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STARTING AND OPERATING A
BUSINESS IN
IDAHO
Copyright © 2024, 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.]
[CAUTION: This checklist was created with the 2024 version of Small Business
Advisor. However, the Idaho state information should not be relied upon as the
Idaho information has not been updated since 2013, when we ceased supporting
an Idaho version.]
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.
(But Idaho exempts up to $100,000 of personal property in a county, generally.
In addition, items costing $3,000 or less, acquired in 2013 or later, are exempt
from state and local property taxes in Idaho.)
[Click here for details]
- 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]
- May be eligible for tax credit for health care coverage costs, as a small business,
under health care reform law.
[Click here for details]
- May be eligible for federal tax credits if a qualifying written plan is in effect
that offers paid family leave to employees for illness or other factors.
[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 of accounting is allowed (average annual sales no more than
$30 million for the last 3 years), even though ABC Shoestore, LLC has
inventories.
[Click here for details]
- Not subject to Uniform Capitalization Rules for inventory accounting
(wholesale or retail industry, under $30 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]
Corporate Transparency Report (Also Applies To
Many Non-Corporate Entities):
- ABC Shoestore, LLC may be required to file reports disclosing its main owners under the federal Corporate Transparency Act of 2021
(CTA), which applies to corporations, LLCs, LLPs, limited partnerships, and business trusts that are small businesses.
Large companies are exempted from CTA reporting requirements if they:
- have over 20 employees; and
- reported U.S.-sourced gross income of over $5 million on the entity's last federal income tax return; and
- operate at a physical office located in the United States.
(ABC Shoestore, LLC has 7 employees, so it does not qualify for the 20-employee exemption.)
(ABC Shoestore, LLC has less than $5 million of annual gross receipts, so it does not qualify for the large company revenue-based exemption.)
[Click here for details]
- The new law applies beginning January 1, 2024, requiring a report to be filed with the Department
of the Treasury’s Financial Crimes Enforcement Network, or FinCEN, within 90 days after a
"reporting entity" is formed (30 days, if formed in 2025 or later).
[Click here for details]
- If ABC Shoestore, LLC was in existence on or before January 1, 2024, it is not required to file its
initial report until January 1, 2025.
[Click here for details]
Miscellaneous:
- File various Form 1099 information returns with the I.R.S.
-- For payments of interest, dividends, royalties, etc.
[Click here for details]
- Give Form 1099-NEC to independent contractors and file
copies of each with the Internal Revenue Service (I.R.S.).
[Click here for details]
- 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.
- 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.
(Securities laws are highly technical and beyond the scope of this publication.)
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.
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