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LEGISLATURE
OF
THE
STATE
OF
IDAHO
Sixty-eighth
Legislature
Second
Regular
Session
-
2026
IN
THE
HOUSE
OF
REPRESENTATIVES
HOUSE
BILL
NO.
605
BY
GANNON
AN
ACT
1
RELATING
TO
TAXATION;
AMENDING
CHAPTER
30,
TITLE
63,
IDAHO
CODE,
BY
THE
AD
-
2
DITION
OF
A
NEW
SECTION
63
-
3022W,
IDAHO
CODE,
TO
PROVIDE
FOR
SUBTRAC
-
3
TIONS
TO
IDAHO
TAXABLE
INCOME
FOR
QUALIFIED
TIPS
AND
OVERTIME
COMPENSA
-
4
TION;
AMENDING
SECTION
63
-
3024A,
IDAHO
CODE,
TO
REVISE
PROVISIONS
RE
-
5
GARDING
FOOD
TAX
CREDITS
AND
REFUNDS;
AMENDING
SECTION
63
-
3077G,
IDAHO
6
CODE,
TO
PROVIDE
A
CORRECT
CODE
REFERENCE;
AMENDING
SECTION
63
-
3077H,
7
IDAHO
CODE,
TO
PROVIDE
A
CORRECT
CODE
REFERENCE;
AND
DECLARING
AN
EMER
-
8
GENCY
AND
PROVIDING
RETROACTIVE
APPLICATION.
9
Be
It
Enacted
by
the
Legislature
of
the
State
of
Idaho:
10
SECTION
1.
That
Chapter
30,
Title
63,
Idaho
Code,
be,
and
the
same
is
1
1
hereby
amended
by
the
addition
thereto
of
a
NEW
SECTION
,
to
be
known
and
des
-
12
ignated
as
Section
63
-
3022W,
Idaho
Code,
and
to
read
as
follows:
13
63
-
3022W.
QUALIFIED
TIPS
AND
OVERTIME
COMPENSATION.
(1)
For
taxable
14
years
beginning
on
or
after
January
1,
2026,
and
before
January
1,
2029,
in
15
computing
Idaho
taxable
income,
there
shall
be
subtracted
from
federal
ad
-
16
justed
gross
income:
17
(a)
The
amount
of
qualified
tips,
as
defined
in
section
224
of
the
In
-
18
ternal
Revenue
Code
as
added
by
P.L.
119
-
21,
received
by
the
taxpayer
19
during
the
taxable
year,
subject
to
the
limitations,
phase
-
outs,
and
20
other
provisions
provided
in
such
section;
and
21
(b)
The
premium
portion
of
qualified
overtime
compensation,
as
defined
22
in
section
225
of
the
Internal
Revenue
Code
as
added
by
P.L.
119
-
21,
re
-
23
ceived
by
the
taxpayer
during
the
taxable
year,
subject
to
the
limita
-
24
tions,
phase
-
outs,
and
other
provisions
provided
in
such
section.
25
(2)
The
state
tax
commission
may
prescribe
rules,
subject
to
legisla
-
26
tive
approval,
as
necessary
to
implement
the
provisions
of
this
section.
27
SECTION
2.
That
Section
63
-
3024A,
Idaho
Code,
be,
and
the
same
is
hereby
28
amended
to
read
as
follows:
29
63
-
3024A.
FOOD
TAX
CREDITS
AND
REFUNDS.
(1)
Any
resident
individual
30
who
is
required
to
file
and
who
has
filed
an
Idaho
income
tax
return
shall
31
be
allowed
a
credit
against
taxes
due
under
the
Idaho
income
tax
act
for
the
32
taxpayer,
the
taxpayer's
spouse,
and
each
dependent,
as
defined
in
section
33
152
of
the
Internal
Revenue
Code,
claimed
on
the
taxpayer's
Idaho
income
tax
34
return
and
awarded
by
the
court
under
section
32
-
706,
Idaho
Code,
if
appli
-
35
cable.
For
tax
year
2022,
the
credit
is
one
hundred
dollars
($100).
For
tax
36
years
2023
and
2024,
the
credit
is
one
hundred
twenty
dollars
($120).
