Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.02 - IDAHO SALES AND USE TAX ADMINISTRATIVE RULES › Section 35.01.02.128 - CERTIFICATES FOR RESALE AND OTHER EXEMPTION CLAIMS

Current through August 31, 2023
Sections
				63-3612,
				63-3622, Idaho Code
01.
In General
. This rule
			 applies to proper documentation for exempt purchases of tangible personal
			 property for resale and all other exemption claims for taxable transactions
			 enumerated in Section
			 63-3612, Idaho Code. All forms
			 approved by this rule may be reproduced. (3-31-22)
02.
Burden of Proof
. All sales
			 made within Idaho are presumed to be taxable unless the seller obtains from the
			 buyer a properly executed resale or exemption certificate. If the seller does
			 not have an exemption certificate on file it will have the burden of proving
			 that a sale is not taxable. The seller may overcome the presumption by
			 establishing the facts giving rise to the exemption. If the seller obtains a
			 valid certificate from the buyer, the seller need not collect sales or use
			 taxes unless the sale of the tangible personal property or the transaction in
			 question is taxable to the buyer as a matter of law in the particular instance
			 claimed on the certificate. (3-31-22)
03.
Description and Proper Execution of
			 Approved Forms
. In order to be valid, all forms are to be legible and
			 include a date, the buyer's name, signature, and address. If the buyer has a
			 federally issued Employer Identification Number (EIN), the buyer will include
			 that EIN on the form. If the buyer does not have an EIN, the buyer will provide
			 the buyer's driver's license number and the state of issue. The seller's name
			 and address are to be completed on the form when requested. The buyer will
			 comply with any additional requirements provided in these rules.
			 (3-31-22)
04.
Form ST-101,
			 Sales Tax Resale or Exemption Certificate -- Buying for Resale
. To claim
			 a resale exemption, Form ST-101, or a Uniform Sales and Use Tax Certificate --
			 Multi-jurisdiction, is completed. The resale certificates approved by this rule
			 may only be taken from a buyer described in Subsection
			 128.04.b. The reason for the
			 claimed exemption is included on the form as well as the primary nature of
			 business and the type of products sold, leased or rented by the buyer. An Idaho
			 registered retailer includes its Idaho seller's permit number. A buyer need not
			 identify every type of product it sells but indicates the general character of
			 the property it sells, rents or leases. (3-31-22)
a. Information on the resale certificate. The
			 resale certificate bears the name and address of the buyer, the name and
			 address of the seller, is signed and dated by the buyer or his agent, indicates
			 the Idaho seller's permit number issued to the buyer, or that the buyer is an
			 out-of-state retailer, and indicates the general character of the tangible
			 personal property sold by the buyer in the regular course of business. By
			 executing the resale certificate, the buyer is certifying that the specific
			 property is being purchased for resale. (3-31-22)
b. Qualified Buyers. The resale exemption may
			 be claimed by the following buyers when buying goods for resale: (3-31-22)
i. A retailer or wholesaler doing business in
			 Idaho who holds a current and valid Idaho seller's permit number.
			 (3-31-22)
ii. A wholesaler who
			 makes no retail sales and who is not required to hold an Idaho seller's permit
			 number. (3-31-22)
iii. An
			 out-of-state retailer who makes not more than two (2) sales in Idaho in any
			 twelve (12) month period and is not required to hold an Idaho seller's permit
			 number. (3-31-22)
c.
			 Seller's Responsibility. A seller is not liable for the collection of sales tax
			 on items sold to a customer from whom the seller has obtained a properly
			 executed Sales Tax Resale and Exemption Certificate, Form ST-101, if the
			 customer intends to resell the items in the regular course of business. The
			 seller has no duty or obligation to collect sales or use taxes in regard to any
			 sales transaction so documented unless the sale fits into the narrow
			 classification of sales that can be considered to be taxable as a matter of law
			 in the particular instance claimed on the resale certificate. If the particular
			 item being purchased for resale does not commonly match the description of the
			 general character of the tangible personal property as identified on the resale
			 certificate, then it is presumed that the sale is taxable as a matter of law;
			 however, if the seller questions the buyer and the buyer provides a new
			 certificate specifically identifying the property in question as being
			 purchased for resale, then the seller can accept the certificate and is
			 relieved of any further responsibility. (3-31-22)
d. Example. A grocery store that in addition
			 to groceries sells miscellaneous items such as cosmetics, magazines, and school
			 supplies. The store would provide its Idaho seller's permit number and describe
			 the primary nature of its business as selling groceries. It could buy
			 cosmetics, magazines, and school supplies for resale and it does not need to
			 list those items on the resale certificate. It only needs to indicate the
			 general character of the property it sells as groceries. (3-31-22)
e. Example. A lawn and garden store
			 occasionally sells barbecue grills as promotional items. Even though it
			 describes lawn and garden items as the types of products it sells, it can buy
			 the grills for resale. (3-31-22)
f.
			 Example. A grocery store describes the primary nature of its business as
			 selling groceries. It then buys an automobile for resale. The grocery store
			 should provide the automobile seller a resale certificate for this transaction
			 and identify its primary nature of its business as grocery and indicate it is
			 specifically buying the automobile for resale. (3-31-22)
g. Example: A restaurant operator completes a
			 Form ST-101 for his supplier. He indicates the general character of the
			 products he sells as food and beverages. The restaurant operator buys sugar and
			 flour from the supplier. The supplier is not liable for the collection of the
			 sales tax as the character of the goods is that which the restaurant operator
			 will resell in the regular course of business. The resale claim made by the
			 restaurant operator is available as a matter of law. (3-31-22)
h. Example: The same restaurant operator
			 later buys dish towels and dish washing soap. The supplier collects the tax.
			 The general character of the goods are not those sold by a restaurant in the
			 normal course of business. The exemption claimed by the restaurant is not
			 available as a matter of law. However, if the restaurant operator identifies
			 cleaning supplies as one of the types of items it resells, either on the
			 original certificate or on a new certificate, then the supplier need not
			 collect the tax. (3-31-22)
i.
			 Example: An appliance store buys appliances and some furniture for resale from
			 a supplier. The appliance store has a resale certificate on file with the
			 supplier. The supplier also sells warehouse equipment as part of its business.
			 The appliance store buys a forklift from the supplier. The supplier should
			 charge tax. However, if the furniture store provides a new certificate
			 indicating it will sell the forklift, the supplier has no duty or obligation to
			 collect the tax. Without the new certificate, an objectively reasonable person
			 would not assume a furniture store sells forklifts. Additionally, the furniture
			 store is only buying one (1) forklift and this fact indicates to the supplier
			 that it is not buying the forklift for resale. (3-31-22)