Idaho Sales Tax Guide for SaaS and E-Commerce Businesses 2025
Idaho imposes a 6% statewide sales tax, with some local option taxes that can increase the total rate by up to 3%. Tangible goods and digital products are taxable, but SaaS and electronically delivered software are not subject to Idaho sales tax.
This guide explains how SaaS companies and e-commerce sellers are taxed in Idaho, including nexus rules, marketplace facilitator obligations, filing deadlines, and exemptions.
Last updated: October 2025
Quick Reference: Idaho Sales & Use Tax 2025
| Topic | Details |
|---|---|
| Statewide sales tax rate | 6% (Idaho State Tax Commission – Sales & Use Tax Overview) |
| Local rates | 0%–3% depending on city/county |
| Economic nexus threshold | $100,000 in Idaho sales in the current or prior year (Idaho Online Sellers Guide) |
| Is SaaS taxable? | No. SaaS and electronically delivered software are exempt. |
| Filing due date | 20th of the month following the reporting period |
| Registration portal | Idaho State Tax Commission – TAP |
| Tax agency | Idaho State Tax Commission |
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SaaS & Digital Products in Idaho
Idaho’s rules define digital products such as music, books, videos, and games as tangible personal property when the purchaser obtains a permanent right to use them. Subscriptions, rentals, and streaming access are not taxable. SaaS, where no copy of the software is transferred, is also not taxable.
- Not taxable: SaaS and cloud-hosted software (remote access without transfer of ownership)
- Not taxable: Digital subscriptions or streaming access without permanent rights
- Taxable: Digital products sold with permanent rights (e.g. downloadable e-books, music, or movies)
- Taxable: Prewritten software on physical media (CDs, flash drives)
- Exempt: Custom-developed software for a single purchaser
- Bundled transactions: If SaaS is bundled with taxable goods and not separately stated, the taxable portion may apply
Source: Idaho Administrative Rules – Sales & Use Tax, Rule 027
E-Commerce & Tangible Goods in Idaho
| Category | Taxable? | Notes |
|---|---|---|
| Tangible goods | Yes | All tangible personal property is taxable unless specifically exempt |
| SaaS & software | No | SaaS and electronically delivered software are exempt |
| Custom software | No | Exempt if developed for a single client |
| Digital products | Yes | Taxable if purchaser receives permanent rights |
| Services | Mostly no | Services are generally exempt unless specifically listed |
Idaho uses destination-based sourcing, meaning the tax rate is based on the customer’s delivery location.
Economic Nexus: Remote Seller Rules
Remote sellers must register and collect Idaho sales tax if, in the current or prior year, they have:
- More than $100,000 in Idaho sales
Threshold includes both taxable and exempt sales.
Source: Idaho Online Sellers Guide
Marketplace Facilitator Rules
Marketplace facilitators must collect and remit Idaho sales tax if they exceed the $100,000 threshold:
- Platforms such as Amazon, Walmart, and Etsy collect on behalf of third-party sellers
- Marketplace sellers should maintain documentation from facilitators showing tax is collected
Source: Idaho Marketplace Facilitators – Business Types
Filing & Due Dates
- File via: Idaho TAP
- Filing frequency: Monthly, quarterly, or annually depending on sales volume
- Due date: 20th of the month following the reporting period
- Zero returns: Required even if no taxable sales
Penalties & Compliance Notes
- Late filing: 5% penalty per month, up to 25%
- Late payment: Interest accrues on unpaid tax
- Recordkeeping: Maintain exemption certificates and invoices to document SaaS as exempt
See: Idaho State Tax Commission – Sales Tax Filing and Paying
FAQs: Idaho Sales Tax for SaaS & E-Commerce
Is SaaS taxable in Idaho?
No. SaaS and electronically delivered software are exempt.
Is custom software taxable?
No. Custom-developed software for one purchaser is exempt.
Are digital goods like e-books and streaming taxable?
Yes, if the purchaser receives permanent rights. Streaming and subscriptions without permanent rights are not taxable.
What is Idaho’s economic nexus threshold?
Remote sellers must register if they exceed $100,000 in Idaho sales in a year.
Do marketplace facilitators have to collect?
Yes. Marketplaces like Amazon and Etsy collect Idaho sales tax on behalf of sellers once they meet the threshold.
Does Idaho have local sales tax?
Yes. Local option taxes can add up to 3% on top of the statewide 6% rate.
Official Idaho Resources
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