What You’ll Learn
If you are a nonprofit in Idaho, or you are a nonprofit considering fundraising or other activities in Idaho, you must understand the requirements that Idaho has established for nonprofits operating in the state.
How can you become familiar with these laws? Where should you start?
Start here. This state profile includes the basic requirements nonprofits must consider. Reading the profile and implementing appropriate compliance measures will help you prepare your organization for success in Idaho.
Getting to Know the State Nonprofit Corporation Law
*Important primarily for nonprofits incorporated in Idaho
Emma Woodhouse, handsome, clever, and rich, with a comfortable home and happy disposition, seemed to unite some of the best blessings of existence; and had lived nearly twenty-one years in the world with very little to distress or vex her. She was the youngest of the two daughters of a most affectionate, indulgent father; and had, in consequence of her sister’s marriage, been mistress of his house from a very early period. Her mother had died too long ago for her to have more than an indistinct remembrance of her caresses; and her place had been supplied by an excellent woman as governess, who had fallen little short of a mother in affection.
- Emma, Jane Austen
When reading a novel, we get to know a fictional character by the author’s description. The author tells us about the character’s appearance, purpose, actions, mannerisms, and values.
Nonprofit corporations are something like fictional characters.
We learn how a nonprofit will look and act and make decisions not by reading a novel, but by reading the state law (called the nonprofit corporation act) and the rules the nonprofit makes for itself (called the bylaws and articles of incorporation). The law and the organization’s own rules tell us the organization’s name, purpose, way of acting, and method of making decisions.
To get to know your own nonprofit, be sure to review the sections below.
State Nonprofit Corporation Law
Idaho Code § 30-30-101 et seq.
For Religious Nonprofits
Nonprofit Religious Corporation Act: Idaho’s nonprofit corporation law expressly: (a) acknowledges an option for nonprofit corporations to incorporate for religious purposes and (b) includes specific provisions to protect the right of nonprofits incorporated for religious purposes to self-government in internal affairs. The law does not include an option to incorporate expressly as a nonprofit religious corporation. See Idaho Code § 30-30-101, et. seq.; Idaho Code § 30-30-107; Confused about what it means to be a religious nonprofit corporation? See our whitepaper “Why a Religious Corporation?”
Reliance on Religious Guidance in Governance: Idaho law permits a director to rely on guidance from religious figures within his or her faith tradition in the fulfillment of the director’s fiduciary duties. Idaho Code § 30-30-618(2)(d)
Understanding Religious Liberty in this State
*Important for all nonprofits doing business in Idaho, whether incorporated in Idaho or elsewhere
The religious education and formation of students is the very reason for the existence of most private religious schools, and therefore the selection and supervision of the teachers upon whom the schools rely to do this work lie at the core of their mission. Judicial review of the way in which religious schools discharge those responsibilities would undermine the independence of religious institutions in a way that the First Amendment does not tolerate.
- Our Lady of Guadalupe School v. Morrisey-Berru, 140 S. Ct. 2049 (2020).
Sometimes, the state or local government (like the city or county) makes laws that could conflict with your organization’s free exercise of religion or its sincerely-held religious beliefs.
For example, a law might require employers not to make faith-based distinctions between job candidates. If your organization’s mission is to pass on the teachings of your faith, you will need to make faith-based distinctions in evaluating candidates because their faith commitments will impact their abilities to partner in your mission and witness the faith to your program participants.
So what do you need to do? Be aware of the laws listed below. If any of the laws impact your organization—for example, if you are an employer or a facility open to the public—learn more about how you can protect yourself by reviewing Napa Legal’s religious liberty resources. Talk to an attorney if you have specific concerns.
Religious Liberty Protections
State Religious Freedom Restoration Act: Idaho has enacted a RFRA that protects the religious free exercise of all individuals and entities by requiring government burdens on religious exercise to satisfy strict scrutiny. These protections originate in a statute rather than the state constitution. Idaho Code § 73-402 . Not sure what a “religious freedom restoration act” is? Click here to learn the fundamentals.
Constitutional Protections for Free Exercise: The Idaho Constitution follows in lockstep with the federal constitution’s protections, meeting but not exceeding the required minimum protections of the First Amendment. Idaho Const. art. I, § 4, art. IX, § 6, art. XXI, § 19
State Blaine Amendment: The Idaho Constitution contains a Blaine Amendment that broadly restricts faith-based organizations’ freedom to participate in public benefit programs on the same terms as similarly situated secular institutions. Current US Supreme Court precedent has rendered this language ineffective, but it could become effective in the future if Court precedent changes. Idaho Const., art. IX, § 5. Not sure what a Blaine Amendment is? Review the basics here.
Other Relevant State Laws and Regulations
Idaho has a statewide public accommodation law, Idaho Code § 67-5909 of which nonprofits performing public programming should be aware. Some religious and educational organizations may be excluded from the act. See Idaho Code § 67-5910. Not sure what a public accommodation law is or what it means for your organization’s religious liberty? Learn the basics in this article which discusses the issue in the context of the case Fulton v. City of Philadelphia.
Protections for Religious Exercise in State of Emergency: Idaho law has no explicit constitutional or statutory protections for religious exercise during a time of emergency. Idaho Code § 46-1008(7)
Key Employment Laws and Regulations
Like the federal anti-discrimination employment law, Title VII of the Civil Rights Act of 1964, Idaho Code § 67-5909 prohibits employers from discriminating on the basis of race, color, religion, sex, or national origin. Under the Idaho law, an employer is any person who “who hires five (5) or more employees for each working day in each of twenty (20) or more calendar weeks in the current or preceding calendar year.” Idaho Code § 67-5910 clarifies that the requirement does not apply to religious employers with respect to the employment of individuals to carry out the organization’s religious activities. Local governments may also have employment-related regulations. An attorney can help you understand what requirements apply to your organization.
