STARTING AND OPERATING A
BUSINESS IN IDAHO



Copyright © 2016, Michael D. Jenkins
All Rights Reserved



Appendix A

[SAMPLE] Startup Checklist for ABC Shoestore, LLC

This Startup Checklist depends on information you have entered in the Startup Interview. That information is summarized as follows:


  • Name of Business:  ABC SHOESTORE, LLC
  • Applicable State Law:   IDAHO
  • Type of Business:  RETAIL MERCHANDISING
  • Existing Business?  YES
  • Number of Employees:   7
  • Type of Legal Entity:  LLC (LIMITED LIABILITY COMPANY)
  • Average Annual Gross Revenues:  UNDER $1 MILLION  
  • Owned by One Person?   NO
  • Has Inventories of Goods?   YES
  • Company Has Pension or Profit Sharing Plan(s)?   YES
  • Company Has Employee Welfare Benefit Plan(s)?   YES
  • Foreign Business Entity or Has Foreign Investors?   NO
  • Franchise Operation?   NO


NOTES REGARDING THIS SAMPLE CHECKLIST:

The Small Business Advisor software is a unique program that, among other things, will instantly create a Business Startup Checklist, based on the information you enter the first time you run the program, in response to a series of questions about your existing or proposed business. The checklist is customized not only for your state's specific taxes and laws, but also for a number of facts about your business, such as the type of legal entity, number of employees, type of business, whether or not you maintain retirement plans, the amount of your gross annual sales, and other such basic facts.

Change any of the facts in your company profile (or the state whose laws are to be applied), and the startup checklist will immediately be adjusted to reflect the change in your situation -- and the entire "Starting and Operating a Business in ____ (your state)" e-book will instantly be re-created on your computer, as well, all in 2 or 3 seconds. It's a bit like having the author, a Harvard Law-educated attorney and a former "Big 4" CPA, on retainer.... for as little as $19.95!

Below we have set forth a sample Business Startup Checklist created by the program, for a hypothetical small shoe store business in Idaho.

[NOTE: In the actual checklist form created by the Small Business Advisor software, each item has a clickable hyper-link to the detailed discussion of that item in the e-book; we have removed such hyper-links from this sample checklist.]



Federal and Idaho Income Tax Requirements:

  • File Form SS-4, Application for Federal Taxpayer ID Number. [Click here for details]
  • An LLC with multiple owners is generally treated as a partnership for federal tax purposes, in which case it is not a taxable entity, but instead files a partnership tax information return, Form 1065, and provides a Form K-1 to each member, showing their share of the LLC's income or losses, and other items. [Click here for details]
  • Individual members of the LLC must report their distributive share of the business income on Schedule E of federal income tax Form 1040. Other entities that are members (owners) of ABC Shoestore, LLC must report their share of the income on their respective corporation, partnership or LLC federal income tax returns (Form 1120 or Form 1120S for corporations, or Form 1065 for partnerships or LLCs). [Click here for details]
  • Some individual members may have to report their distributive share of any self-employment income and compute their self-employment tax on Schedule SE of their federal Form 1040 tax return. [Click here for details]
  • Minor or inactive owners of the LLC who are not managers or who do not receive a guaranteed payment for services rendered to the LLC may be considered to be the equivalent of limited partners, and thus may not have to report any self-employment income from the LLC. [Click here for details]
  • Income of an LLC, as an entity, is not taxable in Idaho (unless the LLC is treated as a corporation for tax purposes). However, like partnerships, LLCs must generally file Idaho income tax information returns and members must each pay state income tax on their distributive share of the LLC's taxable income. [Click here for details]
  • Idaho permits voluntary prepayments of estimated state personal income tax, but does not require any such prepayments by individuals. [Click here for details]
  • File various Form 1099 information returns with the IRS -- For payments of interest, dividends, royalties, etc. [Click here for details]
  • Give Form 1099-MISC to independent contractors and file copies of each with the Internal Revenue Service (IRS). [Click here for details]
  • If acquiring real property, be sure to obtain Certificate of Non-Resident Status affidavit from seller, or you may be liable for failure to withhold federal income tax of up to 10% of the sale price, if the seller isn't a U.S. citizen or resident. [Click here for details]

Idaho Capital Values or Franchise Taxes:

  • N/A -- Idaho has no capital values tax.

