Sales tax on food a hot topic

It’s one of the most talked-about issues this election season: Democrats and Republicans say something needs to be done about Idaho’s sales tax on groceries. But they have different ideas on how to do it.

Democrats want the tax lifted entirely; Republicans say that would eliminate too much state revenue too suddenly and are instead proposing an increase in the income tax credit given for grocery sales.

Groceries are taxed at the standard rate of 6 cents per $1.

Taxpayers can claim a $20-per-person credit on their annual income tax filings. People over 65 can claim $35.

Some lawmakers have tried to increase the grocery tax credit for years, but this year’s 1-cent increase in the sales tax pushed the issue into the spotlight.

Now, virtually every candidate is talking about it.

“I can’t conceive of anything that’s more ludicrous than charging someone for a necessity,” said Chuck Thomas, the Democrat running for state Senate in District 5.

Lyndon Harriman, the Democratic candidate for the state House in District 5, said requiring citizens to pay the government every time they buy food to feed their family is wrong.

He ran for state representative in the last two elections and said he has always pushed to eliminate the grocery sales tax.

Republicans, the majority party, have ignored the issue until this election season rolled around, Harriman said.

But the Republicans say eliminating the tax is not that easy.

Sales tax on groceries brings about $155 million into the state coffers annually, they say, so eliminating that tax outright would leave a big hole in the state budget.

“Where do we cut the $155 million out of the state budget? My question to the Democrats is, do we cut it from education?” said Rep. Bob Nonini, R-Coeur d’Alene.

“They want more money for education, but they’re willing to just go and slash $155 million from the budget.”

But Democrats say additional money coming into the state from the growing economy can be used in place of the sales tax revenue. Plus, there are sales tax exemptions that can be eliminated, including some in place since the sales tax was adopted in 1965, Thomas and Harriman said.

“We can find the money. It’s there,” Thomas said.

GOP Rep. Frank Henderson of Post Falls, Harriman’s opponent, said he and Nonini are working with other lawmakers on a plan that would boost the per-person income tax credit on groceries – now $20 – to likely $100. That would mean the average family would get a refund of about two-thirds of what they pay in groceries sales tax.

But they are waiting until revenue and surplus projections come in December to pin down the increase.

Republican Sen. John Goedde of Coeur d’Alene is drafting legislation that would set up a method for reviewing sales tax exemptions.

Nearly 80 exist, and Goedde’s plan calls for lawmakers to review about a fifth of them each year, keeping the ones that make sense and throwing out the others that don’t.

The thought is that enough exemptions could be tossed out to make up the revenue that would be lost by eliminating the grocery sales tax.

But Harriman said under that plan, families wouldn’t see an immediate change in what they pay.

They may get a bit more money back at the end of the year, but “that’s not going to alter their buying process,” he said.

Post Falls resident Sue Otis said she didn’t notice the sales tax increase this month.

She moved here from Minnesota, where there’s no tax on groceries or clothes. But she said the difference in tax systems doesn’t matter.

“You just pay it,” she said. “You have to eat.”