Idaho Governor Signs Historic Income Tax Cut

Governor Brad Little of Idaho signed House Bill 40, enacting a $240 million income tax cut, the largest in state history. The legislation reduces the income tax rate for individuals and businesses from 5.695% to 5.3% and exempts military pensions and capital gains on precious metals from state taxes. While praised for returning money to taxpayers, critics argue it disproportionately benefits the wealthy and could negatively impact state budget projections. The tax cut is part of Governor Little's 'Keeping Promises' plan and reflects Idaho's commitment to substantial per capita tax relief, having delivered $4.6 billion in cuts since Little took office. Despite the revenue reduction, Little emphasized balancing the budget per the state constitution. The bill's enactment is retroactive to January 2025, underscoring the urgency of these reforms.