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 Listed
below are the most common taxes a small business or a business owner may
be required to pay and
the agencies that collect them. For a brief description of an agency's taxing
activities and a link to its website, click on the agency's name.
 
Idaho Department of Insurance
Premium Tax:
The Department of Insurance collects premium taxes
from insurance companies licensed to do business in Idaho. The amount of
the tax varies by the type of insurance and other considerations. For information and rates, contact the Department of Insurance at
(208)334-4250, or visit their website at
http://www.doi.idaho.gov/.
Hospital and Professional Service Corporation Tax:
Hospitals and professional service corporations that self-fund their
insurance programs pay this tax. Visit the DOI website for more
information. The form to file is found at www.doi.idaho.gov/Company/Thpsc.pdf.
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Idaho Department of Labor 
State Unemployment Insurance Tax: Most
employers must provide unemployment insurance coverage to protect their
employees against loss of income during periods of involuntary
unemployment or a reduction in hours. If you are required to provide
unemployment insurance, you must complete form IBR-1, Idaho State Business
Registration application,
found at
https://www2.labor.idaho.gov/ibrs/ibr.aspx.
Liability Checklist: If you
meet one or more of the following criteria, you must pay state
unemployment tax and should complete the registration process. If you
have not paid wages or do not meet any of the following criteria for
liability, you are not required to pay Idaho unemployment insurance tax.
An employer must pay the tax if:
- The employer paid $1,500 or more in total wages in any calendar
quarter to one or more employees.
- The employer had one or more employees in at least 20 separate weeks
during a calendar year.
- The employer acquired a business that is subject
to the tax.
- The employer is subject to the Federal
Unemployment Tax Act and had one or more employees in Idaho, or is required
by the Federal Unemployment Tax Act to be covered by the state.
- The employer paid wages of $1,000 or more
in a calendar quarter for domestic service.
- The employer engaged 10 or more agricultural
laborers in at least 20 separate weeks during a calendar year.
- The employer paid cash wages of $20,000 or more
for agricultural labor in a calendar quarter.
Information about the Idaho Unemployment Insurance
Tax Program is found at http://labor.idaho.gov/dnn/idl/UnemploymentInsurance/UIBenefits/tabid/681/Default.aspx.
Quarterly Payroll Reports:
Once registered for
unemployment insurance coverage, an employer files quarterly reports
and payments using form Tax020 found at http://labor.idaho.gov/ftp/tax020.pdf
and Tax026 found at http://labor.idaho.gov/ftp/tax026.pdf. Reports
and payments are due the last day of April, July, October,
and January for the quarter ending the previous month. The Department of
Labor mails report forms to all known covered employers
during the last week of each quarter. Report forms may also be obtained
by contacting the nearest Department of Labor Tax Representative, by
accessing them on-line at the websites listed above, or at:
Idaho Department of Labor
Employer Accounts Bureau
317 W.
Main Street
Boise, Idaho 83735-0760
To find the location of your nearest IDOL office, click on the IDOL Offices logo above.Federal
Unemployment Taxes are paid to the Internal Revenue Service. For more information, see Internal Revenue
Service below.Tax Credits and Incentives: Employers who meet
certain requirements may be eligible to receive a tax credit. For
information visit http://labor.idaho.gov/dnn/Businesses/EmployerTaxCredits/tabid/644/Default.aspx
or visit the Employer Issues section of
this website.
Idaho Department of Commerce
Tax Credits and Incentives: Find tax incentives for hiring new
employees in certain rural counties, for creating jobs, capital
investments and other business
activities at
http://commerce.idaho.gov/business/incentives-/ and
http://commerce.idaho.gov/assets/content/docs/Incentive Brochure.pdf.top
Idaho
State Tax Commission
The
Idaho State Tax Commission administers and collects the taxes listed below.
Also refer to page 5 of the most current Idaho State Tax Commission
Annual Report found at
http://tax.idaho.gov/.
