are explanations of commonly used business
terms, most of which appear on this site.
E F G
L M N
P Q R
U V W X Y
Dissolution: Corporations and
LLCs must file an annual report with the Idaho Secretary of State's office. The
form is mailed to the business's address of record and cannot be forwarded by
the Post Office. If the form is not returned by the due date, the Secretary of
State will withdraw the business's right to operate in Idaho, known as
administratively dissolving the business.
For an existing business, this is a realistic budget for the current
fiscal year based on past income and expenditures.
It includes anticipated changes in income and spending that may occur
during the year. For a start-up
business, this is a realistic projection of the income and costs of doing
business for a year.
Auditorium District Tax:
Boise Auditorium District Tax below.
legal proceeding involving a person or business that is unable to repay
outstanding debts. The bankruptcy process begins with a petition filed by the
debtor (most often) or on behalf of creditors (less frequent). All the debtor's
assets are evaluated and a trustee may sell them and use the funds to repay a portion of outstanding debt. Upon
the successful completion of bankruptcy proceedings, the debtor is relieved of
their debt obligations incurred before the bankruptcy filing. If the person or
business has assets, creditors may
receive a percentage of what they were originally owed.
See UPC Codes
Beer and Wine Taxes:
Taxes on these products are remitted by wholesalers to the
Idaho State Tax Commission. For more information, see the
Taxes section of this website.
A short-term loan, usually associated with the purchase
or remodel of real estate and usually for a term of less than one year. It
enables a borrower to close quickly and later work out permanent financing.
Business Entity Form: The legal
structure of a business, such as LLC, partnership or corporation. Businesses
register their entity type with the Idaho Secretary of State's office. For
information on entity forms recognized in Idaho, see the
Legal Structure/DBA section of this website.
A license to do
business in a specific city or county. Some Idaho cities require all
businesses to obtain a license. Others license only certain activities, such as
taxis and eating and drinking establishments. City business licenses are obtained from the city
clerk's office. County business licenses are obtained from the county clerk's
office. Idaho does not have a state business license. (Note:
Obtaining a business license is not the same as registering a business legal
form (entity) or name, both of which are administered by the Secretary of State's office.)
A business plan contains all the information about your business: name, location, number of employees, how the business is organized,
management team, the business’s purpose, products and/or services and how they
will be rendered, target markets, equipment needs, financial projections, and any other pertinent
information. Anything you can think
of pertaining to your business should be included in your business plan. The
marketing plan may be included as well.
You will need a detailed business plan that includes financial
statements before approaching a
Every business should have a business plan; it is a planning tool to keep the business
organized and focused. The plan should be regularly updated as the
business grows and changes.
Cash Flow Projections: A month-by-month future projection of income and expenditures
over a period of time, usually a year. The
projections for an existing business are based on current cash flow patterns.
A cash flow projection for an existing business can be created with more
than one anticipated outcome. For instance, a projection of
income and expenditures can be created to reflect a 5% increase in business, another for a
7% increase, and another for a 10% increase. Cash
flow projections enable business owners to anticipate future funding needs
compared to anticipated income. Your
accountant can assist in preparing this.
cash flow projection for a start-up business anticipates monthly income and expenditures
over a period of time, usually a year. The
statement can be created with more than one outcome, based on anticipated sales
and expenditures, but be conservative in estimating anticipated income.
Cigarette and Tobacco Taxes:
these products are remitted by wholesalers to the Idaho State Tax Commission. For more information, see
section of this website.
City Sales Tax:
A local option
tax collected by a city in addition to the state
sales tax. For a list of Idaho cities that collect local sales tax, visit
Coin Operated Amusement Device Annual Decals:
Sales tax is prepaid on coin-operated amusement devices (such as video
games) by the
owner, who purchases a yearly "amusement device decal" from the State
Tax Commission for each
amusement device. Owners of coin-operated vending machines also pay sales tax in
Completed Operations (Errors and Omissions)
architects and other licensed
professionals may need this insurance to protect against financial loss to
clients caused by errors or
omissions in services provided.
Covers inventory, supplies and equipment in a rented building. The building
owner should have property insurance to cover the actual building.
Cookie: A small
piece of information sent by a web server (the site you are viewing) and stored on a
(your computer) so it can
later be read back from that browser. This is useful because the browser "remembers" bits of specific
information, such as your choices when filling out a form or survey. Some
cookies are temporary; others are permanent and you must remove them from your
computer when you delete files. This website uses temporary cookies to remember
your selections when you go through the Business Wizard or the Resource Wizard.
County Sales Tax: A sales tax
collected by a county in addition to the state sales tax. Nez Perce
County collects a .5% local option sales tax which is administered by the Idaho
State Tax Commission.
An abbreviation for "Doing Business As," also called ABN, "Assumed Business
Name." This term is used in connection with the registration of a business name
with the Idaho Secretary of State's office. For information, see the
Legal Structure/DBA section of this website.
You can pay your Idaho taxes to the State Tax Commission by electronic payment at
ACH sign-up is required.
called "worker;" a person who has entered into the employment of, or
who provides a service for an employer for payment. An employer usually has the right
of control over how, when, and where an employee performs her/his duties.
who hires others to work for them in a business, trade, or profession.
