Cuts to Idaho’s income tax seem to be on a glide path to the state Senate.
House Bill 40 would drop personal and corporate income tax rates in Idaho by nearly half a percentage point to 5.3%. Those rates currently stand at 5.695%.
The proposal from House Speaker Mike Moyle (R-Star) would also benefit veterans with retirement benefits who are working outside of the military and exclude capital gains tax from precious metal transactions.
Moyle expects the measure to cost $253 million in total.
Democrats on the House Revenue and Taxation Committee opposed the bill, including House Assistant Minority Leader Steve Berch (D-Boise).
“This bill cannot be viewed in isolation,” said Berch. “It is part of a broader mosaic that doesn’t make it clear it can be justified given other factors.”
Those other factors he mentioned include money needed to support rural emergency medical services, schools and in-home health care.
But House Majority Leader Jason Monks (R-Meridian) said individuals are better suited to spending their money than the state.
“If the economy goes south, well, who do we want having the money? We want the people out there with the money, not the government with the money,” Monks said.
Before committee members voted on the bill, which passed along party lines, Moyle left them with two choices.
He said either return the $253 million to the taxpayer, or it will be used elsewhere before the legislature adjourns for the year.
“If you do not give it back, it will get spent before you leave here and I would much rather have it back in Idahoans’ pockets to spend and grow the economy than to grow government.”
The bill, which is co-sponsored by nearly half of the 61 Republican state representatives, now goes to the House floor for a vote.
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