Idaho State Tax
Introduction
Idaho state tax is a critical issue that affects residents and non-residents alike. According to the Idaho State Tax Commission, state tax is levied on individuals and businesses who earn or generate income within the state. The state tax is utilized to fund public services such as education, public safety, healthcare, and infrastructure development. In this post, we will explore the basics of Idaho's state tax and provide updated information on how it functions.
Idaho State Income Tax
Idaho's state income tax system is progressive, which implies that higher-income earners are liable to higher tax rates. According to the Idaho State Tax Commission, the state's tax rate structure comprises six brackets, with rates varying from 1.125% to 6.925%. Tax brackets range from $1,542 to $27,422 for individual taxpayers and $3,084 to $54,844 for married taxpayers filing jointly.
Idaho state tax follows what is known as federal taxable income, which profits the income tax obligation. According to the Idaho State Tax Commission, the federal taxable income implies the amount taxpayers should report on their Idaho tax returns, minus any applicable federally taxable income exclusions. Besides wage, salary, and business income, taxpayers should also report taxable dividends, capital gains, interest, and pension income.
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Idaho State Sales Tax
Idaho's state sales tax rate is 6%, which is applied to all products and services, excluding food, medicine, and utilities such as electricity, natural gas, and water. Sales tax is typically imposed on the retail sale of goods and services, even though some states charge sales tax on services such as vehicle repair and personal care services.
Counties have the option to impose their sales tax, which leads to the local tax rate varying. According to the Idaho State Tax Commission, some counties also impose a local option tax, bringing the sales tax rate higher.
Idaho State Property Tax
Idaho's state property tax rate varies as it is dependent on the assessed value of the property. Although the state government does not set property tax rates or assess property values, it does oversee the process through the Idaho State Tax Commission.
According to the Idaho State Tax Commission, property taxes are used to support the local community's needs and provide essential services such as infrastructure, public safety, and education. Property taxes are the primary funding source for schools, with Idaho's K-12 education system accounting for approximately 50% of property tax revenue.
Idaho Property Tax Assessment
The assessment of property tax in Idaho is the responsibility of county assessors. According to the Idaho State Tax Commission, the property value assessment commences on January 1st of the year and examines the property's value based on factors such as location, size, and use. County assessors use this information to establish taxable value and then apply the applicable state tax rate.
Idaho State Tax Filing
Idaho's state tax filing deadline is generally April 15th. Individuals who require an extension to file their Idaho state tax return are provided with an automatic six-month filing extension. An extension to file is not an extension of time to pay taxes owed. Consequently, taxpayers who owe taxes are advised to pay the amount owed by April 15th.
According to the Idaho State Tax Commission, taxpayers are required to submit their state tax returns electronically or through mail. Electronic delivery of tax returns is a fast, easy, and convenient way to file a return and obtain a prompt refund. To utilize this method, taxpayers can visit tax.idaho.gov to access the Idaho State Tax Commission's online filing system.
Idaho State Tax Payment
Idaho's state tax payment options include electronic payment, check, and money order. Taxpayers can pay their income tax, sales tax, and property tax online through the Idaho State Tax Commission's e-payment system or by submitting a check or money order. The tax commission does not accept cash payments. Taxpayers are advised to allow standard mailing time if sending their deductible taxes through mail.
Non-Resident Income and Withholding Tax
Non-residents who generate income in Idaho are subject to Idaho state income tax on the income earned within Idaho. According to the Idaho State Tax Commission, non-residents who work in Idaho are exempted from the state tax on earnings from interstate businesses. Employers who hire non-resident employees are responsible for withholding Idaho state tax in addition to employee federal income tax, Social Security, and Medicare taxes.
Conclusion
Idaho state tax is essential to the state's infrastructure, public safety, education, and healthcare. It is vital for residents and non-residents alike to understand Idaho's tax system to ensure compliance and avoid penalties. This post has provided an overview of Idaho state income tax, sales tax, property tax, tax filing, and tax payment. However, it is advisable to consult a tax expert to obtain specialized, comprehensive advice.
There are a number of taxes applicable to the state of Idaho, which includes a state sales tax, income tax, and other taxes.
Idaho state sales tax
The state income tax is 6%, while some localities in Idaho may add on additional local taxes.
Idaho personal income tax
Idaho uses a graduated tax system, where income for individuals are as follows:
Between $0 and $1,237, 1.6%.
Between $1,238 and $2,474, 3.6%.
Between $2,475 and $3,710, 4.1%.
Between $3,711 and $4,987, 5.1%.
Between $4,988 and $6,184, 6.1%.
Between $6,185 and $9,276, 7.1%.
Between $9,277 and $24,736, 7.4%.
$24,737 and over, 7.8%.
Idaho property taxes
- Fund local governments but approved by state
- Property tax rates vary depending on the location of the property
-The average urban rate is 1.275% of the value of the property.
-The average rural rate is .832% of the value of the property.
Idaho special excise taxes
Taxes assessed on vehicles, alcohol, tobacco, gasoline and are in addition to federal excise taxes.
- Funds health programs and other related activities
-$0.57tax on every pack of cigarettes
-$0.45 tax per gallon of wine
-$0.15 tax per gallon of beer
Idaho inheritance tax
Idaho does not have a state inheritance tax, however state residents are still subject to Federal estate taxes.
Idaho payroll taxes
State Disability Insurance – None
State Unemployment Insurance – 0.96% to 6.80%
Exemptions
Certain exemptions for
-Limited Military personnel and veteran exemptions
-Persons age 65 and older
- Homeowner tax credits
- Qualified child and Dependant tax credits
Taxable income
Gross income is defined as all income from whatever source derived, including but not limited to:
- Wages
- Salaries
- Commissions
- Stock Gains
- Dividends
- Royalties income
- Rental income
- Business income
- Inheritance
- Pensions
- Annuities
- Partnership/shareholder income
- Gain from sale of property
Corporate income tax
Idaho has a corporate tax rate of 7.6%
Misc
Idaho also has state tax requirements for Travel and Hotel use, oil and gas produced in the state, a mine license tax, illegal drug stamp act, utilities, but does not have special taxation for cars and transportation.
Idaho property taxes are collected by the local county tax assessors while the state collects all income and sales taxes. All residents, individuals, married couples, and head of households are required to file. Partnerships are not taxed separately.