IDAPA 35.01.02.036 — SIGNS AND BILLBOARDS (RULE 036)

Sections 63-3609, 63-3612, 63-3613, 63-3622, Idaho Code
01.
Signs and Billboards as Custom Made Articles. The fabrication, manufacturing, lettering, etc., of
advertising or informational signs of whatever description, including, but not limited to, neon signs, display lettering
on trucks, display cards, show cards, etc., are considered made-to-order goods or custom made articles and as such
are subject to sales tax based upon the total sales price of the completed sign to the user. The sales price includes both
material and labor.
(3-31-22)
02.
Lease or Rental of Signs. The lease or rental of signs is taxable and sales tax will be collected and
remitted to the state upon the date on which rental payments are due and owing the lessor. The tax will be measured
by the gross rental receipts. A lease-purchase agreement which in fact a sale, will be treated as a sale and tax collected
on the entire sales price at the date upon which the contract is executed.
(3-31-22)
03.
Material That Becomes Part of a Sign. The sale of advertising signs may consist of a mixed
transaction including both a sale of tangible personal property and a sale of real property.
(3-31-22)
a.
Persons who sell signs may buy materials which become a part of the product without paying tax if
they give the seller the documentation required by Rule 128 of these rules. Both the materials and labor necessary to
fabricate the sign are taxable. Therefore, the entire price of the tangible personal property sold will be taxable to the
customer.
(3-31-22)
b.
Signs may be attached to poles or mountings that are affixed to real property in such a way that they
are intended to remain in place and become a real property improvement. The person installing materials into real
property is acting as a contractor and is the consumer of the materials installed, such as the concrete or sign poles.
The contractor owes a sales or use tax on the purchase of these materials.
(3-31-22)
04.
Road Signs. Road signs are signs installed alongside or above roads that provide roadway
information to users of the road. Examples of road signs include traffic signs such as speed limit signs and stop signs;
street signs; recreational area signs; highway signs such as mileage signs and exit signs; and highway exit service
information signs.
(3-31-22)
a.
In general, road signs become real property upon installation. Consequently, an installer of road
signs acts as a contractor improving real property when performing the installation work. Therefore, a road sign
installer is the consumer of all materials used in the installation of the road sign. The installer owes sales or use tax on
its use of all sign materials regardless of whether the installer purchased the materials or had the sign materials
provided by the sign owner. However, if the sign owner has already paid sales or use tax on its purchase of the sign
materials, the installer will not owe any additional use tax.
(3-31-22)
b.
Alternatively, if a road sign is intended to serve a temporary purpose, the road sign does not
become real property regardless of the nature of its purpose or how the road sign is affixed to real property.(3-31-22)
i.
Example 1: A contractor installs a stop sign on behalf of a public transportation department to
adjust traffic flow during a period of road construction. The contractor removes the stop sign upon completion of the
construction and returns the stop sign to the public transportation department. The stop sign remains tangible personal
property while installed. Therefore, the contractor does not owe use tax.
(3-31-22)
ii.
Example 2: A contractor purchases signs used to warn approaching vehicles of a construction
project that affects traffic flow such as "Be Prepared to Stop." The contractor maintains an inventory of such signs for
use on a variety of projects. The signs only ever serve a temporary purpose for the duration of a project. The
contractor does not resell the signs or install the signs on a permanent basis. The purchase of these signs is taxable to
the contractor.
(3-31-22)
IDAHO ADMINISTRATIVE CODE
IDAPA 35.01.02
State Tax Commission
Idaho Sales & Use Tax Administrative Rules
Section 037
Page 29
05.
Custom Painting Directly on Real Property. A sale of custom painting of displays, graphics or
signs directly on walls or windows of a building is not considered to be a retail sale of tangible personal property and
is not taxable. The sign painter pays sales or use tax on purchases of materials used to paint these custom displays,
graphics or signs.
(3-31-22)
06.
Billboards. Billboards, which are also referred to as twenty-four (24) sheet posters and painted
billboards, are not in the same category as signs covered in this rule. The rental of a billboard is not a rental of
tangible personal property under the Idaho Sales Tax Act. Material used in the construction, erection, painting, and
maintenance of a billboard is taxable.
(3-31-22)