You can take it to the bank – taxes will be cut again this year in Idaho. State leaders kicked off the 2025 Legislative Session by making it clear it’s not a matter of if, but which taxes will be reduced and by how much. This continued attention and opportunity for tax relief can be traced to Idaho’s history of fiscally conservative budgeting and strong economic growth.
Idaho’s tax relief outlook is the exact opposite of just across the border, where Washington lawmakers are yet again pushing tax increases.
Here is what Governor Brad Little said during his State of the State address on January 6:
“Together, we promised Idahoans historic tax relief and delivered back to back to back tax cuts for Idaho families and businesses. We delivered property tax cuts and a new lower flat income tax. We increased the grocery tax rebate, and we stand ready to implement President Trump’s promised tax cuts.
My KEEPING PROMISES plan continues the trend. I am proposing yet another round of tax relief for hardworking Idaho families – $100 million – on top of the $4.6 billion we have already given back to Idahoans over the past five years!”
House Speaker Mike Moyle agreed that tax relief is a priority for the coming session. Moyle tweeted:
“The Governor proposed $100 million in tax relief for the people of Idaho. Great, that's a good start. I want to see at least three times that by the end of this session.”
Further framing the economic outlook for Idaho, lawmakers on the JFAC budget committee received this update on January 7 from the Division of Financial Management:
“$4.6B in tax relief since Governor Little took office
Least regulated state in the country
Top 3 in the country for multiple years for job growth and low unemployment
Among top states for population growth (over 22% since 2010)
Ranks #1 for small business friendly environment
2nd fastest GDP growth over the last 5 years (#1 earlier in 2024)
Idaho has the fastest personal income growth over last 5 years
#2 overall strongest economy in the nation”
As Idaho lawmakers consider the various tax relief options for 2025, here are some of our recommendations for the session:
Expand options for students and families by adopting an education choice tax credit. (66% Idaho Poll support)
Increase the grocery tax rebate and index for inflation.
Improve transparency with a tax transparency website, taxpayer receipt, Truth in Taxation property tax website, and gas tax transparency stickers. (88% Idaho Poll support for Truth in Taxation).
Send voters a constitutional amendment to require a legislative supermajority vote (or voter approval) for tax increases. (72% Idaho Poll support)
Adopt revenue growth triggers to authorize automatic tax rate reductions.
Move to a 30-day filing threshold for remote income tax liability.
Avoid imposing a mileage tax.
While we wait to see which taxes are reduced and by how much this year in Idaho, we should appreciate the good economic policies and fiscal discipline that make this debate possible. The “Idaho Way” of prioritizing tax relief leads to a much brighter economic future than the tax-and-spend mentality of our neighbors to the West.