Tax Cut Bill Clears Idaho House, Moves to Senate for Consideration

House Bill 436, an income tax cut bill, has cleared the Idaho House and now heads to the Idaho Senate.

The bill passed on a vote of 57-13, with all Democrats opposing the measure, along with one Republican, Rep. Fred Wood (R-Burley). The proposal was put forward by Governor Brad Little in his State of the State Address and was worked on over the last few months and sponsored by Rep. Steve Harris (R-Meridian), Rep. Mike Moyle (R-Star), Sen. Jim Rice (R-Caldwell), and Sen. Scott Grow (R-Eagle).

Here is what HB 436 will do according to the “Statement of Purpose”:

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This 2022 Tax Relief bill makes the following changes to Idaho’s income tax laws:
• It consolidates the income tax brackets from five brackets to four and lowers rates to 1%, 3%, 4.5% and 6% retroactive to January 1, 2022.
• It lowers the corporate income tax to 6% retroactive to January 1, 2022.
• It provides a one-time tax rebate of $350 million, returning approximately 12% of 2020 Idaho personal income tax (line 20) or $75 for each taxpayer and dependant, whichever is greater.

During the opening debate on the House floor, Harris told other House members in part,

Let’s do a lot. Let’s provide the tax relief that Idahoans deserve. We collected too much from Idahoans. You might think this is the state’s money, but none of it is. It’s all taxpayers’ money, who give it to the state to do certain things with it. The state has too much. It needs to be returned.

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Harris also cited a Boise State survey that asked respondents what type of tax relief they wanted. Harris said income tax relief and property tax relief tied at 37.5% in the survey.

Moyle told the House members that the bill is Idaho’s “largest tax cut in history” at $600 million in relief in either cuts to tax rates or rebates.

Rep. James Ruchti (D-Pocatello) was the first to stand up and oppose HB 436, saying,

I can guarantee that none of you have had your constituents knocking on your door, sending you emails, talking to you in the grocery store, about the need to reduce their income tax rate, or the need to reduce corporate tax rates. What they have been talking to you about, is the grocery tax likely, but I know they’re talking to you about their property taxes.

Another legislator to oppose HB 436 was House Minority Leader Ilana Rubel (D-Boise). Rubel criticized the measure saying,

Frankly, and if I sound frustrated, it’s because I really am. I really feel that this legislature has been a one-trick pony for years when it comes to tax policy. Every time we have two dimes ticking to rub together, this is what we see: a big income tax cut where almost all the money goes to the people in the top 1%, and there are scraps for those in the bottom.

Rep. Ron Nate (R-Rexburg) said that he supported HB 436 and echoed the need for grocery and property tax relief.

Nate told the other House members,

It was mentioned in the opening that we have one of the highest income taxes of states, and it’s great that we can reduce that. But we are also a leader of states in terms of grocery tax. We have the third-highest tax on food amongst the states.

At that point, Nate was told by Speaker Scott Bedke (R-Oakley) that he needed to keep his debate to HB 436.

The Idaho House and Senate Democrats posted on Twitter after, which was shared by the Idaho Democrat Party Twitter account,

Today, the GOP proved just how out of touch they are with the people of Idaho. Instead of listening to the many cries for property tax relief and eliminating the grocery tax, they passed a bill that will gobble up all of the dollars needed to address either. #idleg #idpol

The Idaho Republican Party did not post anything after the bill’s passage at the time of this writing. The Libertarian Party of Idaho simply posted “Staying tuned.”

A date and time for the public hearing of HB 436 in the Idaho State Senate has not been scheduled yet.