Federal and Idaho Payroll Tax Requirements:

  • File quarterly Form 941 federal payroll tax returns and deposit withheld employee income and FICA taxes. [Click here for details]
  • File federal unemployment tax (FUTA) returns (Form 940) and pay federal unemployment tax. [Click here for details]
  • Register as an employer for Idaho wage withholding tax [Click here for details] and Idaho unemployment tax purposes. [Click here for details]
  • Pay over Idaho personal income tax withheld from wages. [Click here for details]
  • File Idaho unemployment tax returns and pay state unemployment tax. [Click here for details]
  • Report newly hired employees to Idaho new hire registry immediately after hiring or rehiring. [Click here for details]
  • File and give copy of Form W-2 wage statement to each employee at the end of each calendar year. [Click here for details]

Federal Immigration, Wage/Hour and Other Labor Law Requirements:

  • Immigration law: Complete Form I-9, Employment Eligibility Verification, for each new hire. Retain in your records, in case you need to provide proof of verification if asked by the U.S. Citizenship and Immigration Services (USCIS). [Click here for details]
  • Comply with federal minimum wage law ($7.25 an hour). [Click here for details]
  • Comply with federal overtime pay rules for employees who work over 40 hours a week. [Click here for details]
  • Comply with federal child labor laws (if hiring children under age 18). [Click here for details]
  • Not subject to federal Family and Medical Leave Act. (Under 50 employees) [Click here for details]
  • Not subject to federal WARN Act mass layoff notification rules. (Under 100 employees) [Click here for details]
  • Comply with military leave requirements under the Uniformed Services Employment and Re-employment Rights Act (USERRA) if you have employees who are called up for military service. [Click here for details]
  • Mandatory lie detector tests for employees or applicants are prohibited under the federal Employee Polygraph Protection Act. [Click here for details]
  • Must display Employee Polygraph Protection Act poster in the workplace (obtainable from U.S. Department of Labor). [Click here for details]

Idaho Wage/Hour and Workers' Compensation and Other Labor Law Requirements:

  • Comply with Idaho minimum wage law. [Click here for details]
  • Comply with Idaho child labor laws. [Click here for details]
  • As an employer, ABC Shoestore, LLC must comply with Idaho "right-to-work" laws. [Click here for details]
  • Workers' compensation insurance coverage is required under Idaho law, unless ABC Shoestore, LLC is able to self-insure. [Click here for details]
  • Notify employees of their workers' compensation insurance coverage.
  • Report all serious workplace injuries or deaths, under the Idaho workers' compensation law.
  • Comply with all Idaho payday and wage payment laws and regulations. [Click here for details]
  • Idaho law generally forbids the use of lie detector tests for hiring or as a reason for firing or otherwise penalizing employees.

OSHA (Job Safety and Health) Requirements:

  • Comply with federal (OSHA) job safety and health regulations. [Click here for details]
  • Post OSHA notices in the workplace. [Click here for details]
  • Report any job fatalities or multiple injuries to area OSHA director within 8 hours. [Click here for details]
  • Exempt from OSHA recordkeeping requirements -- fewer than 11 employees. (Unless the Bureau of Labor Statistics selects ABC Shoestore, LLC as a small employer that must keep such records.) [Click here for details]
  • The federal Occupational Safety and Health Administration enforces OSHA standards in Idaho. [Click here for details]

Fair Employment Requirements:

  • While the employment provisions of the Americans with Disabilities Act (ADA) may not apply to ABC Shoestore, LLC (under 15 employees), the public accommodations provisions (Part III of ADA) are applicable, and require all new commercial firm facilities to be made accessible to the disabled. [Click here for details]
  • May not be subject to Title VII of the Civil Rights Act (discrimination prohibitions), Pregnancy Discrimination Act, or the Americans with Disabilities Act employment provisions (less than 15 employees); unless ABC Shoestore, LLC is a federal contractor or subcontractor. [Click here for details]
  • Equal Pay Act (sex discrimination in compensation) applies (more than 1 employee). [Click here for details]
  • Exempt from the federal Age Discrimination in Employment Act provisions (less than 20 employees). [Click here for details]
  • Discrimination based on sex, race, color, religion, national origin, mental health or physical disabilities is prohibited, if ABC Shoestore, LLC is a federal contractor or subcontractor (contracts above certain dollar amounts). [Click here for details]
  • Affirmative action programs required for certain disabled veterans if ABC Shoestore, LLC is a federal contractor or subcontractor (contracts of $10,000 or more). [Click here for details]
  • Post notice regarding prohibited discrimination (all employers that are federal contractors or subcontractors -- for contracts above certain dollar amounts). [Click here for details]
  • Not required to file Form EEO-1 annually with EEOC (under 100 employees). [Click here for details]
  • Must also comply with Idaho anti-discrimination laws. [Click here for details]