All businesses (except sole proprietorships with no employees) must obtain a Federal Employer Identification Number (EIN),
also called a Tax Identification Number. This number
is used when
your business reports employee tax withholdings and files tax returns. Your bank
and businesses for whom you perform work may require you to have an EIN even if you are a sole
proprietor without employees. You must provide your EIN number if another
business is required to
include it on their tax return. For more information, see
the following IRS publications:
an Employer Identification Number On-line
Understanding Your EIN. If you change
your business name or entity type, you may need to obtain a new EIN. For
information, click on the links above. Idaho does not issue a state EIN. Your
federal number is used for Idaho business income tax purposes.
Employment Practices Liability Insurance (EPLI):
Protects against wrongful termination and discrimination lawsuits.
All employers are required to withhold certain federal and
state taxes from employee earnings, including:
Security and Medicare Taxes (FICA)
Unemployment (FUTA) Taxes
State Income Tax
State Unemployment (SUTA) Taxes
information on your federal tax responsibilities as an employer, see IRS
15, Circular E, Employer’s Tax Guide. If
you have agricultural employees, see IRS
51, Circular A, Agricultural Employer’s Tax Guide. For information on state tax withholding, visit
If you are not sure whether people working for you are
employees or independent
contractors, see IRS Publication
15-A, Employer’s Supplemental Tax Guide. If
you misclassify workers, you could be subject to fines and back taxes.
Estate tax is charged on the
transfer of property after the death of the original property owner. For information about Idaho
estate tax (for deaths occurring prior to 2005) visit
http://tax.idaho.gov/. For information on
Federal estate tax, see http://www.irs.gov/businesses/small/article/0,,id=98968,00.html.
Estimated tax payments must be made by individuals
who expect to owe $1,000 or more
in taxes on their personal income tax return and
who do not have at least 90% of the tax withheld by an employer. Sole proprietors, owners of limited liability companies, members of
partnerships, and S corporation shareholders may need to pay estimated taxes.
Individuals receiving income from interest, dividends, rental property,
royalties and other forms of passive income may also need to pay estimated taxes. Payments are made four times a year using form 1040-ES, Estimated Tax for
Individuals. For information,
505, Tax Withholding and Estimated Tax.
Individuals are not required to make state quarterly estimated tax payments,
though they may do so voluntarily to reduce their state tax liability. To pay
state estimated taxes, complete Form 51, Estimate of Idaho
Individual Income Tax.
For information and to obtain the form, see
Estimated Income Tax (Corporations):
Corporations expecting to owe $500 or more in federal taxes must make
estimated income tax payments. For information, see
Corporations may also be required to pay quarterly estimated taxes to the
Tax Commission. For
Internal Revenue Service collects federal excise
tax on the following:
profit tax on domestic crude oil production
tax on the receipt of hazardous materials
tax on manufacturing petroleum and chemicals
use tax by heavy trucks and buses
sale, or importing of alcohol, tobacco, or firearms
tax on the purchase of high-end passenger cars, yachts, and other consumer luxury goods
Excise tax is also collected on some
activities, such as the use of indoor tanning salons. For
more information on federal excise taxes, see http://www.irs.gov/businesses/small/article/0,,id=99517,00.html
An employee who is exempt from overtime
payments, often a supervisor or one who travels regularly for business, such as
a salesperson. Federal regulations, not the employer, determine whether an
employee is exempt or non-exempt from overtime pay.
A method of raising working capital by selling a business's accounts receivables
to a bank or another lender at a discounted rate. The purchaser then manages and collects payments.
Tax Deposit Coupon:
are used for depositing employment taxes. Each coupon shows the deposit amount, the type of tax and the period for which
the deposit is made. The IRS automatically sends
coupon book about six weeks after a business applies for an Employer
Identification Number (EIN). If the business has no employees,
it can then cancel the coupons.
federal unemployment tax is part of the federal and state program that pays
unemployment compensation to workers who lose their jobs.
Only the employer pays FUTA tax; no funds are withheld from an employee’s
pay. Payments are made using IRS
940 or 940-EZ, Employer’s Annual Federal Unemployment (FUTA) Tax Return.
These taxes are used to administer the Unemployment Insurance and Employment
Services Programs in Idaho and other states.
The Federal Insurance Contributions Act
(FICA) tax is a tax imposed by the federal government on both employees and
employers to fund Social Security and Medicare. A portion of the tax is withheld
from employee earnings and remitted to the IRS. Employers also contribute a
portion of the tax. Self-employed individuals contribute to Social Security and
Medicare by paying
on their net earnings.
A type of insurance that protects employers against
employee dishonesty, theft, negligence, fraud and/or embezzlement. Employees
who have direct access to a company's cash, securities, and/or accounting records, and those who handle investment funds, should be bonded.
Specialty fidelity bonds can be purchased, such as ones covering janitorial
services or trust or pension fund managers. Fidelity bonds are purchased from insurance companies.
detailing the business’s financial status. These
include an income
statement, balance sheet, and cash flow statements, and may include other
statements appropriate for your business, such as accounts receivable and
accounts payable statements. Your
accountant can prepare these, or, if you use accounting software such as
QuickBooks, the software can be used to prepare the statements.
Degree of Consanguinity: