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Do Homeowners Who Provide Temporary Lodging Have To Charge Tax?
AirBnB, VRBO and similar websites have made it easy for homeowners to rent a room, cabin or another temporary lodging to the public. However, a homeowner cannot just open their doors without first registering as a business with the Idaho Secretary of State’s office and securing required state and local permits. See short-term rentals on the Idaho State Tax Commission’s website for information on properly establishing a temporary lodging facility. The IRS website contains Federal tax reporting information for temporary rentals. Short term rentals must collect sales tax, lodging tax and more. If a lodger remains more than 30 continuous days in the same room or space, taxes do not apply.
As of January 1, 2018 short-term rental marketplaces (AirBnB, VRBO, etc.) are required to register with the state and collect applicable taxes. If the marketplace fails to register or the property owner doesn’t use a marketplace, the property owner is responsible for collecting and remitting taxes.
Limitations - Homeowners may not rent space in an RV, travel trailer or similar structure not designed for permanent habitation, nor can they allow someone to park and live in an RV or travel trailer on their property and collect rent for the space.
Local Requirements - Check with your local city clerk’s office to find out if you need a local business license or permit, a home occupation permit or something more. Some cities impose additional requirements, including such things as proof of adequate parking and proof of an emergency evacuation plan. There may be an annual license fee, which can be several hundred dollars. Requirements vary by city, including a requirement in some cities that the homeowner be on-site during the time the space is rented. Some cities, such as Sandpoint, also impose a local option lodging tax in addition to state lodging taxes.
Homeowners who rent storage space at their home for items such as RVs or boats are considered business owners and must register a business name with the Idaho Secretary of State and collect any applicable taxes.
I want to start a non-profit organization. How do I do that and are there special regulations?
To be classified as a non-profit, approval must be secured from the Internal Revenue Service. The process can be expensive and time-consuming and many business activities do not qualify. Your attorney can assist with the application process. Information about establishing a non-profit, tax reporting and maintaining non-profit status is found on the IRS website. After receiving IRS approval, the business can register with the Idaho Secretary of State’s office as a Domestic Non-profit Corporation.
Alternatives: Before establishing a non-profit, you may want to consider other, less expensive, ways to accomplish your goal. See Alternatives to Forming a Charitable Nonprofit for recommendations.
If you decide to move forward in creating a non-profit, you may find it helpful to go through the Business Wizard. You can search for information related to the primary activity of your non-profit and find out if you or your employees may need specific licenses or permits, such as occupational licenses.
Taxes: Non-profits are not exempt from all taxes. Your non-profit may be required to collect or pay state sales or use tax. If so, you will need to secure a sales and use tax permit from the Idaho State Tax Commission. For information and a list of exempt organizations, see the Tax Commission’s website.
Recordkeeping: IRS requirements for exempt organizations
Assistance: The Idaho Non-profit Center offers information about establishing a non-profit in Idaho, including establishing a board of directors, writing by-laws, recruiting volunteers, financial record keeping and more.
The Idaho Attorney General publishes the booklet, Service on an Idaho Non-profit Board of Directors, which explains the responsibilities and liability associated with serving on a nonprofit’s board.
If your nonprofit is engaged in activities involving children, the elderly, or vulnerable adults, your employees and volunteers will need a background check and to be fingerprinted. For information, visit the Idaho State Police website.
Closing/Selling: If you close your non-profit, sell it or convert it to a for-profit entity, you must notify the Idaho Attorney General using the form found here. The Idaho Charitable Assets Protection Act governs how you can legally dispose of the assets of the non-profit.
You will also need to notify the IRS of the closure or conversion of the non-profit and file a final tax report.
I need a grant to start my business. Who offers them and how do I apply?
Very few grants are available to start or expand a for-profit business unless you have invented a new technology. Most grants are available to non-profits and community organizations to expand their work or to fund special projects and activities.
SBIR/STTR Grants: With few exceptions, most grants available to for-profit start-up businesses are SBIR and STTR grants (Small Business Innovation Research and Small Business Technology Research). If you have invented an innovative product that will serve the national interest, you may qualify for an SBIR or an STTR grant to help develop it. Grants are offered by 11 federal agencies through a competitive process. Information is available at SBIR.gov.
If you think you may qualify for an SBIR grant, contact your nearest Small Business Development Center for assistance in applying.
NASA Idaho Space Grant Consortium and Idaho NASA Established Program to Stimulate Competitive Research: Research opportunities and student internships with NASA
Grants for Innovation: If you own an existing for-profit business (not a start-up) that is engaged in the development of new processes or technologies or uses natural resources in an innovative way, you may qualify for a research grant. To find grant opportunities, see the following:
- U.S. Department of Agriculture Rural Development – grants for special business activities in rural communities
- U.S. Department of Energy
- U.S. Department of Justice
- U.S. Department of Education
- U.S. Department of the Treasury
- National Institute of Health
- Housing and Urban Development (HUD)
- U.S. Bureau of Reclamation – WaterSMART water and energy grants
Made in America Grants: If you manufacture a product that is made in America and you have problems competing with foreign businesses, you may be eligible for assistance through the Northwest Trade Adjustment Assistance Center. Eligible businesses must be located in Idaho, Alaska, Oregon or Washington.
U.S. Economic Development Administration: Economic development assistance and disaster recovery grants – available to communities and tribes
Agriculture Loans and Grants: The Idaho Department of Agriculture offers several financial programs.
USDA Rural Development: Rural Development Business Programs – Idaho
Idaho Regional Travel Grant Program – available to chambers, visitors centers, travel councils and other community organizations to promote tourism in their area
FedEx Small Business Grants
National Association for the Self-Employed micro grants
Wells Fargo Grants: available to community organizations and nonprofits for community development activities
Idaho Power Local Energy Efficiency Funds – grants for energy conservation projects
Amber Grants for Women – Monthly grants of $500 are offered. At the end of the year, one of the monthly winners will receive an additional $25,000. See WomensNet for details.
Chobani Community Impact Fund – available to businesses in the Magic Valley to expand economic opportunity and promote entrepreneurship
Micron Gives - Available to non-profits
Non-profits: If you are a non-profit organization, these sites will be helpful:
Other Programs: Special business assistance programs for women, minorities, veterans, the disabled, and others are available, but they are usually for low interest loans, government contracting opportunities, and other types of assistance, not grants.
Partnerships: U.S. Fish & Wildlife Service
Tax Incentives: Your business may qualify for tax incentives (tax credits) for certain business activities, such as creating new jobs in an economically depressed area, hiring the long-term unemployed, or making workplace accommodations for a disabled employee. Incentives are offered at both the state and federal levels. State programs are listed on the Idaho Department of Commerce website. To find federal tax incentives, visit the Internal Revenue Service website.
SCOR/U-7 Finance Program: The Small Company Offering Regulations program administered by the Idaho Department of Finance enables established businesses to accept investment funds from qualified Idaho investors without registering with the U.S. Securities and Exchange Commission.
Challenge.gov: Government agencies having a specific need list it on Challenge.gov. Businesses and individuals can submit a solution. The needs regularly change, as do the requirements to submit a proposal.
To learn about funding for which your business may qualify, talk with a counselor at the Boise or Spokane Small Business Administration offices, the Idaho Small Business Development Center, or a SCORE counselor. Contact information for each organization is listed in the Assistance Resources section of this site. Counseling services are free.
How do I register a trademark?
Your trademark, also known as a service mark, can be registered in three ways:
State Registration: The Idaho Secretary of State registers trademarks in Idaho. Your trademark must be unique and not similar to one already registered. Be aware that registering your trademark only in Idaho does not provide national protection from its use by a business in another state.
International Registration: Madrid – The International Trademark System
The trademark symbol ™ can be used on written materials that include your unique name or logo (including your website) to indicate that your business claims an ownership right in the use of the symbol or word. You do not need to register your trademark to use the symbol, though it is a good idea to do so if you want to protect the name or symbol from use by others.
If the trademark is registered with the U.S. Patent and Trademark Office, the Registered ® symbol is used. Using the symbol gives public notice that the logo or name is trademarked and cannot be copied without legal consequences.
What is a vendor’s license and where do I get it?
Businesses engaged in temporary retail sales or solicitation of sales for future delivery, including selling door-to-door or at festivals, events, and trade shows, may need a vendor’s license or a temporary vendor’s license, also called a solicitor’s license. Temporary food cart vendors may also need a license. Licenses are obtained from the City Clerk’s office in the city where you will do business.
If you are engaged in door-to-door sales, you and each of your employees may need a permit in every city or county where you work. Each of you will need a background check before the permit is issued and you may need to post a bond. Out-of-state applicants have additional requirements. You and each of your employees must wear your permit on your clothing in a clearly visible location.
In addition to a vendor’s license, you will also need an Idaho sales tax permit or a temporary sales tax permit. A permanent permit can be obtained by completing form IBR-1. A temporary sales tax permit for one specific event lasting less than 90 days can be printed from the Idaho State Tax Commission’s website.
