Bill > H0886

This bill establishes a new state property tax in Idaho, repealing a previous restriction on state property taxes when a sales tax is in effect, and amends existing law to provide for exemptions from this new tax and to outline how the tax revenue will be levied, collected, and distributed. The Legislature's intent is to create a sustainable revenue source to fund public safety services like law enforcement, fire protection, and emergency medical services, which are experiencing increased demand due to the proliferation of non-primary residences and short-term rentals, and to offset the financial strain on local infrastructure caused by rapid growth. The bill levies a state property tax at a rate of 2.5 mills on each dollar of taxable value for properties not otherwise exempted, with exemptions including personal property, operating property, forest land, mineral exploration property, commercial and industrial property, agricultural land, and certain residential properties. Specifically, primary residences with a homestead exemption are largely exempt, though short-term rentals with high occupancy or those rented for less than 30 days annually may not be. Residential properties not used as primary homes but leased long-term to a tenant are also exempt. The collected revenue will be distributed: 50% to counties and cities for public safety services, 30% to provide direct property tax credits for homeowners with homestead exemptions, and 20% for infrastructure maintenance related to roads, water, sewer, fire, ambulance, and public safety. This new tax and its distribution system will take effect on January 1, 2027.

Budget and Finance

Revenue and Taxation Committee (House)

https://legislature.idaho.gov/sessioninfo/2026/legislation/H0886/