Idaho state tax: Overview
Idaho moved to a flat income tax rate this year. Social Security benefits aren't subject to Idaho state tax, but the state may tax other types of retirement income. Idaho has one of the lowest sales tax rates in the U.S. However, it is one of the few states that taxes groceries.
Alcohol and tobacco taxes are lower in Idaho than in many other states. Property taxes in the Gem State are also lower than those in much of the country.
[Data for this state tax guide was gathered from several sources including the U.S. Census Bureau, the state’s government website, the Sales Tax Handbook, and the Tax Foundation. Property taxes are cited as a rate percentage rather than the assessed value.]
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Idaho income tax
Idaho has a flat income tax rate of 5.8%, according to the Tax Foundation.
Idaho tax on retirement benefits: Social Security benefits and Railroad Retirement benefits are not taxed by the state.
If age 65 or older (62 or older if you have a disability), you may be able to deduct all or part of distributions from the following retirement plans.
- Military Retirement
- Civil Service Retirement (eligibility is dependent on account number)
- Idaho Firemen's Retirement Fund
- Policemen's Retirement Fund of Idaho City
Idaho sales tax
Idaho's state sales tax rate is 6%. Localities (typically resort communities) can add as much as 3%, but the average combined rate is just 6.03%, according to the Tax Foundation.
- Groceries: Taxable
- Clothing: Taxable
- Prescription drugs: Taxable
How much are property taxes in Idaho?
In Idaho, the average effective property tax rate is 0.47%.
Source: Tax Foundation
Idaho Property Tax Breaks for Retirees
Property Tax Reduction: For 2024, some Idaho residents may qualify for a property tax reduction of up to $1,500. To qualify, homeowners must meet the following criteria.
- Be 65 or older (see below for exceptions)
- Had a income at a certain threshold or less after deducting medical expenses
- You must have lived at the property before April 15, 2024
- The property must be your primary residence
- You must have a current homestead exemption
Some individuals under age 65 may qualify for the property tax reduction. These include people who are blind, widowed, or have a disability. Additionally, you may qualify if you were ever a POW or hostage. Children under 18 without a mother or without a father may also qualify.
Idaho gas tax
Gasoline: $0.32 per gallon.
Diesel: $0.32 per gallon.
Source: Sales Tax Handbook
Idaho alcohol and tobacco taxes
Idaho tobacco taxes
| Product | Tax Amount |
|---|---|
| Cigarettes | $0.57 per pack |
| Other Tobacco Products | 40% of wholesale price |
Source: Sales Tax Handbook
Idaho alcohol taxes
| Product | Tax Amount |
|---|---|
| Wine | $0.45 per gallon |
| Beer | $0.15 per gallon |
| Liquor | state-controlled |
Source: Sales Tax Handbook
Idaho estate and inheritance taxes
Idaho is one of the states with no estate or inheritance taxes.
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