Idaho is one of few states charging taxes on groceries. What’s changing this year?
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BOISE (Idaho Statesman) — Idaho Gov. Brad Little on Thursday signed a $50 million expansion of the state’s grocery tax credit, marking another session without a successful removal of the sales tax on groceries.
Idaho lawmakers since at least 2007 have proposed no longer taxing groceries, even prompting an Idaho Supreme Court decision that upheld a veto of the tax repeal. After another push this year, the Legislature instead approved a bill that raised the annual tax credit for groceries that the state provides families by $35.
Idaho is one of few states that charge a regular sales tax on groceries, while a handful of others charge a lower rate, according to the National Conference of State Legislatures. An Idaho Statesman survey in 2022 showed that two-thirds of Idaho residents supported eliminating the 6% tax on groceries.
Gov. Little applauds ‘historic tax relief’
House Bill 231 would raise the grocery tax credit to $155 starting retroactively for the 2025 tax year. Idahoans who itemize their grocery expenses on their income tax returns can claim up to $250 under the new law.
The credit is part of hundreds of millions of dollars of proposed tax cuts this year. Little already signed a $253 million tax cut — most of which is projected to come from lowering the state’s income tax rate by nearly 0.4%.
“I love the signal we send to Idaho families every year when we deliver even more tax relief while taking care of the needs of a growing state,” Little said in a statement. “As we continue to deliver historic tax relief, we must ensure our budget balances as the Idaho Constitution requires.”
Earlier this year, Little expressed concerns with the amount of the Legislature’s potential tax cuts. Little had proposed $100 million in cuts during his January State of the State address.
The grocery tax bill sparked debate in the Senate this month when Sen. Christy Zito, R-Hammett, tried to send the bill for amendments to eliminate the tax on groceries. Ultimately the move failed, and lawmakers passed the original bill.
“There is no path forward to repealing the grocery tax, we know that,” said Sen. Tammy Nichols, R-Middleton. ”We’re either going to give the people of Idaho back something or nothing at all.”
The credit is not automatic. Those required to file a tax return can claim it on their return, according to Idaho State Tax Commission spokesperson Renee Eymann. Idahoans who don’t have to file a tax return can file one of two forms: Form 24 for those 65 years and older and Form 40 for those under 65.
In the 2023 tax year, People claimed more than 1.6 million tax credits, Eymann told the Statesman.
The Tax Commission doesn’t have an estimate for how many people don’t claim the credit, Eymann said.
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