Becoming an Idaho Dealership

PURPOSE:
A dealer license is required when any person sells five or more vehicles/vessels (that are required to be titled) per calendar year. This fact sheet provides basic information to help you determine if the activities you are involved in require an Idaho dealer license. Information is also provided on how to secure a license.

ACTIVITIES THAT REQUIRE A DEALER LICENSE:

• Soliciting the sale, exchange, or consignment of a vehicle/vessel not titled in the name of the person making the solicitation.
• Selling, displaying for sale, exchanging, or consigning a vehicle/vessel not titled in the displayer´s name.
• Selling, displaying for sale, exchanging, or consigning five or more vehicles/vessels in any one calendar year even though the vehicles/vessels are titled in the seller´s name.
• Engaging in the business of selling, exchanging, or consigning vehicles/vessels, or engaging in any other acts customarily associated with the business of selling or exchanging vehicles/vessels.
• Displaying vehicles/vessels for sale, exchange, or consignment on property not legally controlled by the owner of the vehicle/vessels.

ACTIVITIES THAT DO NOT REQUIRE A DEALER LICENSE:

• Selling less than five vehicles/vessels (titled in your name) in a calendar year.
• Insurance companies, financial institutions, or public utility companies disposing of any vehicle/vessel incidental to primary business activities.
• Manufacturing or selling specialty vehicles (fire trucks, fire engines, urban transit buses, ambulances, street sweepers, and hazardous material response vehicles).

SPECIFIC REQUIREMENTS TO OBTAIN A DEALER LICENSE:

• Dealership name: Prior to applying as a dealer or obtaining a dealer bond, you should call the Dealer Team at (208) 334-8681 to make sure that the proposed name of the dealership is not deceptively similar to an existing dealership´s name. According to Section 53-504, Idaho Code, any dealership name which has a D.B.A. (doing business as) must be filed as an assumed name with the Secretary of State´s office. If the dealership is owned by a corporation, limited-liability company, or a limited-liability partnership, you must submit verification from the Secretary of State at (208) 334-2300.
• Vehicle dealer performance bond required: Idaho Code requires all vehicle/vessel dealers to file a performance bond with the department. The bond shall be in the amount of $20,000 for all dealers except motorcycle, all-terrain vehicle, utility type vehicle, truck campers, and snow machine dealers, who shall have a $10,000 bond. All bonds must be issued by a corporate surety licensed to do business within the state of Idaho. A bond may also be posted in the form of cash or a certificate of deposit, which remains on deposit until five years after the dealership has gone out of business. The bond must remain in effect for the full licensing period or until the license becomes invalid. The bond must reflect the exact ownership, D.B.A.s, and dealership location that is listed on the application for dealer license.
• Building and zoning required: An enclosed commercial structure built to meet applicable building codes. Such structure shall be located in an area zoned by local authorities for the type of business in which the dealer is licensed. A letter of zoning approval or a zoning official´s signature on the dealer application must be submitted. Zoning approval is also required for off-site sales, changes of location, and supplemental lots.
• Application for Idaho Vehicle Dealer License (retail or wholesale): The application for dealer´s license must be completed in FULL. All owners/corporate officers must be listed. A personal history for each owner, partner, corporate officer, or director must be completed, but inactive corporate officers are not required to obtain identification cards. The name of the dealership and location must be accurate and match the information on the bond that is submitted with the application. All owners, partners, officers, or directors must sign the application in the appropriate area and their signatures must be notarized. Please allow 30 days for processing.
• Seller Permit Number: A copy of the seller´s permit number issued in the name of the dealership by the Idaho Tax Commission must be submitted with any retail dealer application. The Idaho Tax Commission can be reached by phone at (208) 334-7660 or (800) 972-7660.
• Liability Insurance (effective 7-1-06): Submit liability insurance certificate. Minimum coverage amount is $25,000 bodily injury to one person, $50,000 bodily injury to two persons, and $15,000 property damage or destruction. The certificate needs to be issued with "any auto" or it needs to state that it complies with Idaho Code 49-1608A.
• Education Requirements (Effective January 1, 2004): Applicants seeking a license for a new dealership selling used vehicles must pass a written examination before a license can be issued. The owner of a used-vehicle-only dealership renewing a license must complete at least four hours of annual education that is recognized by the department before a license can be issued. The owners or members of a corporation, limited liability corporation, or limited liability partnership, who are not active in a dealership may designate a manager to attend. If that manager leaves the dealership, another manager or employee must complete the dealership´s annual education requirements. Franchised dealers and wholesalers are exempt.
• Dealership Location Inspection: After the application is approved, the Motor Vehicle Investigator for your district will be contacted by the Dealer Licensing Team and the investigator will call you for an appointment to inspect your dealership location. The Investigator will verify the location, display area, office, sign, and give instructions on how to complete documents for titling purposes.
• Franchises: If your dealership will be selling NEW vehicles/vessels, a letter of franchise approval from the manufacturer is required for each type of new vehicles/vessels sold.
• Personal History and Salesmen Application: If you will be hiring salesmen, an application (ITD-3171) must be completed for each person hired. The NCR copy or photocopy of this form will serve as a 30-day temporary license for the salesman but is not valid until submitted to ITD with fees. All owners must complete this form.
• Employer Identification Number: Submit EIN issued by Federal Government. (see www.irs.gov/businesses/small)

PRINCIPAL PLACE OF BUSINESS REQUIREMENTS:

• Place of Business: This is the location where the dealer and his salesmen conduct the dealer´s business. Other locations belonging to the same dealership and operating under the same name are called "supplemental lots." Supplemental lots must be located in the same or an adjacent county of the principal location.
• Dealership signing: An exterior sign must be permanently affixed to the land or building, have letters that are clearly visible and readable from the main road, and meet local zoning requirements. The recommended size for an exterior sign is at least 24 square feet (3´ x 8´, 4´ x 6´, etc.) with 2-inch-square minimum lettering. The sign should include the trade name of the dealership, street address, and dealer number. For a wholesale dealer, and for ease of reading by prospective customers, the sign may be painted on the office window next to the entrance door.
• Dealership office: Must be a clearly defined area including a locking office to keep books; a desk; filing cabinet; and a permanent landline phone for the business. A cellular phone cannot be used to replace the permanent phone. The telephone number must be listed in the general directory. The telephone must be answered in the name of the dealership and may be forwarded to another location or an answering machine.
• Display area: The display area must be large enough to display five or more vehicles/vessels of the type the retail dealer is licensed to sell. The “improved display area" should be adjacent to the dealership office, owned or leased by the dealer, and separated from other business property by visual boundaries or signing. If two separate dealerships are located adjacent to one another, there shall be a physical divider made to separate the display areas. (Ropes, chains, barriers, etc., shall meet the definition of physical dividers.) This requirement is not for a wholesale-only dealership.
• Restrictions of dealership use: The principal place of business must be devoted mainly to the business for which the vehicle dealer is licensed. In addition, the office cannot be a room or rooms in a hotel, rooming house, apartment building, or a part of any single- or multiple-unit dwelling house unless the entire ground floor is principally occupied for commercial purposes and the office of the dealership is located on the ground floor.

FEES: