Senate approves $240 million income tax cut; bill also exempts military pensions and removes capital-gains on bullion

BOISE, Idaho — The Idaho Senate on March 4 passed House Bill 40, a multi-part tax package that would reduce the state individual and corporate income tax rate, exempt certain military retirement pay from state income tax and remove capital-gains treatment for some bullion transactions. The Senate approved the bill 27–8.

The bill’s sponsor, identified on the floor as Senator Rex, opened debate saying, “House Bill 40 has 3 main parts,” and outlined the changes: a rate cut from 5.695% to 5.3%, an exemption for military pensions and retirement, and the removal of capital gains on certain bullion sales. He and other supporters described the largest component as a roughly $240 million annual income-tax reduction that they said would leave money in taxpayers’ pockets and stimulate consumer spending.

Supporters argued the cut would return $240 million to Idaho taxpayers and that the military-pension exemption (estimated cost $12 million) would support recruitment and retention of veterans. Opponents called the overall package ill-timed amid revenue uncertainty. Senator Sarah Wintrow sharply opposed the measure on the floor, calling it “probably the largest tax cut we’re gonna see in our history so far” and saying it was “the most irresponsible” course while state revenues showed signs of slowing.

Several senators pressed the point that the state has…