How Much Does Idaho Take Out for Taxes?

Understanding how a state like Idaho collects revenue involves examining its specific tax categories and their implications for taxpayers.

Idaho Individual Income Tax

Idaho operates a tiered individual income tax system, although recent legislative changes have simplified its structure. For the 2024 tax year, the individual income tax rate is a flat 5.695% on taxable income above certain thresholds. This means that after accounting for deductions, a single filer’s income over $2,500 and a married couple filing jointly with income over $5,000 is subject to this rate.

Taxpayers can choose between claiming a standard deduction or itemizing their deductions. The Idaho standard deduction amounts for 2024 are $14,600 for single filers and $29,200 for married couples filing jointly. Idaho eliminated personal exemptions starting in the 2019 tax year.

Various types of income are subject to Idaho’s income tax, including wages, salaries, self-employment income, rental income, royalties, and most forms of interest and dividends. Social Security benefits are not taxed by Idaho. Capital gains are taxed as regular income, but specific deductions may apply; real property held for at least one year can qualify for a 60% deduction of the net capital gain.

Idaho offers several tax credits that can reduce an individual’s tax liability. The grocery credit provides a refund designed to offset sales tax paid on groceries. For 2024, this credit is $120 per person, including qualifying dependents, with an additional $20 for residents aged 65 or older. Even individuals not required to file a tax return due to low income can claim this refundable credit. Eligibility for the grocery credit is prorated for any months an individual received federal food stamps or was incarcerated.

Idaho Sales Tax

Idaho imposes a statewide sales tax of 6% on the retail sale of most tangible personal property and certain services. This tax applies to a wide range of goods and services, including hotel stays and vehicle rentals.

Certain items and services are exempt from Idaho’s sales tax. Prescription drugs are exempt, as is food purchased with Supplemental Nutrition Assistance Program (SNAP) benefits. Utilities such as gas, electricity, and heat are also generally exempt from sales tax.

While the state sales tax is uniform, some local jurisdictions, particularly resort cities and auditorium districts, have the authority to levy additional local sales taxes. These local option taxes can add up to 3% to the state rate, leading to a combined sales tax rate of up to 9% in certain areas. Resort cities can choose to apply their local sales tax to everything subject to the state sales tax, or they may limit it to specific categories like lodging, alcohol consumed on-premises, and restaurant food.

Idaho Property Tax

Property taxes in Idaho are primarily levied and administered by local taxing districts, rather than directly by the state. These districts include counties, cities, school districts, and other specialized entities that rely on property tax revenue to fund public services. The amount of tax is determined by the budgetary needs of these districts.

Property is assessed for tax purposes at its market value each year. County assessors establish valuation guidelines based on recent sales data and characteristics of sold homes, such as size, age, condition, and location. This process estimates what a property would likely sell for on January 1 of the assessment year. The approved budget of a taxing district is then divided by the total taxable value of properties within that district, resulting in the district’s tax rate, often expressed in mill levies.

Idaho offers a property tax relief program known as the Homeowner’s Exemption. This exemption reduces the taxable value of an owner-occupied primary residence and up to one acre of land by 50% of its assessed value, with a maximum exemption of $125,000 for 2024 and 2025. To qualify, the home must be the owner’s primary residence for more than six months of the year.

Another program is the Property Tax Reduction, also called the “Circuit Breaker” program, which can reduce property taxes by $250 to $1,500 for qualified homeowners. Eligibility for this program depends on factors such as income, age, and disability status. For instance, for the 2025 program, the total 2024 income, after medical expense deductions, must be $37,810 or less. Applicants must also be 65 or older, blind, widowed, disabled, a former prisoner of war/hostage, or a motherless or fatherless child under 18, as of January 1 of the application year. Applications for this program must be submitted annually between January 1 and April 15 to the county assessor’s office.

Other Idaho Taxes

Motor fuel taxes are levied on gasoline and diesel, with Idaho’s rate set at $0.33 per gallon. These taxes contribute to the funding of highway construction and maintenance within the state.

Taxes on specific goods, known as excise taxes, are also applied to products like tobacco and alcohol. Cigarettes, for example, are taxed at $0.57 per pack of 20. Alcoholic beverages have varying tax rates.

Lodging or hotel taxes may apply to individuals staying in hotels and other temporary accommodations. These taxes are often included in the total cost of a stay and can vary by location, especially in resort areas that have local option sales taxes. Vehicle registration fees are another cost associated with vehicle ownership. While the exact amounts can vary based on vehicle type and weight, they represent a recurring expense for vehicle owners.