Idaho Provides Exemption for Vehicle Accessory Installation Charges

Idaho passed legislation that adds to existing law to create a sales tax exemption on the labor costs charged by motor vehicle dealers to add accessories to new vehicles. For the purposes of the new legislation, “accessories” mean:

• an object, feature, or device that does not come standard with a motor vehicle to a motor vehicle dealer from a vehicle manufacturer or distributor, but may be ordered by the retail customer as an addition to the motor vehicle to enhance the performance, effectiveness, or beauty of the motor vehicle.

Examples of accessories include, but are not limited to, saddlebags for motorcycles, truck bed coating, rustproofing, stereo or sound systems, alarm systems, and window tinting. Service and maintenance contracts are not considered “accessories.”

“Motor vehicle” means:

• a passenger car, moped, motorbike, motorcycle, motor-driven cycle, motorized wheelchair, electric personal assistive mobility device, neighborhood electric vehicle, specialty off-highway vehicle, all-terrain vehicle, utility type vehicle, all as defined in chapter 1, title 49, Idaho Code, or a vessel, as defined in section 63-3622R(a)(4), Idaho Code

“Motor vehicle” does not mean the following:

• aircraft as defined in section 21-101, Idaho Code, a bus, motor home, recreational vehicle, park model recreational vehicle, farm tractor or other self-propelled farm equipment, any type of trailer, special mobile equipment, commercial vehicle or truck exceeding eight thousand (8,000) pounds, or authorized emergency vehicle, all as defined in chapter 1, title 49, Idaho Code

(H.B. 86, Sixty-fifth Legislature of the State of Idaho, effective July 1, 2019)