Key Points

  • The Idaho Supreme Court held that Idaho Code section 63-3025(1), as amended in 2021, unambiguously imposed the 6.5% corporate rate for all taxable years commencing on and after January 1, 2001.
  • The emergency clause's January 1, 2021 effective date governs only when the amended statute became enforceable, not which tax years the rate covers, so WAFD received the 6.5% rate for its entire fiscal year running from October 1, 2020, to September 30, 2021.
  • The 2022 and 2025 amendments to section 63-3025 were not curative acts because their retroactive dates reached back only to January 1, 2022, and January 1, 2025.
  • On rehearing, the court reaffirmed Verska v. Saint Alphonsus Regional Medical Center and declined the Tax Commission's request to address the refund and credit entitlements of other taxpayers.
  • The substitute opinion withdrew the court's April 23, 2026 opinion and affirmed summary judgment for WAFD, with costs on appeal awarded to WAFD.

The Idaho Supreme Court on Tuesday again held that the Legislature's 2021 cut in the corporate income tax rate applied to all of WAFD Inc.'s fiscal year that began in October 2020. The ruling turned aside the Idaho State Tax Commission's request on rehearing to reverse, after the agency warned that the decision "could require the State to issue tens, if not hundreds, of millions of dollars in tax refunds and credits."

Justice Moeller wrote for a unanimous five-member court in a substitute opinion that withdrew the court's April 23, 2026, opinion. Justices Bevan, Brody, Zahn and Meyer joined both the opinion and the decision on the commission's rehearing petition. The court affirmed a summary judgment for WAFD, formerly known as Washington Federal Inc., entered by District Judge Lynn G. Norton of Ada County.

The decision turns on a date the Legislature left untouched. Idaho Code section 63-3025(1), as amended in 2021, lowered the rate from 6.925% to 6.5% "[f]or all taxable years commencing on and after January 1, 2001." An emergency clause in the bill made the amendment effective retroactively to Jan. 1, 2021. The court held that the 2001 date controls which tax years the new rate covers, while the 2021 date controls only when the law became enforceable.

WAFD, a Washington holding company, keeps a fiscal year running from Oct. 1 to Sept. 30. Because the new rate took effect partway through its 2021 fiscal year, the company applied a "blended rate" of 6.607%, prorating the old rate over 92 days in 2020 and the new rate over 273 days in 2021. It claimed a refund of $593,271.

The commission's Revenue Operations Division applied the 6.925% rate to the whole year and cut the refund by $70,084, to $523,187. On redetermination, the commission concluded that "[n]o section of the Idaho Code allows a taxpayer to prorate its tax rate for any taxable year." WAFD then sued and won in district court.

On appeal, the commission argued that the new rate reached only tax years beginning on or after Jan. 1, 2021. WAFD argued primarily for the 6.5% rate throughout, with proration as a fallback. Justice Moeller wrote that "it is unnecessary for us to weigh each of the three alternative interpretations of section 63-3025 because the plain language of the statute only supports one interpretation."

When the Legislature set a uniform rate in 2001, it matched the statute's reference date to the law's Jan. 1, 2001, effective date. When it cut the rate in 2012, 2018 and 2021, it left the 2001 reference date in place. Justice Moeller wrote that "the legislature knows how to change the reference date of a tax statute when it intends to do so." The commission had called the 2021 omission inadvertent, but the court wrote that "it is far from unprecedented."

The commission also argued that the court's reading "cannot be what the [l]egislature meant when it amended the statute in 2021." The court relied on Verska v. Saint Alphonsus Regional Medical Center, a 2011 Idaho decision holding that courts may not rewrite an unambiguous statute even if its literal reading seems absurd. In a footnote, the court added that "it would be difficult to conclude that a legislative act was unintentional when the legislature repeated it at least three times—in 2012, 2018, and 2021."

The court likewise rejected the commission's argument that the Legislature's 2022 and 2025 amendments were curative acts, meaning laws that correct an error in an earlier enactment and apply retroactively. The 2022 amendment reached back only to Jan. 1, 2022, and the 2025 amendment only to Jan. 1, 2025. Relying on its 2017 decision in Chandler's-Boise LLC v. Idaho State Tax Commission, the court wrote that "we cannot presume that the legislature intended either amendment to retroactively 'cure' the statute's meaning for periods predating those specified retroactive dates."

On rehearing, the commission asked why the 2021 text, rather than the 2018 version that was in force when WAFD's fiscal year began, should supply the rate for a year that straddled the effective date. The court responded that it "clearly answered this question" in its original opinion. The court held that "because WAFD's fiscal year commenced after the January 1, 2001, reference date and ended after the January 1, 2021, effective date, WAFD was entitled to the reduced rate for the entire fiscal year."

The commission had asked the court for further guidance on "how to resolve the deluge of amended tax returns it expects to be filed as a result of the Court's decision." The court declined. "Our decision addresses only the narrow question we were originally asked: what tax rate applies to WAFD's 2021 fiscal year," the court wrote in its decision on rehearing. Claims by other taxpayers, the court said, "will turn on the amendments to section 63-3025 then in effect, their own respective filing dates, and their own discrete facts, which are not before us."

The commission said at oral argument that it was not asking the court to overrule Verska, but the court wrote that its position seemed to imply a limited exception. "Our holding in Verska has acted as a lodestar in steering our course along a path of judicial restraint, deference to the legislature's policy choices, and fidelity to legislative enactments as written," the court wrote. "This case presents no reason to vary from that path."

Richard G. Smith of Hawley Troxell Ennis & Hawley LLP argued for WAFD. The Tax Commission was represented by the office of Idaho Attorney General Raúl R. Labrador.

The substitute opinion affirms the district court's ruling that WAFD is entitled to a refund calculated at the 6.5% rate for its entire 2021 fiscal year. The court awarded WAFD its costs on appeal as the prevailing party under Idaho Appellate Rule 40(a).