Print This Section

BUSINESS INCOME TAX (BIT)

BIT - 1	When am I required to file an Idaho corporate income tax return? You must file a Form 41, Idaho Corporation Income Tax Return, if your corporation: 1. is transacting business in Idaho; 2. is registered with the Idaho Secretary of State to do business in Idaho; or 3. has income attributable to Idaho. Refer to general instructions for Form 41. If you're filing a final Idaho corporate return, check the box on Form 41, question 5, to show the reason and enter the date of the event. Enter your new federal Employer Identification Number (EIN) if the corporation has merged or reorganized. Ref: Idaho Code Section 63-3030 Contact us if you need more information. Return to Questions
BIT - 2	When am I required to file an Idaho S corporation income tax return? If you file an S corporation return for federal income tax purposes, you must file Form 41S, Idaho S Corporation Income Tax Return, if your corporation: is transacting business in Idaho; or is registered with the Idaho Secretary of State to do business in Idaho. Refer to general instructions for Form 41S. Idaho accepts the federal approval of the S corporation election. The first year you file Form 41S, you must attach federal Form 2553 or a copy of the federal notice approving the election to your Idaho tax return. If you are filing a final Idaho S corporation return, check the box on Form 41S, question 5, to show the reason and enter the date of the event. If the S corporation has merged or reorganized, enter your new federal Employer Identification Number (EIN). Ref: Idaho Code Section 63-3030 Contact us if you need more information. Return to Questions
BIT - 3	What is the corporate income tax rate? The income tax rate is 7.6 percent on the Idaho taxable income of a corporation transacting business or authorized to transact business in Idaho or with income attributable to Idaho. If the tax is less than $20, a minimum tax payment of $20 is required. Nonproductive mining companies are not required to pay the minimum $20 tax. Contact us if you need more information. Return to Questions
BIT - 4	How does my corporation file an extension? Taxpayers have an automatic six-month extension of time to file income tax returns (there is no form). To avoid a 2 percent per month penalty, you must pay (by the original due date of your return) at least 80 percent of the total tax due for your current year return or 100 percent of the tax reported on the previous year’s tax return. If you owe more tax but can't file by the due date, use Form 41ES, Quarterly Estimated Tax - Extension of Time Payment. If your tax debt is $50 or less, you don't need to make an extension payment. However, interest will continue to apply to any amount not paid by the original due date. Contact us if you need more information. Return to Questions
BIT - 5	Is my corporation required to make estimated payments? Estimated payments aren't required for the first year a corporation is in Idaho. A corporation must make estimated tax payments to Idaho if it is required to make federal estimated payments and the Idaho tax liability is estimated at $500 or more. Contact us if you need more information. Return to Questions
BIT - 6	Does my company have to pay the Permanent Building Fund Tax? Any C corporation required to file an Idaho income tax return (see question BIT - 1) must pay the $10 permanent building fund tax (PBF). For a unitary group of corporations, the $10 PBF is due for each corporation included in the unitary group that is required to file in Idaho, regardless of whether filing their own return or included in a group return. When a partnership or S corporation pays the income tax liability for any individual partner or shareholder, the $10 PBF must be paid for each individual partner or shareholder that is required to file. Contact us if you need more information. Return to Questions
BIT - 7	How do I know what qualifies for the Investment Tax Credit? Qualifying property is new or used depreciable property. Idaho adopted the definition of qualifying property found in Internal Revenue Code (IRC) Sections 46(c) and 48 in effect before 1986 for this credit. The depreciable life must be three years or more. Property not used in Idaho and vehicles under 8,000 pounds gross weight do not qualify. Property used in a trade or business that does qualify includes: Tangible personal property--machinery and equipment. Other tangible property--property used as an integral part of manufacturing, production, extraction, or furnishing transportation, communications, or utility services, or research facilities and bulk storage facilities used in connection with those businesses. Elevators and escalators. Single purpose agricultural or horticultural structures, such as a commercial greenhouse or a milking barn. Certain qualified timber property. Petroleum storage facilities. Property that does not qualify includes the following: Buildings and their structural components. Property used primarily for lodging. This is an apartment house or other facility where sleeping accommodations are provided and rented. The rental period is normally more than 30 days. (Tangible personal property used in a facility that rents rooms for a period of less that 30 days does qualify.) Property expensed under Section 179, IRC. Property subject to 60-month amortization. Used property: a. not acquired by purchase; or b. in excess of $150,000; or c. acquired from a relative. This includes property that was used before the acquisition. Property that is either nondepreciable or has a useful life of less than three years. The portion of property that is for personal use. Horses. Contact us if you need more information. Return to Questions