Idaho offers a vibrant environment for business, withover 207,000 small businesses employing 56% of the state’s workforce. Whether you’re an established business owner or planning to start a new venture, understanding the tax landscape in Idaho is crucial. This guide provides an overview of the various taxes small businesses in Idaho must navigate, including tax rates, filing requirements, and deadlines.
Types of Business Taxes in Idaho
Idaho business owners may be subject to various taxes depending on their business structure, activities, and revenue. Here’s a breakdown of the main types of taxes:
Business Income Tax
Applicable Entities: C corporations, S corporations, and LLCs with C corp elections
Tax Rate: 5.3%
Filing Requirements: File Form 41 for C corporations or Form 41S for S corporations by the 15th day of the fourth month after the tax year ends.
Estimated Payments: Required for C corporations if liability is at least $500. Payments are due quarterly by April 15, June 15, September 15, and December 15.
Affected Business Entity (ABE) Tax
Applicable Entities: Entities taxed as partnerships or S corporations
Tax Rate: 5.3%
Filing Requirements: File Form PTE-12 by the 15th day of the fourth month following the close of the tax year.
Sales and Use Tax
Withholding Tax
Applicable Entities: Employers with employees
Tax Rate: 5.3%
Filing Requirements: File Form 910 annually, quarterly, monthly, or semi-monthly.
Unemployment Insurance Tax
Applicable Entities: Employers with employees
Tax Rate: Varies based on the business’s experience rating
Wage Base: $53,300 per employee per year
Filing Requirements: File quarterly reports (Form TX20/TX26) by April 30, July 31, October 31, and January 31.
Personal Property Tax
Applicable Entities: Businesses using personal property
Tax Rate: Based on property type and value
Filing Requirements: Report annually to the county assessor by March 15.
Nonresident Withholding Tax
Applicable Entities: Pass-through entities with nonresident members
Tax Rate: 5.3% on distributive share income
Filing Requirements: File Form PTE-01 by the 15th day of the fourth month following the close of the tax year.
How to File and Pay Idaho Business Taxes
Business taxes in Idaho can be filed and paid through various methods:
Online Filing and Payment: Use the Taxpayer Access Point (TAP) for electronic submissions and payments.
Mail: Send forms and payments to the address indicated (where applicable).
Important Deadlines
Keep track of these key dates to avoid penalties:
Business Income Tax Returns: Due by the 15th day of the fourth month after the tax year ends.
Estimated Tax Payments: Due quarterly by April 15, June 15, September 15, and December 15.
Sales and Use Tax Returns: Monthly, quarterly, or annual filing based on sales volume.
Withholding Tax Returns: Due annually, quarterly, monthly, or semi-monthly.
Unemployment Insurance Reports: Due quarterly by April 30, July 31, October 31, and January 31.
Tax Credits and Incentives
Idaho offers several tax credits and incentives for small businesses, including:
Idaho Tax Reimbursement Incentive: This is available to new and existing Idaho businesses in various industries (including aerospace, agriculture, food processing, and high-tech) that create a minimum number of full-time jobs. It is worth up to 30% on income, payroll, and sales taxes for up to 15 years.
3% Investment Tax Credit: This credit is available to all Idaho businesses. It is worth 3% of investments in new machinery and equipment used in the state, and it has a 14-year carryover or a two-year exemption from all personal property taxes.
Idaho Business Advantage: This is available to businesses that invest at least $500,000 in new facilities and create at least 10 jobs paying at least $40,000 annually with benefits. Benefits include a 3.75% Enhanced Investment Tax Credit, 2.5% Real Property Improvement Tax Credit, and 25% Sales and Use Tax Exemption.
Credit for Idaho Research Activities: This credit is available to eligible businesses that conduct qualified research in the state. It equals 5% of the excess of qualified research expenses over the base amount plus 5% of basic research payments.
For more information, read our article all about Idaho tax incentives for businesses.
Idaho’s business tax breakdown by business type
Business taxes can be complicated, so we’ve included a chart below that breaks down the taxes that different business structures usually pay.
Remember that pass-through entities don’t pay federal income taxes themselves—the obligation is passed on to their business owners or shareholders, who pay them through their personal income tax returns.
Business type | Personal income tax | ABE tax | Corporate income tax | Sales and use tax | Withholding tax | Unemployment tax | Federal income taxes |
C corporation | No | No | Yes | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes |
S corporation | Yes (pass-through), if not making the ABE election | Yes, if it makes the election | Yes | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes (pass-through) |
LLC | Yes (pass-through), if not making the ABE election | Depends on how it’s structured | Depends on how it’s structured | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes (pass-through) |
Partnership | Yes (pass-through), if not making the ABE election | Yes, if it makes the election | No | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes (pass-through) |
Sole proprietorship | Yes (pass-through) | No | No | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes, by way of individual income tax |
File your Idaho small business taxes with Gusto
As a business owner, your time and energy are valuable, finite resources. So, instead of managing your taxes manually, let Gusto give you a hand. Our easy-to-use software automatically files all your payroll taxes each time you run payroll—freeing up your bandwidth for the work that matters most.
Learn how else Gusto can simplify the operations of your small business by creating an account today.
