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H 144

TAXATION – Adds to existing law to exempt certain small sellers from sales and use taxes.

68th Legislature, 1st Regular Session (2025)

House Bill 144 exempts Idaho small sellers with annual sales under $5,000 from collecting sales tax, easing their burden and saving over $1.2 million in permits.

Reported Signed by Governor on March 17, 2025 Session Law Chapter 86 Effective: 07/01/2025
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Bill Summary · H 144

Summary of House Bill 144 (H 144)

Title

TAXATION – Exemption for Certain Small Sellers from Sales and Use Taxes

Status

  • Reported Signed by Governor: March 17, 2025
  • Session Law Chapter: 86
  • Effective Date: July 1, 2025

Introduction

  • Introduced on: February 5, 2025
  • Classification: Bill
  • Subject Areas: Business and Business Entities, Licenses and Permits, Sales, Tax and Taxation, Sales and Use

Purpose

House Bill 144 aims to simplify the sales tax process for small sellers in Idaho by exempting individuals with annual sales of less than $5,000 from the requirement to obtain a sales tax permit, collect sales taxes, and remit them to the Idaho Tax Commission. This legislation is designed to reduce the administrative burden on both small sellers and the Tax Commission.

Key Provisions

  1. Sales Tax Exemption:

    • Individuals classified as "small sellers" (those with gross receipts not exceeding $5,000 in the current or previous calendar year) are exempt from collecting and remitting state sales and use taxes.

  2. Definition of Small Seller:

    • A "small seller" is defined as an Idaho resident making sales that do not exceed $5,000. This exemption does not apply to partnerships, corporations, or limited liability companies.

  3. Exclusions from Exemption:

    • The exemption does not apply to:
      • Sales of motor vehicles, trailers, all-terrain vehicles, motorcycles, snowmobiles, aircraft, vessels, alcohol, or tobacco.
      • Items purchased for resale or incorporation into other items for sale.

  4. Temporary Seller's Permit:

    • If a small seller's gross receipts exceed $5,000, they must apply for a temporary seller's permit within 30 days and begin collecting sales tax. This permit is valid only for the remainder of the calendar year.

  5. Record Keeping:

    • Small sellers with annual sales exceeding $3,000 must maintain records for at least four years.

  6. Income Tax Obligations:

    • The bill does not exempt small sellers from filing individual income tax returns if they meet the filing requirements.

  7. Emergency Clause:

    • The bill includes an emergency declaration, allowing it to take effect on July 1, 2025.

Fiscal Impact

  • The legislation is expected to save Idahoans over $1.2 million by eliminating the need for over 10,000 sales tax permits for small sellers.
  • The General Fund may see a decrease of less than $1 million due to the exemption.
  • The Tax Commission will benefit from reduced administrative workload without requesting a reduction in full-time positions.

Conclusion

House Bill 144 represents a significant change in the taxation landscape for small sellers in Idaho, aiming to alleviate the financial and administrative burdens associated with sales tax compliance. By exempting low-volume sellers from these requirements, the bill seeks to foster a more favorable environment for small businesses in the state.

Compiled from official sources — confirm details with the bill’s official record.

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