Lawmakers step up push to repeal Idaho’s sales tax on groceries

BOISE - Momentum for repealing Idaho’s sales tax on groceries is growing.

Eighteen senators and representatives gathered for a news conference Thursday to press for repealing the 6 percent sales tax on groceries and announced that there are up to 48 cosponsors for the bill, nearly half of Idaho’s 105 lawmakers.

“We have the majority of each majority caucus as co-sponsors,” said Sen. Cliff Bayer, R-Boise, including half of the House GOP leadership. Bayer said the bill was delivered to House Revenue and Taxation Committee Gary Collins’ office Thursday and the group is awaiting word on a hearing.

Collins said he hadn’t yet seen the bill. He acknowledged that last year he declined to hold a hearing on similar legislation. He said he made that decision in consultation with House GOP leadership.

“I’ll take a look at it, we’ll talk about it, and go from there,” Collins said.

Bayer said cosponsors of the bill include every legislator from districts 1 through 3, the state’s northernmost districts. Idaho’s grocery tax long has been unpopular in North Idaho, where neighboring Washington and Montana sell groceries tax-free.

“Thirty-seven states have already figured this out, including all of Idaho’s neighboring states with the exception of Utah,” Bayer said.

He noted that when Idaho first enacted its grocery tax credit, which Idahoans claim on their state income tax returns to offset a portion of the sales tax they pay on food, it was seen as an “incremental” way of phasing out the tax; that credit has now grown to $100 or more per person per year. “That time has come,” Bayer said.

The bill would phase out the tax over two years, while eliminating the credit, which would cover the majority of the cost. The hit to the state general fund would be $18.6 million in fiscal year 2018, and $26.1 million in fiscal year 2019.

“This is about fair tax policy,” said Sen. Abby Lee, R-Fruitland. “This is about whether we should be taxing our families providing bread and milk for their children.”

Democrats also have expressed interest in repealing taxes on groceries.

“We have to pay attention to people who are being left behind in this economy,” said Sen. Grant Burgoyne, D-Boise.

Rep. Ron Nate, R-Rexburg, an economics professor at Brigham Young University-Idaho, said, “Any tax cut is stimulative. We’re putting more money in the citizens’ pockets, and they’ll be able to spend, not only on food, but on all other things.”

Twenty-six businesses or organizations, including the Idaho Interfaith Roundtable Against Hunger and the Kootenai County Farmers Market, signed on to a statement in support of the bill.

Although he has not taken a position on the current proposal, Collins said he supports repealing sales taxes on groceries. The issue, he said, is whether now is the right time.

“I’ve been here long enough that I’ve actually voted to repeal the grocery tax several times,” in committee votes, Collins said.

But he said states that have removed their sales tax from food have seen decreased stability in their revenues. “The tax on food is a substantial chunk of money,” he said. “I realize that we are spending $150 million now on the credit, which lessens it.”