Idaho Tax and CPA Services: State, County and City Taxes

Idaho taxes individuals and corporations at the same flat rate, gives pass-through businesses an optional entity-level election, and lets a few resort cities add their own sales taxes. It also draws many out-of-state business owners and remote workers, which makes its nonresident rules worth understanding. This page covers what applies to people who live, earn income or run payroll in Idaho. We serve Idaho clients remotely from our Naperville, Illinois office.

Individual income tax

According to the Idaho State Tax Commission, the income tax rate for 2025 is 5.3 percent on Idaho taxable income. Idaho residents are taxed on income from all sources. A part-year resident is taxed on Idaho-source income and on income earned while a resident, and a nonresident is taxed only on income from Idaho sources. A part-year resident must file if total gross income from the listed sources is more than $2,500, and a nonresident must file if gross income from Idaho sources exceeds $2,500.

Because Idaho is popular for second homes, rental properties, ranch and mountain property and remote work, nonresident filing is common. Examples include a nonresident who sells Idaho real estate, works on an Idaho project for a few weeks, or receives Idaho rental income. Tax residents of Illinois and other states may need a credit for taxes paid to Idaho; see our multi-state tax service. The Commission publishes separate guides for seniors and retirees, credits and deductions, and filing and paying, so confirm treatment of Social Security and retirement income in the current-year guidance.

Business taxes

The Commission's business income tax guide lists a 5.3 percent rate for 2025 as well, so corporations and individuals share the same flat percentage.

Pass-through entities. Partnerships, LLCs taxed as partnerships or S corporations, S corporations, trusts and estates generally pass income to their owners. Idaho's affected business entity (ABE) election allows a partnership or S corporation to pay Idaho income tax at the entity level at the corporate rate, and each member then receives a credit against their own Idaho tax. The election is made each year by checking a box on the return, and the tax is due on or before April 15 for calendar-year filers. An electing entity cannot take the Idaho capital gains deduction on the sale of Idaho property, but must pass it to the owners. Entity-level payments of this kind are a common response to the federal limit on the state and local tax deduction; see SALT deduction and property taxes.

Nonresident owners. A PTE with nonresident individual owners who have at least $1,000 of Idaho distributable income has three options: a signed Nonresident Owner Agreement (Form PTE-NROA), composite filing in which the entity pays at the corporate rate, or withholding at the highest individual rate paid with Form PTE-01 by the 15th day of the fourth month after year end. Resident and part-year resident owners report their share on their own returns, and are not included in composite filings or subject to withholding. Owners with under $1,000 report on their own returns if they have other filing requirements. The entity files Form PTE-12 and a Form ID K-1 for each owner.

Sales and use tax

Idaho's sales tax rate is 6 percent, and the use tax rate is also 6 percent, according to the Tax Commission. Use tax applies when the buyer did not pay at least 6 percent sales tax, such as on goods bought in another state or online without Idaho tax being charged. Some resort cities have an additional local sales tax, decided by local voters; the Commission lists cities such as Irwin and Mackay among those with local option taxes, and says some limit the tax to lodging, alcohol by the drink and restaurant food while others include everything subject to the state tax. Auditorium districts and a travel and convention tax add further local layers in some places. Businesses selling into Idaho should review sales tax nexus and our sales tax service.

Payroll in Idaho

• Withholding: Idaho has its own withholding forms and an update-W-4 process on the Tax Commission's website. See state income tax withholding.
• Unemployment insurance: the Idaho Department of Labor lists a standard rate of 1.000 percent for new employers and a taxable wage base of $55,300 for 2025, up from $53,500 in 2024. Experience-based rates apply after the first six quarters. Confirm the 2026 base with the Department. See state unemployment insurance.
• New hires: Idaho law requires all employers to report new employees to the Department of Labor within 20 days of hire, and rehires if their previous employment ended at least 60 days earlier. See new hire reporting.

Counties, cities and local taxes

Idaho's local layer is mainly property tax at the county level, plus the optional resort-city sales taxes and auditorium district taxes described above. Idaho has no local income taxes. Questions about a property assessment or bill go to the county rather than the State Tax Commission. For border-state comparisons see Arizona, and for local companies see our guide for small business owners.

How we can help

We prepare Idaho resident, part-year and nonresident returns, advise PTEs on the ABE election and nonresident owner options, and help employers set up payroll and track the wage base. If you receive a notice from the Idaho State Tax Commission, see state tax notices and representation. Contact us to begin; this page is general information.

Frequently asked questions

General information only, not tax, legal or accounting advice for your situation. Rules, limits and deadlines change; confirm the current rules with the official source or a qualified professional before you act. Reading this page does not create a professional relationship with CPA Tax Payroll and Accounting Corp.