Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.02 - IDAHO SALES AND USE TAX ADMINISTRATIVE RULES › Section 35.01.02.112 - DIRECT PAY AUTHORITY

Current through August 31, 2023
Sections
				63-3624,
				63-3629,
				63-3631, Idaho Code
01.
In General
.
A
Direct Pay Authority is granted to certain taxpayers where it is to the mutual
			 convenience of the Commission, the taxpayer, and the taxpayer's vendors to have
			 the sales and use tax liability upon the taxpayer's purchases determined by the
			 taxpayer and reported directly to the state in the form of a use tax. This
			 authorization allows vendors to sell all items of tangible personal property to
			 the taxpayer without charging any sales tax. The only effect of this
			 arrangement is to shift the reporting responsibility to the taxpayer holding
			 the authorization. (3-31-22)
02.
Taxable Purchases
. If the particular transaction would have been
			 taxable without the authorization, then the taxpayer holding the authorization
			 pays sales tax to the state even if the use of the item is not subject to use
			 tax. For example, if the taxpayer holding the authorization buys goods from a
			 retailer holding an Idaho seller's permit, then the taxpayer pays sales tax on
			 the transaction even if the goods are intended for use solely outside the
			 state. (3-31-22)
03.
Documentation
. To purchase tangible personal property without
			 paying sales tax to the vendor, the taxpayer holding an authorization provides
			 a copy of that authorization to each vendor. (3-31-22)
04.
Holder's Responsibilities
.
			 The authorization is granted only to those taxpayers who have demonstrated, to
			 the Commission's satisfaction, the accounting and technical capability to
			 comply with the Sales Tax Act. Direct pay authority holders make all purchases
			 of tangible personal property tax exempt and all taxes due as required by the
			 Idaho Sales Tax Act will be remitted directly to the Commission by the direct
			 pay authority holder. Vendors will be allowed to sell all items of tangible
			 personal property to the direct pay authority holder without charging sales tax
			 provided they obtain and keep on file a copy of the letter granting the direct
			 pay authority. (3-31-22)
05.
Revocation
. The Commission may revoke an authorization if it
			 determines that the taxpayer is not complying with this rule or if the taxpayer
			 is allowing contractors or other third parties to make exempt purchases under
			 its authority. Notice of revocation will be given in the manner provided for
			 deficiencies in taxes in Section
			 633629, Idaho Code, and is
			 subject to review as provided in Section
			 63-3631, Idaho Code. Should the
			 Commission revoke a taxpayer's direct pay authority it will be the taxpayer's
			 responsibility to notify his vendors of the revocation. (3-31-22)
06.
Tax Imposed by Hotel/Motel Room
			 Sales Tax
. The authorization can't be used for taxes imposed on lodging
			 accommodations. State sales tax, Travel and Convention tax, and Auditorium or
			 Community Center District tax, when applicable, is charged by and paid to the
			 retailer by the direct pay permittee. (3-31-22)
07.
Valid Only on Purchases of Tangible
			 Personal Property
. The authorization is valid only on purchases of
			 tangible personal property. The taxpayer can't use the authorization when
			 engaging contractors involved in improving real property. Special rules apply
			 to contractors. Refer to Rules
			 012 through
			 015, and
			 066 of these rules.
			 (3-31-22)
08.
Expiration
. Direct Pay Authority is granted for a period of five
			 (5) years. If the authorization is not renewed at the end of the expiration
			 period, the authorization will expire automatically. (3-31-22)