If sales are made door-to-door or at a trade show, fair, festival or similar event, they are considered impulse purchases and the seller must conform with Federal and Idaho Consumer Protection laws. Consumers have the right to change their minds and cancel an order or return an item within three business days. Your cancellation policy and contact information must be clearly communicated in your contract or on your invoice. For details, contact the Idaho Attorney General’s office or visit the Federal Trade Commission’s website.
How do I establish a retirement plan for my employees?
Retirement plans must comply with Federal and state laws and Internal Revenue Service requirements. The U.S. Department of Labor oversees the Employee Benefits Security Administration (EBSA), which sets standards for establishing and maintaining retirement plans. The DOL also administers the Pension Protection Act.
Can I advertise on this site or put a link on this site?
Any state or federal government agency or non-profit organization may be represented on this site if they license or regulate business activities or offer business-related services. Local agencies, such as city and county clerks’ offices, are not represented individually, because there are so many and their requirements vary. There is no cost to be included. This is not a commercial site, so no advertising is accepted.
If your organization fits the above criteria and you want your agency or organization to be listed on the site, send us an email, then we will review your site for possible inclusion. Please do not place a link on your site and then expect us to provide a reciprocal link.
I plan to start my business in my home. Are there special requirements I need to know about?
Home-based businesses may need to conform with additional regulations, as well as those associated with your profession or the product or service offered. First, go through the Business Wizard to find requirements related to your profession, product or service. Then, read through the information below to learn about possible additional requirements.
Local Requirements: Call your local city clerk’s office to find out if you need a city business license or another special license or permit. Your business will need to comply with your city, county, and/or homeowner’s or neighborhood association regulations. If you rent your home or apartment or live in a condo, check your lease agreement or covenants to be certain a home-based business is allowed.
Legal Requirements: All businesses, including home-based ones, need to register their name and entity type with the Idaho Secretary of State’s office. To learn about the entity types recognized in Idaho, visit the Legal Structure section of this website.
The business must be operated by a full-time resident of the home, not an employee. The business must be a secondary use for the home; the primary use must remain that of a residence. The character of the home, interior and exterior, cannot be changed from that of a residence. The square footage allowed for business activities varies by community.
In most communities, a retail store, restaurant, coffee shop or similar business where customers come and go cannot be operated from a home. If you offer lessons (music, art, etc.), the number of students allowed at any one time may be limited.
The business must comply with local health, safety, and fire codes and with city and county ordinances. You may be required to conduct all business activities inside the home or an approved accessory structure (garage, shop, etc.). Equipment used in the business may be restricted in size, weight and power to that of normal household appliances.
You must also comply with local regulations concerning:
- exterior signage
- number of employees
- parking (employee and customer)
- waste disposal
- dust and vibrations
- air, waste water, or soil pollution
You may not be able to store supplies or materials in a yard, garage, or outbuilding or park vehicles or equipment in your yard or on the street.
- Food Preparation – Idaho’s Cottage Food law allows certain “low risk” foods sold directly to the consumer to be prepared in a home kitchen. This includes most baked goods and other products that don’t require refrigeration. Other foods, including baked goods that will be sold at a commercial establishment, sold on-line or across state lines, or contain imported ingredients must be prepared in a commercial kitchen. The commercial kitchen will be inspected and licensed by your regional health department. Visit the Home-Based Business section of the Food and Drug Administration’s website for more information.
- Child Care – If you care for seven or more children in your home (including your own) and you receive payment for one or more of them, a license is needed from your city clerk’s office and/or from Idaho Department of Health and Welfare. The home will be inspected by the health department and the fire marshal. (Note – some cities’ licensing requirements are more stringent than state requirements, so be sure to check.) You and your employees must secure annual training, including pediatric First Aid and CPR training. Federal and state regulations require everyone applying for or renewing a childcare license to check the Central Registry in every state in which the person lived in the past five years (including Idaho) and to submit proof of the check/checks. Anyone living in a home where an in-home daycare is operated must also submit proof of a check. Central Registries are databases maintained by individual states that contain records of child abuse and neglect investigations. Idaho Department of Health and Welfare maintains the Idaho database. In addition to a Central Registry check, some cities also require an FBI background check.
