Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.02 - IDAHO SALES AND USE TAX ADMINISTRATIVE RULES › Section 35.01.02.058 - SALES THROUGH VENDING MACHINES

Current through August 31, 2023
Sections
				63-3612,
				63-3622,
				63-3622L,
				63-3622X, Idaho Code
01.
In General
. The sale of
			 tangible personal property through a vending machine is a taxable transaction.
			 The term vending machine means any mechanical device which, without the
			 assistance of a human cashier, dispenses tangible personal property to a buyer
			 who deposits cash in the device. Video games and other coin operated amusement
			 devices are not vending machines. Fees paid for the use of coin operated
			 amusement devices are not subject to sales tax pursuant to Section
			 63-3623B, Idaho Code. See Rule
			 109 of these rules.
			 (3-31-22)
02.
Amount
			 Taxable
. Pursuant to Section
			 63-3613, Idaho Code, sales of
			 items through a vending machine for amounts from twelve cents ($0.12) through
			 one dollar ($1) are taxable at one hundred seventeen percent (117%) of the
			 vendor's acquisition cost of the items. Items sold for more than one dollar
			 ($1) are taxable on the retail sales price. Sales of items for a price of
			 eleven cents ($0.11) or less are exempt from tax pursuant to Section
			 63-3622L, Idaho Code.
			 (3-31-22)
03.
Requirement to
			 Obtain a Seller's Permit
. Vendors who sell tangible personal property
			 through a vending machine are to obtain a seller's permit. Only one seller's
			 permit is required; however, each vending machine operated by the vendor is to
			 conspicuously display the vendor's name, address, and seller's permit number.
			 When multiple vending machines are placed in a single location, the owner's
			 name, address, and seller's permit number need be displayed only once.
			 (3-31-22)
04.
Calculation of
			 Tax
. The following examples show how vending machine operators calculate
			 the amount of sales tax due: (3-31-22)
a.
			 Example 1: Corporation A's business activity consists only of sales through
			 vending machines in various locations in the state of Idaho. All of the items
			 sold in the vending machines are sold for a unit price of twelve cents ($0.12)
			 or more but none are sold for a price greater than one dollar ($ 1). During the
			 month of July, Corporation A's total sales from the vending machine sales were
			 ten thousand dollars ($10,000). Corporation A purchased the items sold during
			 that one (1) month period for eight thousand dollars ($8,000). The company made
			 no nontaxable or exempt sales. Corporation A should file a sales and use tax
			 return for the month of July, computing and reporting its taxable sales as
			 follows. Numbers correspond to line numbers on the return.
Line 1.
Total sales
$9,360
Line 2.
Less nontaxable sales
$0
Line 3.
Net taxable sales
$9,360
Line 1 computed as follows: 8,000 x
							 117%
= $9,360
(3-31-22)
b.
			 Example 2: During the month of July, Corporation B had total Idaho sales in the
			 amount of ten thousand dollars ($10,000). In addition to sales through vending
			 machines, the corporation made over-the-counter sales, all of which were
			 taxable, in the amount of two thousand dollars ($2,000). The remaining eight
			 thousand dollars ($8,000) constituted sales through vending machines, of which
			 one thousand dollars ($1,000) was for items with a unit retail price of over
			 one dollar ($1). The other seven thousand dollars ($7,000) were sales of items
			 through vending machines with a unit retail price of fifty cents ($0.50) each.
			 The items sold during the month for fifty cents ($0.50) each were purchased by
			 Corporation B for five thousand dollars ($5,000).
The amount to report as taxable sales is:
Taxable Sales = $2,000 (over the counter items) + $5,850
				($5,000 of purchases of items selling for $.50 x 117%) + ($1,000 ½ (1 +
				tax rate expressed as a decimal) (items sold through vending machines for more
				than one dollar ($1)). Assuming a 6% tax rate this amount would be $1,000
				divided by 1.06 or $943.40.
Note that if a vendor sells some items for more than one dollar
				($1) the sales tax is included in the total sales. This amount is divided by
				one (1) plus the current tax rate expressed as a decimal, to determine the
				sales before sales tax. (3-31-22)