Sales tax goes up on Sunday

Buy those big-ticket items before Sunday, when Idaho’s sales tax jumps to 6 percent.

Local retailers said most shoppers likely are unaware of the 1 percentage point increase, which will mean an extra 65 cents on a $65 bag of groceries or $200 more for a $20,000 car.

Knudtsen Chevrolet in Post Falls is using it as a sales pitch to encourage buyers to save some cash.

“We want to tell everyone to please rush out and buy big-ticket items like cars and trucks,” President Eve Knudtsen said, adding that her sales team is reminding customers of the potential savings.

At Best Buy in Coeur d’Alene, customer experience manager Joanie Stoddard said there hasn’t been a rush.

“I haven’t heard anything, and I’m on the floor all the time,” Stoddard said.

Even at 6 percent, Idaho’s sales tax is lower than Spokane Valley’s 8.6 percent tax. Stoddard said the Coeur d’Alene electronics store already gets a lot of business from Spokane County shoppers looking to save money on televisions and stereos.

Idaho is raising its sales tax as part of a tax reform plan that also includes shifting a portion of school funding off the property tax, lowering property taxes.

Idaho’s sales tax had been at 5 percent from 1986 until 2003, when lawmakers approved a temporary, two-year hike to 6 percent to cope with a state budget crisis. The tax dropped back down to 5 percent on July 1, 2005.

However, while it was at its higher level, few apparently noticed. When Boise State University’s annual public policy survey asked Idahoans last winter what they thought of the current sales tax – without mentioning that the state was in the midst of a two-year tax increase to 6 percent – only 33 percent said it was too high. A whopping 63 percent said it was “about right.”

According to the 2005 District of Columbia Nationwide Comparison of Tax Rates and Tax Burdens, the average Idaho family of four can expect to spend about $144 a year more on sales tax with a 1 percent increase.

Although the numbers are small, the biggest impact may be on low-cost necessities, because Idaho is one of only a few states that fully tax groceries. Lawmakers and current Gov. Jim Risch have been calling for changing that when the Legislature convenes again in January, either by lowering the tax on groceries or raising the minimal grocery tax credit Idaho now hands out to residents on their income tax returns.

The sales tax jump to 6 percent doesn’t appear to be inspiring Sherman IGA shoppers to buy before Sunday.

“Gas costs too much to be stocking up on anything,” manager Lee Palmer said. “People are getting rid of stuff. Some have hawked their VCR so they have gas to go to work.”