Idaho State Tax Commission

Idaho State Tax Commission

Business Income Tax

Any entity that is transacting business in Idaho, is registered with the Idaho Secretary of State to do business in Idaho, or has income attributable to Idaho, must file an income tax return with the state of Idaho.

You can save time and postage by e-filing your tax returns and payments.

Tax rates

The income tax rate is 7.4% 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 income tax payment of $20 is required. Nonproductive mining companies aren't required to pay the minimum $20 tax.

S corporations and partnerships generally pass their Idaho income to their shareholders and partners, who pay the Idaho tax on their individual income tax returns. However, nonresident individual shareholders and partners can have their tax paid on the entity's return, rather than file individual returns. An S corporation is required to pay tax calculated at 7.4% of its Idaho taxable income. If the tax is less than $20, a minimum income tax payment of $20 is required. A partnership only pays an income tax, which is calculated at 7.4% of its Idaho taxable income.

Estates and trusts generally distribute their Idaho income to their beneficiaries, who pay the Idaho tax on their individual income tax returns. However, nonresident individual beneficiaries can have the tax paid on their distribution on the entity's return at the rate of 7.4%, rather than file an individual return. An estate or trust may also have Idaho taxable income, and the calculated tax is graduated to make higher earnings taxed at a higher rate.

Forms/publications

Filing

Corporations must file Form 41 if they're transacting business in Idaho, are registered with the Idaho Secretary of State to do business in Idaho, or have income attributable to Idaho.

S Corporations must file Form 41S if they're transacting business in Idaho or are registered with the Idaho Secretary of State to do business in Idaho. Idaho accepts the federal approval of the S corporation election. The first year an S corporation files Form 41S, a federal Form 2553 or a copy of the federal notice approving the election must be attached to the Idaho tax return.

Partnerships must file Form 65 if the business is a partnership transacting business in Idaho, or is a Limited Liability company treated as a partnership for federal purposes and transacting business in Idaho.

Estates and Trusts must file Form 66 in the following circumstances:

  • A resident estate with gross income (as defined in IRC Section 61(a)) of $600 or more for the current tax year
  • A nonresident estate with gross income (as defined in IRC Section 61(a)) from Idaho sources of $600 or more for the current tax year
  • A resident trust that is required to file a federal return, including a grantor trust, with gross income (as defined in IRC Section 61(a)) of $100 or more for the current tax year
  • A nonresident trust that is required to file a federal return, including a grantor trust, with gross income (as defined in IRC Section 61(a)) from Idaho sources of $100 or more for the current tax year
  • An estate of a resident individual involved in bankruptcy proceedings under chapter 7 or 11 of Title 11 of the U.S. Bankruptcy Code with gross income (as defined in IRC Section 61(a)) of $9,500 or more

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's required to make federal estimated payments and the Idaho tax liability is estimated at $500 or more.

Extension of time to file

You have an automatic six-month extension of time to file income tax returns (there is no form). To avoid a 2% per month penalty, you must pay (by the original due date of your return) at least 80% of the total tax due for your current year return or 100% 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.

Permanent Building Fund Tax

Any C corporation required to file an Idaho income tax return 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 its own return or included in a group return. When a partnership, S corporation, trust, or estate pays the income tax liability for any individual partner, shareholder, or beneficiary, the $10 PBF must be paid for each individual partner, shareholder, or beneficiary that is required to file.

More business income tax information

Laws and rules

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Last updated Aug. 16, 2013