What are the Idaho sales tax requirements for restaurants?
Idaho charges a 6% state sales tax on restaurant sales. Unlike many states that exempt groceries, Idaho taxes food whether it’s prepared or not. For restaurants, this means virtually everything you sell is taxable: meals, beverages, desserts, and to-go orders.
Register with the Idaho State Tax Commission before you open. You’ll need a seller’s permit, which authorizes you to collect and remit sales tax. Apply online through the Idaho Business Registration portal. Processing typically takes a few days, though you can operate while waiting for your permit number if you’ve submitted your application.
Some areas add local option taxes on top of the 6% state rate. Resort cities like Sun Valley, McCall, and Ketchum impose additional taxes that you must collect and remit. If you operate in the Treasure Valley, you’re dealing with the standard 6% rate, but verify local requirements if you cater events in resort areas.
Tips are not taxable when customers add them voluntarily to a bill. Mandatory service charges or auto-gratuities are different. If you add a required 18% gratuity for large parties, that amount is part of the taxable sale. The distinction matters for your POS setup and how you calculate tax on checks with built-in gratuities.
Filing frequency depends on your monthly tax liability. Restaurants collecting more than $500 per month in sales tax typically file monthly. Lower volume operations may qualify for quarterly or annual filing. The Idaho State Tax Commission assigns your frequency when you register, and it can change as your business grows.
Keep detailed records of daily sales, tax collected, and any exempt transactions. Your POS system should track taxable sales automatically, but reconcile those numbers against your bank deposits and accounting records. Discrepancies between what your system shows and what you deposit create problems during audits.
Working with Nampa bookkeepers who understand restaurant accounting makes sales tax compliance much easier. The combination of daily cash handling, tip reporting, and sales tax creates more moving pieces than most industries. Getting the systems right from the start prevents costly corrections later.
Due dates fall on the 20th of the month following your reporting period. Miss the deadline and penalties start immediately. Idaho charges the greater of $10 or 5% of the tax due for late filing, plus interest. Consistent late filing can also increase your filing frequency as the state tries to get revenue more quickly.
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More Questions
How do restaurants handle sales tax on food and beverages?
In Idaho, prepared food and most beverages sold at restaurants are taxable at 6%. You collect it at the point of sale, track it separately from revenue, and remit it to the state on your filing schedule.
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