Idaho State Tax Guide

Idaho state tax rates and rules for income, sales, property, fuel, cigarette, and other taxes that impact residents.

Idaho state flag for Idaho state tax guide
(Image credit: Getty Images)

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.]

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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.

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

Swipe to scroll horizontally
Cigarettes$0.57 per pack
Other tobacco products40% of wholesale price
Beer$0.15 per gallon
Wine$0.45 per gallon
LiquorState controlled

Idaho Estate and Inheritance Taxes

Idaho is one of the states with no estate or inheritance taxes.

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Katelyn Washington
Tax Writer

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.

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