Religious Freedom for Faith-Based Employers: No specific protections for employers’ religious freedom in the public square is present but see Idaho Code § 67-5910. Need to review the basics on religious freedom and employment matters? Walk through a self-audit of best practices here.
Religious Freedom for Employees: No specific protections for employees’ religious freedom in the workplace are present.
Conducting Activities or Programs in this State
Understanding the Business Registration Requirement
*Important primarily for nonprofits doing business in Idaho but incorporated elsewhere
If you are fundraising or conducting activities in this state, you must consider whether you need to register as a foreign nonprofit corporation. The state law requires entities that are “conducting a…not-for-profit activity” to register. An attorney can help you decide whether you need to register based on the type and volume of activities you have in this state.
Business Registration Statute
Fundraising and Charitable Registration in This State
How to Know (And What to D0) If You're Fundraising In This State
*Important for all nonprofits doing business in Idaho, whether incorporated in Idaho or elsewhere
Not sure what “charitable registration” is? Need to review the basics? Read this article for a refresher.
Idaho does not require charitable solicitation registration for nonprofit entities.
This does not mean you don’t need to pay attention to any Idaho requirements, however! Be sure to review other Idaho registration, annual report, and tax requirements, and stay informed about updates by visiting the applicable state agency’s website.
If You're Fundraising In Multiple States, Make Sure You Understand the URS
Idaho does not accept the unified registration statement, so the state-specific charitable registration form must be used.
Evaluate Whether You'll Need a Registered Agent
Idaho charities do not need a registered agent for fundraising registration purposes. However, if your organization has programming, remote employees, or other Idaho business connections, you may need to appoint a registered agent as part of your business registration. More information about this is included below. See Idaho Code 30-21-402.
Follow the Rules About Communicating with the Public
Idaho does not require organizations to post specific language when conducting charitable solicitations unless the organization is working with a professional fundraiser, but posting the language is often a best practice to build trust with donors and state regulators. Below is sample language to use with charitable solicitations in this state:
*ORG* is based in *STATE*. The solicitation is made in support of *ORG*’s religious purpose to *PURPOSE*. Questions about *ORG* can be directed to *NAME* at *PHONE*. Upon request, *ORG* can provide: (1) the amount of this contribution which is deductible as a charitable contribution under federal income tax law; and (2) a written financial statement. *ORG*’s registration does not imply endorsement.
Charitable Registration Statute
Charitable Registration Exemption Statute
Annual Report Requirement
Get Acquainted with State and Local Taxes and Exemptions
State and Local Taxes
*Important for all nonprofits doing business in Idaho, whether incorporated in Idaho or elsewhere.
In this state, organizations that have received federal income tax exemption under IRC § 501(c)(3) are automatically exempt from state income tax. Some organizations may choose to send a copy of their IRS determination letter to the state department of revenue to indicate the organization’s position that it qualifies for the exemption. Note that, although an organization may be exempt, if it has unrelated business taxable income (“UBTI”) that is subject to federal taxation, that UBTI may be subject to state income tax. See Idaho Code Ann. § 63-3025B(4).
In Idaho, almost all business entities, even out-of-state business entities, must pay an annual franchise tax. However, entities operated exclusively for religious purposes (such as a faith-based nonprofits) are exempt from this tax. See Idaho Code § 63-3025C. Some organizations may choose to send a copy of their IRS determination letter to the Idaho State Tax Commission to indicate the organization’s position that it qualifies for the exemption.
It is also important to consider whether your organization might be eligible for sales and use tax or property tax exemption. In this state, federal § 501(c)(3) status does not automatically provide an exemption from sales, use, and property taxes. More information about the sales and use tax exemptions and applications is available on the Idaho State Tax Commission website or attorney can provide answers to specific questions regarding your organization’s eligibility for exemptions.
Corporate Income Tax Statute
Idaho imposes a corporate income tax but automatically exempts organizations with federal 501(c)(3) exempt status. Idaho Code § 63-3025
Corporate Franchise Tax Statute
What You Need to Know About Sales Tax
Sales and Use Tax: Idaho imposes a sales and use tax on religious organizations’ sales and only provides limited exemptions for certain items. Idaho imposes a sales and use tax on religious organizations’ purchases and only provides limited exemptions for a narrow subset of religious organizations. Idaho Code § 63-36220
Property Tax: Idaho imposes property tax but, upon application, generally provides an exemption to religious organizations for property used for religious and/or charitable purposes. Idaho Code § 63-602B; Idaho Code § 63-602C; Idaho Code § 63-602
State Tax Treatment of Unrelated Business Income: Idaho Code § 63-3025B(4)
State Sales and Use Tax and Required Registrations: Idaho Code § 63-36220
State-Specific Special Requirements
A volunteer attorney in Idaho
This resource contains general educational information related to legal concepts, but this information does not constitute legal advice. Anyone seeking legal advice is strongly encouraged to consult with a licensed attorney regarding any of the matters discussed herein. Although licensed attorneys work with Napa Legal, Napa Legal is not a law firm and does not undertake legal representation on behalf of any clients. Further, no licensed attorney working with or on behalf of Napa Legal agrees to undertake legal representation on behalf of any client unless the terms of such representation are set forth in a separate, written representation agreement.
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**Please note that the following state profiles are forthcoming and will be published soon:Hawaii and Washington