Idaho Sales and Use Tax Protest

IDAHO SALES AND USE TAX PROTEST AND/OR REFUND CLAIM

TABLE OF CONTENTS

1. Filing Header and Service Information
2. Notice or Payment Identification
3. Timeliness Statement
4. Statement of Facts
5. Protest of Notice of Deficiency Determination
6. Refund Claim Under Idaho Code § 63-3626
7. Wayfair / Economic Nexus Defenses
8. Statute of Limitations Defense
9. Penalty Abatement Request
10. Request for Informal Hearing
11. Relief Requested
12. Reservation of Appeal Rights
13. Verification and Signature
14. Certificate of Service
15. Idaho Practice Notes
16. Sources and References

1. FILING HEADER AND SERVICE INFORMATION

BEFORE THE IDAHO STATE TAX COMMISSION

Appeals Unit
11321 W. Chinden Blvd., Bldg. 2
Boise, Idaho 83714
P.O. Box 56, Boise, ID 83756-0056

TAXPAYER'S PROTEST OF NOTICE OF DEFICIENCY DETERMINATION AND/OR CLAIM FOR REFUND OF SALES AND USE TAX

Idaho Sales Tax Permit No.: [________________________________]

Federal Employer Identification Number: [XX-XXXXXXX]

Tax Periods at Issue: [QUARTERS / MONTHS / YEARS]

Notice Number (if applicable): [________________________________]

Date Notice Mailed (if applicable): [__/__/____]

Total Amount in Dispute: $[AMOUNT]

Type of Filing: ☐ Protest of Deficiency / ☐ Refund Claim / ☐ Both

2. NOTICE OR PAYMENT IDENTIFICATION

2.1. ☐ Protest path. Petitioner contests the Notice of Deficiency Determination ("Notice") issued by the Idaho State Tax Commission ("Commission") on [__/__/____] under Idaho Code § 63-3629, asserting an alleged sales/use tax deficiency of $[AMOUNT], plus interest of $[AMOUNT] and penalties of $[AMOUNT].

2.2. ☐ Refund path. Petitioner claims refund of sales/use tax overpayments totaling $[AMOUNT] paid on the dates and in the amounts identified in Exhibit RC pursuant to Idaho Code § 63-3626. Use Idaho Form TCR is enclosed.

2.3. The tax type(s) at issue (check all that apply):

• ☐ Sales tax on Idaho retail sales (Idaho Code § 63-3619)
• ☐ Use tax on goods purchased outside Idaho for use in Idaho (§ 63-3621)
• ☐ Remote-seller / economic nexus collection (§ 63-3611(3)(h))
• ☐ Marketplace facilitator collection (§§ 63-3611 / 63-3615A)
• ☐ Travel and convention tax (§ 67-4711)
• ☐ Auditorium district tax
• ☐ Other: [________________________________]

3. TIMELINESS STATEMENT

3.1. Protest deadline. Pursuant to Idaho Code § 63-3631, a petition for redetermination of a Notice of Deficiency Determination issued under § 63-3629 must be filed within sixty-three (63) days after the mailing of the Notice (incorporating the deadline in Idaho Code § 63-3045).

3.2. The Notice was mailed on [__/__/____], the 63-day period expires on [__/__/____], and this Protest is filed on [__/__/____] and is therefore timely.

3.3. Refund deadline. Pursuant to Idaho Code § 63-3626(b), a refund claim must be filed within three (3) years from the date the tax was paid to the Commission. Petitioner's claim covers payments made on [DATES], all within the three-year period preceding [FILING DATE].

4. STATEMENT OF FACTS

4.1. Petitioner is [a corporation / LLC / sole proprietor / partnership] organized under the laws of [STATE] with its principal place of business at [ADDRESS] and [is / is not] physically present in Idaho.

4.2. Petitioner's business activities consist of [DESCRIBE — retail sales of tangible personal property; SaaS; digital products; marketplace; etc.].

4.3. Petitioner ☐ holds / ☐ does not hold an active Idaho seller's permit (No. [________________________________]) and [has been registered since [DATE] / registered on [DATE] / has not registered].