- Temporary Lodging/Airbnb – Homeowners who rent a room, cabin or another space to the public must register a business name with the Idaho Secretary of State’s office. If the rental is for 30 days or less, sales tax and applicable lodging taxes must be collected and remitted to the Idaho State Tax Commission. Some marketing programs, such as Airbnb and VRBO, will collect taxes for you. If you rent through another program, you may need to personally collect and remit taxes. For details, see Short-term Rentals. Contact your city clerk's office to learn about local regulations.
- Product Restrictions – Certain products cannot be legally manufactured, grown or raised in a home business. These include fireworks and other combustible items, drugs and drug paraphernalia, poisons, noxious weeds or insects, and sanitary and medical products. Some communities restrict the production of additional items, so check with your city clerk's office for details.
- Service/Sales Restrictions – Services involving risky or illegal activities, adult activities, loud noise, pollution or that create a nuisance for neighbors are restricted in home businesses. The sale of restricted items, such as alcohol, drugs or tobacco, poisonous reptiles or insects cannot occur in a home business.
- Animals – Businesses involving animals (including poultry and birds) are subject to additional regulations and licensing requirements, depending on the type and number of animals and the service provided. A kennel or breeder’s license may be needed; special waste handling and noise abatement procedures may be required, as well as other issues. Contact your city clerk’s office for information.
- On-line Businesses – If you operate an online business, you need to register a business name with the Idaho Secretary of State’s office. If the business involves sales, a sales tax permit secured from the Idaho State Tax Commission will be needed. The business will collect tax on sales to Idaho residents. If you sell food products online, see the “Food Preparation” information above.
- Party Plan Businesses – if you sell Scentsy, Pampered Chef, Mary Kay or another product involving home parties or sales events, check with your city clerk’s office to find out if you can hold parties at your home. Some Idaho cities restrict the number of attendees at open houses and similar events held at the dealer’s home (not at a customer’s home).
- Storage Space - If you allow people to store their RV, boat, trailer or another item on your property and you charge a fee, you are a business and must register with the Idaho Secretary of State and collect appropriate taxes.
- Yard/Garage Sales - If you hold more than three yard or garage sales in a 12 month period, you are a business. You need to register a business name and entity type with the Idaho Secretary of State and obtain a sales tax permit from the Idaho State Tax Commission.
Employees: Your city or county regulates the number of employees a home business can have and the number of vehicles they can park at the home or on a public street. State and federal employment-related posters must be displayed. You must also have workers compensation insurance, pay unemployment insurance taxes, establish a tax withholding account and comply with OSHA safety regulations. For more information on having employees, visit the Employer Issues section of this website.
Signage: Most communities regulate the size and type of signage allowed, if any, in a residential area. Contact your city clerk’s office for local requirements.
Tax Issues: Small business owners, including independent contractors, pay taxes on the profit from their business. They also pay self-employment tax and may need to make quarterly estimated income tax payments. For information, visit the Taxes section of this website and the Small Business and Self-Employed section of the IRS website. For Social Security and Medicare requirements for the self-employed, including independent contractors, visit the Social Security Administration website.
Insurance: All businesses need insurance, regardless of location. Check first with your homeowner’s insurance agent or an agent who writes policies for small businesses. Not all home-based businesses are covered by homeowner’s insurance, particularly if the primary activity, such as house painting, does not occur at the home. If homeowner’s insurance will cover your business, additional coverage may be needed for business equipment, inventory, or a business-owned vehicle.
If clients regularly visit your home, you have a dog or another animal that might harm a client, your business involves animals, or other issues, such as falls, might occur, you may need to increase your liability coverage.
For information on other types of insurance you may need, such as workers’ compensation or product liability insurance, visit the Insurance section of this website.
Security: Home-based businesses have unique security issues, including allowing strangers into the home, protecting mail, computer security, and personal safety issues, both in and out of the office. Mail, particularly checks and financial information, can be protected by using a mailing address other than your home address, such as a post office box or a mail box at a package shipping center.
Disaster Preparation: Like any business, your home-based one is subject to natural disasters, including fire, floods, earthquakes, structural damage caused by excessive snow, wind, falling trees and more. The U.S. Department of Homeland Security offers Business Toolkits to prepare your business for a natural disaster.
Zoning: Before opening a business in a home, check with your city or county planning and zoning department to be certain you can legally do so. Most communities do not allow retail businesses, such as stores, restaurants or coffee shops, to be located in an area zoned for residential use, nor do they allow trucks and equipment to be parked at a home or employees or large numbers of people to come and go. If a business is operating in violation of zoning regulations, it could be closed without notice.
Also check with your homeowner’s or condo association or your apartment lease to be certain the covenants allow a business in your home, particularly if employees, clients and/or delivery trucks will come and go.
