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Idaho Business License Basics

By: Startup 101
Last Updated: November 15, 2024

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The path from brilliant idea to legal business can be an overwhelming maze of paperwork and bureaucracy. When starting a business in Idaho, navigating this landscape alone can lead to costly mistakes, delays, or even legal troubles down the road.

But don’t let these challenges deter you. This guide is your roadmap through the Idaho business registration process, where we’ll break down complex procedures into manageable steps so you can quickly get your business off to a strong start.

Related: Starting A Business In Idaho Checklist

Step 1: Choose a Business Structure

A business structure (also called a business entity) is how a business is legally structured. This decision can impact the owner’s personal liability, taxation, and management. In Idaho, there are four primary types of business entities to consider: sole proprietorship, general partnership, corporation, and Limited Liability Company (LLC).

Related: Comparison of Business Structures

Sole proprietorshipIn Idaho, a sole proprietorship is a business owned by one person. It is the simplest business structure, with no legal distinction between the owner and the business. The owner has complete control over the business but is also personally liable for all debts and obligations.

General partnership: A general partnership in Idaho is an agreement between two or more individuals to operate a business together. No formal setup is needed, but a partnership agreement to outline operations and responsibilities is wise.

CorporationAn Idaho corporation is a legal entity separate from its owners, known as shareholders. It offers limited liability protection, meaning shareholders are not generally personally responsible for the corporation’s debts and liabilities. The downside is that corporations are the most complex structure to start and operate. 

Limited Liability Company (LLC): An Idaho LLC combines aspects of a sole proprietorship or partnership and a corporation. It provides limited liability protection to its owners, called members, shielding their personal assets from the company’s debts and liabilities, in addition to a flexible management structure and multiple tax options.

Step 2: Select a Business Name

Choosing and registering your business name is the next step after deciding on the business structure in Idaho. The requirements and procedures vary depending on your business structure, but all names must be registered with the Idaho Secretary of State, Commercial Division. Here’s what you need to know:

Sole Proprietorships and Partnerships

If you’re operating a sole proprietorship or partnership in Idaho and want to use a business name that is different from the owner’s full legal name(s), they will need to register for an Idaho Assumed Business Name. This is also known as:

  • Doing Business As (DBA)
  • Fictitious Business Name
  • Trade Name

For example, if John Smith wants to operate his landscaping business as “Green Thumb Gardens,” he must file for an Assumed Business Name.

Corporations and LLCs

Corporations and Limited Liability Companies (LLCs) choose their business names as part of the formation process. So, when filing Articles of Incorporation (for corporations) or Articles of Organization (for LLCs), you’ll include your chosen business name in the paperwork. Because the name is chosen when filing for the entity, these business structures don’t typically need to file for an Assumed Business Name unless they plan to operate under a name different from their official registered name.

General Name Registration Requirements

Regardless of your business structure, all business names in Idaho must meet certain criteria:

  1. Uniqueness: Your chosen name must be distinguishable from other registered business names in Idaho. Before filing any paperwork, check if your desired name is available by doing an Idaho business name search on the Idaho Secretary of State website.
  2. Prohibited Words: Certain words (like “Bank,” “Engineer,” or “Insurance”) may be restricted or require additional permissions due to their regulated nature.
  3. Entity Identifiers: Corporations must include words like “Corporation,” “Incorporated,” or their abbreviations. LLCs must include “Limited Liability Company,” “LLC,” or similar identifiers.

While registering your business name is important, it doesn’t provide much protection from others from using it. If you want exclusive rights to your business name beyond Idaho, consider federal trademark registration.

Step 3: Federal Employer Identification Number (FEIN)

The Federal Employer Identification Number (FEIN), also known as a Federal Tax Identification Number, is needed by many businesses. This unique nine-digit number is assigned by the Internal Revenue Service (IRS), similar to a Social Security number, except for a business.

Who Needs an EIN?

While not all businesses are required to have an EIN, many do. You’ll need an EIN if:

  • Your business has employees
  • Your business operates as a corporation or partnership
  • You file employment, excise, or alcohol, tobacco, and firearms tax returns

Sole proprietors without employees can often use their Social Security number instead of an EIN, but getting an EIN keeps the owner’s number from being used on business documents.

See: How to Apply for an EIN

Step 4: Occupational Licensing

There are a wide range of professions in Idaho that require licensing. Some common examples include:

  • Appraisers
  • Collection agents
  • Therapists (including mental health counselors and marriage/family therapists)
  • Driving instructors
  • Outfitters and guides
  • Real estate agents and brokers
  • Accountants
  • Nurses and other healthcare professionals
  • Teachers
  • Attorneys
  • Architects
  • Engineers
  • Cosmetologists and barbers
  • Insurance agents
  • Veterinarians

Additional information, fees, and licensing requirements for professions are available from the State of Idaho.