For
37
tax
year
2025
and
each
year
thereafter,
the
credit
is
one
hundred
fifty
-
five
38
dollars
($155).
If
taxes
due
are
less
than
the
total
credit
allowed,
the
tax
-
39
payer
shall
be
paid
a
refund
equal
to
the
balance
of
the
unused
credit.
40
2
(2)
A
resident
individual
who
is
not
required
to
file
an
Idaho
income
1
tax
return
and
for
whom
no
credit
or
refund
is
allowed
under
any
other
subsec
-
2
tion
of
this
section
shall,
subject
to
the
limitations
of
subsections
(3),
3
(4),
(5),
(6),
and
(7)
,
and
(8)
of
this
section,
be
entitled
to
a
refund
in
the
4
amount
provided
in
subsection
(1)
of
this
section.
5
(3)
A
resident
individual
who
has
reached
sixty
-
five
(65)
years
of
age
6
before
the
end
of
the
taxable
year
and
who
has
claimed
the
credit
available
7
under
subsection
(1)
of
this
section,
in
addition
to
the
amount
of
credit
or
8
refund
due
under
subsection
(1)
of
this
section,
shall
be
entitled
to
fifty
9
dollars
($50.00),
which
shall
be
claimed
as
a
credit
against
any
taxes
due
10
under
the
Idaho
income
tax
act.
If
taxes
due
are
less
than
the
total
credit
1
1
allowed,
the
individual
shall
be
paid
a
refund
equal
to
the
balance
of
the
12
unused
credit.
13
(3)
(4)
Except
as
provided
in
subsection
(8)
(9)
of
this
section,
a
14
credit
or
refund
under
this
section
is
available
only
if
the
individual
for
15
whom
a
personal
exemption
is
claimed
is
a
resident
of
the
state
of
Idaho.
16
(4)
(5)
In
no
event
shall
more
than
one
(1)
taxpayer
be
allowed
a
credit
17
or
refund
for
the
same
personal
exemption
or
under
more
than
one
(1)
subsec
-
18
tion
of
this
section.
19
(5)
(6)
In
the
event
that
a
credit
or
refund
is
attributable
to
any
indi
-
20
vidual
for
whom
assistance
under
the
federal
food
stamp
program
was
received
21
for
any
month
or
part
of
a
month
during
the
taxable
year
for
which
the
credit
22
or
refund
is
claimed,
the
credit
or
refund
allowed
under
this
section
shall
23
be
in
proportion
to
the
number
of
months
of
the
year
in
which
no
assistance
24
was
received.
25
(6)
(7)
In
the
event
that
a
credit
or
refund
is
attributable
to
any
indi
-
26
vidual
who
has
been
incarcerated
for
any
month
or
part
of
a
month
during
the
27
taxable
year
for
which
the
credit
or
refund
is
claimed,
the
credit
or
refund
28
allowed
under
this
section
shall
be
in
proportion
to
the
number
of
months
of
29
the
year
in
which
the
individual
was
not
incarcerated.
30
(7)
(8)
No
credit
or
refund
shall
be
paid
that
is
attributable
to
an
in
-
31
dividual
residing
illegally
in
the
United
States.
32
(8)
(9)
Any
part
-
year
resident
entitled
to
a
credit
under
this
section
33
shall
receive
a
proportionate
credit
reflecting
the
part
of
the
year
in
which
34
he
was
domiciled
in
this
state.
35
(9)
(10)
In
lieu
of
the
flat
tax
credit
amounts
provided
in
subsection
36
(1)
of
this
section,
a
resident
taxpayer
may
elect
for
the
taxpayer,
the
tax
-
37
payer's
spouse,
and
each
dependent,
as
defined
in
section
152
of
the
Internal
38
Revenue
Code,
claimed
on
such
taxpayer's
Idaho
income
tax
return,
the
actual
39
amount
of
sales
tax
paid
by
such
persons
on
food
purchases
that
took
place
40
in
Idaho
during
the
taxable
year,
up
to
a
maximum
of
two
hundred
fifty
dol
-
41
lars
($250)
per
person.
To
make
this
election,
the
taxpayer
shall
indicate
42
this
choice
on
the
taxpayer's
tax
return
or
application
and
submit
scanned
43
copies
of
sales
tax
receipts
of
qualifying
food
purchases
along
with
the
tax
44
return
or
application.
