The purpose of this policy is to affirm the district’s tax-exempt status under Idaho law and federal law, and to provide guidance for staff, vendors, and community partners regarding the handling of tax-related matters. This policy applies to all district departments, schools and programs; purchases made with district funds; and contracts and agreements entered into by the district.
The district is a tax-exempt governmental entity as provided by Idaho Code §§63-602A (exempting property owned by school districts from taxation) and 63-3622O (exempting the district from sales and use tax when purchases are made directly by the district for official purposes). Additionally, Section 115 of the Internal Revenue Code provides that the district is not subject to federal income tax as a political subdivision of the State of Idaho.
In accordance with the district’s tax-exempt status, vendors and contractors must not charge sales tax on qualifying purchases made directly by the district. Additionally, district staff must ensure that all purchases are made in the name of the district and supported by the district’s official tax-exempt certificate. The district will not reimburse employees for sales tax paid on personal purchases, even if later claimed for district use.
The business office is responsible for maintaining the district’s tax-exempt certificate and to provide copies to vendors upon request. District employees are responsible for using district purchasing procedures to ensure tax-exempt status is applied. Failure of district employees to follow this policy may result in unnecessary tax charges and financial loss to the district. Therefore, staff who do not comply with purchasing procedures may be held personally responsible for unapproved tax expenses and may be subject to disciplinary action in accordance with district policies.
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LEGAL REFERENCE:
Idaho Code Sections
63-602A – Property Tax Exemption
63-3622O(1)(f) – Sales Tax Exemption for Schools
26 U.S.C. §115 – Income of States and Political Subdivisions
ADOPTED: February 18, 2026
AMENDED: