SIEDO - Taxes & Financing Options

Tax Structure
Idaho offers a sound tax structure, reasonable tax rates and one of the very lowest overall per capita tax burdens in the West. Revenue to provide needed services comes from a mix of income, sales, and property taxes.

Corporate
Idaho’s corporate income tax rate is 7.6% of the taxable income of a corporation transacting business or authorized to transact business in Idaho or with income attributable to Idaho. Multi-state corporations must apportion their Idaho income using a weighted three-factor formula consisting of property, sales, and payroll factors, with the sales factor double-weighted. A corporation may elect to determine its income using a water’s edge election. This election allows exclusion of a substantial portion of foreign subsidiaries’ income.

Sales & Use Tax
Sales and Use Tax is collected at a rate of 6% for most items purchased or consumed in the state. Idaho’s Production Exemption exempts equipment and materials used or consumed in or during manufacturing, processing, mining, farming, fabricating operations, and clean rooms (used to make semiconductors and semiconductor manufacturing equipment) from the sales and use tax. Most services are exempt from sales and use tax. With the exception of a few resort communities, Idaho cities have no local option sales tax.

Inventory
Idaho does not have an inventory tax. There is also a 100% goods-in-transit sales and use tax exemption for goods purchased by a carrier in its business and delivered outside of Idaho, in accordance with Idaho Freeport laws.

Property
Property tax in Idaho varies according to the needs of local taxing districts with a statewide average of 1.2% of market value. Items exempt from property tax include inventories, livestock, property in transit, pollution control facilities, properly licensed motor vehicles, vessels, aircraft, and up to $104,471 (not to exceed 50%) of the value of a primary residence.

Taxing districts may not increase their annual budget requests more than 3% plus an increase resulting from construction and annexation. The property tax revenue limitation does not include revenue from levies that are voter approved.

Personal Income Tax
Personal Income tax in Idaho closely follows the federal tax code. The starting point of the Idaho income tax is federal adjusted gross income. The personal income tax rate is graduated on taxable income below $52,836 for married taxpayers and below $26,418 for single taxpayers. Rates vary from 1.6% to 7.8% depending on income. A wide variety of credits personal exemptions, and standard or itemized deductions reduce the amount of Idaho tax owed.

TAX PACKAGES
The following tax packages are a summary of Governor's and the Idaho Legislature's new tax package supporting economic development. For more detailed information about Idaho's business taxes, contact the Idaho State Tax Commission at 208-334-7660 or Idaho Commerce & Labor at 208-334-2470.

See what Idaho has to offer here.

THE IDAHO BUSINESS ADVANTAGE

CAPITAL INVESTMENT PROPERTY TAX INCENTIVES

100% PROPERTY TAX EXEMPTION

NEW JOBS INCOME TAX CREDIT

3% INVESTMENT TAX CREDIT

NET OPERATING LOSS DEDUCTIONS

5% RESEARCH AND DEVELOPMENT INCOME TAX CREDIT

3% BROADBAND TELECOM INCOME TAX CREDIT

100% SALES TAX EXEMPTION

100% GOODS-IN-TRANSIT TAX EXEMPTION

IDAHO PRIME RATE LOAN PROGRAM

UP TO $20 MILLION IN INDUSTRIAL REVENUE BONDS

FINANCING - ECONOMIC DEVELOPMENT PROGRAMS

Business Resources and Assistance

Workforce Development Training Funds
Financial reimbursement up to $3,000 is available to eligible companies to cover the cost of training a new employee or retraining one facing permanent layoff.

Customized Recruiting Services
The Department of Labor offers employers one-on-one professional guidance in managing the recruitment process. Experienced Labor Workforce consultants can visit your work site to identify needs and then effectively match employee prospects to the skills, training and experience required to fill available jobs. The Department of Labor has offices located across the state.

Customized Work Force Training
Idaho supports educational and training programs through the Department of Labor and its local offices to provide skilled, productive workers for your company. Training can be tailored to your specific company needs and designed to develop skill sets for a company’s precise requirements.

Work Force Training Network
This network coordinates delivery of statewide training programs to meet the needs of Idaho’s employers and citizens. The state provides these programs in a customized manner based on a businesses' needs.

Access Labor Market Information
Visit the Department of Labor’s web site or a local office for current information about work force trends, economic conditions, demographics, wages, industry and occupational statistics and census data.

Existing businesses, economic development groups, and companies considering startup, expansion or relocation can also call on labor economists throughout the state for information, analysis, referral services and technical assistance.

Idaho Business Network (IBN)
The Idaho Business Network is the state’s recognized Procurement Technical Assistance Center (PTAC). This organization matches the purchasing needs of federal and state agencies with the products and services of Idaho companies. In addition, it provides technical assistance with completing bid documents, offers seminars on evolving procurement practices and hosts the
Governor’s Business Opportunity Conference to put you face-to-face with purchasing professionals from government agencies and large corporations. Annually, Idaho businesses average over $100 million in federal and state contracts by taking advantage of the Idaho Business Network.

Export Assistance
The Department of Commerce’s International Trade Division offers export counseling, seminars and marketing resources to Idaho companies. Marketing opportunities via catalogs, trade shows and trade missions are provided at a nominal fee. Idaho trade representatives in Mexico, China, and Taiwan assist companies by finding business opportunities, distributors and projects. They are co-located and partner with the U.S. Commercial Service to provide worldwide resources and assistance.

TechHelp
TechHelp assists Idaho manufacturers in lean manufacturing, human performance, quality systems, product development and information technology to help them become more competitive.

Small Business Development Centers
Small Business Development Centers around the state deliver up-to-date counseling, training and technical assistance in all aspects of management to help small business owners and potential business owners make sound decisions. http://www.idahosbdc.org

TechConnect
TechConnect staff act as project managers to access the resources necessary for businesses to commercialize private, university, and governmental technologies. State-sponsored programs and federal grants are earmarked to help Idaho communities and counties with infrastructure improvements that encourage business expansion and strengthen the local economy. http://www.idahotechconnect.com

Gem State Prospector
Gem State Prospector gives companies considering relocation or expansion a database of business locations across Idaho. This resource allows companies to search by their property needs and provides in-depth results for each site, including demographic information for the surrounding area, access to utilities, and proximity to support businesses.
www.gemstateprospector.com

Infrastructure Improvements

Up to $500,000 in Community Block Grants
Local cities and counties may receive grants to finance public infrastructure improvements that support business development.

Up to $500,000 in Rural Development Grants
Communities in rural Idaho may receive grants to facilitate business development, expansion or relocation.

Up to $500,000 in Gem Grants
Rural communities may receive grants for projects that create assets with a high certainty of aiding job creation and job retention.

Economic Development Administration Grants
Communities may receive grants for industrial or commercial site development where commercial financing cannot be secured. Loans up to $10,000 may be granted for each new job created.

Tax Increment Financing
Cities and counties may use Tax Increment Financing to fund new infrastructure needed to support business development.

The following is a listing of agencies to contact for further information:

Division of Economic Development
Idaho Commerce and Labor
208-334-2470
http://www.idahoworks.com

Small Business Administration
Boise District Office
208-334-1696
http://www.sba.gov

USDA Rural Development Financing Programs
Idaho State Office
208-378-5603
www.rurdev.usda.gov/id

Idaho-Nevada Community Development Financial Institution
(208) 637-0671
www.idahonevadacdfi.org

Idaho Professional Technical Education
208-334-3216
http://www.pte.idaho.gov

Idaho Department of Water Resources
208-736-3033
www.idwr.idaho.gov

Idaho State Tax Commission
http://tax.idaho.gov