February 6, 2026
FOR IMMEDIATE RELEASE
Senate GOP Votes to Align Idaho Tax Code with Trump’s One Big Beautiful Bill, Returning $155 Million to Hardworking Idahoans
BOISE, Idaho – Today, the Idaho Senate Republican Caucus celebrated the successful passage of House Bill 559, a landmark piece of legislation which brings Idaho into “Near Full Conformity” with the federal tax relief provisions of the One Big Beautiful Bill Act. Not only will this reduce taxpayer confusion and administrative costs, but this bold decision represents one of the largest tax relief packages in recent Idaho history, returning an estimated $155 million annually to the state’s taxpayers, families, and small businesses.
“Idahoans work hard for their money, and H559 ensures they get to keep more of it,” said Senate Majority Leader Lori Den Hartog. “By aligning our state code with the common-sense tax relief passed at the federal level, we are rewarding work, supporting our seniors, and making Idaho the best place in the nation to raise a family and grow a business. This isn’t just a tax bill; it’s a commitment to the financial freedom of every citizen in the Gem State.”
House Bill 559 includes several key provisions designed to provide immediate relief to Idaho’s workforce and most vulnerable populations. Aligning with a federal framework which Michael Legarreta, president of Associated Taxpayers of Idaho, described as a plan “where 91% of taxpayers save, and the biggest savings are to the low and moderate income earners,” the legislation delivers targeted cuts through:
- Tax-Free Tips and Overtime: For the first time, Idaho will recognize the value of extra effort by providing significant deductions for service workers and laborers. Under H559, Idahoans can deduct up to $25,000 in tips and up to $12,500 in overtime pay ($25,000 for married couples) from their taxable state income.
- Enhanced Senior Protections: To combat the rising cost of living for those on fixed incomes, the bill creates a new $6,000 senior deduction for residents aged 65 and older.
- Auto Loan Interest Relief: Recognizing that transportation is an essential cost for Idaho families, H559 allows for a deduction of up to $10,000 on interest paid for auto loans, directly lowering the cost of vehicle ownership.
Fueling Idaho’s Economic Engine
In addition to individual relief, H559 strengthens Idaho’s competitive edge by adopting pro-growth business provisions:
- R&E Innovation: The bill allows for the immediate expensing of Research and Experimentation (R&E) costs incurred after January 1, 2025. This ensures that Idaho’s tech and manufacturing sectors can reinvest in new technologies without the burden of long-term depreciation schedules.
- Small Business Expensing: By increasing Section 179 expensing limits, the legislation makes it easier for small businesses and entrepreneurs to purchase equipment and expand their operations.
“With rising inflation and housing costs squeezing family budgets, we must ensure our tax code rewards hard work rather than penalizing it,” said Senate Majority Caucus Chair Ben Toews. “By protecting the earnings of our service industry and labor force, H559 ensures Idaho remains a beacon for economic growth and job creation. Ultimately, this is about trust—trusting Idahoans to spend their own money better than the government ever could.”
With the passage of H559, the Idaho Senate Republican Caucus continues its track record of fiscal conservatism, ensuring Idaho remains a low-tax, high-growth leader in the West. The bill now heads to Governor Brad Little’s desk for his signature.
About Idaho Senate Republican Caucus
The Senate Republican Caucus is committed to preserving freedom, promoting personal responsibility, and delivering commonsense solutions that reduce regulatory burdens and support Idaho’s small businesses. Visit their website at https://www.idahosenategopcaucus.com/
