On February 4, Idaho Governor Little signed into law HB 436, which will decrease individual and corporate income tax rates. HB 436 was passed and signed into law in just over 20 days after being introduced. Specifically, the legislation lowers the corporate income tax rate from 6.5% to 6% and consolidates the personal income tax brackets from five brackets to four and lowers the rates as well. HB 436 also provides a one-time tax rebate totaling $350 million of personal income taxes (returning approximately 12% of an individual’s 2020 Idaho personal income tax or $75 per individual taxpayer and dependents, whichever is greater). These individual and corporate income tax changes are retroactive to January 1, 2022.
Although we have seen several states introduce legislation that would decrease corporate and individual income tax rates, Idaho is the first state to pass such legislation this year.