Budget & Taxes (Tax Credits)

This Idaho bill (H 633) exempts most food items for human consumption from sales tax (excluding restaurant meals, pre-prepared foods, and items sold with utensils), aligning with federal SNAP eligibility. It repeals the grocery tax credit program and adjusts how sales tax revenue is distributed to local governments. Specifically, it increases annual funding to counties by shifting from fixed amounts to a population-based formula adjusted annually for inflation, ensuring at least $4.1 million total for county election costs. These changes directly affect grocery shoppers, retailers, and local government budgets.

This bill increases Idaho's Parental Choice Tax Credit for 2026 and 2027, allowing eligible parents to claim up to $5,000 per child for education expenses. It directly affects Idaho parents of students aged 5-18 (or 5-21 for children with disabilities), covering costs like private school tuition, tutoring, textbooks, and transportation. Parents with income under 300% of the federal poverty level get priority, and families with children requiring disability services qualify for a higher $7,500 credit. To claim the credit, parents must apply annually, document expenses, and verify eligibility through the state tax commission.

H 519 updates Idaho's tax code to align with the current federal Internal Revenue Code (as of 2026) and revises tax credits for business capital investments and research activities. It sets a 3% annual cap on the capital investment tax credit based on qualifying property, including equipment eligible for federal tax credits and qualified broadband infrastructure. The bill also allows eligible businesses to opt for a two-year exemption from personal property taxes on qualifying investments instead of claiming the capital investment credit, subject to specific income and investment criteria. These changes primarily affect Idaho-based businesses making qualifying capital investments or conducting research within the state.