Idaho LLC Taxes

As an increasing number of people move to Idaho, a larger number of entrepreneurs seek to start businesses within the state. Yet, many business owners may find it challenging to understand the state’s business tax landscape. 

Regardless of the size of your business, if you operate a limited liability company (LLC) in Idaho, you’ll need to stay up to date on your finances and pay federal, state, and local taxes. Our guide will help you understand which taxes you must pay for your Idaho LLC.

Recommended: Schedule a free consultation with an accountant to stay on top of your taxes. 

Idaho LLC Taxes Owed

LLCs benefit from pass-through taxation, which means the business’s profits pass through to its members’ individual tax returns. As a result, your LLC itself won’t pay taxes to the federal government or the state of Idaho. Instead, LLC owners must pay taxes on their portion of the income made from the LLC. 

In Idaho, LLC owners can expect to pay the following taxes:

Federal Taxes

Regardless of where your business is located, if you have an LLC within the United States, you will have to pay federal income taxes and federal self-employment taxes. These taxes are reported on your Form 1040.

Federal Self-Employment Taxes

It doesn’t matter if your LLC is a single-member LLC or a multi-member LLC; all LLC members must pay self-employment taxes on their share of the LLC’s profits. The self-employment tax rate is 15.3%. 

Federal Income Taxes

Your federal income taxes will depend on your tax bracket, and the cutoffs for individual tax brackets, as well as the percent owed, will change each year.

Idaho State Taxes

All states have their own laws and regulations on how they tax residents and businesses. The following are important state-level taxes you need to know about when running an LLC in Idaho.

Idaho Income Taxes

Idaho’s state income tax rate is 5.8%, which puts it near the middle when compared to other states. 

Idaho Sales and Use Tax

The state sales tax rate in Idaho is 6%. Like its income tax rate, this falls near the middle when compared to other state’s sales tax rates. What makes Idaho attractive in this regard is that the average local sales tax rate is 0.02%. While some Idaho cities and counties may impose a maximum 3% sales tax on products and services, it’s typically a small amount that shouldn’t affect a business’s pricing too much.

Register for an Idaho Sales and Use Tax Permit

If your business sells taxable goods or services, you must register for an Idaho Sales and Use Tax Permit. You can register with the Idaho State Tax Commission online to get your permit quickly. You’ll then need to file a Sales and Use Tax Return each year on the sales taxes your business collected. 

Additional State Taxes

The Idaho State Tax Commission oversees the collection of various state-specific taxes that your business may have to pay, depending on its location, industry, and number of employees. Some examples of these additional taxes include:

  • Fuels Tax
  • Mine License Tax
  • Tobacco Tax
  • Wine Tax

For more information on Idaho taxes, visit the Idaho State Tax Commission website.

Idaho Local Taxes

The local laws and ordinances of one Idaho city or county can vary greatly from another. Regardless of where your LLC resides within the state, we recommend you check with your local jurisdiction to ensure your business obtains the proper local permits and follows any local regulations that may impact its operations.

Idaho LLC Compliance

You must obey Idaho’s state and local laws to maintain your business in good standing. While LLCs technically don’t file taxes with the state, Idaho businesses must still file an annual report each year.

Idaho LLC Annual Report

Like many other states, Idaho requires all LLCs to file an annual report every year. You can file this with the Idaho Secretary of State online through the Idaho SOSbiz Portal, and there’s no filing fee.

Your LLC’s annual report will always be due at the end of the month in which you formed your business. If you formed your business in mid-April, for example, you must file its annual report by April 30 every year. The first time you file this report should happen a year after your LLC’s formation. If you form your LLC on April 15, 2024, your first annual report will be due April 30, 2025.

Our Idaho LLC Annual Report guide can offer more information on the process.

LLC taxes are complex. While our guide can provide you with important information, we recommend you schedule a free consultation with an accountant to ensure you handle your business taxes correctly.