Grocery tax relief bill to get public hearing

BOISE – New grocery tax relief legislation was introduced in the Idaho Legislature on Friday, just as a national report gave Idaho the “dubious distinction” of being the only state with a grocery tax credit that excludes the poor.

“Every other state that offers food tax benefits recognizes that low-income families have the greatest need for those benefits,” said the Washington, D.C.-based Center on Budget and Policy Priorities.

The legislation introduced Friday in the House Revenue and Taxation Committee would remedy that, and also would expand the current $20 per person annual credit to $50 for low-income people and to $30 for everyone else. Seniors would see their credit rise to $40, from $35. It also includes provisions for the credit to continue to rise in future years to eventually hit $100 per person, which is roughly the amount Idahoans pay in sales tax on groceries.

Opponents said they preferred to remove the sales tax from food entirely. “Thirty-six states don’t tax food at all, and I would say that those states are doing it right and we ought to join them,” said state Rep. Phil Hart, R-Athol.

But supporters of the bill said the state can’t afford that this year. “If we don’t pass this bill we may go home and do nothing,” said state Rep. JoAn Wood, R-Rigby. “I think it’s about time for us to take a few steps.”

Idaho’s current grocery tax credit isn’t available to anyone who makes less than the amount that requires them to file income tax returns, which is $17,500 a year for a married couple filing jointly. The only exceptions are those who are over age 62, blind or disabled veterans; they can get the credit even if they make less.

Dan John, tax policy manager for the Idaho State Tax Commission, estimated that a little more than 200,000 Idahoans are ineligible because they fall below the income threshold.

Gayle Woods, chairwoman of the Idaho Interfaith Roundtable Against Hunger, said, “It makes no sense to leave these families out.”

The legislative committee voted 12-6 to introduce the new bill and hold a public hearing on it on Monday, but only after it had defeated three other motions, including one to reject the bill outright, one to introduce it, and one to send it on a fast track to the full House without another hearing.

A similar bill introduced earlier was killed. This one costs the state slightly less next year by setting the low-income credit at $50 rather than $55, and eliminates a complex index included in the earlier bill. Instead, the new bill would raise the credit $10 a year, if economic conditions permit, until it reached $100.

“I’m hopeful that this will be more appealing,” said state Rep. Cliff Bayer, R-Boise, sponsor of both the previous bill and the new one. The new bill falls within Gov. Butch Otter’s budget recommendation for next year, while the earlier one slightly exceeded it.

Nick Johnson, co-author of the Center on Budget and Policy Priorities report, said, “At the very least, Idaho lawmakers should make low-income households eligible for the same credit that all other Idahoans – including millionaires – receive.”