Amends existing law to revise provisions regarding certain sales tax exemptions for occasional sales and small sellers.

LEGISLATURE OF THE STATE OF IDAHO
Sixty-eighth Legislature Second Regular Session - 2026
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 792
BY WAYS AND MEANS COMMITTEE
AN ACT	1
RELATING TO TAXATION; AMENDING SECTION 63-3622K, IDAHO CODE, TO REVISE A	2
PROVISION REGARDING OCCASIONAL SALES AND TO MAKE TECHNICAL CORREC-	3
TIONS; AMENDING SECTION 63-3622XX, IDAHO CODE, AS ENACTED BY SECTION 1,	4
CHAPTER 86, LAWS OF 2025, TO REVISE PROVISIONS REGARDING SMALL SELLER	5
SALES TAX PROVISIONS AND TO REDESIGNATE THE SECTION; AND DECLARING AN	6
EMERGENCY AND PROVIDING AN EFFECTIVE DATE.	7
Be It Enacted by the Legislature of the State of Idaho:	8
SECTION 1. That Section 63-3622K, Idaho Code, be, and the same is hereby	9
amended to read as follows:	10
63-3622K. OCCASIONAL SALES. (a) There are exempted from the taxes im-	11
posed by this chapter occasional sales of tangible personal property.	12
(b) As used in this section, the term "occasional sales" means:	13
(1) A sale of property not held or used by a person in the course of an	14
activity for which he is required to hold a seller's permit, provided	15
such sale is not one (1) of a series of sales sufficient in number or	16
of such a nature as to constitute the seller a "retailer" under section	17
63-3610(c), Idaho Code. The definition of "occasional sales" provided	18
in this subsection does not apply to use tax in regard to tangible per-	19
sonal property used to improve real property when such property is ob-	20
tained, directly or indirectly, from a person in the business of making	21
like or similar improvements to real property.	22
(2) Any transfer of all or substantially all of the property held or	23
used by a person in a business requiring a seller's permit when, after	24
such transfer, the real or ultimate ownership of such property is sub-	25
stantially similar to that which existed before such transfer. For the	26
purpose of this section, stockholders, bondholders, partners, or other	27
persons holding an interest in a corporation or other entity are re-	28
garded as having a "real or ultimate ownership" of the property of such	29
corporation or other entity.	30
(3) A transfer of capital assets to or by a business when the transfer	31
is accomplished through an adjustment of the beneficial interest of the	32
business and the transferor has paid sales or use taxes pursuant to sec-	33
tion 63-3619 or 63-3621, Idaho Code, on the capital assets, incidental	34
to:	35
(i) A division of joint venture, partnership, or limited liabil-	36
ity company assets among the members or partners in exchange for a	37
proportional reduction of the transferee's interest in the joint	38
venture, partnership, or limited liability company. For the pur-	39
poses of this section, the term "limited liability company" means	40
a business organization as defined in chapter 6, title 53, Idaho	41

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Code, or as defined in section 30-6-102, Idaho Code, as appropri-	1
ate pursuant to section 30-6-1104, Idaho Code;	2
(ii) The formation of a partnership, joint venture, or limited	3
liability company by the transfer of assets to the partnership,	4
joint venture, or limited liability company or transfers to a	5
partnership, joint venture, or limited liability company in ex-	6
change for proportionate interests in the partnership, joint	7
venture, or limited liability company;	8
(iii) The formation of a corporation by the owners of a business	9
and the transfer of their business assets to the corporation in ex-	10
change for stock in proportion to assets contributed;	11
(iv) The transfer of assets of shareholders in the formation or	12
dissolution of a corporation;	13
(v) The transfer of capital assets by a corporation to its stock-	14
holders in exchange for surrender of capital stock;	15
(vi) The transfer of assets from a parent corporation to a sub-	16
sidiary corporation which is owned at least eighty percent (80%)	17
by the parent corporation, which transfer is solely in exchange	18
for stock or securities of the subsidiary corporation;	19
(vii) The transfer of assets from a subsidiary corporation which	20
is owned at least eighty percent (80%) by the parent corporation to	21
a parent corporation or another subsidiary which is owned at least	22
eighty percent (80%) by the parent corporation, which transfer is	23
solely in exchange for stock or securities of the parent corpora-	24
tion or the subsidiary which received the assets.	25
(4) The sale, lease or rental of a capital asset in substantially	26
the same form as acquired by the transferor and on which the initial	27
transferor has paid sales or use taxes pursuant to section 63-3619 or	28
63-3621, Idaho Code, when the owners of all of the outstanding stock,	29
equity or interest of the transferor are the same as the transferee or	30
are members of the same family within the second degree of consanguinity	31
or affinity.	32
(5) The sale of substantially all of the operating assets of a business	33
or of a separate division, branch, or identifiable segment to a buyer	34
who continues operation of the business. For the purpose of this sub-	35
section, a "separate division, branch, or identifiable segment" shall	36
be deemed to exist if, prior to its sale, the income and expense attrib-	37
utable to such "separate division, branch, or identifiable segment"	38
could be separately ascertained from the books of accounts and records.	39
(6) Sales by persons who are not defined as "retailers" in section	40
63-3610, Idaho Code.	41
(7) Sales of animals by any 4-H club or FFA club held in conjunction with	42
a fair or the western Idaho spring lamb sale.	43
(8) The sale or purchase of tangible personal property at home yard	44
sales; provided however, that no more than two (2) such home yard sales	45
per individual calendar year shall be exempt. If a homeowner has more	46
than two (2) home yard sales and the total sales are less than five thou-	47
sand dollars ($5,000) in a calendar year, such homeowner may qualify as	48
a small seller as defined in section 63-3622YY, Idaho Code.	49

