What Is the Idaho Sales Tax and What Does It Cover?

Sales tax is a consumption tax applied to the sale of goods and services. It is collected by businesses at the point of sale and remitted to the state. In Idaho, sales tax revenue funds various public services and programs, contributing to the state’s overall financial health.

Idaho Sales Tax Rate

Idaho implements a statewide sales tax rate of 6%. Beyond the state rate, certain local jurisdictions and special districts may impose additional sales taxes. These local rates can range from 0% to 3%, leading to a combined sales tax rate that can vary between 6% and 9% depending on the specific location of the sale. Consumers might encounter these higher combined rates in designated resort cities or areas with special district levies.

Goods and Services Subject to Sales Tax

In Idaho, sales tax generally applies to the retail sale of most tangible personal property. Common examples include clothing, electronics, and various household goods. Restaurant meals are also typically subject to sales tax. Beyond physical goods, certain services are specifically enumerated as taxable under Idaho law.

Taxable services include:
Admissions tickets for events or recreational facilities
Hotel and motel stays
Leasing or renting of tangible personal property
Services directly involved in the production, fabrication, or printing of tangible personal property

Common Sales Tax Exemptions

Idaho provides several exemptions from sales tax for specific goods and services. While many states exempt groceries, Idaho generally applies the 6% sales tax to most grocery items. However, Idaho residents can claim a grocery credit refund on their income tax returns, which helps offset the sales tax paid on groceries. This credit typically amounts to at least $100 per person annually.

Prescription drugs and durable medical equipment are exempt from Idaho sales tax when purchased under a prescription or work order issued by a licensed practitioner. Certain agricultural products and equipment are also exempt when used primarily and directly in farming operations, including farm machinery, repair parts, and leases of qualifying agricultural equipment.

Services are generally not subject to sales tax unless explicitly defined as taxable by statute. Purchases made for resale by businesses are exempt. Sales made directly to the state of Idaho, its agencies, departments, and political subdivisions are also exempt from sales and use tax.