ERISA Compliance -- Employee Pension, Profit Sharing and Welfare Plans:

  • ABC Shoestore, LLC pension and profit sharing plans: File appropriate IRS Form 5500 series Annual Report. [Click here for details]
  • May qualify for tax credit for retirement plan setup and administrative costs (100 or fewer employees). [Click here for details]
  • Pension and profit sharing plans: Give summary plan description to employees. [Click here for details]
  • Pension and profit sharing plans: Give summary of material modifications (if any) in the plan to participants and beneficiaries. (Not required to file with Department of Labor unless requested.) [Click here for details]
  • Pension and profit sharing plans: Give summary annual report to participants and beneficiaries. [Click here for details]
  • All employee welfare plans: Give summary plan description to employees. (Not required to file with Department of Labor unless requested.) [Click here for details]
  • Funded employee welfare plans: File summary plan description with Department of Labor within 30 days, if requested. [Click here for details]
  • Funded employee welfare plans: Give summary annual report to covered employees each year. [Click here for details]
  • Funded employee welfare plans: Prepare summary of material plan modifications, if any, and distribute to participants. [Click here for details]

Licensing Requirements:

  • Apply for any necessary federal licenses. [Click here for details]
  • Apply for all necessary Idaho business licenses. [Click here for details]
  • Register for local (city or county) business license.

Other Idaho and Local Requirements:

  • Register with Idaho for sales tax license, if ABC Shoestore, LLC will make taxable sales. [Click here for details]
  • If using fictitious or assumed business name, file and/or publish a fictitious name statement in Idaho. [Click here for details]
  • Pay real property taxes if ABC Shoestore, LLC owns any real estate in Idaho. [Click here for details]
  • Pay property taxes on tangible personal property in Idaho. However, intangible personal property is generally exempt from property tax in Idaho. [Click here for details]
  • Business inventories of merchants and manufacturers are generally exempt from personal property taxes in Idaho [Click here for details]

Tax Planning Considerations:

  • May be able to earn various jobs tax credits on some employees hired. [Click here for details]
  • Taxable Year: ABC Shoestore, LLC, a LLC, will generally be required to have a calendar tax year (or else will not be allowed to benefit from any tax-deferral benefits of being on a fiscal year). [Click here for details]
  • Method of Tax Accounting: Cash method may be allowed under Rev. Proc. 2002-22 (if books also kept on cash basis and average annual sales of no more than $1 million for the last 3 years). Even though ABC Shoestore, LLC has inventories, it may also account for the inventory on a cash basis. [Click here for details]
  • Not subject to Uniform Capitalization Rules for inventory accounting (wholesale or retail industry, under $10 million average annual sales). [Click here for details]
  • ABC Shoestore, LLC, as a small business ($5 million or less in annual sales) is eligible to use the simplified LIFO method of inventory accounting. [Click here for details]

Miscellaneous:

  • As a business engaged in retail merchandising, ABC Shoestore, LLC may be subject to federal or state excise taxes, or both. [Click here for details]
  • If ABC Shoestore, LLC purchases insurance from a foreign insurance company, it may have to pay and report a federal excise tax on the insurance premium payments. [Click here for details]
  • If extending credit to customers, comply with the Truth-in-Lending Act, Equal Credit Opportunity Act, and usury laws. [Click here for details]
  • Comply with federal securities laws, before bringing in investors. [Click here for details]
  • Also comply with any state “blue sky” laws when issuing stock or securities in ABC Shoestore, LLC, for Idaho or any other state, where applicable. [Click here for details]



The foregoing checklist is not complete, and not every item listed will necessarily apply in your case, since various exceptions may be applicable. Consult your attorney or tax advisor for details.

[Preface] [Table of Contents] [Chapter One] [Idaho chapter]


Send Mail to:   mdjenk@aol.com with questions or comments about this publication, or if you note any information that is inaccurate or out of date. We update all portions of this series at least once a year, and strive for accuracy, but we are not perfect, and welcome your input, either in the form of corrections or for any major changes that have occurred since our last annual update of the federal or state portions of this series. Please do not contact us for tax, business or legal advice.

Copyright © 2016 Ronin Software
Last modified: January 1, 2016