill of sale, voucher, or other receipt from the out-of-state dealer. If sales tax was correctly paid to a dealer in another state, a credit is allowed against sales or use tax payable to Idaho. See Rule 107 of these rules. (3-31-22)

04. Vehicles Purchased from Private Parties. (3-31-22)

a. Bill of Sale. The buyer presents a bill of sale or receipt as proof of the gross sales price. Canceled checks will not be accepted in lieu of a bill of sale. (3-31-22)

b. No Bill of Sale. In the absence of a bill of sale or documentation supporting the value of the vehicle, tax is collected on the value established as the "average trade-in price" in the most recent NADA Official Used Car Guide for the same make, model, options, year, mileage, and condition. (3-31-22)

c. Trade In. A trade-in allowance is not allowed on a private party sale. See Rule 044 of these rules. The county assessor will collect tax on the gross sales price. (3-31-22)

d. Barter/Exchange. A barter or exchange of vehicles or other property is taxed on the value of the vehicles or other property involved in the exchange. In the absence of documentation supporting the value of the vehicle(s), tax is due on the value established as the "average trade-in price" in the most recent NADA Official Used Car Guide for the same make, model, options, year, mileage, and condition. (3-31-22)

05. Vehicles Purchased from Retailers. (3-31-22)

a. A retailer required to have an Idaho seller's permit collects sales tax when selling a vehicle, even though they are not licensed as a vehicle dealer. The retailer gives the buyer the title to the motor vehicle, properly completing title 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: the date of sale; the name and address of the seller; the complete vehicle description including the, vehicle identification number (VIN), that agrees with the VIN on the title; the person to whom the vehicle was sold; the amount for which the vehicle was sold; and the amount of sales tax charged. (3-31-22)

b. A retailer is not relieved of the responsibility for collecting the tax unless he can provide satisfactory evidence to the Commission that the buyer paid tax to the county assessor. If a retailer fails to collect the tax from the buyer, the county assessor will collect the tax. (3-31-22)

06. Vehicles Rented or Leased. (3-31-22)

a. A lease-purchase and lease with option to purchase have separate definitions and tax applications. See Rule 024 of these rules. A lease-purchase is taxable on the full purchase price at the time the vehicle is delivered to the lessee. A true lease and a lease with an option to purchase are subject to sales tax on each lease payment and on the buy-out or residual value when a lessee exercises his option to buy. The information in Section 106 deals with rentals, true leases, and leases with an option to buy. (3-31-22)

b. The lessor of a vehicle is a retailer and will collect sales tax from the lessee on any rental or lease payment on the date it is required to be made, at the tax rate in effect on that date. The lessor also collects tax on any lessee's exercise of an option to buy based on the full purchase price or residual, at the tax rate in effect on the date title is transferred to the lessee. (3-31-22)

c. The lessor may not rely on the county assessor to collect sales or use tax if the purchase option is exercised. (3-31-22)

d. 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)

e. If the lessor is responsible for maintaining the vehicle and this is stated in the lease or rental agreement, tax does not apply to his purchase of necessary repair parts. (3-31-22)

f. 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 will be denied. (3-31-22)

g. When a vehicle is traded in as part payment for the rental or lease of another vehicle, a deduction is allowed before computing the sales tax. The methods of applying the trade-in value to the lease are found in Rule 044 of these rules. (3-31-22)

08. Cross-References. (3-31-22)

a. See Rule 024 of these rules. Rentals or leases of tangible personal property. (3-31-22)

b. See Rule 044 of these rules. Trade-ins, trade-downs, and barter. (3-31-22)

c. See Rule 099 of these rules. Occasional sales. (3-31-22)

d. See Rule 091 of these rules. Sales to American Indians. (3-31-22)

e. See Rule 101 of these rules. Motor vehicles and trailers used in interstate commerce. (3-31-22)

f. See Rule 107 of these rules. Vehicles and Vessels - Gifts, Military, Nonresident, New Resident, Tax Paid to Another State, Sales to Family Members, Sales to American Indians. (3-31-22)

g. See Rule 108 of these rules. Motor vehicles manufacturer's, rental company's and dealer's purchase or use of motor vehicles. (3-31-22)

h. See Rule 128 of these rules. Certificates For Resale And Other Exemption Claims. (3-31-22)

Notes

Idaho Admin. Code r. 35.01.02.106