Lawmakers propose grocery tax cuts
BOISE – Idaho lawmakers introduced four grocery tax relief proposals Wednesday, including Gov. Butch Otter’s plan, and started planning for a big hearing next week on all four.
“We want to expedite it because this is one of our linchpins for doing the whole budget scenario,” said Rep. Dennis Lake, R-Blackfoot, chairman of the House Revenue and Taxation Committee. “So we’ll push it right along.”
Idaho raised its sales tax by 1 cent, to 6 cents on the dollar, in August as part of a property tax relief push. But lawmakers didn’t address the fact the state is one of a few that still charges the full sales tax on groceries. Idaho offers a $20 per person annual grocery tax credit ($35 for those over age 65), but the state estimates Idahoans now spend five times that much in sales taxes on groceries.
Otter favors a much-increased but targeted grocery tax credit to benefit low-income Idahoans. The poorest families would get a grocery tax credit of up to $90 per person, or up to $105 if they’re over age 65. The credit would drop as incomes rise, with families of four that earn more than $50,300 no longer receiving any credit. Otter’s plan would cost the state an additional $22 million a year.
Reps. Jim Clark, R-Hayden Lake, and Phil Hart, R-Athol, introduced their own bill, seeking to remove the sales tax from groceries in a phased-in, four-year plan. That’s somewhat like former Gov. Jim Risch’s proposal to phase out the sales tax on food over the next six years.
“I wanted to go with two years,” Clark said. “We cut the baby in half and went with four.”
Rep. Cliff Bayer, R-Boise, and a long list of co-sponsors introduced a bill to simply increase the grocery tax credit for everyone. That measure, estimated to cost the state an additional $47.5 million a year, would raise the credit from $20 to $50 for everyone, and from $35 to $70 for those over age 65.
Ten North Idaho lawmakers signed on as co-sponsors of Bayer’s bill.
“It looked like he had a lot of support from the north on it, and it looked like a fair compromise,” said Sen. John Goedde, R-Coeur d’Alene.
Sen. Jim Hammond, R-Post Falls, said, “It looked like the most reasonable effort with the best chance to succeed.”
House Minority Leader Wendy Jaquet, D-Ketchum, introduced a bill to eliminate half the sales tax on groceries, at a cost to the state of about $90 million a year. That, she said, “provides relief daily at the cash register. … It provides relief to everyone.”