How Much Is Idaho State Tax? A Look at Current Rates
Understand Idaho's state tax landscape. Get insights into current rates and how they impact your finances in the Gem State.
Idaho’s tax system encompasses various levies that affect residents and those engaging in commerce within the state. The state imposes taxes on income, sales, and specific goods and services.
Idaho Individual Income Tax
Idaho utilizes a flat income tax rate for most individual taxpayers, set at 5.695% for the 2024 tax year. This rate applies to taxable income exceeding specific thresholds. For single filers, the 5.695% rate applies to taxable income above $2,500, while for married filing jointly, it applies to taxable income above $5,000. Income below these thresholds is effectively taxed at a 0% rate.
Taxable income is determined by starting with federal adjusted gross income (AGI), which is then subject to certain adjustments under Idaho tax law. From this adjusted income, taxpayers can subtract allowable deductions to arrive at their final taxable income. Idaho offers a standard deduction, which for 2024 is $14,600 for single filers and $29,200 for those married filing jointly.
Taxpayers can choose to take the standard deduction or itemize deductions. Personal exemptions, however, were eliminated starting in the 2019 tax year, mirroring changes at the federal level. The state requires individuals to use the same filing status for their Idaho return as they use for their federal return. Common filing statuses include single, married filing jointly, married filing separately, head of household, and qualifying widow(er).
Individuals must file an Idaho income tax return if their gross income surpasses certain thresholds, which vary based on residency and filing status. For instance, a single filer under 65 must file if their gross income is above $14,600. Married couples filing jointly under 65 have a gross income threshold of $29,200. Residents are taxed on all income, including that from sources outside Idaho, though a credit may be available for taxes paid to other states on the same income.
Idaho Sales Tax
Idaho imposes a statewide sales tax of 6% on the retail sale of most tangible personal property. Local jurisdictions, particularly resort cities and auditorium districts, have the authority to levy additional sales taxes, which can increase the combined rate by up to 3%.
Sales tax applies to a broad range of goods and certain services. Taxable items include admission charges, fees for recreational activities, and short-term lodging. Services directly related to the production of tangible personal property, along with the lease or rental of tangible personal property, are also generally subject to sales tax. For example, labor to assemble a bicycle or print business cards is taxable.
However, several common exemptions exist to reduce the tax burden on essential goods. Groceries, excluding prepared food, are exempt from sales tax. Prescription drugs and medical equipment are also exempt. Additionally, certain agricultural supplies and items purchased for resale are not subject to sales tax.
When purchasing a motor vehicle in Idaho, the 6% state sales tax applies to the vehicle’s purchase price. If purchasing from an individual, the sales tax is typically paid when the vehicle is titled and registered at the county Department of Motor Vehicles. The sales tax also applies to the lease or rental of vehicles.
Other State-Level Taxes
Beyond income and sales taxes, Idaho collects other state-level taxes that impact individuals. Motor fuel, such as gasoline and diesel, is subject to an excise tax. The rate for motor fuel is $0.32 per gallon.
Cigarettes and alcoholic beverages also incur state excise taxes. Cigarettes are taxed at $0.57 per pack of 20. Alcoholic beverages have varying excise tax rates: beer is taxed at $0.15 per gallon, wine at $0.45 per gallon, and liquor at $10.90 per gallon.
Vehicle registration fees are another state-mandated charge. These fees are collected when a vehicle is registered for use on public roads. While the specific amounts can vary by vehicle type and weight, they represent a required payment to the state for the privilege of operating a vehicle.
Property taxes, while a significant part of the overall tax landscape, are primarily assessed and collected at the local level by counties, cities, and school districts. The state of Idaho does not collect property taxes for general revenue purposes, but it does establish the legal framework and administrative guidelines under which these local taxes are levied.