Idaho Business Taxes for LLCs

Filing fee: $0 annual report fee (domestic and foreign LLCs)

Processing time: Varies by filing type; annual reports filed through SOSBiz system

State agency: Idaho Secretary of State (entity filings); Idaho State Tax Commission (tax registration and returns)

Annual report due: By the last day of the LLC's anniversary month each year

State tax rate: No entity-level income tax for pass-through LLCs; corporate income tax rate 5.3% (tax years beginning on or after January 1, 2025); state sales tax 6%

An Idaho LLC doesn't pay state income tax at the entity level. Instead, profits pass through to the owners, who report them on their own Idaho and federal returns. Depending on how your LLC is structured, you may also owe self-employment tax, sales tax, and payroll taxes if you have employees.

How your Idaho LLC is taxed depends on how many members it has and whether you've made a federal tax election. Most LLCs are pass-through entities by default, meaning the business itself doesn't pay income tax — the owners do.

Single-member LLC

The IRS treats a single-member LLC as a disregarded entity by default. You report all business income and expenses on Schedule C (Form 1040) and pay self-employment tax on net profit. Idaho follows the same pass-through treatment — you report that income on your Idaho individual return.

Multi-member LLC

A multi-member LLC is taxed as a partnership by default. The LLC files Form 1065 with the IRS and issues a Schedule K-1 to each member showing their share of income. For Idaho, the LLC files a pass-through entity return and provides each member a Form ID K-1 to use on their Idaho individual return.

LLC taxed as a corporation

If you elect C corporation treatment by filing Form 8832, your LLC pays Idaho corporate income tax at 5.3% (for tax years beginning on or after January 1, 2025) and files Idaho Form 41. If you elect S corporation treatment by filing Form 2553, the LLC remains a pass-through entity but must pay owner-members a reasonable W-2 salary.

Idaho doesn't tax pass-through LLC income at the entity level. The income flows to each owner, who pays Idaho individual income tax on their share. Idaho uses a flat individual income tax rate — a tax professional can help you figure out your current rate and any deductions that apply to your situation.

For multi-member LLCs and LLCs taxed as S corporations, the entity must file an Idaho pass-through entity return and attach Form PTE-12 (Schedule of Pass-Through Owners). Each member receives a Form ID K-1 showing their Idaho-source income, adjustments, and credits. That information goes on their individual Idaho return. The pass-through filing requirement catches a lot of owners off guard — the LLC has its own Idaho filing obligation even though it doesn't pay the tax itself.

Idaho has a statewide sales tax of 6% on most retail sales of tangible personal property and certain services. If your LLC sells taxable goods or services in Idaho, you need to get a seller's permit from the Idaho State Tax Commission and collect sales tax from customers.

Idaho also has a use tax that applies when you buy taxable items without paying Idaho sales tax — for example, purchasing equipment from an out-of-state vendor. If Idaho sales tax wasn't collected at the time of purchase, your LLC owes use tax on those items. You register for both through the Idaho Business Registration process.

As an LLC owner, you pay federal income tax on your share of business profits at your individual rate. You also owe self-employment tax — currently 15.3% on net earnings up to the Social Security wage base, and 2.9% on earnings above it — which covers Social Security and Medicare contributions that an employer would otherwise split with you.

Self-employment tax is one of the bigger surprises for first-time LLC owners. You can deduct half of it on your federal return, which helps, but the full amount still hits your net earnings first. A tax professional can help you figure out whether an S corporation election makes sense for your income level.

If your Idaho LLC has employees, you need to register for Idaho income tax withholding with the Idaho State Tax Commission and for unemployment insurance with the Idaho Department of Labor. Both registrations happen through the Idaho Business Registration (IBR) process.

Once registered, you withhold Idaho income tax from employee wages based on each employee's Form W-4 and the Idaho withholding tables. You remit those amounts using Form 910 (Idaho Withholding Payment) on a monthly, quarterly, or annual schedule assigned by the Tax Commission. At year end, you file Form 967 (Idaho Annual Withholding Report) to reconcile total withholding against total payments made.

Most Idaho LLC owners need to make quarterly estimated tax payments to both the IRS and the Idaho State Tax Commission. At the federal level, you owe estimated payments if you expect to owe at least $1,000 in federal tax for the year. For Idaho, the threshold is $500 in Idaho income tax after credits.

Idaho estimated payments are due on the 15th day of the 4th, 6th, 9th, and 12th months of your tax year. For calendar-year filers, that's April 15, June 15, September 15, and December 15. Missing a payment doesn't just mean a penalty — it can mean a larger-than-expected tax bill in April when you haven't set money aside through the year.

Idaho LLCs must file an annual report with the Idaho Secretary of State every year to stay active. The filing fee is $0 — there's no charge for domestic or foreign LLCs. The report is due by the last day of your LLC's anniversary month each year, starting in the calendar year after formation.

You file through the Idaho Secretary of State's SOSBiz system. Idaho doesn't have a franchise tax, so the annual report is the main recurring state obligation beyond your tax filings. Missing the deadline can put your LLC's good standing at risk, so it's worth tracking your anniversary month from the start.