Idaho State Tax Commission

Idaho State Tax Commission

Contractors and Ketchum Sales Tax

This page provides guidance for contractors who improve real property in the City of Ketchum. For related information, see our City of Ketchum Local Option Sales Tax page and our Contractors Who Improve Real Property page.

Tax on contractor sales

Like the Idaho state sales tax, the City of Ketchum sales tax doesn’t apply to sales of real property improvements such as carpet installation. When billing a customer, contractors should not charge the state or Ketchum sales tax on real property work completed anywhere in Idaho. However, if a Ketchum contractor makes a retail sale of materials to a customer within the city limits of Ketchum, the contractor must charge both the state sales tax and the Ketchum sales tax. For more information, see Retail sales vs. improvements to real property on our Contractors page.

Tax on contractor purchases

Contractors must pay Ketchum sales tax on their purchase of building materials that they install into real property if they take delivery of the materials within Ketchum’s city limits. Unlike the state sales tax, there is no corresponding Ketchum use tax. As a result, if a contractor purchases materials outside Ketchum’s city limits, the contractor doesn’t owe a Ketchum sales or use tax. For more information, see When to pay tax on purchases on our Contractors page.

Examples of tax on contractor purchases

In each of the scenarios below, the carpet layer should not charge sales tax to the customer on the sale of the carpet material because the carpet layer improved real property.

Scenario 1

A carpet layer buys carpet from a Ketchum supplier and takes delivery from the supplier within Ketchum’s city limits. The supplier should collect the state and Ketchum sales taxes on the purchase. The carpet layer has no further sales or use tax obligation.

Scenario 2

A carpet layer buys carpet from a Twin Falls supplier and the supplier delivers the carpet to the carpet layer within Ketchum’s city limits. The supplier should collect the state and Ketchum sales taxes on the purchase. The carpet layer has no further sales or use tax obligation.

Scenario 3

A carpet layer buys carpet from a Twin Falls supplier and takes delivery of the carpet outside of Ketchum’s city limits. The supplier should collect the state sales tax on the purchase. The carpet layer then installs the carpet in a home in Ketchum. The carpet layer has no Ketchum sales or use tax obligation.

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Last updated Jan. 10, 2014

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