State & Local Economic Development Incentives
We believe that Idaho is a compelling place to do business in. The State has a variety of incentive programs designed to assist businesses in start-up, expansion, and productivity activities. Administered by the State Department of Commerce, the following programs may be able to help your business.
All Businesses are Eligible for:
- 3% investment tax credit on all new tangible personal property (machinery and equipment).
- Personal property tax exemption on the first $250,000 of personal property, such as equipment and furnishings.
- 5% tax credit on qualified research expenses.
- Energy conservation rebates from Idaho's electricity companies, offering up to $100,000 per year, per site for efficient energy use. For more information, contact your local provider.
Idaho Business Advantage
Businesses that invest at least $500,000 in new facilities and create at least 10 new jobs paying $40,000 annually plus benefits, with additional jobs paying an average of $15.50 per hour during project period, may qualify for the following:
- An enhanced investment tax credit on tangible personal property of 3.75%.
- A new jobs tax credit ranging from $1,500 to $3,000 for new jobs paying $24.04 per hour or more.
- A 2.5% investment tax credit on real property.
- A 25% rebate on sales tax paid during the project period.
- Upon the business's request, local county commissioners may also authorize a partial or full property tax exemption for up to 5 years.
Tax Reimbursement Incentive (TRI)
If your business is adding or bringing high-paying jobs to Idaho, you may be eligible for the Idaho Tax Reimbursement Incentive.
- To qualify, a company must create 20 new jobs in rural communities (population of 25,000 or less) or 50 in urban areas. These jobs must offer wages at or above the average county wage.
- This post-performance incentive awards a maximum credit of 30% on income, payroll withholdings, and sales taxes for up to 15 years.
100% Sales Tax Exemption
Production Sales Tax Exemption
- Provides a tax exemption on equipment and raw materials used directly in manufacturing, processing, mining, fabrication, or logging operations.
- Covers clean rooms, semiconductor equipment manufacturing, and equipment or materials used in research activities.
- Exempts processing materials, substances, or commodities used as fuel for energy production.
Utility and Industrial Fuels Sales Tax Exemption
- Offers a tax exemption on utilities and industrial fuels, including power, water, natural gas, and telephone services.
Idaho Semiconductors for America Act
The Idaho Semiconductors for America Act provides a sales and use tax exemption on qualifying construction and building materials for eligible Idaho semiconductor companies. To qualify, companies must meet the requirements of the U.S. CHIPS and Science Act of 2022.
Data Centers Sales Tax Exemption
New data centers that choose to locate in Idaho are eligible for a sales tax exemption on server equipment and construction materials used to build the data center facility.
Workforce Development Training Fund Programs
The Idaho Workforce Development Council offers grants to reimburse approved training costs for eligible applicants creating jobs in Idaho. For more information, visit wdc.idaho.gov.
College Savings Program Employer Tax Credit
Employers can receive a 20% tax credit for contributions to an employee’s IDeal college savings account, with a maximum credit of $500 per employee, per taxable year.
Step Grant Export Promotions
The State Trade Expansion Program (STEP) Grant supports Idaho businesses seeking to expand into international markets through exports. Funding can be used for trade missions, foreign sales trips, international trade shows, and various other activities.
Economic Development Grants
Idaho Commerce provides the Idaho Gem Grant, Community Development Block Grant (CDBG), and the Rural Community Investment Fund (RCIF) to help qualifying cities, counties, and tribes improve public infrastructure, supporting business expansion and job creation.
Idaho Broadband Grant Program
The Idaho Office of Broadband oversees multiple grant programs aimed at expanding broadband access and connectivity throughout Idaho.
Cap on Property Tax
Businesses that invest a minimum of $1 billion in capital improvements in a county may be eligible for a county property tax exemption on all property valued in excess of $400 million per year, for a duration of seven years.
Capital Investment Property Tax Exemption
Businesses planning new non-retail facilities may be eligible for a partial or full property tax exemption from local county commissioners for up to five years. The required investments for this exemption range from $500,000 to $3 million, depending on the county.
Opportunity Fund
The Opportunity Fund serves as a deal-closing fund for qualifying projects.
