Effective Date: June 1, 2019
Measurement Date: Previous or current calendar year
Includable Transactions: Gross sales; Marketplace sales included towards the threshold for individual sellers
When You Need to Register Once You Exceed the Threshold: Next transaction (state doesn’t specify)
Idaho has enacted legislation with economic nexus and marketplace nexus provisions, effective June 1, 2019. Any retailer without a physical presence in Idaho that has, in the previous calendar year or the current calendar year, cumulative gross receipts from sales delivered into Idaho in excess of $100,000 is required collect and remit Idaho state-level sales and tax, but not local taxes.
Per the legislation, marketplace facilitators without a physical presence in Idaho are required to collect and remit Idaho state-level sales and tax on retail sales they facilitate once the combined total of its own sales and any sales it facilitates for retailers or authorized agents of the retailer exceeds $100,000.
A marketplace facilitator that has physical presence in Idaho but has not previously facilitated a retail sale in the state will have 45 days to comply with these provisions upon completion of the marketplace facilitator’s first facilitated retail sale in Idaho.
A marketplace facilitator is not liable for failure to file, collect, and remit sales and use taxes if the marketplace facilitator demonstrates that the error was due to incorrect or insufficient information provided by the retailer or an authorized agent of the retailer. This does not apply if the marketplace facilitator and the retailer or authorized agent of the retailer are related parties.
A class action lawsuit may not be brought against a marketplace facilitator in Idaho that arises from or is in any way related to an overpayment of sales or use tax collected on sales facilitated by the marketplace facilitator, regardless of whether the claim is characterized as a tax refund claim. The state tax commission may waive penalties and interest if a marketplace facilitator seeks liability relief and the state tax commission finds that a reasonable cause exists.
Marketplace facilitators must obtain a separate seller’s permit and collect and remit under that separate permit for state-level sales and use taxes collected on transactions facilitated for third-party sellers.
The legislation defines “marketplace facilitator” as a person that contracts with sellers to facilitate for consideration, including the deduction of fees from a transaction, the sale of the seller’s products through a physical or electronic marketplace operated by the person, and engages:
Note that Idaho had previously enacted click-through nexus legislation effective July 1, 2018 pertaining to:
For additional details on Idaho’s click-through nexus legislation, click here. For our previous news item on Idaho’s economic and marketplace nexus legislation, click here. (H.B. 259, Laws 2019)
UPDATE: The Idaho State Tax Commission has issued additional guidance regarding the enacted economic and marketplace nexus legislation. Per the guidance, a marketplace facilitator is a person that provides a marketplace for third-party sellers. A person is a marketplace facilitator if they meet all of these criteria:
If an individual makes sales in Idaho, they are required to collect Idaho sales tax on those sales if they have a physical presence in the state (whether permanent or temporary). “Physical presence” includes:
Presence also can be established by the relationship of one business to another that’s doing business in Idaho.
The guidance also states that if an individual already has an Idaho seller’s permit, they may need to get an additional permit if they operate as a marketplace facilitator. (Online Sellers, Idaho State Tax Commission, May 1, 2019; Online Sellers – Explanation of Terms, Idaho State Tax Commission, May 1, 2019)