IDAPA 35.01.02.065 — TIRES BALANCING, STUDDING, AND SIPING (RULE 065)

Sections 63-36112, 63-3613, 63-3619, 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. Examples of such taxable services are balancing, studding, siping, or
similar charges. Sales tax will apply to the total amount charged for the tire, the services, and the materials used to
perform the services.
(3-31-22)
02.
Services Not Subject to Sales Tax.
(3-31-22)
a.
Sales tax does not apply to the amount charged for balancing, studding, or siping a tire owned by
the customer.
(3-31-22)
b.
Sales tax does not apply to a separately stated fee to mount or install a tire whether sold new or
owned by the customer.
(3-31-22)
c.
The person performing the nontaxable service pays use tax on the value of the materials used in
performing the service.
(3-31-22)
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.
(3-31-22)
a.
The allocation of materials may be determined using a percentage basis. Example: The seller
determined through some reasonable basis that sixty percent (60%) of the studs purchased for resale are used in tires
that are purchased from him. The remaining forty percent (40%) are used in tires owned by customers and brought in
for studding. Use tax will apply to the forty percent (40%) used in studding customer owned tires. As sales tax applies
to the entire fee charged for studding a tire sold to a customer, the remaining sixty percent (60%) of the studs will not
be subject to use tax, but are included in the amount subject to sales tax imposed on the buyer.
(3-31-22)
b.
The allocation may be determined based on the value of the material used in performing both
taxable and nontaxable services.
(3-31-22)
c.
The allocation may be determined using any other method that will allow a reasonable allocation of
materials used in both a taxable and nontaxable service.
(3-31-22)
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 066
Page 61
04.
Cross-Reference. Repairs. See Rule 062 of these rules.
(3-31-22)