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Idaho legislators make case for state income tax rebate

Courtesy of the State of Idaho
The Idaho legislature has begun considering tax rebate proposals as the state enjoys a $1.9 billion surplus.

The House Revenue and Taxation Committee moved the income tax proposal to the House floor for debate.

Idaho lawmakers are talking tax cuts as the legislative session moves into its second week. But there’s uncertainty as to which tax will be trimmed.

House Majority Leader Mike Moyle pitched his idea for a $600 million state income tax proposal to the House Revenue and Taxation Committee on Tuesday.

“A lot of that money will go out immediately in the form of rebates to help the citizens dealing with high fuel prices, inflation, all the other things that are falling upon us at no fault of our own. It’s helpful to all Idahoans. Every Idahoan benefits from this bill and I want to emphasize that,” he said.

The 2022 Tax Relief bill would allocate $350 million to taxpayers as one-tine rebate checks later this year. The bill specifies taxpayers would receive about 12% of what they paid in state income tax in 2020 or $75, whichever is greater.

The rest of the savings would come from lowering personal and corporate income tax rates. It would reduce the number of state income tax brackets from five to four and lower the rates to 1%, 3%, 4.5% and 6% and make the changes retroactive to January 1, 2022. The bill would also lower the corporate income tax to 6% retroactive to January 1, 2022.

Boise Democrat Lauren Necochea says an income tax cut would benefit richer residents. She says it would also take the steam out of efforts to reduce other state taxes.

“This is going to sweep a lot of dollars off the table that we could be using to have those conversations about the sales tax on groceries and property taxes,” she said.

It isn’t just Democrats questioning the proposed income tax rebate. Rep. Tammy Nichols [R-Middleton] said she too is interested in reducing property taxes and the state grocery tax. She voted to move the bill to the full House for debate, but said she hasn’t decided whether she would vote for it.

The House committee did forward the proposal. It has the support of Governor Brad Little.

One of the Northwest's most seasoned reporters is returning to his SPR roots. Doug Nadvornick will be heard frequently on KPBX and KSFC reporting on local news.