This article is part of Idaho Freedom Foundation’s special series highlighting our 2027 Freedom and Family Agenda, a conservative blueprint for a freer, stronger Idaho. Read the full agenda here.

Often “tax relief” put forward by “conservatives” means shifting the bill from one tax to another. Recent property tax relief, for example, was paid for by diverting sales tax. If we want to lower taxes in a sustainable manner, the goal must be to shrink spending first and then return the savings. The plan to shrink spending was outlined in the first two articles, so how will the money be returned to Idaho taxpayers?

Our fiscally conservative budget cuts roughly $400 million in General Fund requests for Fiscal Year 2028 (FY28). It further sweeps about $150 million in idle fund balances to the General Fund this year. The state also projects running a nearly $400 million surplus through the end of the fiscal year. Relief can start by returning excess funds to Idaho taxpayers.

A $750 million rebate, or about $1,000 per Idaho household, should be a starting point for helping Idaho families struggling with the cost of living. Using starting cash, extra revenue, fund sweeps while curbing FY27 supplementals means the Legislature could enact meaningful tax relief while maintaining a positive balance on the bottom line. The current surplus is simply overcollected taxes, and they ought to be returned to those from whom they were taken.

Larger opportunities to cut taxes are also part of our agenda. Currently, Idahoans collectively pay $2.29 billion in property taxes. This is roughly split equally between counties, cities, and services including schools. The difference between our plan and others is that we don’t intend to simply replace the property tax with a new or higher sales tax, but will accomplish abolishing the property tax by cutting state spending. This makes it possible to divert sales tax without needing to raise more revenue. This phase-out of property taxes will bring real savings to the citizens of Idaho without impacting the core constitutional services the state of Idaho provides.

Another tax that should be repealed is the 6% tax on groceries. Idaho is one of only eight states that still apply a tax to groceries, and its rate is the highest among them. Part of this is refunded through a $155 per-person tax credit, which cuts the total revenue by around 50%. This halfway house is an absurdity, and the state should move forward with full elimination, especially with the high cost of food. Eliminating the tax fully would save Idahoans over $200 million annually.

The rule should be that the government is right-sized around constitutional principles, and excess money is sent back to the taxpayers through lower taxes and fees. Our budget embraces this principle and ultimately lays out a path to billions of dollars in tax relief for the taxpayers of Idaho. When conservative policies are actually embraced and government shrinks, it becomes possible to create serious financial relief for Idaho taxpayers. Idaho Freedom Foundation is committed to realizing these goals as part of our Freedom and Family Agenda.