Idaho has a progressive income tax system featuring a top rate of 6.925%. The 2023 individual rate is 5.8% of taxable income. The corporate rate is 6%. There is no minimum income required to file taxes. Refund times are 7-8 weeks for e-files, 10-11 weeks for paper returns. First-time filers take about three weeks to enter.
Sales and Other Taxes
Idaho has a 6% sales tax rate and collects taxes on fuel, cigarettes, and cell plans. LLC members pay taxes on their share of profits. Food and lodging are taxed, while prescription drugs are not taxed.
Tax Comparisons
- California has an $800 minimum franchise tax and a 7.25% sales tax.
- Delaware has an 8.7% business tax and no sales tax. Delaware charges $225 annually for businesses with 5,000 shares.
Business Taxes in Idaho
Most small businesses pay income tax, sales tax, withholding tax, and unemployment tax. Pass-through entities pay through the owner’s personal returns at 5.8%.
Tax Benefits
Property taxes are low compared to other states. Idaho offers tax deductions and credits to reduce tax liability. Social Security benefits aren’t taxed, but other retirement income is.
Filing state income taxes in Idaho is typically done with federal filing by April 15 or the next business day if the 15th falls on a weekend.
Does Idaho have a business income tax?
Idaho has income and sales taxes. Residents qualify for the highest income tax rate of 6.925% if income is over $11,760 for individuals or $23,520 for married couples.
What taxes does Idaho have?
Idaho taxes include:
- Income tax with a flat rate at 5.8% for individuals
- Corporate income tax at 6%
- Sales tax at 6% with additional taxes on specific items like lodging
- Property taxes with incentives and relatively low rates