Idaho
State Income Tax:
Business -
http://tax.idaho.gov/i-1044.cfm
Personal -
http://tax.idaho.gov/i-1039.cfm
Income Tax Withholding:
http://tax.idaho.gov/i-1026.cfm
Sales
and Use Tax (reseller's permit): Sales tax
applies to the sale, rental, or lease of tangible personal property and
some services. Food is taxed in Idaho, but prescription drugs are not. See
http://tax.idaho.gov/i-1049.cfm
required when
tax is collected on sales or admission at a special temporary event - the permit
can be printed at
http://tax.idaho.gov/i-1033.cfm.
To see a video explanation of temporary sales tax, click
here.
Sales tax for contractors who improve real property:
http://tax.idaho.gov/i-1013.cfm
Sales tax for non-profits and churches:
http://tax.idaho.gov/pubs/EBR00050_09-29-2006.pdf
Event Promoters:
If you organize a commercial event
involving more than two merchants (including allowing
friends to set up tables and sell products at your company's open house or
other event), you have tax reporting responsibilities. See
http://tax.idaho.gov/i-1037.cfm
for information. Examples of commercial events include bazaars, swap meets
and yard sales not held at the promoter's home and
at which products are offered for sale or exchange.
Use Tax
is collected on goods consumed or
used in the course of business and for which sales tax
was not paid at the time of purchase (such as food or
products donated to charity or used at a trade show).
Use tax is also collected on the price of business-related magazine and on-line
subscriptions. To obtain an Idaho Sales and
Use Tax Permit, apply online at
https://www2.labor.idaho.gov/ibrs/ibr.aspx.
Multi-jurisdiction Uniform Sales and Use
Tax Exemption Certificate:
if you regularly sell products or make wholesale purchases in other
states, you may need this certificate, which is
recognized in 38 states.
http://www.mtc.gov/Resources.aspx?id=1594
Gasoline
and Fuels Taxes:
Idaho charges a fuels tax on motor
fuels, including gasoline, gasohol, special fuels (diesel, biodiesel,
biodiesel blends, propane, and natural gas), aviation and jet fuels, and
any other fuel used to operate or propel motor vehicles, motor boats, or
aircraft. See
http://tax.idaho.gov/p-motorfuels.cfm
for information.
Beer
and Wine Tax:
Beer - http://tax.idaho.gov/i-1021.cfm
Wine - http://tax.idaho.gov/i-1025.cfm
Cigarette and
Tobacco Taxes:
Cigarette -
http://tax.idaho.gov/i-1047.cfm
Tobacco -
http://tax.idaho.gov/i-1048.cfm
Coin
Operated Amusement Device and Vending Machine Annual Decals:
Coin or token-operated amusement games and devices and vending machines
are subject to this tax. See
http://tax.idaho.gov/
Estimated Taxes - Individuals:
Individuals are not required to make state estimated tax payments,
though voluntary payments may be made to reduce an individual's state tax
liability. To pay state estimated taxes, complete Form 51, Estimate
of Idaho Individual Income Tax found at
http://tax.idaho.gov/forms/EFO00092_06-29-2007.pdf.
Estimated Taxes
- Corporations:
Corporations may be required to pay quarterly estimated taxes. For
information, refer to Idaho tax Form
41ES.
Fiduciary Tax: Businesses
and individuals who serve in a fiduciary capacity (as a trustee) for another person, group of
persons or an estate must file Form 66, Idaho Fiduciary Income Tax Return. For
information, see
http://tax.idaho.gov/forms/EFO00036_08-02-2011.pdf.
Greater
Boise Auditorium District Tax: See
http://tax.idaho.gov//i-1117.cfm (scroll down) and
http://tax.idaho.gov/forms/EIN00011_09-22-2012.pdf
Illegal
Drug Stamp Tax:
http://tax.idaho.gov/i-1109.cfm
(scroll down to find the information)
License
Tax on Electricity (Kilowatt Hour Tax):
http://tax.idaho.gov/forms/EFO00159_10-26-2000.pdf
Local Option City Taxes:
The
following communities charge a local option sales tax in addition to
state sales tax:
- Donnelly
- Driggs
- Hailey
-
Ketchum
- Lava Hot Springs
- McCall
- Ponderay
-
Riggins
-
Salmon
- Sandpoint
- Stanley
-
Sun Valley
-
Victor
For information see,
http://tax.idaho.gov/i-1117.cfm.
