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IdahoH 05592026 regular legislative sessionHouseWALLET

TAXATION – Amends existing law to update references to the current Internal Revenue Code and to revise certain tax credits and adjustments.

Sponsored By: REVENUE AND TAXATION COMMITTEE

Signed by Governor

TAXATION

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Bill Overview

Analyzed Economic Effects

3 provisions identified: 0 benefits, 1 costs, 2 mixed.

Businesses lose Idaho bonus depreciation

Idaho ignores federal bonus depreciation when figuring Idaho income, basis, depreciation, and gains. This applies to property bought after September 10, 2001 and before December 31, 2007, and to property bought after December 31, 2009. This usually raises Idaho taxable income for those assets. If federal loss limits (sections 465, 469, 704(d), or 1366(d)) block your bonus in the first year, Idaho waits and adds it back later when the losses are allowed. Pass-through owners must keep records and include their share. Idaho extends the audit window for these items to three years after the later of the return due date or filing date.

New Idaho research credit with limits

Idaho offers a nonrefundable credit for research done in Idaho. The credit equals 5% of the increase in Idaho qualified research costs over your base amount, plus 5% of basic research payments for Idaho research. Costs you deducted or amortized under federal section 174 or 174A do not count for this credit. Only Idaho-performed research and Idaho gross receipts are used in the base amount math. You must claim the credit in the year earned; unused amounts carry forward up to 14 years. Members of a combined group can use another member’s unused credit.

Idaho taxes track 2026 federal code, with carve-outs

Beginning January 1, 2025 (retroactive), Idaho uses the federal tax code as it stands on January 1, 2026. Idaho keeps special rules: unemployment tax rules in section 85 stay as they were on January 1, 2020. For research costs under section 174 in tax years starting on or after January 1, 2022 and before January 1, 2025, Idaho lets you expense them under the old rules. These updates can raise or lower your Idaho taxable income, depending on your situation.

Sponsors & Cosponsors

Sponsor

  • REVENUE AND TAXATION COMMITTEE

    Affiliation unavailable

Cosponsors

  • Jeff Ehlers

    Republican • House

  • Doug Ricks

    Republican • Senate

Roll Call Votes

All Roll Calls

Yes: 87 • No: 16

Senate vote • 2/6/2026

Senate Floor Vote

Yes: 28 • No: 7

House vote • 2/3/2026

House Floor Vote

Yes: 59 • No: 9

Actions Timeline

  1. Reported Signed by Governor on February 10, 2026 Session Law Chapter 1 Effective: Retroactive to 01/01/2025

    2/11/2026

  2. Delivered to Governor at 2:40 p.m. on February 9, 2026

    2/10/2026

  3. Returned Signed by the President; Ordered Transmitted to Governor

    2/9/2026Senate

  4. Signed by President; returned to House

    2/9/2026Senate

  5. Received from the House enrolled/signed by Speaker

    2/9/2026Senate

  6. Reported Enrolled; Signed by Speaker; Transmitted to Senate

    2/9/2026House

  7. Returned from Senate Passed; to JRA for Enrolling

    2/9/2026House

  8. Rules Suspended (2/3 Vote - Read in full as required) – PASSED - 28-7-0

    2/6/2026Senate

  9. Reported out of Committee with Do Pass Recommendation; Filed for second reading

    2/6/2026Senate

  10. Introduced, read first time; referred to: Local Government & Taxation

    2/4/2026Senate

  11. Received from the House passed; filed for first reading

    2/4/2026Senate

  12. Rules Suspended: Ayes 64 Nays 2 Abs/Excd 4, read in full as required – PASSED - 59-9-2

    2/3/2026House

  13. Read second time; Filed for Third Reading

    2/3/2026House

  14. Reported out of Committee with Do Pass Recommendation, Filed for Second Reading

    2/2/2026House

  15. Reported Printed and Referred to Revenue & Taxation

    1/30/2026House

  16. Introduced, read first time, referred to JRA for Printing

    1/29/2026House

Bill Text

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