IDAPA 35.01.02.106 — VEHICLE SALES, RENTALS, AND LEASES (RULE 106)

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)
IDAHO ADMINISTRATIVE CODE
IDAPA 35.01.02
State Tax Commission
Idaho Sales & Use Tax Administrative Rules
Section 106
Page 98
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.
IDAHO ADMINISTRATIVE CODE
IDAPA 35.01.02
State Tax Commission
Idaho Sales & Use Tax Administrative Rules
Section 107
Page 99
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)