The rules where you work $17
A first 30 days checklist, everyday forms, licenses, workers’ comp and taxes for Idaho, with a yearly calendar. Instant PDF download.
Buy the packet: $17Digital product, all sales final. Informational only, not legal, financial, tax or business advice.
What Idaho expects from a new trade business
Idaho registers builders more than it licenses them, but skip the registration and you lose your right to sue and your lien rights both. Liens run on a clean 90 days. And there are no lump-sum games on sales tax here: the contractor pays it on the materials.
Registration, not a license, but don't skip it
Anyone in the business of construction has to register with the Idaho Contractors Board (under the Division of Occupational and Professional Licenses). The fee is $120, then $60 a year or $120 on a two-year renewal. A $40 reinstatement fee gets added to renewal. The Board began moving to a two-year cycle in October 2025, so check the expiration date on your certificate. You need proof of $300,000 in general liability, plus a comp certificate or a statement of why comp isn't required.
The handyman door is small: a casual or minor job under $2,000 total, and not one that's a piece of something bigger or split up to duck the rule.
Electrical, plumbing and HVAC are licensed by the state on top of that. Public works has its own license.
Working unregistered is a misdemeanor, up to $1,000 or six months. You also can't sue to collect and you give up lien rights. A construction attorney can tell you if you fall under an exemption.
Source: Idaho Code 54-5204, registration required · Idaho Code 54-5205, exemptions · Idaho Code 54-5208, denial of lien rights · Idaho Code 54-5210, application · Idaho Code 54-5217, penalties · Idaho Contractors Board and fees · Idaho Code 54-1002, electrical license · Idaho Code 54-2610, plumbing certificate · Idaho HVAC Board · Idaho Public Works Contractors · Idaho Code 54-5211, expiration on the certificate
Who to call: an attorney near you
Comp covers your crew, but owners are outside it
Idaho's law says every employer secures comp, and the section sets no minimum headcount. You don't have to cover yourself, though. A sole proprietor, a working member of a partnership or LLC, and a corporate officer-director with at least 10% of the voting stock are all exempt by law.
Uninsured subs land on you. If your sub doesn't have coverage and his worker gets hurt, you can be liable for that comp, the same as if the worker were yours. You can go after the sub for it afterward, if there's anything to collect. Get a certificate before they start.
Failing to carry it is a misdemeanor, and LLC members or officers who had the authority to buy it can be personally liable for the claims. An insurance agent who writes contractors can price the policy.
Source: Idaho Code 72-212, exemptions · Idaho Code 72-216, contractors · Idaho Code 72-301, security for compensation · Idaho Code 72-319, penalties
Who to call: an insurance agent near you
Getting paid: 90 days to file, six months to sue
Idaho's lien clock is simple and doesn't forgive:
- File your claim with the county recorder within 90 days of finishing your labor or last furnishing materials. It's verified by oath, and it states your demand after credits and offsets, the owner, who hired you, and a description of the property. The filing section doesn't ask for a preliminary notice first.
- Get a copy to the owner by personal service or certified mail no later than 5 business days after filing.
- Sue to enforce within 6 months of filing, or the lien stops binding the property. A payment on account or an extension of credit, endorsed on the lien record, restarts that time.
The loser of a fight over the lien pays the winner's attorney fees. An owner can release a lien by posting a surety bond, and your claim then runs against the bond. Liens rank laborers first, then suppliers, subs, the original contractor, then engineers and surveyors.
A GC with a contract over $2,000 on a home of one to four units has to give a written lien disclosure and get it acknowledged before signing, with an exception for emergency repair calls. For that work, your lien claim has to include proof of that disclosure. That GC also owes a signed list of subs and suppliers before closing or final payment.
Not registered as a contractor and not exempt? You've waived your lien. A registered sub, employee or supplier working for an unregistered contractor keeps theirs, unless they knew. A construction attorney can set up your disclosure form.
Source: Idaho Code 45-507, claim of lien · Idaho Code 45-510, duration of lien · Idaho Code 45-525, residential disclosures · Idaho Code 54-5208, denial of lien rights · Idaho Code 45-512, priority · Idaho Code 45-518, release by surety bond
Who to call: an attorney near you
You pay the tax on what you install
Idaho's rule is plain: when you build, alter, repair or improve real property, you are the consumer of the goods you use. You pay the 6% sales tax when you buy materials, tools and supplies. If a supplier didn't charge it, you report and pay use tax to the state yourself.
One trap: if you buy something fabricated, the tax is on the full price including the supplier's labor. If you buy raw material, fabricate it and install it yourself, only the material is taxed.
Owner-supplied materials can land on you too. If the owner buys materials and doesn't pay tax, you can be liable for it. If the owner is tax-exempt, you owe tax on the value of the materials, even if you buy in the owner's name.
Selling goods along with your real property work makes you a contractor-retailer. You collect sales tax on the retail part and pay tax on the materials you use for the improvement. Free-standing appliances sold with installation are taxed on the unit. Built-ins become part of the building. A CPA who works with contractors can sort out which hat you're wearing.
Source: IDAPA 35.01.02, Rule 012, contractors improving real property · Idaho Code 63-3619, state sales tax rate
Who to call: a CPA or tax pro near you
LLC, sole proprietor, or S-corp?
You file with the Idaho Secretary of State for $100, or $120 for a paper filing. The annual report is $0, but it's still due by the end of your anniversary month. Miss it and the state can dissolve your company 60 days past the due date. A free filing is still one you can forget.
Idaho has no franchise tax on LLCs. Profit that passes through to you gets hit with the state's flat income tax, currently 5.3% above a small threshold.
When an S-corp starts saving you money depends on what the business clears after your floor rate. Bring your numbers to a CPA and ask them to run it.
Source: Idaho Secretary of State, business services · Idaho Code 63-3024, income tax rate
Who to call: a CPA or tax pro near you
Education, not legal or tax advice. Rules change. Confirm anything here with a licensed pro in Idaho before you rely on it. Last updated November 2026.