Does Idaho charge sales tax on services?
by September 14, 2023
The majority of U.S. states require merchants to charge sales tax on tangible personal property (TPP), otherwise known as physical goods. Many states also implement sales and use tax on digital goods and SaaS. Because the economy has shifted over time from a manufacturing economy to a service economy, states are now looking to generate revenue by taxing services.
Here’s what merchants need to know about taxing services in the state of Idaho, which has a state sales tax rate of 6%.
Does Idaho charge sales tax on services?
Services in Idaho are generally not taxable, unless the service you provide includes creating or manufacturing a product. Here are some examples of taxable services in Idaho:
- Furnishing, preparing, or serving food, meals, or drinks
- Admission to a place or event in Idaho
- Short-term rental accommodations for 30 days or less
Please keep in mind that this is a guideline, and you should consult with a sales tax professional to determine if the services your business provides should be subject to state sales tax. For an in-depth look at Idaho sales tax, TaxJar’s guide to sales tax in Idaho and the Idaho State Tax Commission has more details.
How to stay compliant with sales tax when you sell services
Managing all the moving parts of sales tax can be challenging. Are accounting services taxed? What about hair care or car maintenance? They may not be taxed in your state today, but sales tax laws change all the time. TaxJar makes it easier for you to stay current with it all, especially as you scale your business across states.
If you need to charge sales tax on services, TaxJar takes all of these state laws into account and makes your job simple. To learn more about TaxJar and get started automating your sales tax compliance, start a free, 30-day trial today.
