Report: Undocumented immigrants paid nearly $72M in Idaho, local taxes in 2022

BOISE (Idaho Capital Sun) – In 2022, undocumented immigrants paid $71.9 million in Idaho state and local taxes, a recent study found.

That means undocumented immigrants — in Idaho, and 39 other states — paid higher state and local tax rates than the top 1% of households living in those states, according to a report by the Institute on Taxation and Economic Policy.

The study “shines a light on how undocumented immigrants pay higher tax rates than the top 1 percent in Idaho,” May Roberts, policy analyst at the Idaho Center for Fiscal Policy, said in a news release Thursday. “This information is important for lawmakers to consider when making policies that affect our tax structure and undocumented folks living in Idaho.”

The study found undocumented workers’ current tax rate in Idaho was 7.2%, compared to 6.4% for the top 1% of all taxpayers.

How do undocumented immigrants pay taxes?

Undocumented immigrants pay a mix of taxes, including sales and excise taxes on purchases, property taxes, and personal and business income taxes, the study said.

About 44% of undocumented immigrant’s tax contributions in Idaho, including local and state taxes, are through sales and excise taxes, while 28% come from property taxes and 27% from income taxes, either personal or business, the news release said.

“This study is the most comprehensive look at how much undocumented immigrants pay in taxes. And what it shows is that they pay quite a lot, to the tune of nearly $100 billion a year,” Marco Guzman, study co-author and senior policy analyst at the Institute on Taxation and Economic Policy, said in the release. “The bottom line here is that regardless of immigration status, we all contribute by paying our taxes.”

How much would undocumented immigrant taxes raise with work authorizations?

In total, the study found undocumented immigrants in 2022 paid over $96 billion in taxes — including federal, state and local taxes. Most taxes, about $59 billion, were paid to the federal government, while over $37 billion went to states and localities, according to the study.

On average, undocumented immigrants that year paid $8,889 in taxes.

But if every undocumented immigrant was granted work authorization, the study projected their tax contributions would increase by $40.2 billion each year — with the federal government set to receive around $33 billion, while states and localities would receive $7 billion.

Idaho’s yearly contributions, under that scenario, would rise from almost $72 million to around $89.9 million.

The study said Idaho’s undocumented population, estimated at 30,000 people, earned an aggregate income of around $1 billion.

The study didn’t attempt to measure broader impacts “from the increased economic activity created by these individuals,” according to a news release. If those are taken into account, that would likely show undocumented immigrants “have an even larger significance to public revenues,” the release said.