Idaho Admin. Code r. 35.01.02.108 - VEHICLE MANUFACTURER'S, RENTAL COMPANY'S, AND DEALER'S PURCHASE OR USE OF VEHICLES
Sections 63-3612, 63-3613, 63-3622, 63-3623, Idaho Code
01.
Buying for Resale. Licensed
vehicle dealers, vehicle rental companies, and manufacturers of vehicles may
purchase vehicles tax exempt when the vehicles are held for resale or rental
and are used for no purpose other than retention, demonstration, or display
while holding the vehicles for sale or rental in the regular course of
business. Purchases of parts that will be installed on vehicles held in a
resale inventory are exempt from sales tax. (3-31-22)
02.
Titling a Vehicle. Under the
Sales Tax Act, no vehicle may be titled without documentation establishing that
any sales or use taxes which may be due have been paid. However, certain
vehicles may be titled by dealers and rental companies with no tax applying.
(3-31-22)
a. Rental companies may title and
register vehicles held in their rental inventory in their company name with no
tax applying. (3-31-22)
b. Idaho
dealers may title vehicles held for resale in their dealer name to ensure clear
title to the vehicle. However, the vehicle cannot be registered in the dealer's
name. If the dealer applies for registration, tax applies.
(3-31-22)
03.
Dealer Plates. Any vehicle upon which a dealer's plate may be
lawfully displayed, as provided by Sections
49-1627 and
49-1628, Idaho Code, is, for
purposes of the Sales Tax Act, 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 so
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. The
unauthorized use or display of a dealer's plate on the vehicle which is
otherwise required to be titled or licensed under the laws of the state of
Idaho subjects the dealer to a use tax liability. (3-31-22)
04.
Service Vehicles. Vehicles,
such as work or service vehicles, which are not held in stock for sale or
rental are taxable at the time of their purchase. The use tax will be reported
and paid on the sales tax return relating to the period during which the
vehicle was purchased. In titling the vehicle, the vehicle dealer may report
his seller's permit number to the county assessor or Department of
Transportation as evidence that sales or use tax has been paid.
(3-31-22)
05.
Inventory
Withdrawals by Dealers. Dealers may withdraw vehicles from inventory and
put them to a use for which a dealer's plate is not authorized, creating a
requirement for the vehicles to be titled and licensed. Vehicles required to be
titled and licensed are taxable. The taxpayer may choose one (1) of two (2)
methods for reporting the tax: (3-31-22)
a. At
the time the vehicle is withdrawn from resale inventory, the taxpayer may
report and pay use tax on his acquisition cost. (3-31-22)
b. During each month or part of a month
during which a vehicle is held for purposes other than resale, the taxpayer may
report and pay use tax on a reasonable monthly rental value. A reasonable
monthly rental value is an amount equal to rentals charged for vehicles of like
or similar make and model when such vehicles are leased or rented by the
taxpayer or by other persons in the community in the business of leasing or
renting such vehicles. (3-31-22)
06.
Inventory Withdrawals by Rental
Companies. Rental companies that withdraw vehicles from their rental
inventory and put them to a use subject to use tax may elect either method of
reporting tax discussed in Subsection
108.05 of this rule.
(3-31-22)
07.
Applicability
of Rule 108
.
The provisions of this rule apply only to vehicle dealers or manufacturers
licensed as such by the Department of Transportation, and to companies engaged
in the business of renting vehicles without operators. (3-31-22)
Notes
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