The City of Sandpoint is the largest of the four incorporated cities at the heart of Bonner County. The others are Dover to the west of Sandpoint and Ponderay and Kootenai to the north and east. Each is governed by a Mayor and City Council. Bonner County, of which Sandpoint is the county seat, is governed by a three-member commission.

Both the city of Sandpoint and the county have full-time planners who work with appointed planning commissions on the development of planning objectives and zoning ordinances. Anyone considering building is directed to them for help in beginning the application process. A resource for finding contractors, the Sandpoint Plan Center is located at the Greater Sandpoint Chamber of Commerce at 900 North Fifth Ave.

Idaho taxes are among the lowest in the country. Property taxes within the City of Sandpoint are about 1.8 percent of assessed market value; county taxes are approximately one percent. Idaho's income tax code follows federal guidelines with graduated rates that range from 1.6 percent to 7.8 percent. Sales tax is currently 6 percent.