Step 5: State of Idaho Business Registration

Most new businesses in Idaho need the Idaho Business Registration application (Form IBR-1). This form consolidates multiple registrations into a single process, saving time and reducing paperwork. It’s primarily used to obtain your Idaho Seller’s Permit, which allows you to collect sales tax on taxable goods and services. Beyond the Seller’s Permit, this application also covers:

  • Withholding tax accounts for businesses with employees
  • Unemployment insurance registration
  • Use tax permits for out-of-state purchases
  • Special tax registrations (e.g., travel and convention tax, if applicable)

To apply:

  1. Visit the Idaho State Tax Commission website
  2. Provide business details, owner information, EIN, and estimated sales/employee data
  3. Submit online (faster) or by mail
  4. Processing typically takes 2-4 weeks
  5. Receive your Seller’s Permit and other relevant registrations

Step 6: Resale Certificate

After obtaining your Idaho Seller’s Permit, the Idaho Resale Certificate (also known as a resale permit or tax exemption certificate) is a document that allows businesses that purchase inventory or materials intended for resale to avoid paying sales tax on these items.

Who Should Get an Idaho Resale Certificate?

  • A retailer who purchases goods to resell to customers.
  • A manufacturer who buys materials to create products for sale.
  • A wholesaler who sells goods to other businesses for resale.

Step 7: Local Business Licenses

After determining your business structure and applying for any federal and state requirements, the next step is understanding and obtaining local business registrations. Unlike some states, Idaho doesn’t have a one-size-fits-all business license. Instead, licensing requirements vary based on your business location and activities.

Here’s an overview of licensing in some major Idaho cities:

Boise: The state’s capital doesn’t require a general business license, but certain types of businesses need specific licenses from the City of Boise City Clerk’s Office:

  • Restaurants and food service establishments
  • Childcare facilities
  • Massage establishments
  • Taxicab companies
  • Pawnbrokers
  • Secondhand dealers

Nampa: The City of Nampa Clerk’s Office requires licenses for specific business types, including:

  • Alarm installers
  • Amusement businesses (e.g., arcades, bowling alleys)
  • Businesses selling alcohol
  • Peddlers and solicitors
  • Taxicab operators

Idaho Falls: The Idaho Falls City Clerk’s Office has licensing requirements for various businesses, such as:

  • Alcohol vendors
  • Childcare providers
  • Secondhand goods dealers
  • Pawnbrokers
  • Mobile food vendors

Other local licenses – Depending on your business activities, you may need additional licenses or permits, such as:

  • Food Service: Health permits from your local health district
  • Construction: Contractor registration with the Idaho Division of Building Safety
  • Alcohol Sales: Licenses from the Idaho State Police Alcohol Beverage Control
  • Professional Services: Licenses from relevant state boards (e.g., Idaho Board of Medicine, Idaho Real Estate Commission)

Be sure to verify current requirements with the appropriate authorities before starting your business.

Step 8: Local Building & Zoning Permits

Building, zoning, and signage regulations are another area to consider when starting a business in Idaho, and these can vary significantly from one municipality to another. Here’s a brief overview of these requirements, with examples from specific Idaho localities:

Zoning: In Idaho, zoning regulations vary by city and county. Zoning laws determine how properties can be used, including for home-based businesses. Before starting a business, check with your local planning and zoning department to ensure your business complies with zoning regulations. For example, the Planning and Development Services department in Boise offers an online zoning map and code lookup tool to help business owners determine if their intended use is allowed in a specific location.

Building Permit: If you plan to construct, alter, or repair a building for your business in Idaho, you’ll likely need a building permit. Permits are issued by the local building department or planning and development services department in the city or county where the property is located. In Coeur d’Alene, the Building Services Department provides a streamlined online permit application process, allowing business owners to apply for and track their permits digitally.

Signage Permit: Before installing any signage for your business in Idaho, you must obtain a sign permit from your local government. Signage permits ensure that your signs comply with local size, placement, and design regulations. In Idaho, sign permits are typically issued by the local planning and zoning department or building department. For example, the City of Twin Falls Planning and Zoning Department has detailed sign regulations in its zoning code, specifying permitted sign types, sizes, and locations.

Take the guesswork out of figuring out what licenses and permits are required to start your business with license research packages from Bizee and LegalZoom.

For only $99, you can save a lot of time and know your business complies with local, state, and federal requirements.


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