Proposed legislation could increase grocery tax credit
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BOISE — A group of the Idaho legislators have been trying to repeal the six percent sales tax on groceries since 2018, but after several unsuccessful attempts, some legislators are trying something different.
A bill currently being debated in the legislature would increase the grocery tax credit in Idaho, rather than repeal the tax itself. Each year, Idahoans can file to receive a grocery tax credit of $100 per person under the age of 65 and $120 for those 65 and older. The new bill would raise the grocery tax credit to $135 per person.
The bill’s sponsors say raising the tax credit is easier than attempting to repeal the grocery tax.
“We’d increase the value of the refundable tax credit to $135. That protects (Idahoans) as well as not creating an additional bureaucracy, which is the problem that we were having on trying to figure out how to peel the sales tax off of groceries,” Rep. Megan Blanksma, R-Hammett, said.
Blanksma explained if the grocery tax was repealed the legislature would have to decide exactly what constitutes a grocery and then all retailers would have to reprogram their computers and cash registers to reflect which items would be taxed and which ones wouldn’t.
“That’s where we get in the weeds and that’s why that refundable tax credit is pretty nice,” Blanksma said.
She said they decided on $135 per person after researching what the average family of four would spend on groceries in a year.
“We went ahead and calculated the amount of groceries a family of four would purchase and tried to shield them from the sales tax on groceries,” Blanksma said.
As it is right now, the grocery tax credit is available to all Idahoans, regardless of if they make enough money to pay income tax.
Under this bill, the grocery tax credit would remain available to all Idahoans.
“It’s a nice clean way of making sure that people can purchase groceries without sales tax,” Blanksma said.
The House and Senate passed a repeal of the grocery tax in the 2018 legislative session, however, then Gov. Butch Otter vetoed the bill. In the 2020 State of the State address, Gov. Brad Little said his budget plan supports grocery tax relief.
The increased tax credit would be paid for through the Tax Relief Fund and according to the bill’s statement of purpose won’t have any effect on the state’s general fund or county and local governments.
The bill, which was introduced Tuesday, is sponsored by Representatives Scott Bedke, Mike Moyle, Jason Monks and Blanksma. It will now go to the House Taxation and Revenue committee for debate.