Amends existing law to revise provisions regarding certain sales tax exemptions for occasional sales and small sellers.

LEGISLATURE OF THE STATE OF IDAHO Sixty-eighth Legislature Second Regular Session - 2026 IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 792 BY WAYS AND MEANS COMMITTEE AN ACT1 RELATING TO TAXATION; AMENDING SECTION 63-3622K, IDAHO CODE, TO REVISE A2 PROVISION REGARDING OCCASIONAL SALES AND TO MAKE TECHNICAL CORREC-3 TIONS; AMENDING SECTION 63-3622XX, IDAHO CODE, AS ENACTED BY SECTION 1,4 CHAPTER 86, LAWS OF 2025, TO REVISE PROVISIONS REGARDING SMALL SELLER5 SALES TAX PROVISIONS AND TO REDESIGNATE THE SECTION; AND DECLARING AN6 EMERGENCY AND PROVIDING AN EFFECTIVE DATE.7

Be It Enacted by the Legislature of the State of Idaho:8

SECTION 1. That Section 63-3622K, Idaho Code, be, and the same is hereby9 amended to read as follows:10 63-3622K. OCCASIONAL SALES. (a) There are exempted from the taxes im-11 posed by this chapter occasional sales of tangible personal property.12 (b) As used in this section, the term "occasional sales" means:13 (1) A sale of property not held or used by a person in the course of an14 activity for which he is required to hold a seller's permit, provided15 such sale is not one (1) of a series of sales sufficient in number or16 of such a nature as to constitute the seller a "retailer" under section17 63-3610(c), Idaho Code. The definition of "occasional sales" provided18 in this subsection does not apply to use tax in regard to tangible per-19 sonal property used to improve real property when such property is ob-20 tained, directly or indirectly, from a person in the business of making21 like or similar improvements to real property.22 (2) Any transfer of all or substantially all of the property held or23 used by a person in a business requiring a seller's permit when, after24 such transfer, the real or ultimate ownership of such property is sub-25 stantially similar to that which existed before such transfer. For the26 purpose of this section, stockholders, bondholders, partners, or other27 persons holding an interest in a corporation or other entity are re-28 garded as having a "real or ultimate ownership" of the property of such29 corporation or other entity.30 (3) A transfer of capital assets to or by a business when the transfer31 is accomplished through an adjustment of the beneficial interest of the32 business and the transferor has paid sales or use taxes pursuant to sec-33 tion 63-3619 or 63-3621, Idaho Code, on the capital assets, incidental34 to:35 (i) A division of joint venture, partnership, or limited liabil-36 ity company assets among the members or partners in exchange for a37 proportional reduction of the transferee's interest in the joint38 venture, partnership, or limited liability company. For the pur-39 poses of this section, the term "limited liability company" means40 a business organization as defined in chapter 6, title 53, Idaho41

2 Code, or as defined in section 30-6-102, Idaho Code, as appropri-1 ate pursuant to section 30-6-1104, Idaho Code;2 (ii) The formation of a partnership, joint venture, or limited3 liability company by the transfer of assets to the partnership,4 joint venture, or limited liability company or transfers to a5 partnership, joint venture, or limited liability company in ex-6 change for proportionate interests in the partnership, joint7 venture, or limited liability company;8 (iii) The formation of a corporation by the owners of a business9 and the transfer of their business assets to the corporation in ex-10 change for stock in proportion to assets contributed;11 (iv) The transfer of assets of shareholders in the formation or12 dissolution of a corporation;13 (v) The transfer of capital assets by a corporation to its stock-14 holders in exchange for surrender of capital stock;15 (vi) The transfer of assets from a parent corporation to a sub-16 sidiary corporation which is owned at least eighty percent (80%)17 by the parent corporation, which transfer is solely in exchange18 for stock or securities of the subsidiary corporation;19 (vii) The transfer of assets from a subsidiary corporation which20 is owned at least eighty percent (80%) by the parent corporation to21 a parent corporation or another subsidiary which is owned at least22 eighty percent (80%) by the parent corporation, which transfer is23 solely in exchange for stock or securities of the parent corpora-24 tion or the subsidiary which received the assets.25 (4) The sale, lease or rental of a capital asset in substantially26 the same form as acquired by the transferor and on which the initial27 transferor has paid sales or use taxes pursuant to section 63-3619 or28 63-3621, Idaho Code, when the owners of all of the outstanding stock,29 equity or interest of the transferor are the same as the transferee or30 are members of the same family within the second degree of consanguinity31 or affinity.32 (5) The sale of substantially all of the operating assets of a business33 or of a separate division, branch, or identifiable segment to a buyer34 who continues operation of the business. For the purpose of this sub-35 section, a "separate division, branch, or identifiable segment" shall36 be deemed to exist if, prior to its sale, the income and expense attrib-37 utable to such "separate division, branch, or identifiable segment"38 could be separately ascertained from the books of accounts and records.39 (6) Sales by persons who are not defined as "retailers" in section40 63-3610, Idaho Code.41 (7) Sales of animals by any 4-H club or FFA club held in conjunction with42 a fair or the western Idaho spring lamb sale.43 (8) The sale or purchase of tangible personal property at home yard44 sales; provided however, that no more than two (2) such home yard sales45 per individual calendar year shall be exempt. If a homeowner has more46 than two (2) home yard sales and the total sales are less than five thou-47 sand dollars ($5,000) in a calendar year, such homeowner may qualify as48 a small seller as defined in section 63-3622YY, Idaho Code.49