4.4. During the audit period, Petitioner reported Idaho sales tax as follows:

4.5. The Commission's audit findings asserted [DESCRIBE — disallowed exemptions, untaxed sales, unreported use tax on fixed assets, marketplace seller liability, economic nexus assessment].

4.6. Petitioner disagrees with the Commission's determinations on the grounds set forth herein.

5. PROTEST OF NOTICE OF DEFICIENCY DETERMINATION

5.1. Ground 1 — Valid Resale and Exemption Certificates. Sales identified by the Commission as taxable were in fact exempt under Idaho Code § 63-3622 because Petitioner held valid Form ST-101 certificates from purchasers asserting [resale / production / exempt-organization / interstate-commerce] exemptions. Certificates are produced as Exhibit A.

5.2. Ground 2 — Sale for Resale. The transactions at issue are wholesale sales for resale and are excluded from the definition of "retail sale" under Idaho Code § 63-3609.

5.3. Ground 3 — Production Exemption. Equipment and materials purchased were used directly in a qualifying production activity within the meaning of Idaho Code § 63-3622D, and the Commission's denial of the production exemption is contrary to [CITE RULE OR DECISION].

5.4. Ground 4 — Occasional Sale Exemption. The transaction(s) qualify as occasional sales under Idaho Code § 63-3622K and are not subject to sales tax.

5.5. Ground 5 — Improper Use Tax Assessment. Items asserted as subject to Idaho use tax under Idaho Code § 63-3621 were either (a) purchased outside Idaho for use outside Idaho, (b) subject to sales tax paid to another state with proper credit under § 63-3621(j), or (c) otherwise exempt.

5.6. Ground 6 — No Substantial Nexus. Petitioner lacked sufficient physical or economic nexus with Idaho during the audit period to impose collection duties (see Section 7).

5.7. Ground 7 — Computational Errors. The Commission's audit computations contain errors identified on Exhibit B, including double-counting, application of incorrect rates, and inclusion of non-Idaho transactions.

5.8. Ground 8 — Marketplace Facilitator Defense. Sales attributed to Petitioner were facilitated by a marketplace facilitator that bore the collection obligation under Idaho Code § 63-3611, and Petitioner is relieved of liability for such sales under § 63-3615A.

6. REFUND CLAIM UNDER IDAHO CODE § 63-3626

6.1. Petitioner files this claim for refund of Idaho sales/use tax pursuant to Idaho Code § 63-3626 in the total amount of $[AMOUNT], plus statutory interest under Idaho Code § 63-3626(d).

6.2. Form. Idaho Form TCR (Sales Tax Refund Claim) is enclosed as Exhibit TCR.

6.3. Basis for refund. The tax was overpaid because (check all that apply):

• ☐ Tax was paid on exempt transactions (resale/production/agricultural/interstate)
• ☐ Tax was paid on returned merchandise (Idaho Code § 63-3613)
• ☐ Tax was paid in error or twice
• ☐ Customers were charged tax that should not have been collected and were refunded
• ☐ Bad-debt allowance under Idaho Code § 63-3626(c)
• ☐ Other: [________________________________]

6.4. Schedule of overpayments. A detailed schedule is provided in Exhibit RC, identifying each transaction, the date of payment, the amount of tax paid, the basis of overpayment, and supporting documentation references.

6.5. Pass-through certification (where applicable). Petitioner certifies that for refunds of tax originally collected from customers and remitted to the Commission, Petitioner has either (a) refunded the tax to the customers, or (b) will refund or credit the customers within ninety (90) days of receipt of the Commission refund, consistent with Idaho Code § 63-3626 and IDAPA 35.01.02.117.

6.6. Three-year limitation. All payments included in this claim were made within the three-year period preceding the filing of this claim under Idaho Code § 63-3626(b).

6.7. Authorization. If filed by a representative, Petitioner has executed Idaho Form ID-POA authorizing the representative to file this refund claim.

7. WAYFAIR / ECONOMIC NEXUS DEFENSES

7.1. Statutory framework. Idaho Code § 63-3611(3)(h), enacted in response to South Dakota v. Wayfair, Inc., 138 S. Ct. 2080 (2018), imposes Idaho sales-tax collection duty on remote retailers without physical presence whose cumulative gross receipts from sales delivered into Idaho exceeded $100,000 in the previous or current calendar year. The threshold has been in effect since June 1, 2019.

7.2. Below threshold. Petitioner's cumulative gross receipts delivered into Idaho during the calendar years at issue did not exceed $100,000:

7.3. No physical presence. Petitioner had no offices, employees, agents, inventory, real property, or other tangible physical presence in Idaho during the audit period sufficient to satisfy the substantial-nexus requirement of Wayfair and Quill Corp. v. North Dakota, 504 U.S. 298 (1992) (overruled in part).

7.4. Marketplace facilitator collection. To the extent Petitioner's sales were made through one or more marketplace facilitators (e.g., [NAMES]), those facilitators were obligated to collect and remit Idaho sales tax under Idaho Code § 63-3611, and Petitioner is relieved of duplicate liability under § 63-3615A.

7.5. Constitutional limits. Imposition of collection duty on transactions and periods inconsistent with the standards articulated in Wayfair (substantial nexus, fair apportionment, non-discrimination, fair relation to state services) violates the dormant Commerce Clause and the Due Process Clause of the United States Constitution.

7.6. Safe harbor for prior periods. Pre-Wayfair periods (before June 21, 2018) cannot support an assessment based solely on economic nexus absent physical presence under the then-controlling Quill standard.

8. STATUTE OF LIMITATIONS DEFENSE

8.1. Idaho Code § 63-3633 imposes the following limitations on sales/use tax assessment and collection:

(a) Three (3) years from the later of the return's due date or the date filed (returns timely filed);

(b) Seven (7) years from the date the return should have been filed (returns not filed) — provided the taxpayer's failure to file lacked a reasonable belief no tax was due;

(c) No limitation in cases of fraud, false return with intent to evade, or willful evasion;

(d) Six (6) years from assessment for collection by levy or court action.

8.2. Petitioner timely filed all returns and the assessment for the periods identified below is barred:

8.3. No statutory exception applies because Petitioner did not file a fraudulent or false return, did not willfully evade tax, and did not consent in writing to extend the limitations period.

9. PENALTY ABATEMENT REQUEST

9.1. Petitioner requests abatement of all penalties imposed in the Notice for reasonable cause and absence of willful neglect under Idaho Code § 63-3046, § 63-3634, and IDAPA 35.02.01.

9.2. Reasonable cause exists because [DESCRIBE — first-time error, reliance on competent professional advice, ambiguity in remote-seller rules during transition periods, records destroyed by casualty, good-faith reliance on resale certificates that proved invalid, etc.].

9.3. Petitioner has a history of compliance with Idaho sales/use tax obligations and cooperated fully throughout the audit.

10. REQUEST FOR INFORMAL HEARING

10.1. Pursuant to Idaho Code § 63-3045(3) (incorporated through § 63-3631) and IDAPA 35.02.01, Petitioner requests an informal hearing before the Commission's Appeals Unit prior to issuance of a Final Decision.

10.2. Hearing format requested: ☐ in person at the Commission's Boise office; ☐ by telephone; ☐ by videoconference.

10.3. Preferred hearing dates: [DATES].

10.4. Petitioner ☐ will / ☐ will not be represented by counsel or authorized representative.

11. RELIEF REQUESTED

WHEREFORE, Petitioner respectfully requests that the Commission:

• A. Cancel the Notice of Deficiency Determination in its entirety; or, in the alternative, redetermine the deficiency to reflect the correct Idaho sales/use tax liability of $[AMOUNT];
• B. Approve the refund claim in the amount of $[AMOUNT], with statutory interest under Idaho Code § 63-3626(d);
• C. Abate all asserted penalties for reasonable cause;
• D. Recompute interest consistent with any redetermined tax;
• E. Maintain the suspension of collection activity during pendency of this Protest;
• F. Schedule an informal hearing as requested in Section 10; and
• G. Grant such further relief as the Commission deems just and proper.

12. RESERVATION OF APPEAL RIGHTS

12.1. Petitioner expressly reserves all appeal rights, including:

(a) Appeal to the Idaho Board of Tax Appeals under Idaho Code § 63-3049 (made applicable to sales tax via § 63-3634) within ninety-one (91) days after receipt of the Final Decision, but only if the amount asserted does not exceed $25,000 and after providing the required 20% cash deposit or acceptable security;

(b) A complaint in Idaho District Court under Idaho Code § 63-3049 / § 63-3634 within the same ninety-one (91) days after receipt, after providing the required 20% cash deposit or acceptable security;

(c) Appeal from the Board of Tax Appeals to District Court under Idaho Code § 63-3812, taken and perfected under Idaho R. Civ. P. 84, which ordinarily requires filing within twenty-eight (28) days after the BTA action is ripe for review;

(d) Appeal to the Idaho Supreme Court from any adverse District Court judgment.

12.2. No statement, omission, or concession in this filing shall be construed as a waiver of any defense, claim, privilege, or right.

13. VERIFICATION AND SIGNATURE

I, [NAME, TITLE], declare under penalty of perjury under the laws of the State of Idaho that I have read the foregoing Protest and/or Refund Claim, that the factual statements herein are true and correct to the best of my knowledge, information, and belief, and that I am authorized to sign and file this document on behalf of Petitioner.

Date: [__/__/____]

[________________________________]

[NAME, TITLE]

Submitted by Counsel / Authorized Representative:

[________________________________]

[ATTORNEY / REPRESENTATIVE NAME]

Idaho State Bar No.: [####] (if attorney)

CAF / PTIN: [________________________________] (if practitioner)

Firm: [FIRM NAME]

Address: [STREET, CITY, STATE ZIP]

Telephone: [NUMBER]

Email: [EMAIL]

14. CERTIFICATE OF SERVICE

I certify that on [__/__/____], I caused a true and correct copy of the foregoing PROTEST AND/OR REFUND CLAIM to be filed with the Idaho State Tax Commission by:

☐ U.S. Mail, certified, return receipt requested, addressed to:

Idaho State Tax Commission
Appeals Unit (Protests) / Refund Claim Processing (Refunds)
P.O. Box 56
Boise, Idaho 83756-0056

☐ Hand delivery to 11321 W. Chinden Blvd., Bldg. 2, Boise, Idaho 83714.

☐ Electronic submission via the Commission's Taxpayer Access Point (TAP) at tax.idaho.gov.

[________________________________]

[NAME OF FILER]

