Idaho is becoming an increasingly popular state for small businesses and startups alike. In addition to low operating costs, the Gem State also has a variety of business incentive programs for new and existing operations. Keep reading below to see which programs your business qualifies for.
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Idaho business tax incentives
Idaho Tax Reimbursement Incentive
The Idaho Tax Reimbursement Incentive (TRI) rewards businesses for creating new jobs in the state. Qualifying businesses can get a 30% tax credit on income, payroll, and sales taxes for up to 15 years. The TRI is available to existing Idaho businesses and businesses relocating to Idaho.
To qualify, you need to:
- Create at least 20 new full-time jobs (30 hours or more a week) if your business is based in a rural area and at least 50 new full-time jobs if your business is based in an urban area
- Pay a wage that’s equal to or greater than the average county wage
- Make a meaningful community contribution and demonstrate that your business has a significant economic impact on your community and the state
Learn more about the TRI and apply here.
Related: Learn what it takes to hire employees in Idaho.
3% Investment Tax Credit
All Idaho businesses can apply for the 3% Investment Tax Credit, which gives them a 3% tax credit on all new depreciable, tangible, personal property used in Idaho. That includes machinery and equipment for business purposes.
Idaho College Savings Program Employer Tax Credit
With the Idaho College Savings Program Employer Tax Credit, eligible businesses can get a 20% tax credit (up to $500) per employee for contributing directly to their employee’s IDeal college savings account.
As an Idaho employer, you can contribute to your employees’ IDeal accounts in the form of a bonus, gift, or matching program.
Learn more about the IDeal – Idaho 529 College Savings Program here.
Idaho Business Advantage
The Idaho Business Advantage is a tax incentive program for companies that invest in constructing new facilities and creating new jobs with specific requirements. Qualifying businesses can potentially take advantage of three different tax incentives:
- An enhanced investment tax credit of 3.75% on all new, depreciable, tangible personal property used in Idaho during the project period
- A 2.5% real property improvement tax credit on new plants, buildings, and structural components that don’t qualify for the investment tax credit
- A 25% tax rebate on all sales and use tax paid for any property constructed, installed, or located within the project site during the project period
- A new jobs tax credit from $1,500-$3,000 for new jobs paying $24.04 per hour or more
To qualify, your business has to invest at least $500,000 in a new facility project and create at least ten jobs that each pay a minimum of $40,000 a year with benefits. For any new employees hired beyond the ten new employees, the average wage must be $15.50 an hour plus benefits.
Learn more about the Idaho Business Advantage here, or download the application form here.
Credit for Idaho Research Activities
Similar to the federal research and development (R&D) tax credit, the Credit for Idaho Research Activities gives certain Idaho businesses a 5% tax credit on their qualified research expenses.
Qualified research activities must be technological in nature, useful in the development of a new or improved business component of the taxpayer, and involve a process of experimentation. The credit doesn’t apply to research in economics, business management, behavioral sciences, arts, or humanities.
Download the credit application here.
Idaho business tax exemptions
Property Tax Exemption
Idaho’s Property Tax Exemption gives businesses in certain counties a property tax exemption for investing at least $500,000 in new or existing non-retail, commercial, or industrial facilities. The exemption is available for up to five years. The exact amount depends on the county.
Learn more here.
Idaho Semiconductors for America Act
The Idaho Semiconductors for America Act gives qualifying Idaho semiconductor companies a sales and use tax exemption on certain construction and building materials.
To be eligible for the exemption, you need to qualify for the US CHIPS and Science Act of 2022, which helps fund the development of facilities where semiconductor research, manufacturing, and advancement take place.
Get more information here to see if you qualify.
Data Center Sales Tax Exemption
The Data Center Sales Tax Exemption is available to data centers that choose to relocate to Idaho. Eligible data center companies can get a sales tax exemption on server equipment and construction materials used to build the data center facility.
To qualify, data center companies need to:
- Create and maintain at least 30 new jobs in Idaho within the first two years after beginning operations
- Pay the new hires at or above the average county wage
- Invest at least $250 million within five years after construction begins
Get more information on the exemption here.
100% Sales Tax Exemption
Idaho businesses are eligible to apply for a sales tax exemption on equipment and raw materials used directly in the following activities:
- Manufacturing, processing, mining, fabrication, or logging operations
- Clean rooms and semiconductor equipment manufacturing
- Equipment or material used in research activities
- Processing materials, substances, or commodities for use as fuel for the production of energy
Learn more here.
Personal Property Tax Exemption
All Idaho businesses can apply for the Personal Property Tax Exemption, which gives them an exemption on the first $250,000 of personal property, including equipment and furnishings. Learn more here.
Idaho electricity company energy rebates
Many electricity providers in Idaho offer energy rebates to businesses that invest in energy efficiency upgrades or other green projects. Here are some to note:
- Avista has a variety of energy rebates—from commercial lighting installations to site-specific incentives—for business owners.
- Idaho Power has incentives for companies that incorporate energy-efficient installations into their construction projects.
- Intermountain Gas Company offers a handful of incentives to businesses installing energy-efficient heating appliances and commercial kitchen equipment.
- Rocky Mountain Power gives cash incentives to businesses upgrading their equipment, lighting, and HVAC systems.
Check here to find out which utility company is available in your city.
Related: 6 powerful strategies for building a more environmentally sustainable business.
Idaho city and county tax credits
Some Idaho cities have local business tax incentives. Look for your city’s website here to explore your options.
Want more information on Idaho business taxes? Gusto has your full breakdown here.
Financing for Idaho businesses
If you need a business loan, line of credit, or grant to take your Idaho operation to the next stage, we’ve got you covered. Check out Gusto’s comprehensive guide to grants and loans in Idaho.
