This month, we travel west to Idaho, the 14th largest state in the U.S. Known for its mountainous landscapes, vast swaths of protected wilderness and outdoor recreation areas, Idaho is bigger than all of the New England states combined. Boise, the capital and largest city, is set in the Rocky Mountain Foothills and is bisected by the Boise River, a popular destination for rafting and fishing.

Although Idaho is best known for its great fishing, other outdoor recreational adventures attract people to mountain biking at the Schweitzer Mountain Resort, and jet boating on the Snake River. Rafting and Kayaking are also popular activities. Idaho is ranked number one in the U.S. and in the world for whitewater adventures by Outdoors Magazine. And for something on the calmer side, excellent golf courses await throughout Idaho. Idaho has more than 100 golf courses nestled amongst the gorgeous Idaho landscape.

Business Climate

 

Idaho is a prominent agricultural state. Nearly one-third of the nation’s potatoes are grown in the state. Additionally, all three varieties of wheat are grown in Idaho: dark northern spring, hard red, and soft white. But Idaho is more than outdoor recreation and farming. Some major industries include food processing, lumber and wood products, machinery, chemical products, paper products, electronics manufacturing, silver and other mining, and tourism.

Recently, Idaho expanded its commercial base as a tourism and agricultural state to include the science and technology industries. Science and technology have become the largest single economic center (over 25 of the state’s total revenue) within the state and are greater than agriculture, forestry and mining combined.

Tax Climate

 

Idaho is the 10th highest of states in the U.S. that levy an income tax. Idaho’s individual income tax system consists of seven brackets with a top rate of 7.4%. Corporations based in Idaho must pay a corporate income tax at a flat rate of 7.4%. Among all of the states in the country, this corporate rate is the 19th highest.

Consumer taxes, sales and use, at 6% are near the national average of 5.95%. Idaho also taxes gasoline at a relatively high rate 32 cents per gallon, the 14th highest nationally. The “sin tax” on cigarettes, however is a relatively low 57 cents.

State and local property taxes are also relatively low. In 2013, state and local governments collected nearly $888 per person in property taxes, ranking Idaho 41st nationally in states that collect property taxes. In comparison, California collected $1,365 per person in 2013.

Tax Credits & Incentives

 

Idaho attracts businesses with its low operating costs, and a predictable tax structure and a variety of tax incentives make the state appealing to businesses. Some of these tax incentives are:

• Idaho tax reimbursement incentive– a performance based incentive, which features a tax credit of up to 30% for up to 15 years on new state tax revenues generated by companies seeking to expand or relocate in the state by adding new, qualifying jobs.
• Idaho business advantage– if a business invests at least $500,000 in new facilities and creates at least 10 new jobs averaging $40,000 a year with benefits, it may qualify for a wide package of incentives, including tax credits, sales tax rebates, and property tax exemptions.
• 3% investment tax credit– this is an investment tax credit on all new depreciable, tangible personal property (machinery and equipment) used in Idaho.
• Property tax exemption– if a business invests $3 million in new manufacturing facilities, it may qualify for a full or partial property tax exemption for up to five years.
• Workforce development training reimbursements– Businesses can receive up to $3,000 in cash reimbursements for the training of full-time, new employees or for helping retaining employees facing permanent lay-offs.