Forming your business entity in Delaware—specifically, a corporation—gives you a lot of flexibility, but you may still need to follow local laws depending on what state you operate in.
Specifically, if you do business in Idaho, you need to register with the state. We’ll walk through the process and simplify it. But first, how can you tell whether you’re legally doing business in Idaho?
When to register as doing business in Idaho
Delaware C corps—and all other corporations formed outside of Idaho—are referred to as “foreign” corporations by the State.
Idaho statutes do not specifically define what is considered doing business in the state. However, Idaho statutes provide that the following activities would not require you to register with the State:
Defending or settling a lawsuit
Having a bank account in the state
Selling through independent contractors
When to register to collect sales tax in Idaho
Every state has rules about when a company is required to pay sales tax. These are called sales tax nexus rules.
You can think of the nexus as a special version of that state’s border; if you perform certain business activities within that border, you fall into the state’s sales tax nexus, and you’re required to register for and collect state sales tax.
Typically, these actions take the form of buying and selling goods and services.
In Idaho, the sales tax nexus rules only apply to sellers who sell physical goods or services to Idaho residents.
Until 2018, selling or buying non-physical goods—like subscriptions to streaming services, SaaS memberships, etc.—did not, generally speaking, qualify you for sales tax nexus. After an important court ruling in 2018, that changed. Now, if you buy or sell non-physical goods or services in a state, you may fall within its sales tax nexus.
Idaho sales tax nexus (physical goods and property)
If you have a physical presence in Idaho, then you need to pay sales tax to the state. You may be physically present in the state if you do any of the following within the state:
- Have an office, warehouse, sales or sample room, or storage place
- Maintain a stock of goods
- Service tangible personal property
You will need to pay sales tax as long as you have physical presence regardless of any minimum thresholds. You can learn more about physical presence for sales tax purposes through the State’s website.
Idaho sales tax nexus (non-physical good and property)
The new state sales tax laws applying to non-physical (ie. internet) sales allow you to qualify for sales tax nexus even without physical presence or goods. In Idaho, you need to cross a certain threshold to qualify.
You will need to collect and remit sales tax if you have cumulative gross receipts from Idaho sales exceeding $100,000 in the current or preceding calendar year.
If you would like to take a deep dive, you can check out the State’s website.
As usual, this isn’t legal advice—just a guide. If you’re not 100% clear on whether you fall within Idaho’s sales tax nexus, it’s best to confer with your legal counsel and/or an accountant that has expertise in Idaho’s legal code and tax regulations.
How to register to do business in Idaho
- Select a name under which to do business. This doesn’t have to be the name you registered when incorporating in Delaware, but it can be.
- Fill out an application. You’ll need to file a Foreign Registration Statement to the Idaho Secretary of State along with a Delaware Certificate of Good Standing.
- Pay the fee. Now you pay the Idaho Secretary of State a $100 filing fee.
- Submit your Foreign Registration Statement.
- Wait. Processing typically takes two to four weeks.
Once you’re approved to operate as a qualified foreign business in Idaho, you’ll need to comply with certain requirements.
Compliance as a qualified business in Idaho
Your registered agent in Idaho is your point of contact with local authorities. If you don’t have a physical address for your company in Idaho, it may be advantageous to find a registered agent to receive state notices on your behalf.
Foreign corporations are required to have a registered office in Idaho. The office cannot be a P.O. box, rather it must be a physical address of your registered agent or a licensed registered agent service.
Your registered agent will forward any important information, such as business mail, to you. There are a number of firms that contract out registered agents. They typically cost $50 – $100 per year.
Annual reporting in Idaho
Every year, you must file a statement with the State, updating any changes to the company address or the composition of the Board and officers. You’ll include info like:
- The legal name of your business
- The name and address of your registered agent
- The names and addresses of board members, managers, and officers
There is no filing fee for the annual report.
Paying your business income tax
Idaho has a business income tax that functions like a corporate income tax. A corporate income tax is a tax imposed directly on the income of your corporation. For more information on filing and paying your corporate income taxes, please see the following guidance from Idaho’s State Tax Commission.
Paying your permanent building fund tax
Idaho has a permanent building fund tax which is a tax imposed on C Corporations to help maintain the state’s buildings including those at the college, universities and community colleges. For more information on filing and paying your permanent building fund tax, please see the following guidance from Idaho’s State Tax Commission.
Registering for sales tax in Idaho
If you meet the requirements to collect sales tax in Idaho, you will need to apply for an Idaho seller’s permit. You can apply for a seller’s permit online.
Hiring and paying employees in Idaho
When you hire a new employee in Idaho, federal and state laws require that you report new hires within 20 days of the date of hire. You can report your new hires online.
Your payroll provider should be able to take care of paycheck withholdings, but it’s up to you to register as an employer with the State and set up an online employer account.
For a comprehensive guide of your responsibilities, Idaho provides the following information.
The Easiest Way To Register Your Business In Idaho
To register your business in Idaho, you’ve got to keep track of a lot of moving parts. Failing to file the right forms, provide the right information, or stay on top of compliance laws can lead to serious headaches.
Capbase makes it easy. When you incorporate your Delaware corporation on Capbase, we will generate the required information needed to register to do business in Idaho and keep you up to date on any required filings.
The compliance calendar inside your Capbase account will notify you of upcoming fees, reporting, or other requirements, so you can keep your startup in good standing with Idaho state officials. Try Capbase now.
Written by Capbase Staff
Capbase is a team of designers, engineers, and business professionals spread across 6 time zones on 3 continents united by our passion for dogs, coffee, and great software.
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