Local
Option County Sales Tax -
Nez Perce County:
http://tax.idaho.gov/i-1117.cfm
Mine License Tax (Form 47):
Tax is paid on the
value of ores mined or extracted. See
http://tax.idaho.gov/forms/EFO00048_10-07-2010.pdf
Severance
Taxes: Tax on market value of oil and gas produced or sold in Idaho
- http://tax.idaho.gov/i-1109.cfm
(scroll to the bottom of the page)
Travel
and Convention Hotel/Motel Tax: Paid on sleeping
accommodations, including campgrounds. See
http://tax.idaho.gov/pubs/EBR00016_09-29-2006.pdf
Property
Taxes on both real estate and business equipment are levied by individual counties and taxing districts,
not the Idaho State Tax Commission. See
Property Taxes below.
Internal Revenue Service
The IRS collects taxes owed to the Federal government, including:
Personal income taxes
Corporate and business income taxes
Self-employment taxes
Estimated taxes - individuals and corporations
Excise and luxury taxes
Federal unemployment taxes
Social
Security and Medicare taxes
To learn more about
the taxes your small business may be required to withhold and/or pay and to locate
forms and publications, visit the small business section of the IRS website at http://www.irs.gov/businesses/small/index.html.
Information is also available on this site at irs_one.htm.
To reach the Business and Specialty Tax Help Line, call 1-800-829-4933.
On-line video and audio presentations on small business tax issues are
available at
http://www.irs.gov/businesses/small/article/0,,id=97726,00.html.
Estimated Taxes: Federal Income tax is a pay-as-you-earn tax.
You must make payments throughout the year as you receive income. Federal
law requires individuals who expect to owe
$1,000 or more in taxes to have at least 90 percent of their anticipated
tax liability withheld from their wages or make quarterly estimated tax
payments. Self-employed individuals, partners, members of
S-corporations and independent contractors who don't have adequate tax withholdings may need to make estimated tax payments. Individuals receiving taxable
passive income from interest,
dividends, rental property, royalties or other sources may also need to
pay estimated taxes. For information, see
http://www.irs.gov/businesses/small/article/0,,id=110413,00.html.
Farmers
and commercial fishermen have
different estimated tax requirements. See
http://www.irs.gov/publications/p505/index.html for information.
Corporations expecting to owe $500 or more in taxes must make
federal estimated income tax payments. For information, see
http://www.irs.gov/publications/p542/ar02.html#en_US_2011_publink1000257787 and
http://www.irs.gov/businesses/small/article/0,,id=110413,00.html
Excise Tax: Excise taxes are paid
at the time of purchase on certain products, such as gasoline, and may
be included in the purchase price. Excise tax is also charged on certain
activities, such as wagering, indoor tanning services, or highway usage
by trucks. For information, see
http://www.irs.gov/businesses/small/article/0,,id=99517,00.html.Also
see the Glossary
on this
site for more information.
FICA:
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. For information,
see
http://www.irs.gov/businesses/small/international/article/0,,id=104936,00.html.
Self-employed individuals pay FICA in the form of
self-employment tax on earnings.
Federal Unemployment Taxes: An employer must make Federal
Unemployment Tax (FUTA) payments on employee earnings. The payments
are reported to the IRS using Form 940 or 940EZ, Employer's Annual
Federal Unemployment Tax Return. For information,
see
http://www.irs.gov/businesses/small/international/article/0,,id=104985,00.html.
Payments are made quarterly to the IRS along with deducted
Federal income tax payments, Social Security tax deductions and Medicare
payments, using Form 8109, Federal Tax Deposit Coupon Book. Your
business will automatically receive a Coupon Book when you apply for an
Employer Identification Number (EIN). (For information on EINs and how to
secure one, visit the
Glossary or the
Hot
Topics sections of this
Web site.)
