TITLE 63

REVENUE AND TAXATION

CHAPTER 36

SALES TAX

63-3622K.  Occasional sales. (a) There are exempted from the taxes imposed by this chapter occasional sales of tangible personal property.

(b)  As used in this section, the term "occasional sale" means:

(1)  A sale of property not held or used by a person in the course of an activity for which he is required to hold a seller’s permit, provided such sale is not one (1) of a series of sales sufficient in number or of such a nature as to constitute the seller a "retailer" under section 63-3610(c), Idaho Code. The definition of "occasional sales" provided in this subsection does not apply to use tax in regard to tangible personal property used to improve real property when such property is obtained, directly or indirectly, from a person in the business of making like or similar improvements to real property.

(2)  Any transfer of all or substantially all of the property held or used by a person in a business requiring a seller’s permit when, after such transfer, the real or ultimate ownership of such property is substantially similar to that which existed before such transfer. For the purpose of this section, stockholders, bondholders, partners, or other persons holding an interest in a corporation or other entity are regarded as having a "real or ultimate ownership" of the property of such corporation or other entity.

(3)  A transfer of capital assets to or by a business when the transfer is accomplished through an adjustment of the beneficial interest of the business and the transferor has paid sales or use taxes pursuant to section 63-3619 or 63-3621, Idaho Code, on the capital assets, incidental to:

(i)   A division of joint venture, partnership, or limited liability company assets among the members or partners in exchange for a proportional reduction of the transferee’s interest in the joint venture, partnership, or limited liability company. For the purposes of this section, the term "limited liability company" means a business organization as defined in chapter 6, title 53, Idaho Code, or as defined in section 30-6-102, Idaho Code, as appropriate pursuant to section 30-6-1104, Idaho Code;

(ii)  The formation of a partnership, joint venture, or limited liability company by the transfer of assets to the partnership, joint venture, or limited liability company or transfers to a partnership, joint venture, or limited liability company in exchange for proportionate interests in the partnership, joint venture, or limited liability company;

(iii) The formation of a corporation by the owners of a business and the transfer of their business assets to the corporation in exchange for stock in proportion to assets contributed;

(iv)  The transfer of assets of shareholders in the formation or dissolution of a corporation;

(v)   The transfer of capital assets by a corporation to its stockholders in exchange for surrender of capital stock;

(vi)  The transfer of assets from a parent corporation to a subsidiary corporation which is owned at least eighty percent (80%) by the parent corporation, which transfer is solely in exchange for stock or securities of the subsidiary corporation;

(vii) The transfer of assets from a subsidiary corporation which is owned at least eighty percent (80%) by the parent corporation to a parent corporation or another subsidiary which is owned at least eighty percent (80%) by the parent corporation, which transfer is solely in exchange for stock or securities of the parent corporation or the subsidiary which received the assets.

(4)  The sale, lease or rental of a capital asset in substantially the same form as acquired by the transferor and on which the initial transferor has paid sales or use taxes pursuant to section 63-3619 or 63-3621, Idaho Code, when the owners of all of the outstanding stock, equity or interest of the transferor are the same as the transferee or are members of the same family within the second degree of consanguinity or affinity.

(5)  The sale of substantially all of the operating assets of a business or of a separate division, branch, or identifiable segment to a buyer who continues operation of the business. For the purpose of this subsection, a "separate division, branch, or identifiable segment" shall be deemed to exist if, prior to its sale, the income and expense attributable to such "separate division, branch, or identifiable segment" could be separately ascertained from the books of accounts and records.

(6)  Sales by persons who are not defined as "retailers" in section 63-3610, Idaho Code.

(7)  Sales of animals by any 4-H club or FFA club held in conjunction with a fair or the western Idaho spring lamb sale.

(8)  The sale or purchase of tangible personal property at home yard sales; provided however, that no more than two (2) such home yard sales per individual calendar year shall be exempt.

(c)  As used in this section, the term "occasional sale," when applied to the sale of a motor vehicle, means only:

(1)  Sales of motor vehicles between members of a family related within the second degree of consanguinity, unless a sales or use tax was not imposed on the sale of that motor vehicle at the time of purchase, in which situation the sale is taxable.

(2)  Sales of motor vehicles that fall within the scope of the transactions detailed in subsection (b)(2) through (b)(5) of this section.

(d)  The exemption provided by subsection (b)(1), (b)(4), (b)(6) or (b)(8) of this section shall not apply to the sale, purchase or use of aircraft, as defined in section 21-201, Idaho Code, nor shall it apply to the sale, purchase or use of boats or vessels, as defined in section 67-7003, Idaho Code, nor shall it apply to the sale, purchase or use of snowmobiles, recreational vehicles or off-highway motorbikes, as defined in section 63-3622HH, Idaho Code.

History:

[63-3622K, added 1984, ch. 239, sec. 12, p. 579; am. 1988, ch. 157, sec. 2, p. 284; am. 1988, ch. 367, sec. 2, p. 1084; am. 1989, ch. 264, sec. 1, p. 643; am. 1990, ch. 135, sec. 1, p. 308; am. 1996, ch. 46, sec. 10, p. 131; am. 1996, ch. 111, sec. 1, p. 413; am. 1997, ch. 62, sec. 5, p. 126; am. 1999, ch. 42, sec. 7, p. 92; am. 2005, ch. 15, sec. 1, p. 44; am. 2008, ch. 176, sec. 4, p. 520.]