Idaho's overall tax burden, per capita, is the sixth-lowest in the country and the lowest among western states, the Idaho Tax Commission says. That's the result of its latest tax burden study, which showed significant impact from the 2006 legislation that lowered Idaho's property tax, although it also increased the state's sales tax. The study showed that Idaho's tax burden is 29.5 percent below the national average, the lowest it's been compared to the national average since similar studies started 22 years ago. Click below to read the full news release from the Tax Commission.
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Study shows tax burden for Idahoans is among nation’s lowest
BOISE — Idaho has the sixth lowest overall per capita tax burden in the country and the lowest tax burden among western states, according to the latest tax burden study published by the Idaho Tax Commission.
The study, conducted by Tax Policy Supervisor Alan Dornfest, compares Idaho taxes with national taxes and those of an 11-state western region. It’s based on data from fiscal year (FY) 2007, the latest year for which census figures are available.
Dornfest said the most significant change from previous studies is in property tax. “Property taxes decreased significantly in fiscal year 2007,” he said, “with the state providing a much larger share of school funding.” This change resulted in Idaho’s overall property tax collections dropping by 10 percent in contrast with an average rate of increase of 6.9 percent per year over the previous four years.
In 2006 the study ranked Idaho’s property tax burden 12.9 percent below the national average, while in 2007 it ranked 29.5 percent below the national average. Dornfest said this is the lowest property tax burden ever measured for Idaho over the 22-year period during which this study has been done.
In other taxes:
· Idaho’s per capita sales tax burden increased significantly in FY2007 due to the Oct. 1, 2006, increase in the sales tax rate from 5 percent to 6 percent. It went from 22 percent below the U.S. average in FY2006 to 13.8 percent below average in 2007.
· The individual income tax burden increased for Idahoans between 2006 and 2007, going from the 27th highest to the 23rd highest ranking in the nation on a per capita basis.
· Idaho’s corporate income tax burden remained below the national average. In 2006 it was 23.5 percent below average, compared to 37.3 percent below average in FY2007.
· Motor vehicle taxes (fuel taxes, licenses, and registration fees) remained 24.7 percent over the national average on a per capita basis for FY2007, unchanged from the previous year. Idaho traditionally ranks much higher than average in this category, although its ranking is somewhat inflated because the state charges registration fees rather than personal property taxes on vehicles, which show up in a different category for other states.
When comparing taxes to income, the overall tax burden in Idaho decreased 6.8 percent to just under $100 per $1,000 of income in FY2007. This amount was 9.5 percent below the U.S. average. Idaho’s per capita taxes rose 3.6 percent in FY2007, to $3,185.37 for each person. The national average was $4,233.63 per person.
The tax burden study is available on the Tax Commission’s Web site at tax.idaho.gov, or by calling (208) 334-7541.