Closing Your Home Business: When a business closes, several agencies need to be contacted. For information, visit the Assistance Resources section of this website and look for “Business Closure.”
CAUTION – If you are starting a home business in response to an ad about earning money at home, BEWARE! Work-at-home scams are among the most prevalent. Before sending money, meet with a counselor at your nearest Idaho Small Business Development Center or SCORE office, listed under Assistance Resources, Business Formation and Expansion, and contact the Better Business Bureau in both your community and where the business is located. Also see the information found on the Federal Trade Commission’s (FTC) website.
What is crowdfunding?
Crowdfunding is a financing option designed to quickly raise funds by securing many small donations from many contributors. The most common type of crowdfunding involves soliciting donations to start a business or launch a new product. Donors receive a specialty gift for donating. Kickstarter and IndieGoGo are two popular crowdfunding donation websites.
About 30 percent of businesses meet their funding goal. If they don’t, the business receives no money and donated funds are returned to the donors. Crowdfunding is most successful when a business needs to raise a modest amount of money in a short time. The median donation is $25 and the average donation is $70.
The most easily funded products are games, art, books, music, food, fashion and design. Crowdfunding is not often successful for service businesses, website or app development and any other activity not offering a tangible product.
Equity funding, debt funding and subscription based funding are additional types of crowdfunding. Equity funding sites, such as EquityNet, sell small amounts of equity in a business to a large network of purchasers. Crowdfunding equity sales are regulated by the Securities and Exchange Commission (SEC).
Debt funding sites, such as Kiva, provide micro loans, usually to individuals in emerging nations. The lender is repaid when the business makes a profit. Patreon is an example of a subscription funding site used by podcasters, musicians and other creative individuals where fans pay to listen to the artists’ work.
Crowdfunding websites may charge a percentage of the amount raised to cover their administrative costs. Credit card processing fees also apply. U.S. residents who raise money through crowdfunding must pay income tax on funds received.
Act for Impact: Bank of the West has teamed with Ulule to provide crowdfunding opportunities for women owned businesses, social impact entrepreneurs, small businesses and nonprofits with a vision for social change.
How do I register to sell to the government or become a preferred vendor?
Federal, state and local government agencies purchase everything from computers and vehicles to cookies and coffee from small businesses. They also contract with small businesses to construct or renovate buildings, build or improve infrastructure (roads, bridges), maintain landscaping, clean buildings and more.
Contracting With Federal Agencies: Businesses must register with System for Award Management (SAM). Once registered, you can peruse requests for bids on government contracts listed in the Contract Opportunities database.
The GSA (General Services Administration) is the Federal government’s primary purchasing agency. Federal “Prime” contractors (major contractors) are required to purchase a percentage of the goods and services they use from small businesses. A list of prime contractors is found in the GSA Subcontracting Directory. Prime contractors list goods and services they are seeking on Sub-Net.
Contracting With a Regional Agency: The US Army Corps of Engineers Walla Walla District provides contracting opportunities for waterways navigation, flood risk management, design, construction, operation and maintenance at public works facilities within the District's boundaries (ID, WA, OR, WY).
Contracting With Idaho Agencies: For information about the State purchasing process, see ID Division of Purchasing. Businesses need to register in order to gain information on current bid solicitations. The Division of Purchasing offers regular training programs to assist businesses in learning how to sell to the State.
Not all state agencies list their contracting opportunities with Idaho Purchasing, instead posting bid requests on their individual agency websites:
- Idaho Transportation Department contractor bidding
- Idaho Division of Public Works construction projects
- Idaho Department of Lands contracting opportunities
- Idaho Department of Environmental Quality vendor opportunities
- Idaho and Federal Bureau of Land Management contracting
Contracting With Local Agencies: Cities and counties list their bid opportunities in the legal section of a local newspaper and/or on their city or county website.
Disadvantaged Businesses: Woman, veteran and minority-owned businesses, collectively known as disadvantaged business enterprises (DBE), may have preference in bidding on certain contracts through the various Federal agencies’ Offices of Small and Disadvantaged Business Utilization. In Idaho, the Idaho Transportation Department handles such contracts.
Minority Owned Businesses: The National Minority Supplier Development Council, Inc. certifies minority-owned businesses.
HUBZones: Businesses located in a federally-designated HUBZone (an economically distressed area within a city or county) have preference when bidding on federal contracting opportunities. Find Idaho HUBZone areas here: HUBZone maps. Businesses must be certified in order to access bid opportunities.
