Idaho Senate Approves Tax Cut Bill Aligning with Federal 'Big Beautiful Bill'

The $155 million in state tax cuts will provide benefits to Idaho taxpayers but raise concerns over potential budget impacts.

Feb. 7, 2026 at 2:31am

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The Idaho Senate has approved a bill to adopt nearly all the tax cuts from the federal 'One Big Beautiful Bill', at an estimated cost of $155 million to the state in the current fiscal year. The projected cost for the next fiscal year is $175 million. The bill, which now heads to the governor, will allow Idaho taxpayers to take advantage of the same benefits from the federal policy, including no taxes on workers' tips, no taxes on overtime, and an enhanced senior deduction.

Why it matters

The decision to conform Idaho's tax code to the federal cuts has raised concerns from Democrats over the potential impacts on the state's already tight budget, with fears of cuts to programs like Medicaid, Meals on Wheels, and skilled nursing homes. However, Republican supporters argue the tax cuts will provide significant benefits to Idaho taxpayers.

The details

House Bill 559 passed in a nearly party-line vote in the Idaho Senate. The bill would allow for taxpayers to take advantage of the same benefits from the federal policy, including no taxes on workers' tips, no taxes on overtime, and an enhanced senior deduction for those in a certain income range, on their state income taxes. The individual benefits expire in 2028, while there are also a number of corporate tax write-offs that remain in effect in perpetuity.

  • The Idaho Senate approved the bill on Friday, February 6, 2026.
  • The projected cost of the tax cuts is $155 million in the current fiscal year and $175 million in the next fiscal year, which starts on July 1.

The players

Brad Little

The governor of Idaho, who will consider the bill for approval.

Lori Den Hartog

The Idaho Senate Majority Leader, who expressed frustration that the federal bill put a sunset date on the tax deductions for individuals while keeping the corporate incentives permanent.

Melissa Wintrow

The Idaho Senate Minority Leader, who argued that potential cuts to programs like Medicaid, Meals on Wheels, and skilled nursing homes were not worth the tax cuts.

Jim Guthrie

The only Republican Idaho senator who voted against the bill, due to concerns over the state's treatment of the research and experimentation deduction.

Doug Ricks

The Republican senator who sponsored the bill, arguing that the $155 million in tax cuts will provide a 'huge benefit to our Idaho taxpayers'.

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What they’re saying

“We really need to rethink that. We need to be more conservative, and in that respect, restore the revenue that we've taken out and cut too hard. Because our government is on the brink, and folks are suffering.”

— Melissa Wintrow, Idaho Senate Minority Leader

“In my opinion, we should rip the Band-Aid off now and fully conform.”

— Jim Guthrie, Idaho Senator

“Even though there is a cost of $155 million projected for (fiscal year 2026), there is a huge benefit to our Idaho taxpayers.”

— Doug Ricks, Bill Sponsor, Idaho Senator

What’s next

The bill now heads to Governor Brad Little for consideration.

The takeaway

The decision to align Idaho's tax code with the federal 'Big Beautiful Bill' highlights the ongoing debate over the balance between tax cuts and maintaining funding for critical state programs and services. While supporters argue the tax cuts will benefit Idaho taxpayers, opponents warn of potential budget impacts and cuts to important social services.