3 (c) As used in this section, the term "occasional sales," when applied1 to the sale of a motor vehicle, means only:2 (1) Sales of motor vehicles between members of a family related within3 the second degree of consanguinity, unless a sales or use tax was not im-4 posed on the sale of that motor vehicle at the time of purchase, in which5 situation the sale is taxable.6 (2) Sales of motor vehicles that fall within the scope of the transac-7 tions detailed in subsection (b)(2) through (b)(5) of this section.8 (d) The exemption provided by subsection (b)(1), (b)(4), (b) (6), or9 (b) (8) of this section shall not apply to the sale, purchase or use of air-10 craft, as defined in section 21-201, Idaho Code, nor shall it apply to the11 sale, purchase or use of boats or vessels, as defined in section 67-7003,12 Idaho Code, nor shall it apply to the sale, purchase or use of snowmobiles,13 recreational vehicles or off-highway motorbikes, as defined in section14 63-3622HH, Idaho Code.15

SECTION 2. That Section 63-3622XX, Idaho Code, as enacted by Section 1,16 Chapter 86, Laws of 2025, be, and the same is hereby amended to read as fol-17 lows:18 63-3622XX 63-3622YY. SMALL SELLER. (1) There is hereby exempted from19 the taxes imposed by this chapter sales of tangible personal property made by20 an individual making small sales. A small seller shall not collect or remit21 any state sales or use tax imposed by this chapter.22 (2) For purposes of this section, "small seller" means an Idaho resi-23 dent making sales that do not exceed five thousand dollars ($5,000) in cumu-24 lative gross receipts in the current or previous calendar year. It shall not25 include partnerships, corporations, or limited liability corporations.26 (3) The exemption provided in this section shall not apply to:27 (a) Sales of motor vehicles, trailers, all-terrain vehicles, utility28 type vehicles, specialty off-highway vehicles, motorcycles intended29 for off-road use, snowmobiles, aircraft, vessels as defined in section30 67-7003, Idaho Code, alcohol, or tobacco; or31 (b) Items purchased to be sold or incorporated into items to be sold.32 (4) A small seller with gross receipts exceeding five thousand dollars33 ($5,000) in a calendar year shall within thirty (30) days file with the state34 tax commission an application for a temporary seller's permit and begin col-35 lecting and remitting sales and use tax on all sales exceeding five thousand36 dollars ($5,000) in such calendar year. No temporary seller's permit shall37 be issued for a period of time greater than the remaining calendar year in38 which sales exceeded five thousand dollars ($5,000) for a small seller. The39 following year, If such seller reasonably anticipates to exceed five thou-40 sand dollars ($5,000) in sales for the next calendar year, such seller shall41 apply for a seller's permit under the provisions of section 63-3620(a),42 Idaho Code. A small seller with gross receipts exceeding seven thousand five43 hundred dollars ($7,500) in a calendar year shall collect and remit sales and44 use tax on all sales made during such calendar year.45 (5) A small seller shall indicate on such seller's invoice, if re-46 quested by the purchaser, that the sale was exempt from sales and use tax47 pursuant to the provisions of this section.48

4 (6) A small seller shall not permanently maintain, occupy, or use an1 office, place of distribution, sales or sample room or place, warehouse or2 storage place, or other place of business or maintain a stock of goods with3 anticipation of exceeding gross receipts of five thousand dollars ($5,000).4 (7) A small seller may file an application with the state tax commission5 for a seller's permit pursuant to section 63-3620, Idaho Code, before such6 seller reaches the five thousand dollar ($5,000) threshold provided in sub-7 section (2) of this section.8 (8) Nothing in this section relieves a small seller from filing indi-9 vidual income tax returns for persons who meet the filing requirements under10 section 63-3030, Idaho Code.11 (9) A small seller with sales exceeding three thousand dollars ($3,000)12 annually shall keep such records for not less than four (4) years pursuant to13 section 63-3624, Idaho Code.14

SECTION 3. An emergency existing therefor, which emergency is hereby15 declared to exist, this act shall be in full force and effect on and after16 July 1, 2026.17