Contracting Assistance: Idaho PTAC, a division of the Idaho Small Business Development Center, assists businesses in registering to contract with state and federal agencies and in finding appropriate bid opportunities.
Harassment is a touchy subject. What do I need to know to protect my employees and myself?
On the job harassment takes many forms, none of which should be tolerated. One employee may harass another; a supervisor may harass an employee, group of employees or another supervisor; or a customer may harass one or more of your employees. Harassment may be related to religion, ethnicity, gender, age, disability or another issue. Bullying is a form of harassment and should not be tolerated.
Every business with employees should have a written harassment policy that is clearly communicated to employees, both as a deterrent to harassment and to inform employees of their rights if they are harassed. It is particularly important to have a written sexual harassment policy because sexual harassment on the job violates federal civil rights laws. Having a written policy your employees know about may offer some protection if you are sued.
Click here for training videos and additional information about preventing or investigating sexual harassment.
For more information about employer responsibilities in preventing harassment, see “Employee Handbooks” on the Helpful Links page of this website.
What is a Health Insurance Identification Number and how do I get one?
If your business offers health insurance to employees, and you must if you have 50 employees or more, you will need a National Standard Employer Identification number to report claims electronically. For information, see National Provider Identifier Standard.
What loans are available to start a business?
Banks, some credit unions and numerous private organizations offer loans for everything from the purchase of a business to equipment leasing to factoring (a loan against accounts receivables). Family and friends may also lend money to help start your business. The following loan programs are available to many small businesses, though some are available only to established businesses, not start-ups. All require the borrower to have a well researched and written business plan and collateral. To find banks and other loan resources in your area, complete a search of the Resource Wizard on this site.
Small Business Administration Loans – The SBA does not lend money. Rather, it guarantees loans offered by participating banks. To qualify, an applicant must meet both the bank’s and the SBA’s requirements.
For information about applying for an SBA loan, talk to your bank or visit SBA Loan Programs.
- CAPLines – Helps established businesses meet short term and cyclical working capital needs
- 7a Loan Program – The most common SBA loan
- Microloan Program – Guarantees loans up to $50,000; restrictions apply
- SBA 504 Loans – available only through Certified Development Companies. Provides fixed-rate, long term financing for the purchase of major fixed assets such as real estate and equipment. To find a Certified Development Company in your area, contact the Idaho SBA office or your local Small Business Development Center. CDCs are located in Hayden Lake, Boise, Twin Falls, Pocatello and Rexburg.
USA.gov - find loan programs backed by the U.S. government and other funding options
Idaho Department of Agriculture – Agricultural Development Loan Program
REDiFiT – Low Interest transportation loan program to expand Idaho’s freight shipping industry
Idaho Housing and Finance Association – Collateral Support Program – Contact your banker for information.
MoFi – formerly known as Montana and Idaho CDC, loans are offered to businesses in Montana, Idaho, Wyoming, eastern Oregon and eastern WA that can’t qualify for bank financing. Asset management services are available.
Whole Foods Local Producer Loans – Available to businesses who sell their products to Whole Foods.
Crowdfunding – A method of raising funds via the internet by securing either many small donations from a large number of people or offering a small equity share in a business to many small investors. See the above FAQ about Crowdfunding.
Angel Investors/Venture Capital – See the Venture Capital/Angel Capital FAQ below.
Lender Match is a division of the Small Business Administration that matches businesses seeking a loan with SBA-approved lenders.
Loan Preparation – Before approaching a lender, be certain you have gathered all the necessary documents, including a well researched and written business plan and personal financial statements for owners. Your lender can tell you everything you need. Also see the SBA website.
To find banks and other lending resources in your area, make a search on the Resource Wizard. To learn about loan programs that may fit your business needs, contact your banker.
I have an out-of-state business and plan to do business in Idaho. How can I find out about Idaho regulations?
What you need to do depends on how long you plan to do business in Idaho. If you plan to engage in business for more than a few days or weeks, you will need to contact:
- The Secretary of State’s office to find out if you need to register your business in Idaho as a foreign corporation or LLC.
- The Idaho State Tax Commission to learn about taxes you may need to pay, permits you may need, and to establish an employee withholding tax account for your employees who live or work in Idaho. If an employee earns income from work performed in Idaho, you need to withhold state income tax.
- The Idaho Industrial Commission to learn about workers compensation insurance requirements.
- The Idaho Department of Labor to establish a state unemployment insurance tax account.
