The dispute centers on a drafting mismatch in Idaho Code section 63-3025. In 2021, the Idaho Legislature amended the statute to lower the corporate tax rate from 6.925% to 6.5%. The amended text specified that the new rate applied to all “taxable years commencing on and after January 1, 2001.” However, an emergency clause in the bill set the effective date of the amendment as January 1, 2021.
WAFD’s fiscal year runs from October 1 to September 30, straddling the January 1, 2021 effective date. WAFD filed its 2021 tax return using a blended rate that prorated the two different rates across the fiscal year, claiming a refund of $593,271. The Tax Commission’s Revenue Operations Division rejected the blended calculation, applying the higher 6.925% rate to the entire fiscal year and reducing WAFD’s allowed refund by $70,084.
The Tax Commission upheld the Division’s determination on redetermination, arguing that Idaho law does not allow taxpayers to prorate tax rates for any taxable year. WAFD sued in Ada County district court, which granted summary judgment in favor of the bank. The district court held that because WAFD’s fiscal year commenced on October 1, 2020—a date after January 1, 2001—the plain language of the statute mandated application of the lower 6.5% rate to the entire year.
The Idaho Supreme Court affirmed, holding that the statute’s plain language is unambiguous. The court reasoned that the phrase “commencing on and after January 1, 2001” establishes the scope of covered tax years, while the emergency clause’s effective date merely specifies when the statute became legally enforceable. The court noted that the legislature knows how to change a reference date when it intends to do so, pointing out that previous amendments in 2012 and 2018 left the “January 1, 2001” date unchanged despite having different effective dates.
The court rejected the Tax Commission’s argument that subsequent 2022 and 2025 amendments to the tax code served as “curative acts” clarifying legislative intent. The court explained that those later amendments lacked retroactive application to the 2021 period and therefore could not be used to rewrite the meaning of the 2021 statute. The court emphasized that it cannot revise an unambiguous statute even if the literal interpretation seems illogical, as doing so would usurp legislative power.
WAFD was awarded costs on appeal as the prevailing party. The decision resolves the immediate dispute over WAFD’s 2021 tax liability, confirming that the reduced rate applies to its full fiscal year.