Idaho State Tax Guide
Idaho state tax rates and rules for income, sales, property, fuel, cigarette, and other taxes that impact residents.
Idaho State Tax: Overview
Idaho moved to a flat income tax rate this year. Social Security benefits aren't subject to Idaho state tax, but the state may tax other types of retirement income. Idaho has one of the lowest sales tax rates in the U.S. However, it is one of the few states that taxes groceries.
Alcohol and tobacco taxes are lower in Idaho than in many other states. Property taxes are low when compared to the rest of the nation, too.
[Data for this state tax guide was gathered from several sources including the U.S. Census Bureau, the state’s government website, the Sales Tax Handbook, and the Tax Foundation. Property taxes are cited as a rate percentage rather than the assessed value.]
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Idaho Income Taxes
Idaho imposes a flat income tax rate of 5.8% on taxable income over $2,500 ($5,000 for joint filers) for tax year 2023. The threshold will be adjusted annually for inflation.
Idaho tax on retirement benefits: Social Security benefits and Railroad Retirement benefits are not taxed by the state.
If age 65 or older (62 or older if you have a disability), you may be able to deduct all or part of distributions from the following retirement plans.
- Military Retirement
- Civil Service Retirement (eligibility is dependent on account number)
- Idaho Firemen's Retirement Fund
- Policemen's Retirement Fund of Idaho City
Idaho Sales Tax
Idaho's state sales tax rate is 6%. Localities (typically resort communities) can add as much as 3%, but the average combined rate is just 6.02%, according to the Tax Foundation.
- Groceries are taxable. (The grocery income tax credit is used to offset tax)
- Prescription drugs are tax-exempt.
How Much Are Property Taxes in Idaho?
In Idaho, the average effective property tax rate is 0.63%.
Idaho Property Tax Breaks for Retirees
Property Tax Reduction: For 2023, some Idaho residents may qualify for a property tax reduction of up to $1,500. To qualify, homeowners must meet the following criteria.
- Be 65 or older (see below for exceptions)
- Had a 2022 income of $37,000 or less after deducting medical expenses
- You must have lived at the property before April 15, 2023
- The property must be your primary residence
- You must have a current homestead exemption
Some individuals under age 65 may qualify for the property tax reduction. These include people who are blind, widowed, or have a disability. Additionally, you may qualify if you were ever a POW or hostage. Children under 18 without a mother or without a father may also qualify.
Idaho Motor Vehicle Taxes
Idaho imposes a personal property tax on vehicles.
Idaho taxes gasoline at $0.33 per gallon.
Idaho Alcohol and Tobacco Taxes
Cigarettes | $0.57 per pack |
Other tobacco products | 40% of wholesale price |
Beer | $0.15 per gallon |
Wine | $0.45 per gallon |
Liquor | State controlled |
Idaho Estate and Inheritance Taxes
Idaho is one of the states with no estate or inheritance taxes.
Related Content
- Beware the 'Food Tax': States That Tax Groceries
- 10 States With the Lowest Sales Tax
- States Where You'll Pay Less Income Tax in 2023
To continue reading this article
please register for free
This is different from signing in to your print subscription
Why am I seeing this? Find out more here
Katelyn has more than 6 years’ experience working in tax and finance. While she specializes in tax content, Katelyn has also written for digital publications on topics including insurance, retirement and financial planning and has had financial advice commissioned by national print publications. She believes that knowledge is the key to success and enjoys helping others reach their goals by providing content that educates and informs.
-
Is a Phased Retirement Right for You?
Want to keep working, just not as hard? A phased retirement may just be the answer.
By Kimberly Lankford Published
-
Four Tips to Make Your Sales Presentation a Winner
Being prepared and not being boring can go a long way toward persuading a potential customer to buy into what you’re offering.
By H. Dennis Beaver, Esq. Published
-
'Instant' EV Tax Credits Are a Hit: $580M Paid This Year
EV Credits Claiming federal electric vehicle tax credits at the point of sale is a new and popular option in 2024.
By Kelley R. Taylor Last updated
-
Retirees Face Significant Tax Bills Due to Fraud
Fraud A new report sheds light on how older adult scam victims end up with big tax bills and lost retirement savings.
By Kelley R. Taylor Last updated
-
Tax Day: Is the Post Office Open Late?
Tax Filing Tax Day means some people need to mail their federal income tax returns.
By Kelley R. Taylor Published
-
High Earners: Beware of These Illegal Schemes to Lower Taxes
Tax Schemes The IRS says high-income filers are targets for several illegal tax schemes.
By Katelyn Washington Last updated
-
Mailing Your Tax Return This Year? What to Know Before You Do
Tax Filing There are plenty of reasons not to mail your tax return this year, but here’s what you should know if you are.
By Katelyn Washington Last updated
-
IRS Warning: Beware of Smishing and 'Helper' Tax Scams
Scams Tax season is a time to look out for email and text message scams.
By Kelley R. Taylor Last updated
-
Most Expensive States to Live in for Homeowners
Property Taxes High property tax bills make the places on this list the most expensive states for homeowners to live in.
By Katelyn Washington Last updated
-
Don’t Miss This $2,500 Tax Break for Paying Your Student Loan
Tax Deductions Do you qualify for the student loan interest deduction this year?
By Katelyn Washington Last updated