Idaho yesterday formally ended state income taxes on gold and silver as part of its largest tax cut in state history.
House Bill 40, sponsored by House Speaker Mike Moyle and begrudgingly signed by the state’s liberal Republican governor Brad Little, provides a sweeping $253 million income tax cut for Idahoan taxpayers by lowering the rate from 5.695% to 5.3% while also adding two specific exemptions.
The new law includes a tax-neutral provision whereby taxpayers back out any “net capital gains or losses that meet the definition of precious metal bullion or monetized bullion… included in the taxpayer’s federal adjusted gross income.”
Idaho already had a long-standing sales tax exemption on purchases of precious metals. By exempting income connected with precious metals sales, it now becomes less difficult for gold and silver to resume their constitutional role as money in Idaho. All tax cuts contained in HB 40 take effect as of January 1, 2025, pursuant to the bill’s emergency provisions.
Championed by Speaker Moyle and supported by the Sound Money Defense League and Money Metals Exchange, HB 40 received overwhelming support in both chambers of the Idaho legislature, reflecting a recognition of the importance of sound money principles at a time of blistering inflation.
Moyle said today, “I’m proud to help secure another $253 million in income tax cuts for Idaho families. Meanwhile, it makes no sense for Idaho to tax gold and silver, the only money mentioned in the U.S. Constitution.”
Political observers have noted that Governor Little appears worried about the potential of a conservative primary challenger in the upcoming 2026 election and also faces a high likelihood of veto overrides, so he has signed bills this session that the liberal Republican might normally be expected to veto.
Last year, Little violated his fiduciary duty to taxpayers by vetoing a bill that would have merely permitted, not required, the State Treasurer to hold physical gold to hedge risks endemic to the state’s large debt paper holdings.
Jp Cortez, executive director of the Sound Money Defense League, stressed the importance of Idaho’s new stance towards the precious metals, stating “Taxpayers are not permitted to deduct losses when the purchasing power of the Federal Reserve note declines, so it would be unfair to impose income taxes when gold and silver rise in nominal value largely as a result of currency debasement.”
“Idaho is now the 14th state without income taxes on gold and silver, following Alabama and Nebraska which enacted similar exemptions last year ,” Cortez continued.
Idaho joins its neighbor Wyoming as the first two states to enact sound money legislation so far in 2025. Last month, Wyoming enacted a law establishing a state reserve fund of no less than $10 million in physical gold — only months after the State of Utah had greenlighted a $180 million physical gold holding as part of its own state reserves.
Idaho’s current ranking of 14th in the 2025 Sound Money Index is expected to rise to a top-five ranking with the passage of House Bill 40.