Despite earlier concerns, governor signs largest income tax cut in Idaho history

Gov. Brad Little signed a $253 million tax cut into law Thursday, despite sharing his earlier concerns over the total amount of proposed losses in state revenue this year. It is the largest income tax cut in state history, according to a news release announcing the cut.

In his annual State of the State address in Little proposed $100 million in tax cuts. The Legislature responded by proposing more than four times that amount this session across three bills, including the income tax cut. 

“Idaho families and businesses need and deserve to keep more of their hard-earned money,” Little said in a statement. “As we continue to deliver historic tax relief, we must ensure our budget balances as the Idaho Constitution requires.”

House Bill 40 is projected to lower state revenues by $240 million by lowering the income tax rate from just under 5.7% to 5.3%.

The bill also would expand an income tax exemption on military pensions and remove capital gains and losses on precious metals and monetized bullion when calculating state income taxes, according to (Idaho Statesman). Those two measures would together reduce revenue by another $13 million. 

The biggest reduction in taxes will go to those paying the most, lawmakers have said.