Credit card processing and merchant services in Idaho

Idaho keeps its sales tax simple at the state level. The State Tax Commission's online guide puts the sales tax rate at 6%, with the same 6% for use tax. The detail most merchants miss is in the same guide: it lists service fees for paying with a credit card, debit card or gift card among the charges that are part of the taxable purchase price.

If that applies to your sales, a card fee on a taxable sale gets taxed too. Add a 3% surcharge to a $100 taxable sale and the fee is $3, so the tax on the fee is 18 cents and the customer pays $109.18 rather than $109. It's a small amount, but your POS has to calculate it and your receipts have to show it. Check the Tax Commission's current guidance before you switch a surcharge on.

Surcharging itself isn't restricted by any Idaho statute we found, so Visa's and Mastercard's rules apply. Neither network allows a surcharge on debit or prepaid cards, Visa caps it at your merchant discount rate or 3%, and Mastercard caps it at your average effective rate or 4%. Post notice at the entrance and at checkout, and show the amount on the receipt. As for cash, nothing in Idaho law that we found requires you to take it.

If you'd rather lower your costs than add a fee, start with a free statement review and compare your current rate with interchange-plus pricing. Our surcharging program handles the disclosures if you go ahead.