Governor Brad Little signed a comprehensive tax cut package into law during the 2023 session, continuing Idaho’s march toward a flat income tax and reducing the overall tax burden on Idaho residents and businesses.

The cumulative tax reductions passed over the 2022 and 2023 sessions represented hundreds of millions in tax relief. Idaho moved to a 5.8% flat income tax rate, down from the previous graduated structure that topped out at 6.5%.

Conservative legislators pushed for even deeper cuts, arguing that sustained revenue surpluses demonstrated the state was collecting more than it needed. The debate over the pace and size of tax reductions became a defining issue within the Republican caucus.

For North Idaho residents, the income tax cuts provided meaningful relief but did not address the property tax increases driven by soaring home values. Property tax remained the dominant fiscal concern at town halls and constituent meetings across Kootenai, Bonner, and the other northern counties.