Amends, repeals, and adds to existing law to revise provisions regarding the rate of income taxes.

The purpose of this bill is to give the state of Idaho the flexibility to increase revenue should the uncertainty concerning state and national economic conditions require considering doing so. This bill does not repeal H40. It only puts a potential one-year pause on just the income tax portion of H40. It does not change the military or capital gains on precious metals portion of H40. The bill restores the income tax rate to the rate prior to H40 (5.695%) only for tax year 2026 and then returns to the tax rate in H40 (5.3%) for tax year 2027 and beyond. If this bill should become law and economic conditions in January 2027 are favorable, this law could be repealed retroactive to January, 2026 by the 2027 legislature and the income tax rate would remain unchanged at 5.3% for 2026 and beyond.