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Idaho sends out $169M in one-time income tax rebates

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BOISE — Some 645,000 income tax rebates totaling $169 million have been sent out so far this year, an Idaho official said Wednesday.

Idaho Division of Financial Management Administrator Alex Adams told lawmakers on a finance committee that the average rebate has been $248.

The rebates are part of tax relief legislation passed by the Legislature and signed into law by Republican Gov. Brad Little earlier this year.

“With your help, we did pass the largest tax relief package in the history of the state,” said Adams, Little’s budget chief, during his presentation to the Legislature’s Joint Finance-Appropriations Committee.

The legislation passed the House and Senate with no support from Democrats, who said it mainly benefitted the wealthy.

The legislation included $220 million in one-time income tax rebates and $163 million in ongoing income tax relief. Part of the ongoing income tax relief comes from reducing the number of tax brackets from seven to five and lowering the top bracket from 6.925% to 6.5%.

Little, when he signed the legislation into law in May, said cutting the number of tax brackets and reducing the top rate would make the state more competitive in keeping businesses and attracting businesses from other states.

The one-time rebates are going to 2020 personal income tax filers for taxes paid in 2019. The minimum amount is $50 for each taxpayer and dependent or 9% of income taxes paid.

Adams said the rebates are currently paused while the Idaho State Tax Commission works on income tax returns coming in later due to an extended filing deadline. He said the commission will return to processing rebates on Nov. 1.

“Only one Idahoan has chosen to return their rebate to the state treasury,” Adams told lawmakers.

He also said $890,000 of tax rebate money went to other state agencies rather than the taxpayer to take care of debt, primarily for child support.

“I think that’s always something that is forgotten about when you talk about tax relief,” he said.

The Joint Finance-Appropriations Committee has been meeting this week at the Statehouse as it prepares for the legislative session that starts in January.

Budget analysts on Tuesday told lawmakers the state has a $1.45 billion budget surplus, a record-setting amount.

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