Idaho State Tax Rate

As of January 1, 2025, Idaho uses a flat income tax rate of 5.3% for both individuals and corporations.

This lower flat rate replaces the prior 5.695% rate and simplifies tax calculations for residents and businesses alike.

In addition to income taxes, Idaho imposes a 6.00% statewide sales tax, with a modest average combined state and local rate of 6.03%.

Idaho’s streamlined tax structure contributes to its reputation as a tax-friendly state, particularly for middle-income earners and small businesses.

Idaho State Tax Rate Breakdown

Individual Income Tax

5.3% flat rate on taxable income. Applies to income over:

• $2,500 (single filers)
• $5,000 (married filing jointly)

Example: If a single taxpayer has $50,000 of Idaho taxable income, the state income tax would be approximately $2,650.

Corporate Income Tax

• 5.3% flat rate on Idaho taxable corporate income

Example: An Idaho corporation with $200,000 in taxable income would owe about $10,600 in state corporate income tax.

Sales and Use Tax

• 6.00% state sales tax
• 6.03% average combined state and local rate

Sales tax applies to:

• Most tangible goods
• Some services
• Online and remote purchases delivered to Idaho

Example: A $1,000 purchase typically results in about $60–$63 in total sales tax, depending on location.

Property Tax

• 0.48% effective rate on owner-occupied housing

Example: A home valued at $350,000 would have an estimated annual property tax of about $1,680, though actual bills vary by county and levy.

Other Idaho Excise Taxes

• Gas Tax: 33 cents per gallon
• Cigarette Tax: $0.57 per pack

These taxes help fund transportation and public programs.

Usage Examples & Practical Context

Income Tax Withholding

Idaho requires employers to withhold state income tax for employees working in the state—even for temporary or short-term work assignments.

Sales and Use Tax Compliance

Idaho enforces use tax on taxable purchases made online or out of state when sales tax was not collected.

Tip: Keep receipts for large purchases made online or while traveling—use tax may be due when you file.

Flat Tax Planning Advantage

Because Idaho uses a flat tax rate, taxpayers don’t move into higher brackets as income increases.

Tip: Flat tax states often make tax forecasting easier, especially for retirees and self-employed individuals.

Idaho’s Tax Competitiveness

Idaho ranks 9th overall on the 2026 State Tax Competitiveness Index, thanks in part to:

• A simplified flat income tax
• Moderate sales tax rates
• Relatively low property taxes
• Business-friendly tax policies

This makes Idaho attractive for both residents and business owners.

Recommendation: File Idaho Taxes Electronically

To ensure accuracy and faster processing, electronic filing (e-file) is strongly recommended for Idaho state tax returns.

Benefits of e-filing include:

• Faster refunds with direct deposit
• Fewer calculation errors
• Immediate confirmation of receipt
• Easier compliance with withholding and use tax rules
• Secure recordkeeping for future reference

Best practice: File both your Idaho state return and federal return electronically, and choose direct deposit to receive any refund as quickly as possible.