(Before you continue reading, this article is not to be considered as financial advice. Nor should it be considered as an actual quote for your taxes. Speak with a certified accountant before you try to make any plans for your finances. These figures are a snapshot of taxes in 2018 – your mileage may vary)
Idaho and California are different in many ways, but some of those differences are pretty subtle. Let’s look at some of the taxes and fees you’ll notice are different between the two states and some that you won’t find too different after your move.
One of the first things you might do is stop for a tank of gas, where you’ll save some money. Fuel taxes in Idaho are lower, at 33 cents per gallon. In California, you pay 46.7 cents on each gallon of gas, 61 cents on diesel. That’s a savings of nearly 14 cents per gallon of gas in Idaho, 28 cents on diesel.
When it’s time to register your car you will need to get an Idaho title first, which costs $14, and a VI
N inspection of $5. Don’t worry about an emissions test – they are only required in Ada and Canyon counties (Boise area) and are normally done after you register your vehicle. They usually run about $20.
The car registration fee structure is much simpler in Idaho – no need for an online estimator! Instead of charging personal property taxes on vehicles, Idaho employs a fee structure based on the age of the car. A car less than 2 years old registers for $69, it’s $57 for cars three to six years old and $45 for anything older than that. Motorcycles register for $25.
There are a few additional fees. Idaho road maintenance is funded largely by gas taxes, so there is a surcharge of $140 for most electric cars and $75 for plug-in hybrids to help make up the difference. If you’re settling in Ada County, voters approved an extra registration fee to help pay for bike lanes and other improvements make safer routes to schools. Currently, the Ada County fees are $40, $36, or $24, based on the vehicle age bracket for the statewide registration, with $8 for motorcycles.
Since you paid less to register your vehicle, why not consider a personalized license plate ($25) or special interest plate (up to $35)? You should also consider an Idaho State Parks Passport. The annual pass to all Idaho state parks is just $10 per year and is assigned to a specific vehicle, it’s not transferable and can only be purchased through the DMV. It includes boat launch fees within state parks and parking at events at the Ford Idaho Center in Nampa. While California does have 280 state parks compared to Idaho’s 28, the annual fee of $10 sure beats $195 for the California Explorer.
Retail sales and service taxes illustrate a few quirky distinctions between Idaho and California. The Golden State sales tax of 7.5% can be marked up by local sales taxes up to 2.5%. Idaho’s rate is 6% statewide, and local sales taxes (above the state tax) are allowed as high as 3% but only in small resort/tourist communities. Some of the tourist towns limit their local sales tax to lodging, restaurant food and alcohol by the drink (max is 3%).
Idaho vs. California Taxes on Tabaco and Liqour
While neither state taxes prescription drugs, Idaho does charge a sales tax on food. However, the state offers a grocery tax credit with your state income tax, averaging $100 per person per year on the Idaho tax return. Both states also tax alcohol and tobacco, no surprises. Idaho’s excise tax on beer is 5 cents less per gallon, but you’ll pay more for wine. There is a growing wine industry in southern Idaho, but the excise tax is 25 cents more per gallon than in California.
The bigger differences are for tobacco and liquor. Cigarettes are taxed considerably lower in Idaho at 57 cents per pack as opposed to $2.87 in California. For spirits, you’ll mostly notice the change in location rather than the price. Idaho is one of 16 states that control liquor sales directly, either through state-run liquor stores or partner businesses. Our neighboring states of Montana, Oregon, Utah, and Wyoming do the same. There are over 60 state stores and 100 plus contract sellers around the state. Don’t worry about the lack of libation locations, remember that there are fewer than 2 million people in the state so there’s plenty to go around.
In California, you do pay taxes on tire repairs, but that’s not a thing in Idaho. Here we do have taxes on downloads if you’re retaining permanent rights to the book or song, and there are taxes on entry fees to amusement parks and the circus, and on sporting and cultural event tickets. And uh, if you’re learning how to hunt or fish, you also have to pay taxes on fishing and hunting guide services, taxidermy, and custom meat slaughtering. Happy hunting!
Income taxes are complicated as both states are responding to changes in the federal tax code from 2017. In Idaho, both personal and business tax rates have been reduced, with top-tier rates set at 6.925%. Standard deductions are now $12,000 for singles, $18,000 for heads of households, and $24,000 for couples filing jointly, but most itemized deductions were either capped or eliminated. Two other changes families may notice in the Idaho tax code – child tax credits per qualifying child are now $205, and K-12 and private school expenses are now eligible for withdrawal from a 529 Education Savings account.
There is some good news for homeowners when it comes to property taxes. Both states offer homeowner (homestead) exemptions on property taxes. California’s exemption knocks $7,000 off the value of the home for tax purposes, but in Idaho, the exemption is as high as $100,000. Real estate property is taxed at about 1% in both states, however local taxes in Idaho put the urban average rate higher at about 1.6%, rural rates remain closer to 1%. Although the rate in Idaho can be higher, the lower assessed home values make the property tax burden much lighter in Idaho.
These are just a few of the financial differences and similarities between two great states. When moving from the Golden State to the Gem State you’ll find great places to live, work, and play, and you’ll mostly pay less to enjoy it all.