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On July 22, 2025, the Idaho Legislature approved a new tax plan with the goal of increasing state revenue and providing relief to taxpayers. The plan, which was proposed by Governor John Smith, includes a combination of tax cuts for individuals and businesses, as well as some targeted tax increases.One of the key components of the new tax plan is a reduction in the individual income tax rate. Under the plan, the income tax rate will be lowered by 2%, putting more money back in the pockets of Idaho residents. In addition, the plan includes a tax credit for low-income families to help offset the costs of basic necessities.For businesses, the new tax plan includes a reduction in the corporate tax rate and an increase in the threshold at which businesses are subject to the tax. These changes are expected to make Idaho a more attractive destination for businesses looking to relocate or expand.However, in order to offset the revenue lost from these tax cuts, the plan also includes some targeted tax increases. One such increase is a hike in the sales tax on certain luxury items, such as boats and RVs. This move is expected to generate additional revenue for the state while still keeping the overall tax burden on Idaho residents relatively low.Overall, supporters of the new tax plan are optimistic about its potential to boost Idaho's economy and provide relief to taxpayers. Governor Smith praised the Legislature for their swift approval of the plan, stating that it will help position Idaho for long-term growth and prosperity.The new tax plan is set to go into effect at the beginning of the next fiscal year, and state officials are already working on implementing the changes. Idaho residents can expect to see the impact of these tax reforms in their paychecks and at the checkout counter in the coming months.