Grocery tax plan may be revised

BOISE – A little less than an hour after a House bill to provide $47.5 million in sales tax relief on groceries landed in Senate hands Thursday, lawmakers decided they needed to make some changes.

The Senate Local Government and Taxation Committee sent the bill, which would increase the income-tax credit on groceries to $50 for most Idaho residents and to $70 for seniors, to the Senate floor to be amended, after about 45 minutes of public testimony.

“This is what we do with House tax bills,” said Sen. Joe Stegner, R-Lewiston. “There’s room for improvement.”

Once on the floor, the bill could see a slew of potential amendments, ranging from those that would attempt to phase out or eliminate the sales tax on groceries to one that would reduce the amount of tax credit the measure provides from $50 to $40, said Sen. Brent Hill, R-Rexburg, who chairs the committee. The existing tax credit is $20 for residents, and $35 for those older than 65.

But Hill added it’s unlikely that the bill will be worked over to look more like Gov. Butch Otter’s grocery tax relief proposal, which would provide as much as $90 a year in tax relief to low-income residents and cost the state less than half of what the current proposal would.

“That has no support in the Senate,” Hill said. “The governor’s office is going to have a very hard time finding someone to carry that proposal.”

Otter’s proposal, which was shut out by a House committee this month, would give each member of a family of four as much as $90 in tax relief annually if the family earned less than $25,300 and provide relief on a sliding scale for those earning up to $50,300. Those with incomes above that level got no grocery tax credit.

Sen. Russ Fulcher, R-Meridian, one of the sponsors of the House bill, said he favors his measure because it helps Idahoans across the board.

Still, many who testified at the committee meeting said they thought the governor’s proposal did a better job of aiming tax relief where it was needed while saving the state money. And his ideas have the support of Senate Democrats, said Sen. David Langhorst, D-Boise.

Otter has not said whether he will veto the bill if it comes across his desk unamended.