Income tax

Income tax reduction bill presented to Idaho House committee

Legislation to reduce Idaho’s income tax and provide one-time discounts was introduced to the House income and tax committee on Wednesday.

Gov. Brad Little described the proposal in his state-of-state address earlier this week, and the House committee moved at unusual speed to get it presented on the third day of the session, reported the ‘Idaho Press.

The bill would offer one-time refunds of $ 75 or 12% of 2020 state income taxes paid – whichever is greater – to all Idaho residents who have filed income tax returns. State in 2019. It would also consolidate Idaho’s five tax brackets into four, thereby permanently reducing personal and corporate income tax rates, adding $ 251 million per year in ongoing tax cuts. .

Representative Lauren Necochea, a Democrat from Boise, was the only lawmaker to vote against the bill’s introduction, but said she would have more to say about the legislation when it is scheduled for a full hearing. This date has not yet been set.

“This just isn’t the tax break Idahoans want, so I won’t be able to support the print motion,” she said.

One of the sponsors of the bill is Rep. Steven Harris, a Republican from Meridian and chairman of the committee.

“The bill does a few simple things, but will have a dramatic fiscal impact, both for our taxpayers but also for the state government,” Harris told the panel.

The bill would partially offset the cost of ongoing cuts to the public purse by continuously drawing $ 94 million a year from the Tax Relief Fund, a public fund that now collects all sales taxes paid on online purchases. , rather than sending these taxes through the same distribution formula to local governments and the general state fund as other sales taxes.

The bill would reduce Idaho’s top tax rate from 6.5% to 6%. The corporate tax rate would also drop from 6.5% to 6%.

The House Republican Caucus, in a statement immediately after the bill was tabled, called it a “major tax break,” and Harris said the bill allows “working families in Idaho to keep more of what they earned ”.

House and Senate Democrats also immediately released a statement on the new legislation, saying it will greatly benefit the wealthiest taxpayers at a “huge price.”

Necochea said he would take other opportunities off the table, such as lowering property taxes or eliminating the tax on groceries.

“Every major tax bill in Idaho for at least the past decade or so has prioritized profitable businesses and the wealthy,” she said. “We have the opportunity this year to put working Idahoans first and strengthen our middle class.”