If
taxes
due
are
less
than
the
total
credit
allowed,
45
the
taxpayer
shall
be
paid
a
refund
equal
to
the
balance
of
the
unused
credit.
46
The
provisions
of
section
63
-
3042A,
Idaho
Code,
shall
not
apply
to
the
credit
47
provided
in
this
section.
If
a
taxpayer
meets
the
qualifications
under
the
48
provisions
of
subsection
(5)
(6)
of
this
section,
such
taxpayer
shall
not
be
49
eligible
for
the
credit
under
this
subsection.
If
a
taxpayer
misrepresents
50
3
the
amount
of
sales
tax
paid
on
food
purchases
on
such
taxpayer's
tax
return
1
or
application,
the
amounts
that
were
improperly
claimed
shall
be
subject
2
to
recovery
by
the
state
tax
commission
pursuant
to
section
63
-
3045,
Idaho
3
Code,
and
the
taxpayer
shall
be
subject
to
the
penalties
provided
in
sections
4
63
-
3046
and
63
-
3075(b),
Idaho
Code.
5
(a)
For
the
purposes
of
this
subsection,
"food"
means
the
sale
of
food
6
sold
for
human
consumption
and
shall
have
the
same
definition
as
pro
-
7
vided
in
7
U.S.C.
2012
as
that
section
existed
on
January
1,
2025.
The
8
types
and
kinds
of
food
products
on
which
sales
tax
qualifies
as
credit
9
by
this
section
shall
be
the
same
types
and
kinds
of
food
products
that
10
are
eligible
for
purchase
with
benefits
provided
under
the
federal
sup
-
1
1
plemental
nutrition
assistance
program
and
shall
not
include
candy,
12
soda,
restaurant
sales
of
food,
food
sold
in
a
heated
state
or
heated
by
13
a
retail
seller,
two
(2)
or
more
food
ingredients
mixed
or
combined
by
a
14
retail
seller
for
a
single
sale,
or
food
sold
with
an
eating
utensil
pro
-
15
vided
by
the
retail
seller
such
as
a
plate,
knife,
fork,
spoon,
glass,
16
cup,
napkin,
or
straw.
17
(b)
For
the
purposes
of
paragraph
(a)
of
this
subsection:
18
(i)
"Candy"
means
a
preparation
of
sugar,
honey,
or
other
natural
19
or
artificial
sweeteners
combined
with
chocolate,
fruits,
nuts,
20
or
other
ingredients
or
flavorings
in
the
form
of
confections,
21
bars,
drops,
or
pieces.
"Candy"
does
not
include
any
item
that
22
contains
more
than
ten
percent
(10%)
flour
by
weight
or
requires
23
refrigeration.
24
(ii)
"Soda"
means
any
nonalcoholic
beverage
that
contains
natural
25
or
artificial
sweeteners.
"Soda"
does
not
include
beverages
that
26
contain
milk
or
milk
substitutes,
greater
than
fifty
percent
(50%)
27
of
vegetable
or
fruit
juice
by
volume,
or
that
require
preparation
28
before
consumption,
such
as
powders
or
concentrates.
29
(10)
(11)
Any
refund
shall
be
paid
to
such
individual
only
upon
his
30
making
application
therefor,
at
such
time
and
in
such
manner
as
may
be
31
prescribed
by
the
state
tax
commission.
The
state
tax
commission
shall
32
prescribe
the
method
by
which
the
refund
is
to
be
made
to
the
taxpayer.
The
33
refunds
authorized
by
this
section
shall
be
paid
from
the
state
refund
fund
34
in
the
same
manner
as
the
refunds
authorized
by
section
63
-
3067,
Idaho
Code.
35
(11)
(12)
An
application
for
any
refund
that
is
due
and
payable
under
the
36
provisions
of
this
section
must
be
filed
with
the
state
tax
commission
within
37
three
(3)
years
of:
38
(a)
The
due
date,
including
extensions,
of
the
return
required
under
39
section
63
-
3030,
Idaho
Code,
if
the
applicant
is
required
to
file
a
re
-
40
turn;
or
41
(b)
The
fifteenth
day
of
April
of
the
year
following
the
year
to
which
42
the
application
relates,
if
the
applicant
is
not
required
to
file
a
re
-
43
turn.
