Idaho Administrative Code
Title IDAPA 35 - Tax Commission, State
Rule 35.01.02 - IDAHO SALES AND USE TAX ADMINISTRATIVE RULES
Section 35.01.02.067 - REAL PROPERTY

Universal Citation: ID Admin Code 35.01.02.067

Current through September 2, 2024

Sections 63-3609, 63-3612, 63-3616, Idaho Code

01. Real Property. For the purpose of these rules, the term real property means land and improvements or fixtures to the land.

02. Improvements or Fixtures. Improvements or fixtures to real property include:

a. Property which is physically attached to the land or other improvements affixed to the land in such a manner that it may not be removed without materially damaging the real property or is of such a nature that it would normally be expected to be sold together with the land.

b. Property which increases the market value of the land or increases the ability of the possessor of the land to use it more productively.

c. Property which increases the market value or productivity on a relatively permanent basis.

03. Three Factor Test. A three (3) factor test may be applied to determine whether an article has become a fixture to real property. The three (3) tests to be applied are:

a. Annexation to the realty, either actual or constructive.

b. Adoption or application to the use or purpose to which that part of the realty to which it is connected is suitable.

c. Intention to make the article a permanent addition to the realty.

04. Example 1: The original builder or owner of an apartment building installs draperies. The draperies meet the three (3) factor test of a fixture to realty. First, they are constructively annexed to the realty when attached to the drapery rod. Although the draperies are not affixed to the realty, they comprise a necessary, integral, or working part of the object to which they are attached. Second, they appropriately adapt to the purpose of the realty to which they are connected. Window coverings are necessary in order to maintain occupancy of the apartment. The third and controlling factor in this example is the intention with which the installation was made. The intention is determined from the surrounding circumstances at the time of installation. It is not the undisclosed purpose of the annexor, but rather the intention implied and manifested by his act. The builders intended that the drapes would remain as long as they served their purpose.

05. Example 2: The three (3) factor test would not be met in Subsection 067.03 of this rule, if the drapes were installed by a tenant of an apartment leased for a term with no agreement as to ownership. The tenant would be expected to remove or sell the drapes to an incoming tenant, and his intention would be the controlling factor. The draperies would not be considered as fixtures to the real property.

06. Personal Property Incidental to the Sale of Real Property. This rule does not affect the provisions of Section 63-3609(b), Idaho Code.

07. Store Fixtures. Store fixtures are items that are affixed to a building and used by retailers in the conduct of their business. The term "store fixtures" includes display cases, trophy cases, clothing racks, shelving, modular displays, kiosks, wall cases, register stands, and check-out counters. If store fixtures only benefit the particular business occupying a building, they are not adapted to the use of the real estate and are therefore personal property. A store fixture will only be deemed to be a real property improvement if:

a. It is affixed to the real estate and its removal would cause significant structural damage to the building itself; or

b. It is affixed to the real estate and is of benefit to the land or building regardless of the particular business conducted on the premises.

08. Fiber Optic and Communication Cable. Fiber optic and communication cable installed in a building is presumed to be a real property improvement.

Effective March 31, 2022

Disclaimer: These regulations may not be the most recent version. Idaho may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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