Idaho sales tax on invoices (2026 guide)

Idaho's sales and use tax rate is 6%. A number of Idaho resort cities add their own local sales tax on top, but in most of the state 6% is the whole story.

For service businesses, the important rule is that Idaho taxes goods and a limited set of services. Most pure services aren't taxed, but how you write the invoice can decide whether labor is taxable. This guide covers rates, taxable services, permits and what your Idaho invoices should show.

Idaho sales tax rates

The Tax Commission lists the Idaho cities with a local sales tax, including Bellevue, Bonners Ferry, Cascade, Crouch, Donnelly, Driggs, Hailey, Harrison, Irwin, Kellogg, Ketchum, Lava Hot Springs, Mackay, McCall, Ponderay, Riggins, Salmon, Sandpoint, Stanley, Sun Valley, Swan Valley, Tetonia and Victor. These are local "option" taxes approved by voters, and each city decides what's taxed — some limit the tax to lodging, alcohol by the drink and restaurant food. The Tax Commission tells sellers to contact these cities directly with questions about their local tax.

Which services are taxable in Idaho?

Idaho taxes the sale of goods, and services only where the law says so. The Tax Commission's basics guide lists services that are taxable, including:

• furnishing meals or drinks,
• admissions to events or places in Idaho,
• the privilege to use personal property or facilities for recreation,
• production, fabrication, printing or imprinting labor, and
• short-term lodging of 30 days or less.

For freelancers and contractors, the labor rules matter most:

• Repair labor isn't taxable if you list the labor and the parts separately on the invoice. Only the parts are taxed. If you combine parts and labor in one charge, the whole amount is taxable.
• Installation labor isn't taxable when it's separately stated.
• Fabrication labor — making something new from parts or raw materials — is taxable even when it's listed separately.
• Services agreed as part of a sale of goods, such as design services that come with the product, are part of the taxable sale.

The split between parts and labor has to be reasonable — you can't inflate the labor charge to shrink the tax.

Getting an Idaho seller's permit

The Tax Commission says almost everyone selling goods or offering taxable services in Idaho needs a seller's permit. You apply online through the Tax Commission, and applying is free. Permits arrive in about 10 to 15 business days when you apply online.

Two exceptions are worth knowing:

• Small seller exemption. Since July 1, 2025, Idaho residents operating as individuals or sole proprietors whose cumulative gross sales don't exceed $5,000 in the current or previous calendar year don't have to charge sales tax on their Idaho sales. Once sales go over $5,000, you have 30 days to get a permit and start collecting. The exemption doesn't cover vehicles, lodging, alcohol or admissions.
• Remote sellers. A retailer with no physical presence in Idaho must collect Idaho sales tax once its sales into Idaho exceed $100,000. Below that, an out-of-state seller isn't required to get an Idaho permit.

What an Idaho sales tax invoice should show

• your business name and address,
• the customer's name and address,
• a unique invoice number and the invoice date,
• a description and price for each item or service,
• parts and labor on separate lines when you do repairs or installation,
• sales tax as a separate line, with the rate you applied, and
• the total due.

In Invoice Native, tick Tax only on the taxable lines — the parts, not the separately stated repair or installation labor.

Resale and exemption certificates

A business buying goods from you to resell gives you Form ST-101, Sales Tax Resale or Exemption Certificate. Keep the completed certificate and don't charge tax on that customer's qualifying purchases. The Tax Commission notes that out-of-state businesses can use the Uniform Sales and Use Tax Certificate – Multijurisdiction instead of Form ST-101.

Other exempt buyers also use Form ST-101 to claim their exemption. See how to invoice a tax-exempt customer.

A worked example

Suppose you run a small engine repair shop in Boise, where the rate is the state's 6%, and you fix a customer's riding mower:

• $300 in replacement parts, and
• $450 in repair labor, listed on its own line.

Only the parts are taxable: $300 × 6% = $18.00. The invoice total is $300 + $450 + $18 = $768.00.

If you'd written one line — "Mower repair, $750" — the whole $750 would be taxable, and the tax would be $45.00. Separating the lines saves your customer $27.

Selling to customers in other states

If you ship goods or deliver taxable services to customers in another state, that state's rules may apply instead of Idaho's. Since the Supreme Court's 2018 decision in South Dakota v. Wayfair, states can require out-of-state sellers to register and collect their sales tax once sales into the state pass a threshold the state sets. If you sell across state lines regularly, check the thresholds and registration rules of each state you sell into — and use that state's rate on those invoices.

Common mistakes on Idaho invoices

• Combining parts and labor on one line, which makes the whole charge taxable.
• Treating fabrication as repair. Fabrication labor is taxable even when listed separately.
• Ignoring resort city taxes when you sell in a city that has one.
• Assuming the small seller exemption applies to a business that isn't an Idaho-resident individual or sole proprietor, or that's over $5,000.
• Not keeping Form ST-101 for sales you didn't tax.

Quick checklist for Idaho invoices

• ✅ Free seller's permit before your first taxable sale (unless an exemption applies)
• ✅ Checked whether your services are taxable in Idaho
• ✅ Parts and repair or installation labor on separate lines
• ✅ Resort city tax added where it applies
• ✅ Form ST-101 on file for resale and exempt sales