44
(12)
(13)
The
state
tax
commission
shall
provide
income
tax
payers
with
45
the
irrevocable
option
of
donating
credited
funds
accruing
pursuant
to
this
46
section.
Any
funds
so
donated
shall
be
remitted
from
the
refund
fund
to
the
47
cooperative
welfare
fund,
created
pursuant
to
section
56
-
401,
Idaho
Code,
48
and
shall
be
used
solely
for
the
purpose
of
providing
low
-
income
Idahoans
49
with
assistance
in
paying
home
energy
costs.
50
4
SECTION
3.
That
Section
63
-
3077G,
Idaho
Code,
be,
and
the
same
is
hereby
1
amended
to
read
as
follows:
2
63
-
3077G.
AGREEMENT
FOR
EXCHANGE
OF
INFORMATION
WITH
THE
IDAHO
DE
-
3
PARTMENT
OF
CORRECTION.
The
state
tax
commission
and
the
Idaho
department
of
4
correction
shall
enter
into
a
written
agreement
for
exchange
of
information
5
relating
to
an
individual's
incarceration
status
and
whether
that
indi
-
6
vidual
has
claimed
the
Idaho
food
tax
credit
pursuant
to
section
63
-
3024A,
7
Idaho
Code.
Such
information
shall
be
confidential
to
the
recipient
and
may
8
be
used
by
the
Idaho
department
of
correction
and
the
state
tax
commission
9
only
for
purposes
of
determining
whether
an
incarcerated
person
erroneously
10
claimed
the
food
tax
credit
in
violation
of
section
63
-
3024A(6)
63
-
3024A(7)
,
1
1
Idaho
Code.
No
such
information
shall
be
public
unless
it
is
used
in
the
12
course
of
a
judicial
proceeding
arising
under
the
laws
of
this
state.
The
13
information
provided
by
the
state
tax
commission
shall
be
limited
to
name,
14
date
of
birth,
social
security
number,
an
indication
as
to
whether
the
food
15
tax
credit
was
claimed
under
that
person's
name
or
social
security
number
for
16
a
particular
taxable
year
and
incarceration
status
during
the
year
at
issue.
17
SECTION
4.
That
Section
63
-
3077H,
Idaho
Code,
be,
and
the
same
is
hereby
18
amended
to
read
as
follows:
19
63
-
3077H.
AGREEMENT
FOR
EXCHANGE
OF
INFORMATION
WITH
THE
IDAHO
DE
-
20
PARTMENT
OF
HEALTH
AND
WELFARE.
The
state
tax
commission
and
the
Idaho
21
department
of
health
and
welfare
shall
enter
into
a
written
agreement
for
22
exchange
of
information
relating
to
an
individual's
receipt
of
federal
food
23
stamp
benefits
and
whether
that
individual
has
claimed
the
Idaho
food
tax
24
credit
pursuant
to
section
63
-
3024A,
Idaho
Code.
Such
information
shall
25
be
confidential
to
the
recipient
and
may
be
used
by
the
Idaho
department
of
26
health
and
welfare
and
the
state
tax
commission
only
for
purposes
of
de
-
27
termining
whether
a
person
who
was
receiving
federal
food
stamp
benefits
28
erroneously
claimed
the
food
tax
credit
in
violation
of
section
63
-
3024A(5)
29
63
-
3024A(6)
,
Idaho
Code.
No
such
information
shall
be
public
unless
it
is
30
used
in
the
course
of
a
judicial
proceeding
arising
under
the
laws
of
this
31
state.
Any
information
disclosed
by
the
Idaho
department
of
health
and
32
welfare
pursuant
to
the
provisions
of
this
section
must
be
disclosed
in
33
compliance
with
the
privacy
act
of
1974,
5
U.S.C.
552a,
applicable
federal
34
law
or
regulations
regarding
public
assistance
programs
and
any
applicable
35
state
law
or
regulation.
36
SECTION
5.
An
emergency
existing
therefor,
which
emergency
is
hereby
37
declared
to
exist,
this
act
shall
be
in
full
force
and
effect
on
and
after
its
38
passage
and
approval,
and
retroactively
to
January
1,
2026.
39