The Idaho Legislature passed the largest income tax cut in state history during the 2022 session, reducing both individual and corporate rates and providing direct tax rebates to Idaho residents.

Governor Brad Little signed the legislation, which moved Idaho toward a flat income tax rate and returned hundreds of millions of dollars to taxpayers. The cuts were made possible by record state tax collections driven by strong economic growth and federal pandemic-era spending that boosted state revenues.

The tax cuts were broadly popular in the Legislature, passing with overwhelming Republican support. Conservative members pushed for even deeper cuts, arguing the state should return more money to taxpayers rather than allowing government to expand.

North Idaho legislators were among the strongest advocates for the reductions. Property tax relief, however, remained the more pressing issue for their constituents, as income tax cuts did not directly address the assessment-driven property tax increases hitting Kootenai, Bonner, and other northern counties.