- The city clerk’s office in the city in which your business will be located or working to find out if you need a business license. If your business activities will occur outside city limits, check with the county clerk’s office to find out if you need a county business license.
Also visit the Business Wizard to obtain a customized check-list of agencies from which you may need to obtain licenses or permits, including professional licenses for your employees.
I had to fire an employee who used drugs on and off the job. I don’t want this to happen again. Where can I get help?
With the legalization of cannabis use in several states, employee use of illegal or controlled substances has become an increasing problem. According to the U.S. Department of Labor, 75 percent of illegal drug users are employed, and 3.1 percent say they have used illegal drugs before or during work hours. The American Insurance Association reports that prescription drug abuse is the fastest growing drug problem in the U.S. In addition, 79 percent of the nation’s heavy alcohol users are employed, and 13 percent say they have consumed alcohol during the workday. Fourteen percent of heavy drinkers (those who consume 5 or more drinks each day) are employed full or part-time. Between 10 and 20 percent of workers who die on the job test positive for alcohol or drugs. Substance abuse on the job costs employers approximately $74 billion each year in lost productivity and more in workers compensation claims.
To help combat substance abuse both on and off the job, the Substance Abuse and Mental Health Services Administration (SAMHSA), a division of the U.S. Department of Health and Human Services, maintains a resource center to help employers address these issues and to assist in creating substance abuse employment policies. Additional information can be found on the National Safety Council’s website.
Ninety percent of large corporations have drug-free workplace programs but less than 10 percent of small and medium sized businesses have one, making them prime targets for addicted employees. DrugFree Idaho helps Idaho businesses establish a drug-free workplace program. Having a program may reduce workers comp insurance premiums. Today, with the legalization of medical marijuana use in some states and recreational use in others, it is important to involve your attorney when drafting a drug-free workplace policy.
How do I obtain a UPC code for the product I plan to sell?
See GS1 US BarCodes and eCom, formerly known as Universal Packaging Codes.
I’ve heard about venture capital and angel investors but I am not sure how they work or if my business qualifies for their help.
Finding venture capital or an angel investor may seem like the answer to many small business funding needs, and it may be if you are in the right industry, have a solid business plan, a track record in your industry or a related one, a qualified management team, and you don’t mind giving up equity in your business and having someone watching over your shoulder.
Venture Capital: Most venture capital firms invest several million dollars in the companies they fund and in return expect an ownership share in the company (stock) and a management position within the company or a seat on the board of directors. Most prefer companies in rapidly growing industries, such as technology or bio-technology. Less than 1% of applicants qualify for funding. To find a venture capitalist, ask your banker, attorney, or accountant for a recommendation to a company specializing in your field and arrange an introduction. (Most VCs don’t like cold calls.)
Venture capital funding is a fertile field for scam artists. Before engaging in business, contact the Better Business Bureau in the community where the company is located. Also contact the Attorney General’s office in the state in which the business is located and ask if complaints have been filed against them.
Angel Investors: Angel investors are wealthy individuals or groups that provide less money than venture capital firms, usually to early stage businesses. Like venture capitalists, angel investors usually prefer to invest in rapidly growing small businesses that will provide a high rate of return in a short time. They will expect a seat on the board and/or a management position within the business.
Ask your banker, attorney, or CPA to arrange an introduction to an angel investor. Like venture capitalists, angel investors don’t usually like cold calls, and only a small percentage of businesses qualify for funding (less than one in 500).
VCgate and National Venture Capital Association are online venture/angel capital resource directories where those seeking venture capital can find possible investors. To find venture capital and angel investors who specifically invest in Idaho businesses, make a search on the Resource Wizard.
For more information about venture and angel capital funding, visit the Small Business Administration’s website.
My product is made in the U.S., a rarity today. Do I need to do something to be able to advertise it as U.S. made?
The Federal Trade Commission (FTC) regulates “Made in the U.S.A” advertising. U.S. content must be disclosed on certain products, including textiles, wool, fur and automobiles. Manufacturers and marketers of other products who choose to claim their product is made in the U.S. also need to comply with labeling requirements.
I am interested in joining a service club where I can help the community and promote my business. Can you recommend one?
Many excellent service clubs exist in even the smallest communities. Among them are Rotary, Kiwanis, Optimist, Lions Clubs, Elks and more. Most focus on specific types of community and/or international assistance. If you have a passion for certain activities, such as those involving youth, education, the environment, recreation or international development, there may be a group for you.
