Gov. Little signs $253 million income tax cut bill
The bill, which is expected to reduce the state's revenue by $253 million, will lower the flat income tax rate for individuals and corporations from 5.965% to 5.3%
BOISE — Gov. Brad Little on Thursday signed House Bill 40, which cuts corporate and individual income taxes, eliminates the capital gains tax on precious metal bullion, and expands tax exemptions on some military pension income.
The bill, carried by House Speaker Mike Moyle, R-Star, and Majority Leader Rep. Jason Monks, R-Meridian, is expected to reduce the state's revenue by $253 million, and is the largest income tax cut in state history.
The bill lowers the flat income tax rate on individuals and corporations from 5.965% to 5.3%.
Under HB 40, a household earning between $55,600 and $91,800 would save around $127 on average on state income taxes, according to a report by the Idaho Center for Fiscal Policy. Those earning up to $146,000 would average about $264 in savings.
“Idaho families and businesses need and deserve to keep more of their hard earned money," Little said in an emailed news release. "It is the right thing to do. Idaho’s continued strength comes from our focus on good government and the Idaho taxpayer. I appreciate my partners in the Legislature for sharing our goal of prioritizing tax relief while taking care of the needs of a growing state. As we continue to deliver historic tax relief, we must ensure our budget balances as the Idaho Constitution requires."
The bill is part of a slate of tax-cut bills, including HB 304, which advanced out of the House on Tuesday and would provide $100 million for property tax relief and school facility funding. The Senate on Wednesday also passed a bill to put $50 million toward increasing the grocery sales tax credit from $120 to $155.
Little last week also signed into law a $50 million school choice tax credit bill, which allows families to receive a refundable tax credit for educational expenses, including private school tuition.
In all, the tax-related bills total around $450 million.
During debate, there were concerns about the state reducing a large amount of revenue amid economic uncertainty. Senators on Tuesday noted that a preliminary report from the Division of Financial Management showed Idaho was around $50 million behind in projections for February and nearly $60 million behind projections year-to-date.
The bill passed the Senate in a 28-7 vote, and the House in a 63-7 vote.
Guido covers Idaho politics for the Lewiston Tribune, Moscow-Pullman Daily News and Idaho Press of Nampa. She may be contacted at lguido@idahopress.com and can be found on Twitter @EyeOnBoiseGuido.