Idaho Small Business Taxes: The Employer’s 2024 Guide
Idaho offers a vibrant environment for business, with about 189,000 small businesses employing 56% of the state’s workforce. Whether you’re an established business owner or planning to start a new venture, understanding the tax landscape in Idaho is crucial. This guide provides an overview of the various taxes small businesses in Idaho must navigate, including tax rates, filing requirements, and deadlines.
Types of Business Taxes in Idaho
Idaho business owners may be subject to various taxes depending on their business structure, activities, and revenue. Here’s a breakdown of the main types of taxes:
Business Income Tax
Applicable Entities: C corporations, S corporations, and LLCs with C corp elections
Tax Rate: 5.695%
Filing Requirements: File Form 41 for C corporations or Form 41S for S corporations by the 15th day of the fourth month after the tax year ends.
Estimated Payments: Required for C corporations if liability is at least $500. Payments are due quarterly by April 15, June 15, September 15, and December 15.
Affected Business Entity (ABE) Tax
Applicable Entities: Entities taxed as partnerships or S corporations
Tax Rate: 5.695%
Filing Requirements: File Form PTE-12 by the 15th day of the fourth month following the close of the tax year.
Sales and Use Tax
Withholding Tax
Applicable Entities: Employers with employees
Tax Rate: 5.695%
Filing Requirements: File Form 910 annually, quarterly, monthly, or semi-monthly.
Unemployment Insurance Tax
Applicable Entities: Employers with employees
Tax Rate: Varies based on business’s experience rating
Wage Base: $53,500 per employee per year
Filing Requirements: File quarterly reports (Form TX20/TX26) by April 30, July 31, October 31, and January 31.
Personal Property Tax
Applicable Entities: Businesses using personal property
Tax Rate: Based on property type and value
Filing Requirements: Report annually to the county assessor by March 15.
Nonresident Withholding Tax
Applicable Entities: Pass-through entities with nonresident members
Tax Rate: 5.695% on distributive share income
Filing Requirements: File Form PTE-01 by the 15th day of the fourth month following the close of the tax year.
How to File and Pay Idaho Business Taxes
Business taxes in Idaho can be filed and paid through various methods:
Online Filing and Payment: Use the Taxpayer Access Point (TAP) for electronic submissions and payments.
Mail: Send forms and payments to the address indicated (where applicable).
Important Deadlines
Keep track of these key dates to avoid penalties:
Business Income Tax Returns: Due by the 15th day of the fourth month after the tax year ends.
Estimated Tax Payments: Due quarterly by April 15, June 15, September 15, and December 15.
Sales and Use Tax Returns: Monthly, quarterly, or annual filing based on sales volume.
Withholding Tax Returns: Due annually, quarterly, monthly, or semi-monthly.
Unemployment Insurance Reports: Due quarterly by April 30, July 31, October 31, and January 31.
Tax Credits and Incentives
Idaho offers several tax credits and incentives for small businesses, including:
Idaho Tax Reimbursement Incentive: This is available to new and existing Idaho businesses in various industries (including aerospace, agriculture, food processing, and high-tech) that create a minimum number of full-time jobs. It is worth up to 30% on income, payroll, and sales taxes for up to 15 years.
3% Investment Tax Credit: This credit is available to all Idaho businesses. It is worth 3% of investments in new machinery and equipment used in the state, and it has a 14-year carryover or a two-year exemption from all personal property taxes.
Idaho Business Advantage: This is available to businesses that invest at least $500,000 in new facilities and create at least 10 jobs paying at least $40,000 annually with benefits. Benefits include a 3.75% Enhanced Investment Tax Credit, 2.5% Real Property Improvement Tax Credit, and 25% Sales and Use Tax Exemption.
Credit for Idaho Research Activities: This credit is available to eligible businesses that conduct qualified research in the state. It equals 5% of the excess of qualified research expenses over the base amount plus 5% of basic research payments.
For more information, read our article all about Idaho tax incentives for businesses.
Idaho’s business tax breakdown by business type
Business taxes can be complicated, so we’ve included a chart below that breaks down the taxes that different business structures usually pay.
Remember that pass-through entities don’t pay federal income taxes themselves—the obligation is passed on to their business owners or shareholders, who pay them through their personal income tax returns.
Business type | Personal income tax | ABE tax | Corporate income tax | Sales and use tax | Withholding tax | Unemployment tax | Federal income taxes |
C corporation | No | No | Yes | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes |
S corporation | Yes (pass-through), if not making the ABE election | Yes, if it makes the election | Yes | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes (pass-through) |
LLC | Yes (pass-through), if not making the ABE election | Depends on how it’s structured | Depends on how it’s structured | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes (pass-through) |
Partnership | Yes (pass-through), if not making the ABE election | Yes, if it makes the election | No | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes (pass-through) |
Sole proprietorship | Yes (pass-through) | No | No | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes, by way of individual income tax |
File your Idaho small business taxes with Gusto
As a business owner, your time and energy are valuable, finite resources. So, instead of managing your taxes manually, let Gusto give you a hand. Our easy-to-use software automatically files all your payroll taxes each time you run payroll—freeing up your bandwidth for the work that matters most.
Learn how else Gusto can simplify the operations of your small business by creating an account today.
