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Idaho Income Tax Filers: Remember Use Tax

  • Mar 14, 2014 | Gail Cole

 It's income tax time! Idaho reminds taxpayers to remember use tax.

The deadline for filing state and federal income tax returns is fast approaching. In an effort to enhance use tax compliance in Idaho State Tax Commission has issued a reminder, “Use tax payment required on Internet, other untaxed purchases.

In a nutshell, if sales tax wasn’t collected at the time of sale, use tax is due on the following purchases:

  • Internet purchases (including digital music, movies, books, games, etc);
  • Magazine subscriptions;
  • Book and record clubs;
  • Catalog purchases; and
  • Purchases made in states without sales tax.

As Idaho shares borders with both Oregon and Montana—two states without sales tax—that last point is particularly important.

Idaho income tax filers who are year-round residents should report use tax on line 28 of Form 40. Part-year residents should report it on line 48 of Form 43.

Don’t limit use tax to annual income tax returns!

If you’re the type who hates having outstanding taxes, consider reporting use tax on Form 850-U, Idaho’s Self-Assessed Use Tax Worksheet and Return. It can be submitted any time, multiple times each year.

Why pay use tax?

Many taxpayers may wonder what this use tax is, anyway. Use tax is the correlation to sales tax that is remitted by the buyer rather than the seller when the seller does not collect sales tax on a taxable good or service. All states with sales tax have a corresponding use tax.

Unpaid use tax costs the State of Idaho approximately $46.4 million each year. That’s revenue the state could use.

Businesses as well as individuals owe use tax. How does your business handle consumer use tax?

photo credit: kenteegardin via photopin cc

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.