How To Start a Nonprofit in Idaho in Eight Steps

Pick a unique name for your nonprofit corporation that is consistent with its purpose. Make sure it’s not already in use by another business in Idaho by checking your name’s availability on the Idaho Secretary of State’s website. You can find out if the name is trademarked by searching the United States Patent and Trademark Office (USPTO) database. You should also see if the name is being used as a website address by searching the internet or typing it into an online domain name search.

Choose a group of people to serve as the board of directors. They will be responsible for making major decisions for the nonprofit and guiding its mission. State law requires at least three people on your board.

When picking your initial directors, look for individuals who are passionate about the cause your nonprofit supports. It’s helpful if they have experience in areas like fundraising, finance, law, or management. Having directors with different backgrounds and ties to the community can also be valuable to ensure your nonprofit is well-connected.

To create a nonprofit corporation in Idaho, you need to file nonprofit Articles of Incorporation with the Idaho Secretary of State. Filing requirements include stating your nonprofit’s name, address, names and addresses for the board of directors, and information for a registered agent service that will accept important mail and other legal documents for your nonprofit. You should also include a purpose clause and provision for the dissolution of assets if you plan on applying for tax-exempt status.

You can file the Articles of Incorporation online by creating an account with the Idaho Secretary of State's website. You can also file by mail by sending the completed Articles of Incorporation template form to this mailing address: Office of the Secretary of State, 450 N 4th Street, PO Box 83720, Boise, ID 83720-0080. The state fee is $30 if you file online. If you file by mail, the fee is $50 (this includes an additional manual processing fee of $20).

Bylaws are the rules for how your nonprofit operates. They provide a governance structure to outline how the nonprofit runs, who makes decisions, and how those decisions are made. Bylaws also explain how often the board meets, how meetings are conducted, and how new board members are chosen. They ensure accountability and transparency by setting clear roles and responsibilities for everyone involved. Bylaws help resolve issues by providing methods for handling disagreements or changes in the organization.

Having bylaws is a requirement for getting tax-exempt status from the IRS. When creating your bylaws, be sure to include the nonprofit’s purpose, how the board of directors is structured, rules for meetings and voting, and how finances are managed.

Hold an initial board of directors meeting to set the stage for how your nonprofit will run. During this first meeting, the board of directors makes some key decisions to get everything organized, including:

• Adopt the bylaws

• Elect officers, like a president, treasurer, and secretary

• Address organizational matters, like setting up committees and discussing goals and plans

It's crucial to take notes, called minutes, during this meeting to record what was decided.

Apply for an EIN from the Internal Revenue Service (IRS). This is like a Social Security number for your nonprofit that the IRS uses to identify your nonprofit for tax purposes. Even if your nonprofit doesn’t have any employees, it still needs an EIN to open a bank account, apply for tax-exempt status, and file taxes.

To apply for an EIN online, your nonprofit can complete and file IRS form SS-4 through the IRS website. You’ll need to provide some basic information about your nonprofit, like its name, address, and the type of organization. The process is pretty straightforward, and once you finish, you’ll receive your EIN immediately.

The Internal Revenue Code permits nonprofit corporations to get federal tax-exempt status by filing certain forms with the IRS. This is important because it means your nonprofit won’t have to pay certain taxes. If your nonprofit is a 501(c)(3) organization, which includes charities, religious, or educational groups, you’ll need to file Form 1023 or the simpler Form 1023-EZ. If you qualify to use the 1023-EZ form, you have to submit it online through the Pay.gov website.

For 501(c)(4) organizations, which focus on social welfare, you need to file Form 1024-A. There are also other types of tax-exempt organizations, like 501(a), which require Form 1024. Once your nonprofit’s tax-exempt status is approved, you will receive a determination letter from the IRS.

In the state of Idaho, charitable organizations that have been granted IRS tax exemptions are also entitled to the state corporate income tax exemption. You need to fill out an Idaho tax form and pay Idaho taxes if your organization has business income that's not related to its main purpose. Sales to and purchases by nonprofits in Idaho are taxable unless an exemption applies. Idaho law allows certain nonprofits to buy everything exempt and allows other nonprofits to buy specific items exempt. Certain nonprofit groups, like religious organizations, food banks, soup kitchens, and groups that provide clothing to the needy without charge can buy specific things exempt from the state sales and use tax. To qualify for the exemption, a nonprofit must provide the seller with a completed Form ST-101, Sales Tax Resale or Exemption Certificate.

As a nonprofit, you don’t have to pay sales or use tax on gifts you get. This includes things like items, money, gift cards, or even help from people. When nonprofit groups sell things that are taxed, they are considered sellers. They need to get a sales tax exemption permit from Idaho and collect the tax from customers to send to the state. If a nonprofit only sells things once in a while, it can get a temporary permit instead. You can find more information about state requirements for nonprofit and religious group tax exemptions on the Idaho State Tax Commission website.