Luxury Tax:
Luxury tax is paid on the purchase of certain
non-essential goods, such as luxury cars and boats and expensive
jewelry. The tax is paid by the purchaser to the selling business at the
time of purchase. The seller then remits the tax to the IRS.
Non-profits/Charities:
These organizations have
special tax reporting requirements; see
http://www.irs.gov/charities/article/0,,id=206582,00.html
Hobby Business: Does the IRS
consider your business to be a hobby? Find out the difference between a
business and a hobby business and how to report your income at
http://www.irs.gov/uac/Business-or-Hobby%3F-Answer-Has-Implications-for-Deductions.
Outsourced Payroll and Tax Reporting:
If you outsource your payroll preparation and tax reporting,
you have a responsibility to be certain deadlines are met and taxes are
paid. See
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Outsourcing-Payroll-and-Third-Party-Payers
and
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Outsourcing-Payroll-Duties.
Self-employment Taxes:
Owners of a sole proprietorship, an LLC or
S-corp and members of a partnership pay self-employment tax on their
share of the net profits of the business.
Independent contractors pay self-employment tax
on all income received from self-employment activities. Waiters,
hairdressers and others who regularly receive tips pay self-employment
tax on tip income not reported to their employer. The
tax is a form of Social Security.
You must
pay this tax if you earn $400 or more from self-employment activities, including part-time
activities, even if you are paying Social Security taxes through another employer or
are currently receiving Social Security payments.
Self-employment tax is reported
annually at the time you file your personal income taxes (usually April 15)
by using IRS Form
1040-SE. For information, visit
http://www.irs.gov/businesses/small/article/0,,id=115043,00.html
and
http://www.irs.gov/businesses/small/article/0,,id=115045,00.html
Tax Payer Identification Number or Employer Identification Number (EIN)
- For information on obtaining an EIN visit the
Hot
Topics section of this website or
http://www.irs.gov/businesses/small/article/0,,id=98350,00.html.
Idaho does not issue a state tax payer identification number.
Tax Credits and Incentives:
The IRS offers several business tax credits,
including credits for disability access modifications, a
research tax credit, energy tax credit, credit for hiring Native American employees
and more. Information on each is available at
http://www.irs.gov/Credits-&-Deductions.
Fiduciary Tax: Businesses and individuals who serve as trustees of an estate
or trust (including banks) must file Form 56 and Form 1041. See
http://www.irs.gov/pub/irs-pdf/i56.pdf.
Idaho
Industrial Commission
The Industrial Commission levies premium taxes on
insurance companies approved to write workers comp policies in Idaho.
See
http://www.iic.idaho.gov/forms/ic_4008_semi_annual_premium_2012.pdf.
The tax is paid semiannually and is based on the number of policies
written during the reporting period.
Self-insured employers pay
the premium tax using the form found at
http://www.iic.idaho.gov/forms/ic_4010a_computation.pdf to compute
their tax.
Section 179 Depreciation Deduction
Section 179 of the Internal Revenue Code allows small and medium-sized
businesses to deduct the full purchase price, up to $560,000, of qualifying
equipment purchased or financed during the 2012 and 2013 tax years. The deduction
is available for most new and used capital equipment, and includes some
types of software. A bonus deduction is available for
qualifying new equipment. For information, visit
http://www.section179.org/ and
check with your accountant.
Property Taxes
Property taxes are established
and collected by individual counties and taxing districts, not by the
state. The collected funds are used to
finance local services,
such as roads, schools and libraries. Two types of property tax are collected.
Personal
property tax is assessed on the value
of depreciable assets owned by a business, including machinery, equipment,
and office equipment (including computers, software, fax machines, desks,
chairs, and more). The tax is paid annually or semi-annually in December
and June to your local county assessor.
Real estate property tax
is collected on the assessed value of real
estate (real property) owned by a business or an individual. Real estate taxes are paid annually or
semi-annually in December and June to your local county assessor.
Note: Personal property tax is not in any way related
to income taxes. If you own a business, you owe property tax. The tax
must be paid regardless of whether your business has income or owes income taxes. Failure to pay property tax can result in a lien being filed against your business's
real estate and/or equipment.
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