A buried provision in Idaho's latest codifier bill protects very small personal care businesses from state sales tax collection requirements.
Most Idaho salon and personal care owners assume they're required to collect and remit sales tax on every service and product they sell. But a provision in H0893—a bill primarily focused on technical corrections—quietly codifies an exemption that may apply to your business.
What the exemption covers
Idaho resident individuals with annual gross sales of tangible personal property under $5,000 are fully exempt from collecting or remitting Idaho sales and use tax. This means if you're a sole proprietor or individual operator whose yearly gross receipts from selling physical goods stay below that threshold, you don't have to register for a sales tax permit or file returns for those sales.
The exemption applies to tangible personal property—think retail products like shampoo, conditioner, styling products, or retail goods you sell directly to clients. It does not apply to services, which remain taxable regardless of your gross receipts.
Why H0893 matters, even though it's a "codifier correction"
H0893 is primarily a housekeeping bill that makes technical corrections to Idaho code. But buried in Section 29 (page 36) is a redesignation of the sales tax exemption from section 63-3622XX to 63-3622YY. While that sounds like bureaucratic shuffling, it formalizes an exemption that was enacted earlier in 2025 under Chapter 86, Laws of 2025.
For micro-sellers in salons and personal care—think independent contractors, booth renters, or very small operations—this codification matters. It locks in legal protection for businesses operating below the $5,000 annual threshold.
Who this affects
This exemption is most relevant to:
If you operate as a business entity other than an individual, or if your annual gross receipts exceed $5,000, the exemption does not apply.
Key dates
The codifier correction in H0893 becomes effective July 1, 2026. However, the underlying exemption itself was already enacted in 2025, so the protection is already in effect for qualifying businesses—the 2026 date simply reflects when the code redesignation takes place.
What you should do
If you're a sole proprietor with annual gross product sales under $5,000, you may not need to register for an Idaho sales tax permit. If you're currently registered and your sales are below the threshold, you may be eligible to discontinue filing. However, the exemption applies only to tangible property sales, not services.
Because tax law is fact-specific and individual circumstances vary, it's wise to verify your eligibility with the Idaho State Tax Commission or a tax professional before making changes to your filing status.
Source: H0893, Section 29, Page 36; effective July 1, 2026. Underlying exemption: Chapter 86, Laws of 2025.