A new Idaho nexus law will require certain out-of-state retailers to collect state sales tax on their sales to in-state customers.  The “click-through” nexus legislation goes into effect July 1, 2018.

Any out-of-state retailers will be required to collect the tax and remit it to the Idaho State Tax Commission if the out-of-state seller has an agreement with an Idaho retailer to refer potential buyers to the out-of-state seller for a commission that’s paid on each resulting sale, and the total sales to Idaho buyers through these agreements exceed $10,000 in the preceding 12 months.  Qualifying referrals include a link on a website, a written or oral presentation, or any other similar third-party purchase opportunity.

Furthermore, the Tax Commission is working to analyze how the recent Wayfair ruling affects out-of-state retailers making sales to Idaho citizens.  The Supreme Court’s Wayfair ruling upheld a South Dakota statute requiring out-of-state retailers to collect and forward the tax to South Dakota if the retailer has an economic connection rather than a physical presence in that state.

Out-of-state retailers who conduct business in Idaho may be affected by the newly enacted “click-through” nexus legislation.  Any out-of-state retailer required or who voluntarily wishes to collect state sales tax can register online via the Idaho Business Registration website.  A qualified tax attorney can assist with the execution of the application and potential questions or concerns that may arise in the process.

Jeanette Moffa is an attorney who concentrates on state and local taxes at Moffa, Sutton, & Donnini, P.A. She is also an adjunct professor and assistant editor to the American Bar Association’s The Sales and Use Tax Deskbook. For more information please call us at 888-966-8216.

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