January 13, 2015


State & Local Taxes in 2015


Idaho Tax Code Features

Progressive Features

• Graduated personal income tax structure

• Provides a refundable income tax credit to offset the impact of its sales tax on groceries

• Provides a property tax homestead exemption

• Requires the use of combined reporting for the corporate income tax

Regressive Features

• State and local sales tax bases include groceries

• Fails to provide a refundable Earned Income Tax Credit (EITC)

• Fails to provide a property tax “circuit breaker” credit for low-income non-elderly taxpayers

• Fails to provide refundable child tax credits

Tax Changes Enacted in 2013 & 2014

• Exempted the first $100,000 of business equipment from the property tax

ITEP Tax Inequality Index

According to ITEP’s Tax Inequality Index, Idaho has the 43rd most unfair state and local tax system in the country. States with regressive tax struc­tures have negative tax inequality indexes, meaning that incomes are less equal in those states after state and local taxes than before (See Appendix B for state-by-state rankings and more details).

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