Amends existing law to revise provisions certain definitions related to sales and use tax.

LEGISLATURE OF THE STATE OF IDAHO Sixty-eighth Legislature Second Regular Session - 2026 IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 839 BY REVENUE AND TAXATION COMMITTEE AN ACT1 RELATING TO TAXATION; AMENDING SECTION 63-3612, IDAHO CODE, TO REVISE A DEF-2 INITION; AMENDING SECTION 63-3613, IDAHO CODE, TO REVISE A DEFINITION;3 PROVIDING APPLICABILITY; AND DECLARING AN EMERGENCY AND PROVIDING4 RETROACTIVE APPLICATION.5

Be It Enacted by the Legislature of the State of Idaho:6

SECTION 1. That Section 63-3612, Idaho Code, be, and the same is hereby7 amended to read as follows:8 63-3612. SALE. (1) The term "sale" means any transfer of title, ex-9 change or barter, conditional or otherwise, of tangible personal property10 for a consideration and shall include any similar transfer of possession11 found by the state tax commission to be in lieu of, or equivalent to, a trans-12 fer of title, exchange or barter.13 (2) "Sale" shall also include the following transactions when a consid-14 eration is transferred, exchanged or bartered:15 (a) Producing, fabricating, processing, printing, or imprinting of16 tangible personal property for consumers who furnish, either directly17 or indirectly, the tangible personal property used in the producing,18 fabricating, processing, printing, or imprinting.19 (b) Furnishing, preparing, or serving food, meals, or drinks and nonde-20 preciable goods and services directly consumed by customers included in21 the charge thereof.22 (c) A transfer of possession of property where the seller retains the23 title as security for the payment of the sales price.24 (d) A transfer of the title or possession of tangible personal property25 which has been produced, fabricated, or printed to the special order of26 the customer, or of any publication.27 (e) Admission to a place or for an event in Idaho, provided that an or-28 ganization conducting an exempt function as defined in section 527 or29 exempted by section 501(c)(3) of the Internal Revenue Code, as incor-30 porated in section 63-3004, Idaho Code, and collecting any charges for31 attendance at the aforementioned event, shall not have those admission32 charges be defined as a sale if the event:33 (i) Is not predominately recreational or commercial; and34 (ii) Any included entertainment value is minimal when compared to35 the charge for attendance; and36 (iii) Such entity has paid sales and use tax on taxable property or37 services used during the event.38 (f) The use of or the privilege of using tangible personal property or39 facilities for recreation.40

2 (g) Providing hotel, motel, campground, or trailer court accommo-1 dations, nondepreciable goods directly consumed by customers and2 included services, except:3 (i) where Where residence is maintained continuously under the4 terms of a lease or similar agreement for a period in excess of5 thirty (30) days.; or6 (ii) Accommodations for redemptions of loyalty or rewards program7 points where monetary consideration has not been paid for the ac-8 commodations by the program member; however, sales tax shall apply9 to monetary consideration paid by a loyalty program to an accom-10 modations owner or operator when loyalty or reward points are re-11 deemed for the providing of customer accommodations.12 (h) The lease or rental of tangible personal property.13 (i) The intrastate transportation for hire by air of freight or passen-14 gers, except (1) as part of a regularly scheduled flight by a certified15 air carrier, under authority of the United States, or (2) when providing16 air ambulance services.17 (3) As used in subsections (2)(b) and (2)(g) of this section, goods "di-18 rectly consumed by customers" shall not be interpreted to mean any linens,19 bedding, cloth napkins or similar nondisposable property.20

SECTION 2. That Section 63-3613, Idaho Code, be, and the same is hereby21 amended to read as follows:22 63-3613. SALES PRICE. (a) The term "sales price" means the total23 amount for which tangible personal property, including services agreed to be24 rendered as a part of the sale, is sold, rented or leased, valued in money,25 whether paid in money or otherwise, without any deduction on account of any26 of the following:27 1. The cost of the property sold. However, in accordance with such28 rules as the state tax commission may prescribe, a deduction may be29 taken if the retailer has purchased property for some purpose other than30 resale or rental, has reimbursed his vendor for tax which the vendor is31 required to pay to the state or has paid the use tax with respect to the32 property, and has resold or rented the property prior to making any use33 of the property other than retention, demonstration or display while34 holding it for sale in the regular course of business. If such a deduc-35 tion is taken by the retailer, no refund or credit will be allowed to his36 vendor with respect to the sale of the property.37 2. The cost of materials used, labor or service cost, losses, or any38 other expense.39 3. The cost of transportation of the property prior to its sale.40 4. The face value of manufacturer's discount coupons. A manufacturer's41 discount coupon is a price reduction coupon presented by a consumer to42 a retailer upon purchase of a manufacturer's product, the face value of43 which may only be reimbursed by the manufacturer to the retailer.44 (b) The term "sales price" does not include any of the following:45 1. Retailer discounts allowed and taken on sales, but only to the extent46 that such retailer discounts represent price adjustments as opposed to47 cash discounts offered only as an inducement for prompt payment.48

