Starting a Business in Idaho
Idaho is a great state to do business due to factors such as an equalized and stable state budget, a fair and balanced tax environment, and a regulatory environment that is viable for business owners. The industries that make up the economic backbone of Idaho are in Agriculture, Manufacturing, Food products, Tourism, Health Care, and Technology. The Gem State is an opportunistic place to start a small business and in turn the business can benefit from a variety bountiful incentives. The most common incentives come in the form of tax credits and reimbursements, given to companies that qualify. Before researching these programs, there are some other important things to do after starting a business in Idaho. If you lease commercial office space, posting an Idaho business license in a visible place may be required. Securing an EIN number instead of using your SSN number in order to apply for business credit cards or business loans may be necessary. Looking up an Idaho sales tax rate, trying to pay Idaho sales tax, and retaining copies of form IBR-1 or ST-101 can also be addressed.
STEPS TO STARTING A BUSINESS IN IDAHOThe Idaho State Tax Commission facilitates the collection of business taxes and manages the policies that govern them. The Idaho Secretary of State is responsible for setting guidelines for the formation of new businesses. Before you can form a company, you must first conduct a business name search with the Idaho Secretary of State. After you select a name and setup the business, you can complete an Idaho Business Registration by applying online for an Idaho Seller’s Permit. In order to meet compliance standards and requirements, it will be necessary to find the Business Licenses you need to successfully operate. After completing your other compliance tasks, you can focus on looking into various business incentives that are offered. Idaho Businesses can receive many benefits from leveraging the following resource programs:
- One major tax credit that Idaho offers is the Investment Tax Credit. This credit is applicable to new tangible personal property that is depreciable through its life cycle. It can be used for any equipment or machinery that is used in business operations inside Idaho.
- The Idaho Job Opportunity Tax Credit provides incentives to a business that is able to give jobs to people who otherwise would be considered challenging to employ. Examples would be people with physical or learning disabilities, those who are chronically under employed and people who have been convicted of a felony.
- Another job reimbursement program is the Idaho Workforce Training Fund. Reimbursements are given to a business that can train workers who are having difficulties with upward mobility by providing them with the skills and training needed for further development. These incentives can be applied to new hires as well as current employees.
- The Idaho Tax Reimbursement Incentive that offers a tax credit for creating new jobs. A credit of up to 30 percent can be taken for a period of up to 15 years and applied to new state tax revenues.
- For those that want to start a small business in Idaho there is a Capital Investment Tax Credit that is available. It is an Income tax credit that can be taken from any new equipment purchases used in the course of business operations.
- Idaho Sales Tax Exemptions are offered to businesses within certain industries which include Research & Development, Mining, Manufacturing and the energy used in the manufacturing process, and custom computer programming. Capital expenditures on equipment, machinery, and raw materials used in R & D as well as in the manufacturing process of tangible personal property that is for resale qualify for a Sales Tax Exemption. Additionally, a Sales Tax Exemption is available for any processing materials used to produce energy (electricity or fuel) used in the manufacturing process. Note that before a resale certificate can be issued, you will first need to get a sales tax number.