Idaho Sales Tax: A Comprehensive Guide by the State Tax Commission

As a resident of Idaho or someone who intends to do business in the state, understanding Idaho sales tax is crucial. The Idaho State Tax Commission is the agency responsible for collecting and administering state taxes, including sales tax. In this comprehensive guide, we will explore the different types of Idaho taxes, the sales tax in Idaho, capital gains tax in Idaho, income tax in Idaho, Idaho tax deadline 2023, Idaho taxes for retirees, Idaho sales tax calculator, obtaining a seller’s permit in Idaho, and Idaho tax services.

Introduction to Idaho Sales Tax

Idaho sales tax is a consumption tax imposed on the retail sale of tangible personal property and certain services in Idaho. The sales tax rate in Idaho is 6%, which means that for every dollar spent on taxable goods or services, 6 cents goes to the state government. However, some counties and cities in Idaho have their own additional sales tax rates, which means the total tax rate could be higher than 6%.

Types of Idaho Taxes

Apart from sales tax, there are other types of taxes in Idaho. For instance, Idaho has an income tax, property tax, and capital gains tax. While sales tax is the most visible tax, the other types of taxes also contribute to the state’s revenue.

Sales Tax in Idaho

As mentioned earlier, the sales tax rate in Idaho is 6%, but some counties and cities have local sales tax rates, which means the total tax rate could be higher than 6%. For example, the sales tax rate in Ada County is 6%, but in Garden City, which is in Ada County, the sales tax rate is 6.5%.

It is essential to note that not all goods and services are taxable in Idaho. For instance, groceries and prescription drugs are exempt from sales tax in Idaho. Additionally, Idaho offers a sales tax exemption for purchases made by nonprofit organizations and certain types of businesses.

Capital Gains Tax in Idaho

Capital gains tax is a tax on the profit realized from the sale of an asset that was purchased at a lower price. In Idaho, capital gains tax is treated as ordinary income, which means it is taxed at the same rate as regular income. The top marginal tax rate in Idaho is 6.925%, and this applies to taxpayers who earn more than $220,000.

Income Tax in Idaho

Idaho has a progressive income tax system, which means that the more you earn, the higher your tax rate. The tax rates range from 1.125% to 6.925%, depending on your income level. Idaho also offers tax credits and deductions, which can lower your tax liability.

It is essential to note that Idaho conforms to the federal tax code, which means that Idaho taxpayers can benefit from federal tax deductions and credits.

Idaho Tax Deadline 2023

The Idaho tax deadline 2023 is April 17th, which is the same as the federal tax deadline. If you need more time to file your tax return, you can request an extension until October 15th, 2023. However, an extension to file your tax return does not mean an extension to pay your taxes.

Idaho Taxes for Retirees

Idaho is a tax-friendly state for retirees. Social Security benefits are exempt from Idaho income tax, and so are military pensions. Additionally, taxpayers who are 65 years and older can claim a retirement benefits credit, which can lower their tax liability.

However, retirees who have income from other sources, such as rental income or investment income, may still be subject to Idaho income tax.

Idaho Sales Tax Calculator

The Idaho State Tax Commission offers a sales tax calculator on its website. The calculator allows you to calculate the amount of sales tax you will pay on a purchase in Idaho. You need to enter the purchase price and the sales tax rate to get the total tax amount.

Obtaining a Seller’s Permit in Idaho

If you intend to sell goods or services in Idaho, you need to obtain a seller’s permit from the Idaho State Tax Commission. The seller’s permit allows you to collect sales tax from your customers and remit it to the state government. To obtain a seller’s permit, you need to complete an application and pay a fee.

Idaho Tax Services

The Idaho State Tax Commission provides various tax services to taxpayers, including online tax filing, tax forms and instructions, tax education, and taxpayer assistance. Additionally, taxpayers can contact the Idaho State Tax Commission if they have questions about their taxes or need help resolving a tax issue.

Conclusion

In conclusion, understanding Idaho sales tax is crucial for residents and businesses in the state. Idaho has different types of taxes, including sales tax, income tax, and capital gains tax. While sales tax is the most visible tax, the other types of taxes also contribute to the state’s revenue. The Idaho State Tax Commission administers state taxes and provides various tax services to taxpayers. If you need assistance with your taxes or have questions, you can contact the Idaho State Tax Commission.