15. IDAHO PRACTICE NOTES

• 63-day protest window. The ordinary deadline for protesting a Notice of Deficiency Determination is sixty-three (63) days after the notice is sent under Idaho Code § 63-3045 (made applicable to sales tax via § 63-3631). Shorter periods apply to specified audits and jeopardy matters. Confirm the rule governing a refund denial separately.
• Three-year refund window. Refund claims under Idaho Code § 63-3626 must be filed within three (3) years of payment. File Form TCR with supporting schedules; an incomplete claim does not toll the limitations period.
• Wayfair / economic nexus. Idaho Code § 63-3611(3)(h) imposes collection duty on remote sellers exceeding $100,000 in cumulative gross receipts delivered into Idaho. Idaho does not use a transaction-count threshold (unlike some states). The threshold applies on a calendar-year basis (previous or current).
• Marketplace facilitator collection. Idaho Code §§ 63-3611 and 63-3615A obligate marketplace facilitators meeting the $100,000 threshold to collect and remit Idaho sales tax on facilitated sales. Marketplace sellers are generally relieved of duplicate liability for sales handled by a compliant facilitator.
• Records retention — 4 years. Idaho Code § 63-3625 requires retailers to retain records for at least four (4) years; longer where audits or disputes are open.
• Statute of limitations on assessment. Three (3) years for filed returns; seven (7) years for non-filed returns (subject to the reasonable-belief proviso); unlimited for fraud or willful evasion (Idaho Code § 63-3633).
• State rate and local add-ons. Idaho's general sales-tax rate is 6%. Certain resort cities (e.g., Sun Valley, Ketchum, McCall) and auditorium districts (e.g., Boise's Greater Boise Auditorium District) impose additional local sales/lodging taxes. Verify rate stack for the location of sale.
• Use tax. Idaho use tax (§ 63-3621) applies to goods purchased outside Idaho and used in Idaho. Credit is available for sales tax legally paid to another state up to the Idaho rate.
• Resale and exemption certificates. Form ST-101 is the standard Idaho exemption certificate. Sellers bear the burden to demonstrate good-faith acceptance. Late-cured certificates may be accepted in audit at the Commission's discretion.
• Pass-through refunds. For tax originally passed on to customers, the seller must refund or credit the customer (or escheat unclaimed amounts) before retaining the Commission refund — consistent with the unjust-enrichment principles reflected in IDAPA 35.01.02.117.
• Two-track post-decision review. Within 91 days after receiving a Final Decision, a taxpayer may appeal to the BTA if the amount asserted for sales or use tax does not exceed $25,000, or file a complaint in District Court. Idaho Code § 63-3049(b) requires the 20% cash deposit or acceptable substitute security before either route. Further appeal from the BTA is governed by § 63-3812 and current Idaho R. Civ. P. 84 (ordinarily 28 days after the BTA action is ripe for review).

16. SOURCES AND REFERENCES

• Idaho Code Title 63, Chapter 36 (Sales Tax) — https://legislature.idaho.gov/statutesrules/idstat/title63/t63ch36/
• Idaho Code § 63-3611 (Retailer; Economic Nexus $100,000) — https://legislature.idaho.gov/statutesrules/idstat/title63/t63ch36/sect63-3611/
• Idaho Code § 63-3615A (Substantial Nexus) — https://legislature.idaho.gov/statutesrules/idstat/title63/t63ch36/sect63-3615a/
• Idaho Code § 63-3622 (Exemptions) — https://legislature.idaho.gov/statutesrules/idstat/title63/t63ch36/sect63-3622/
• Idaho Code § 63-3626 (Refunds, Limitations, Interest) — https://legislature.idaho.gov/statutesrules/idstat/title63/t63ch36/sect63-3626/
• Idaho Code § 63-3633 (Period of Limitations on Assessment) — https://legislature.idaho.gov/statutesrules/idstat/title63/t63ch36/sect63-3633/
• Idaho Code § 63-3812 (Appeal from Board of Tax Appeals) — https://legislature.idaho.gov/statutesrules/idstat/title63/t63ch38/sect63-3812/
• Idaho State Tax Commission, Sales/Use Tax Refund Requests — https://tax.idaho.gov/taxes/sales-use/sales-and-use-tax-refund-requests/
• Idaho State Tax Commission, Online Sellers Guide — https://tax.idaho.gov/taxes/sales-use/guides-for-certain-groups/online-sellers/online-guide/
• IDAPA 35.01.02 (Idaho Sales and Use Tax Administrative Rules) — https://adminrules.idaho.gov/
• IDAPA 35.01.02.117 (Refund Claims) — https://regulations.justia.com/states/idaho/35/35-01-02/section-35-01-02-117/
• South Dakota v. Wayfair, Inc., 138 S. Ct. 2080 (2018)
• Quill Corp. v. North Dakota, 504 U.S. 298 (1992) (overruled in part by Wayfair)
• Form TCR (Sales Tax Refund Claim) — https://tax.idaho.gov/

Disclaimer: This template is provided for informational purposes only and does not constitute legal advice. Idaho's 63-day protest deadline and 3-year refund limitations period are jurisdictional. An attorney licensed in Idaho or an enrolled tax practitioner must review and customize this document before filing. Verify all statutory citations, rates, thresholds, and procedural rules before use.