IDAPA 35.01.02.108 — VEHICLE MANUFACTURER'S, RENTAL COMPANY'S, AND DEALER'S PURCHASE OR USE

OF VEHICLES (RULE 108).
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)
IDAHO ADMINISTRATIVE CODE
IDAPA 35.01.02
State Tax Commission
Idaho Sales & Use Tax Administrative Rules
Section 109
Page 104
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)