Bill Description: House Bill 263 would clarify that animal adoption fees charged by a nonprofit are service fees and therefore not subject to sales and use taxes. 

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Does it directly or indirectly create or increase any taxes, fees, or other assessments? Conversely, does it eliminate or reduce any taxes, fees, or other assessments?

In Idaho, sales and use taxes apply to the purchase of products, not services. Historically, animal adoption fees charged by a nonprofit have been regarded as service fees. The Idaho Tax Commission, however, has recently said it will begin treating these fees as payments for the sale of an adopted animal. 

Within this context, House Bill 263 would create Section 63-3622XX, Idaho Code, to clarify that these payments are service fees, not subject to taxation.

It would say, "Any fee charged by a non-profit entity that has tax-exempt status under section 501(c)(3) of the Internal Revenue Code for the adoption or rescue of an animal is deemed a service fee and not the sale or use of tangible personal property. Such adoption or rescue fees, which may include costs ordinarily and necessarily incurred by the nonprofit entity for the care, feeding, housing, and transportation of such adopted or rescued animal, shall not be subject to the taxes imposed by this chapter and have never been subject to such taxes."

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