Before embarking on a business venture in Idaho, you’ll need to obtain an appropriate Idaho business license in order to operate legally. The state government doesn’t offer a universal business license, however, so many entrepreneurs struggle with the process of obtaining the necessary licenses.

For this reason, we’ve broken down the process of identifying the exact licenses your specific business will need in Idaho as well as how to get them. This article will walk you through the necessary steps and provide insights on the potential costs involved.

Do I Need a Business License in Idaho

Many Idaho businesses need to obtain numerous different licenses and permits at a local, state, and federal level. Because there’s no general state business license in Ohio, the exact permits you’ll need will depend on your business type and location.

Type of Business

Below, we’ve detailed common ways in which your business type can dictate the licenses you’ll be required to obtain, as well as specific examples of these:

• Seller’s Permit: If your business will sell taxable goods or services, it’ll require a seller’s permit in order to collect sales tax. You can obtain this permit by filing Form IBR-1 online or by mailing it to the Idaho Business Registration office. This will also set up the required state withholding and unemployment insurance tax accounts
• Professional Licenses: If your business works in certain professions, such as accountancy, midwifery, or massage therapy, it’ll need to apply for a professional license from the appropriate licensing board. The Idaho Division of Occupational and Professional Licenses website provides a full list of these professions along with links to their relevant boards.
• Environmental Permits: If your business’s activities have the potential to negatively impact the environment, it may need to apply for a specific permit in order to operate legally. If your business engages in drilling for natural resources on federal lands, for example, it’ll need to apply for a mining and drilling permit from the federal government’s Bureau of Safety and Environmental Enforcement

However, this is not the only factor influencing the exact combination of licenses you’ll need — the location of your business within Idaho plays an important role as well.

Location

In this section, we’ve provided a succinct overview of the potential licenses and permits that your business may need due to local, state, and federal requirements:

• Local: Because different cities in Idaho have varying rules for licenses and permits, it’s essential to consult with your local city office for clarification. In Coeur d’Alene, for example, activities like the construction or alteration of a building, working as a detective, or the running of an arcade with 10 or more machines all require a local business license
• State: Idaho regulates a wide range of activities at the state level, such as dry cleaning, plumbing, farming, and construction. If your business plans to offer any of these services, it’ll likely need a specific license to do so
• Federal: While the federal government regulates fewer business activities within Idaho, it’s important to know about them in case you need a license from a federal agency. Some of the most common activities that require a federal license include those within the alcohol, aviation, firearms and explosives, radio and television broadcasting, and transportation industries

Since the exact permits and licenses your business will need are entirely unique to your situation, you’ll have to conduct thorough research into your own local, state, and federal regulations to smoothly launch your business.

Alternatively, many entrepreneurs opt to leverage the expertise of third-party services to handle this on their behalf.

How to Get a Business License in Idaho

In order to get your business license(s) in Idaho, you will need to complete the following steps:

• Form Your Business 
• Obtain an Employer Identification Number (EIN)
• Apply for the Required Licenses and Permits

Let’s take a look at each step in more detail below.

Step 1: Form Your Business

Before setting out to obtain a business license in Idaho, it’s pivotal that you first choose an appropriate structure for your business. Sole proprietorships, general partnerships, and corporations are all common choices, however it’s often seen as the most advantageous for small businesses in Idaho to register as a Limited Liability Company (LLC). Here are a few reasons for why:

• Limited Liability: Members are protected from personal liability for business debts, safeguarding personal assets
• Tax Benefits: LLCs typically enjoy a pass-through tax treatment, avoiding the double taxation that corporations are subjected to
• Management Flexibility: LLCs allow for flexibility in management structure, either being member-managed or manager-managed based on the preferences outlined in the certificate of formation
• Ease of Formation: With the Idaho Secretary of State providing forms that meet the minimum state law requirements and the option to file online, setting up an LLC is relatively straightforward

Many small business owners opt to avoid the tricky process of forming an LLC by instead leveraging the help of third-party LLC formation services.

Step 2: Obtain an EIN

The second step you’ll need to complete before applying for your business license is to obtain your EIN. This is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to businesses in the United States so that their financial transactions can be identified and tracked.

An EIN is often necessitated when applying for various permits and licenses as it allows local and state governments to ensure your business is operating within the confines of the law. You can obtain it in a number of ways:

• Online: You can apply for your EIN on the IRS’s official website by using the EIN Assistant. You should be granted your EIN shortly after completing this application
• By Fax/Mail: After completing Form SS-4, you can apply for an EIN by submitting it to the IRS via mail or fax
• By Phone: International applicants and businesses located outside US Territories are required to call the IRS at (267) 941-1099 to obtain their EIN — which they should receive during this call

Note: If you are a sole proprietor, you will be able to use your Social Security Number (SSN) instead (as long as you do not have employees).

Step 3: Apply for Licenses and Permits

After settling on the appropriate structure for your business and initiating the application for your EIN, the next step is to focus on securing the necessary licenses and permits to operate legally within your locale and industry.

• Local Licenses: Checking with your local government is a great starting point for identifying your business’s licensing requirements because regulations can vary between locations. In the city of Boise, for example, businesses whose activities involve the health, welfare, or general safety of the public must obtain a specific license to operate legally
• Statewide Licenses: Despite the lack of a general, statewide business license for Idaho businesses, you may still need to obtain other statewide licenses and permits. A common example of this is the seller’s permit, which any business planning to sell or lease a product or service must possess
• Federal Licenses: While the federal government doesn’t mandate licenses for general business operations, if your business falls under any government-regulated category, such as agriculture, fishing, firearms, and alcohol sales, it may be required to obtain an additional federal business license or permit

Note: For more detailed information on special licenses or permits that may apply to your business, check out the Business Wizard tool on the Idaho State & Federal Resources for Business website.

Step 4: Renewal of Licenses and Permits

In Idaho, businesses must renew many types of licenses in order to keep them valid, though a small minority of licenses and permits without this renewal requirement do exist, such as the Idaho seller’s permit.

In general, businesses must renew most licenses in Idaho every one or two years. For example, a pawnbroker’s license requires an annual renewal and has a $50 fee.

Alternatively, you can use a third-party service or a professional attorney for this process. This can be a good choice if you want to ensure that you avoid potential fines, as there can be serious consequences for failing to renew licenses and permits on time.

How Much Is a Business License in Idaho

Due to the lack of a standard fee structure in Idaho, pinpointing the exact cost of acquiring business licenses can prove challenging. Your total expenditure will hinge on the particular licenses your business requires because each one will have its own filing and renewal fees.

Many businesses need to secure sales tax permits and occupational and professional licenses. While you can get a sales tax permit for free in Idaho, the fees for other licenses vary. This makes it somewhat complex to determine the total licensing cost for your business because it largely depends on your business type and location.

To simplify the licensing process, consider hiring a specialist to help you outline all potential licensing expenses.