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(c) As used in this section, the term "occasional sales," when applied	1
to the sale of a motor vehicle, means only:	2
(1) Sales of motor vehicles between members of a family related within	3
the second degree of consanguinity, unless a sales or use tax was not im-	4
posed on the sale of that motor vehicle at the time of purchase, in which	5
situation the sale is taxable.	6
(2) Sales of motor vehicles that fall within the scope of the transac-	7
tions detailed in subsection (b)(2) through (b)(5) of this section.	8
(d) The exemption provided by subsection (b)(1), (b)(4), (b) (6), or	9
(b) (8) of this section shall not apply to the sale, purchase or use of air-	10
craft, as defined in section 21-201, Idaho Code, nor shall it apply to the	11
sale, purchase or use of boats or vessels, as defined in section 67-7003,	12
Idaho Code, nor shall it apply to the sale, purchase or use of snowmobiles,	13
recreational vehicles or off-highway motorbikes, as defined in section	14
63-3622HH, Idaho Code.	15
SECTION 2. That Section 63-3622XX, Idaho Code, as enacted by Section 1,	16
Chapter 86, Laws of 2025, be, and the same is hereby amended to read as fol-	17
lows:	18
63-3622XX 63-3622YY. SMALL SELLER. (1) There is hereby exempted from	19
the taxes imposed by this chapter sales of tangible personal property made by	20
an individual making small sales. A small seller shall not collect or remit	21
any state sales or use tax imposed by this chapter.	22
(2) For purposes of this section, "small seller" means an Idaho resi-	23
dent making sales that do not exceed five thousand dollars ($5,000) in cumu-	24
lative gross receipts in the current or previous calendar year. It shall not	25
include partnerships, corporations, or limited liability corporations.	26
(3) The exemption provided in this section shall not apply to:	27
(a) Sales of motor vehicles, trailers, all-terrain vehicles, utility	28
type vehicles, specialty off-highway vehicles, motorcycles intended	29
for off-road use, snowmobiles, aircraft, vessels as defined in section	30
67-7003, Idaho Code, alcohol, or tobacco; or	31
(b) Items purchased to be sold or incorporated into items to be sold are	32
not exempt from sale or use tax.	33
(4) A small seller with gross receipts exceeding five thousand dollars	34
($5,000) in a calendar year shall within thirty (30) days file with the state	35
tax commission an application for a temporary seller's permit and begin col-	36
lecting and remitting sales and use tax on all sales exceeding five thousand	37
dollars ($5,000) in such calendar year. No temporary seller's permit shall	38
be issued for a period of time greater than the remaining calendar year in	39
which sales exceeded five thousand dollars ($5,000) for a small seller. The	40
following year, If such seller reasonably anticipates to exceed five thou-	41
sand dollars ($5,000) in sales for the next calendar year, such seller shall	42
apply for a seller's permit under the provisions of section 63-3620(a),	43
Idaho Code. A small seller with gross receipts exceeding seven thousand five	44
hundred dollars ($7,500) in a calendar year shall collect and remit sales and	45
use tax on all sales exceeding five thousand dollars ($5,000).	46
(5) A small seller shall indicate on such seller's invoice, if re-	47
quested by the purchaser, that the sale was exempt from sales and use tax	48
pursuant to the provisions of this section.	49

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(6) A small seller shall not permanently maintain, occupy, or use an	1
office, place of distribution, sales or sample room or place, warehouse or	2
storage place, or other place of business or maintain a stock of goods with	3
anticipation of exceeding gross receipts of five thousand dollars ($5,000).	4
(7) A small seller may file an application with the state tax commission	5
for a seller's permit pursuant to section 63-3620, Idaho Code, before such	6
seller reaches the five thousand dollar ($5,000) threshold provided in sub-	7
section (2) of this section.	8
(8) Nothing in this section relieves a small seller from filing indi-	9
vidual income tax returns for persons who meet the filing requirements under	10
section 63-3030, Idaho Code.	11
(9) A small seller with sales exceeding three thousand dollars ($3,000)	12
annually shall keep such records for not less than four (4) years pursuant to	13
section 63-3624, Idaho Code.	14
SECTION 3. An emergency existing therefor, which emergency is hereby	15
declared to exist, this act shall be in full force and effect on and after	16
July 1, 2026.	17

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