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Official Tax Guide

Idaho Taxes 2025: Income, Sales, and Property Tax Guide

Complete guide to Idaho state taxes. Income tax (5.8% (Flat)), sales tax, and what you need to know before moving.

Updated January 15, 2026
5 min read

State Tax Guide 2025: Idaho

Moving to Idaho offers stunning landscapes and a growing economy, but understanding the state's tax structure is crucial for financial planning. This guide provides a comprehensive overview of Idaho's tax landscape for 2025, tailored for new residents.

Income Tax

Idaho has transitioned to a flat income tax system, which simplifies filing for residents.

  • Rate: The state income tax rate is a flat 5.8% for the 2025 tax year.
  • Structure: This is a flat tax, meaning all taxable income levels are subject to the same rate, regardless of filing status (single, married, etc.). This replaced the previous progressive brackets.
  • Filing: Residents must file an Idaho state income tax return if their gross income exceeds specific thresholds, which are generally tied to the federal filing requirements.

Sales Tax

Idaho's sales tax is a key source of state revenue and is relatively straightforward.

  • State Rate: The statewide sales tax rate is 6%.
  • Local Taxes: While the state sets the base rate, local jurisdictions (cities, counties, and special districts) may impose additional local option sales taxes. This means the total sales tax you pay at the register can be higher than 6%, depending on your location within Idaho. Always check local rates for your specific city.

Property Tax

Property taxes in Idaho are primarily administered at the county level and are a significant consideration for homeowners.

  • Overview: Idaho does not have a statewide property tax; instead, rates are determined by local taxing districts (schools, cities, fire departments, etc.). As a result, effective tax rates can vary significantly across the state.
  • General Range: While specific rates are local, property taxes in Idaho are generally considered moderate compared to national averages. Homeowners should anticipate an effective tax rate likely falling between 0.5% and 1.2% of the property's assessed value, though this can fluctuate based on local levies and property classifications.
  • Assessment: Property is assessed by county assessors, and values are intended to reflect market conditions.

Other Taxes

Beyond income, sales, and property taxes, Idaho has several other taxes to be aware of.

  • Gas Tax: Idaho has a state gasoline tax, which is adjusted annually for inflation. For 2025, expect the rate to be approximately 33 cents per gallon, though this is subject to legislative changes.
  • "Sin" Taxes: Idaho imposes special excise taxes on specific goods:
    • Cigarettes: A per-pack tax (around $0.57 per pack of 20).
    • Alcohol: State excise taxes apply to beer, wine, and spirits, with rates varying by type and alcohol content.
  • Inheritance/Estate Tax: Idaho does not have a state-level inheritance or estate tax. This is a significant advantage for heirs compared to some neighboring states.

Retiree Taxes

Idaho is relatively friendly to retirees, but tax treatment depends on the source of income.

  • Retirement Income: Income from pensions, 401(k)s, IRAs, and Social Security is generally taxable in Idaho. However, there are some exemptions.
  • Social Security Benefits: Social Security benefits are taxable, but Idaho offers an exemption for lower-to-moderate-income retirees. If your federal adjusted gross income (AGI) falls below certain thresholds (e.g., $50,000 for single filers), you may exclude a portion or all of your Social Security benefits from Idaho taxable income.
  • Other Retirement Income: Distributions from employer-sponsored retirement plans (pensions, 401(k)s) and IRA withdrawals are fully taxable. Seniors may qualify for a property tax reduction program (Circuit Breaker) if they meet age and income requirements.

Comparison to Neighboring States

Idaho's tax structure offers a mix of simplicity and competitiveness relative to its neighbors.

  • Washington: Idaho's flat 5.8% income tax contrasts with Washington's lack of a state income tax (though it has a high 7% capital gains tax and higher sales taxes).
  • Oregon: Oregon has a progressive income tax (top rate 9.9%) but no sales tax. Idaho's flat 5.8% rate is generally lower than Oregon's top bracket, and Idaho has a sales tax.
  • Montana: Montana has a progressive income tax (top rate 6.75%) and no sales tax. Idaho's flat rate is competitive, and its sales tax is relatively low compared to national averages.
  • Nevada: Nevada has no state income tax but higher sales taxes (avg. 8.2%+) and higher average property taxes.

Bottom Line: Idaho offers a moderate, flat income tax, moderate sales taxes, and no estate tax, making it an attractive option for many, especially compared to high-tax states like California or Oregon.

Disclaimer: Tax laws change frequently and can vary by jurisdiction. This guide is for informational purposes only and is based on 2025 data. Always consult with a qualified CPA or tax professional for personalized advice regarding your specific financial situation.