When a business purchases inventory to resell, it can often do so without paying sales tax.  In order to do so, the retailer will need to provide an Idaho Sales Tax Resale Certificate to their vendor. 

Learn how the Idaho Resale Certificate works, how to get one, and more.

Related: Guide to starting a business in Idaho

How Does An Idaho Resale Certificate Work?

When retailers purchase products to resell, they often don’t pay state sales tax to the supplier on the purchase. The sales tax will still be paid, but instead of the retailer paying the state sales tax, the retailer charges sales tax to their customer on the final value of the merchandise. 

For instance, when a farming supply store in Idaho purchases items like seeds, fertilizer, or farming tools from a wholesaler to sell in their store, by having a resale certificate, the store owner won’t pay sales tax on these transactions. When a home gardener purchases these supplies, the retailer will charge sales tax to the customer based on the full price of the items. Then, typically, at the end of the month, the store owner takes all of the money collected as state sales taxes and sends them to the Idaho State Tax Commission.

Note that the sales tax exemption is only intended to be used for tangible personal property that will be resold and not intended for the tax-free purchase of items used in normal business operations, such as paper, pens, etc.

How To Fill Out the Idaho Sales Tax Resale Certificate (Form ST-101)

Before a business starts selling products or providing taxable services, it must first get an Idaho Seller’s Permit (sometimes referred to as a sales tax permit) from the Idaho State Tax Commission. After registering for the permit, a seller’s permit number will be issued by the State Tax Commission, which will be needed to fill out the Sales Tax Resale Certificate.

Step 1: Download Form ST-101 from the Idaho State Tax Commission

Step 2: Enter the buyer’s name (the business reselling merchandise)

Step 3: Enter the seller’s name (the business selling to the reseller)

Step 4: Indicate what the business does, the products that are sold, and the seller’s permit number.

Step 5: Enter any producer exemptions. This section is only used by a few industries where all goods are tax-exempt.

Step 6: This is only used by certain tax-exempt buyers.

Step 7: If your business provides contractor services, you will enter your information here.

Step 8: There are a few other types of goods or groups that are eligible to purchase goods without paying sales tax. These aren’t common for a small business.

Step 9: Sign and date the form.

Idaho Resale Certificate FAQs