Idaho tax incentives for businesses: Business Advantage
Idaho Department of Commerce
3.75% credit + 25% sales tax rebate
Researched for this program: 5 rejection traps · 7 required documentsWhat decides this award ↓
Idaho Business Advantage gives a business that invests $500,000 in new facilities and creates 10 jobs paying $40,000 a year a 3.75% investment tax credit and a 25% sales and use tax rebate.
Idaho Business Advantage is a package of state tax incentives for businesses that add jobs and invest in new facilities. It pairs the income tax credits and the sales and use tax rebate with a possible county property tax exemption. The minimums are $500,000 in new facilities and at least 10 new jobs, each paying $40,000 a year plus benefits. There is no formal application: the Idaho State Tax Commission runs it and you claim it by filing tax documentation. Manufacturing, technology and headquarters projects are the usual fits.
- Funding type
- Tax Credit
- Level
- State
- Amount
- Three pieces: (1) Enhanced Investment Tax Credit of 3.75% on new, depreciable, tangible personal property placed in Idaho during the project period; (2) Real Property Improvement Tax Credit of 2.5% on new plant, buildings and structural components that do not qualify for the investment credit; (3) Sales and Use Tax Rebate of 25% of the sales and use tax paid on property constructed, located or installed at the project site. Counties may also exempt all or part of the new investment value from property tax for a set period.
- Realistic amount
- A company that places $2M of new equipment in Idaho earns a 3.75% investment credit of $75,000 (3.75% x $2,000,000), plus a rebate of 25% of the sales and use tax it paid on the project.
- Deadline
- Ongoing — no application window. Claim through the Idaho State Tax Commission by filing Form 89SE with your tax return for the year credits are requested.
- Status
- active
- States
- ID
- Payment model
- tax offset
Who qualifies
- A business investing at least $500,000 in new facilities in Idaho
- At least 10 new jobs, each paying $40,000 a year ($19.23 an hour) plus benefits
- The average wage of the additional employees during the project period must be at least $15.50 an hour plus benefits
- Credits are claimed with the Idaho State Tax Commission by filing Form 89SE before filing taxes for the year credits are requested
Hard requirements
- Minimum 10 new jobs
- Minimum investment: $500,000 in new facilities
What it covers
Eligible expenses
- New capital equipment and machinery installed in Idaho (drives the sales and use tax rebate and the investment tax credit)
- New construction of commercial/industrial facilities in Idaho (qualifies for investment component)
- New full-time W-2 jobs at qualifying wages (drives the employment component of the package)
- Software and technology infrastructure qualifying as personal property
Ineligible expenses
- Replacement of existing equipment or employees (must be net-new)
- Investment outside Idaho
- Part-time positions do not count toward job minimum
How to apply
-
1
Check the minimums
Confirm the project puts at least $500,000 into new facilities and adds at least 10 jobs paying $40,000 a year plus benefits.
-
2
Complete Form 89SE
Interested businesses complete Idaho Tax Commission form 89SE before filing taxes for the year in which credits are requested.
-
3
File with your return
The incentive has no formal application. It requires filing tax documentation with the Idaho State Tax Commission.
-
4
Talk to Idaho Commerce
For help with the project, contact attraction@commerce.idaho.gov or 208-287-0779. Counties decide any property tax exemption on their own.
The sales and use tax rebate covers tax your business or its contractors actually paid on property built, located or installed at the project site. Keep those tax records from the start of the project period.
Deadline & timing
There is no application window and no formal application. File Form 89SE with your tax return for the year you request the credits. Plan the project dates early: the credits apply to property placed in Idaho during the project period.
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