Learn about the annual report and tax filing obligations for Idaho limited liability companies.
You’ll need to prepare and submit many paperwork with the state if you want to form and maintain an Idaho limited liability corporation (LLC). This article discusses Idaho LLCs’ most essential continuing reporting and state tax filing obligations.
Table of Contents
Report Annual
The state of Idaho requires you to produce an annual report for your limited liability company. The Secretary of State will send a reminder notice to your LLC before the report is due. The yearly report may be filed online at the SOS website. The yearly report is free to submit.
State Corporation Tax
Most LLCs are pass-through tax corporations when it comes to income taxes. In other words, the burden for paying federal income taxes is passed via the LLC to the individual LLC members. LLCs do not pay federal income taxes by default; only its members do.
Idaho, on the other hand, levies a separate state tax on LLCs. The tax regulations are difficult. Special regulations apply if, among other things, one or more of your LLC’s members are not Idaho citizens or if part of your LLC’s revenue is not dispersed to members. All multi-member LLCs with the default tax classification (partnership) and at least part-year Idaho residents are required to submit Form PTE-12, Form 65, and Form ID-K1. In most cases, the LLC is subject to a minimum tax of $10. Any LLC revenue that is not dispersed to members is subject to corporate taxation. Check with the Idaho State Tax Commission for extra tax advice (STC).
In certain situations, the owners of an LLC elect to have their firm taxed as if it were a corporation. This decision is made by submitting IRS Form 2553 to the IRS. (The form is available on the IRS website.) When an LLC elects to be taxed as a corporation rather than as a pass-through entity, the firm must submit a separate tax return. Idaho, like practically every other state, taxes corporate revenue. Corporation income in Idaho is normally taxed at a flat 7.4% rate plus an extra $10. There are, however, other techniques for calculating the company income tax. A minimal tax is also levied. The STC collects the company income tax. Use Form 41, the state company income tax return.
Employer Taxes in the State
Do you have workers in your LLC? If this is the case, you must pay employer taxes. Some of these taxes are paid to the federal government (the IRS) and are not addressed in this section. (However, it is important to understand that federal employer tax duties begin with getting a federal employer identification number (EIN).) However, Idaho employers must additionally pay state taxes.
To begin, you must withhold and remit employee income taxes to the State Tax Commission. Begin by registering your company with the STC, either online or in print form (Form IBR-1). After registering, you must submit withholding taxes on a regular basis (for example, quarterly) using Form 910. Each year, you’ll also need to utilize a form of Form 967 to reconcile your LLC’s tax withholding. Check out the STC website for further information, including on online filings.
You’ll also need to register to pay state unemployment insurance (UI) taxes. The Idaho Department of Labor is in charge of these taxes (DOL). These taxes may be registered for online or by utilizing Form IBR-1. Then, each quarter, utilize Forms TAX020 and TAX026 to record your salary and pay your unemployment insurance taxes.
The sales tax
If your LLC sells items to clients in Idaho, you must collect and remit sales tax. This implies you’ll have to register with STC for this reason and then pay sales tax on items sold on a regular basis. You may register either online or by mailing Form IBR-1. After you register, you will get a seller’s permit. Then, on a regular basis (such as monthly or quarterly), you must file sales tax reports with the STC. This may be done on paper (Form 850) or online at Idaho’s Taxpayer Access Point (TAP)
Other States Registration
If you want to do business in states other than Idaho, your LLC may need to be registered in any or all of those states. The exact states concerned will determine if you are needed to register: each state has its own regulations for what defines conducting business and whether registration is required. For registration reasons, having a physical presence (a business location) in a state, recruiting personnel in a state, or soliciting business in a state (through telephone, print advertisements, mail, or the Internet) are sometimes considered conducting business. Obtaining a certificate of authority or comparable document is normally required for registration.