3 2. Any sums allowed on merchandise accepted in payment of other mer-1 chandise, provided that this allowance shall not apply to the sale of a2 "new manufactured home," a "new park model recreational vehicle" or a3 "modular building" as defined herein.4 3. The amount charged for property returned by customers when the5 amount charged therefor is refunded either in cash or credit; but this6 exclusion shall not apply in any instance when the customer, in order7 to obtain the refund, is required to purchase other property at a price8 greater than the amount charged for the property that is returned.9 4. The amount charged for labor or services rendered in installing or10 applying the property sold, provided that said amount is stated sepa-11 rately and such separate statement is not used as a means of avoiding12 imposition of this tax upon the actual sales price of the tangible per-13 sonal property; except that charges by a manufactured homes dealer or14 park model recreational vehicle dealer for set up of a manufactured15 home or park model recreational vehicle shall be included in the "sales16 price" of such manufactured home or park model recreational vehicle.17 5. The amount of any tax (not including, however, any manufacturers' or18 importers' excise tax) imposed by the United States upon or with respect19 to retail sales whether imposed upon the retailer or the consumer.20 6. The amount charged for finance charges, carrying charges, service21 charges, time-price differential, or interest on deferred payment22 sales, provided such charges are not used as a means of avoiding impo-23 sition of this tax upon the actual sales price of the tangible personal24 property.25 7. Delivery and handling charges for transportation of tangible per-26 sonal property to the consumer, provided that the transportation is27 stated separately and the separate statement is not used as a means of28 avoiding imposition of the tax upon the actual sales price of the tan-29 gible personal property; except that charges by a manufactured homes30 dealer or park model recreational vehicle dealer for transportation31 of a manufactured home or park model recreational vehicle shall be in-32 cluded in the "sales price" of such manufactured home or park model33 recreational vehicle.34 8. Manufacturers' rebates when used at the time of a retail sale as a35 down payment on or reduction to the retail sales price of a motor vehi-36 cle the following products to which the rebate applies: motor vehicles37 as defined in section 63-3605L, Idaho Code; and all-terrain vehicles,38 utility type vehicles, specialty off-highway vehicles, motorbikes, and39 snowmobiles, as those terms are defined in section 67-7101, Idaho Code.40 A manufacturer's rebate is a cash payment made by a manufacturer to a re-41 tailer or to a consumer who has purchased or is purchasing the manufac-42 turer's product from the retailer.43 9. The amount of any fee imposed upon an outfitter as defined in section44 36-2102, Idaho Code, by a governmental entity pursuant to statute for45 the purpose of conducting outfitting activities on land or water sub-46 ject to the jurisdiction of the governmental entity, provided that the47 fee is stated separately and is presented as a use fee paid by the out-48 fitted public to be passed through to the governmental entity.49

4 10. The amount of any discount or other price reduction on telecommuni-1 cations equipment when offered as an inducement to the consumer to com-2 mence or continue telecommunications service, or the amount of any com-3 mission or other indirect compensation received by a retailer or seller4 as a result of the consumer commencing or continuing telecommunications5 service.6 (c) The sales price of a "new manufactured home" or a "modular building"7 as defined in this chapter shall be limited to and include only fifty-five8 percent (55%) of the sales price as otherwise defined herein.9 (d) Taxes previously paid on amounts represented by accounts found to10 be worthless may be credited upon a subsequent payment of the tax provided in11 this chapter or, if no such tax is due, refunded. If such accounts are there-12 after collected, a tax shall be paid upon the amount so collected.13 (e) Tangible personal property when sold at retail for more than eleven14 cents (11¢) but less than one dollar and one cent ($1.01) through a vending15 machine shall be deemed to have sold at a sales price equal to one hundred16 seventeen percent (117%) of the price which is paid for such tangible per-17 sonal property and/or its component parts including packaging by the owner18 or operator of the vending machines.19 (f) Sales price shall not include a gratuity or tip received when paid20 to the service provider of a meal. The gratuity or tip can be either volun-21 tary or mandatory, but must be given for the service provided and as a supple-22 ment to the service provider's income.23 (g) The sales price of a "new park model recreational vehicle" shall in-24 clude one hundred percent (100%) of the sales price as otherwise defined in25 this section.26

SECTION 3. The provisions of this act shall apply to all appeals pend-27 ing on and after January 1, 2026, involving interpretation or application of28 sections 63-3612 and 63-3613, Idaho Code.29

SECTION 4. An emergency existing therefor, which emergency is hereby30 declared to exist, this act shall be in full force and effect on and after its31 passage and approval, and retroactively to January 1, 2026.32