Section 35.01.02.058 - SALES THROUGH VENDING MACHINESSections 63-3612, 63-3622, 63-3622L, 63-3622X, Idaho Code
01.In General. The sale of tangible personal property through a vending machine is a taxable transaction. The term vending machine means any mechanical device which, without the assistance of a human cashier, dispenses tangible personal property to a buyer who deposits cash in the device. Video games and other coin operated amusement devices are not vending machines. Fees paid for the use of coin operated amusement devices are not subject to sales tax pursuant to Section 63-3623B, Idaho Code. See Rule 109 of these rules.02.Amount Taxable. Pursuant to Section 63-3613, Idaho Code, sales of items through a vending machine for amounts from twelve cents ($0.12) through one dollar ($1) are taxable at one hundred seventeen percent (117%) of the vendor's acquisition cost of the items. Items sold for more than one dollar ($1) are taxable on the retail sales price. Sales of items for a price of eleven cents ($0.11) or less are exempt from tax pursuant to Section 63- 3622L, Idaho Code.03.Requirement to Obtain a Seller's Permit. Vendors who sell tangible personal property through a vending machine are to obtain a seller's permit. Only one seller's permit is required; however, each vending machine operated by the vendor is to conspicuously display the vendor's name, address, and seller's permit number. When multiple vending machines are placed in a single location, the owner's name, address, and seller's permit number need be displayed only once.04.Calculation of Tax. The following examples show how vending machine operators calculate the amount of sales tax due:a. Example 1: Corporation A's business activity consists only of sales through vending machines in various locations in the state of Idaho. All of the items sold in the vending machines are sold for a unit price of twelve cents ($0.12) or more but none are sold for a price greater than one dollar ($ 1). During the month of July, Corporation A's total sales from the vending machine sales were ten thousand dollars ($10,000). Corporation A purchased the items sold during that one (1) month period for eight thousand dollars ($8,000). The company made no nontaxable or exempt sales. Corporation A should file a sales and use tax return for the month of July, computing and reporting its taxable sales as follows. Numbers correspond to line numbers on the return. Line 1. | Total sales | $9,360 |
Line 2. | Less nontaxable sales | $0 |
Line 3. | Net taxable sales | $9,360 |
| Line 1 computed as follows: 8,000 x 117% | = $9,360 |
b. Example 2: During the month of July, Corporation B had total Idaho sales in the amount of ten thousand dollars ($10,000). In addition to sales through vending machines, the corporation made over-the-counter sales, all of which were taxable, in the amount of two thousand dollars ($2,000). The remaining eight thousand dollars ($8,000) constituted sales through vending machines, of which one thousand dollars ($1,000) was for items with a unit retail price of over one dollar ($1). The other seven thousand dollars ($7,000) were sales of items through vending machines with a unit retail price of fifty cents ($0.50) each. The items sold during the month for fifty cents ($0.50) each were purchased by Corporation B for five thousand dollars ($5,000). The amount to report as taxable sales is:
Taxable Sales = $2,000 (over the counter items) + $5,850 ($5,000 of purchases of items selling for $.50 x 117%) + ($1,000 ÷ (1 + tax rate expressed as a decimal) (items sold through vending machines for more than one dollar ($1)). Assuming a 6% tax rate this amount would be $1,000 divided by 1.06 or $943.40.
Note that if a vendor sells some items for more than one dollar ($1) the sales tax is included in the total sales. This amount is divided by one (1) plus the current tax rate expressed as a decimal, to determine the sales before sales tax.
05.Cross-References. a. Amusement devices, see Rule 109 of these rules.b. Money operated dispensing equipment, see Rule 095 of these rules.c. Sales of newspapers through vending machines, see Rule 033 of these rules.Idaho Admin. Code r. 35.01.02.058