If promoting your business is your primary purpose in seeking a service club, you may be better served by joining your local chamber of commerce or a leads group. Chambers are listed in the Resource Wizard on this site. To find leads groups in your area that may be accepting new members, make an internet search or secure a referral from a business associate.
I would like to issue securities to increase my businesses’ funding. How do I do that?
The Idaho Department of Finance oversees the issuance of securities in Idaho. Their brochure, “Raising Small Business Capital Through Securities” provides much helpful information about the process.
How can I have my product certified as organic or “green?”
The Idaho Department of Agriculture certifies organic farms and food products grown in Idaho. They also certify organic soil amendments (fertilizer) made in Idaho.
The U. S. Department of Agriculture administers the National Organic Program for production, handling, and labeling of agricultural products, including meat, poultry, seafood, and alcoholic beverages. They also set policies for the import or export of organic products.
I want to sell my food at our farmer’s market but they won’t let me unless I prepare it in a commercial kitchen. What is that and how do I make my home kitchen into a commercial one?
Commercial kitchens are inspected and licensed by your local health department. To find contact information for your local health department, visit the Forms page of this site. Unfortunately, you cannot make your home kitchen into a commercial one. A commercial kitchen must be located in a separate area away from your home kitchen with a separate entrance and locking door and it cannot be used to prepare family meals. It must contain specific appliances, shelving, stainless steel countertops, and special sinks, all of which can be expensive to implement.
Many churches, community centers and senior citizens centers have commercial kitchens and may be willing to rent space to you. Also check with caterers and with restaurants that serve only breakfast and lunch to see if you can rent space in the evening. With some searching, there is a way to make your business possible. The Idaho Department of Health and Welfare’s Food Protection Program website offers additional information.
Idaho's Cottage Food law allows you to produce certain “low risk” foods, such as most baked goods, in your home kitchen if you sell them directly to the consumer. If you sell any food product, including baked goods, to a store, coffee shop or other commercial establishment, online or across state lines, it must be prepared in a commercial kitchen. Foods requiring refrigeration, such as cream pies, must also be prepared in a commercial kitchen. The Idaho Department of Agriculture publishes a booklet, Starting a Specialty Foods Business that contains much information you may find helpful.
What is TERO? My company wants to bid on a project on the Ft. Hall Reservation but they say we must have a TERO permit.
TERO is an acronym for Tribal Employment Registration Office. To perform work on most reservations your company must employ Native American workers. You can obtain information and the necessary form by contacting the tribal office of any reservation where you plan to work.
The company I am currently working for wants me to give them a W-9. What is it and why do I need to do this?
A form W-9 is a “Request for Taxpayer Identification Number.” When a business pays $600 or more in a calendar year to another business or individual who is not an employee, the business is required to file an information tax return with the IRS. To do so, the business must obtain the correct taxpayer identification number to include on the return.
Examples of businesses that require a W-9 include those that issue 1099s to independent contractors and those that must report real estate transactions, contributions to an IRA, cancellation of debt, payments to a childcare provider and other monetary transactions. See IRS form W-9 information and instructions.
Planning and Zoning closed my business. They said it was not allowed to be located where it was. Can they do that? What recourse do I have?
All Idaho cities and counties have zoning regulations with which businesses must comply. Before signing a lease or purchase agreement, first check with your city or county planning and zoning commission to be certain you can legally operate your type of business in the area you have chosen. For example, you would not be able to establish a construction business, including a home based one, in an area zoned as residential. As you discovered, If a business is opened in violation of zoning regulations, it can be immediately shut down when a zoning inspector finds it or when someone complains. It may then be difficult to terminate a lease or purchase agreement.
Some businesses, such as churches and day care centers, may be able to secure a conditional use permit to operate in an area not specifically zoned for businesses. Be sure to find out if your business qualifies for a conditional use permit and can meet all the requirements before you open it. If you attempt to operate your business without a permit, it will be closed when the city or county finds you.
I think my business may be subject to environmental regulations. How do I verify that and find out how to comply?
The Idaho Department of Environmental Quality regulates business activities affecting air and water quality and waste management and remediation, including hazardous waste. The DEQ’s Permits page contains a comprehensive list of required permits for businesses that may generate pollution in the course of operations. For confidential assistance in understanding and complying with regulations, contact Environmental Solutions. A counselor will be happy to guide you through the process.
How Can My Store Accept Food Stamps?
The U.S Department of Agriculture Food and Nutrition Service issues permits to qualified stores, fruit and vegetable stands and other food retailers. To find out if your business qualifies to accept food stamps and to apply, see USDA SNAP Program.