Idahoans could see an increase in their grocery tax credit this year.
A bill introduced this week by House Speaker Scott Bedke, R-Oakley, would raise the rate to $135 per person. The credit, which is currently set at $100, is meant to offset the taxes that Idaho residents pay while shopping for groceries.
The idea behind the bill is to “take the burden off Idaho families while taxing people who are visiting Idaho or passing through,” according to a statement from the Idaho House Republican Caucus.
“This would be real tax relief for every man, woman and child living in the state,” Bedke said in a statement. “Families across Idaho need us to do more to limit the strain taxes put on their budgets. That’s exactly what this bill will do.”
In a year when state Republican leadership has named tax relief as a top priority, the question of whether to keep the credit, increase it or get rid of Idaho’s 6 percent grocery sales tax has surfaced once again. Gov. Brad Little named grocery tax relief as a priority in his State of the State address, including $35 million from the state’s tax relief fund for grocery tax relief in his proposed budget.
Sen. Michelle Stennett, D-Ketchum, told the Idaho Mountain Express that Bedke’s bill looked potentially promising.
“On first blush, it gives some relief to Idahoans by increasing the grocery tax credit,” said Stennett, who serves as Senate minority leader. “This is particularly good for seniors, people with disabilities and low-income folks.”
However, Stennett said, she would need to take a closer look at whether other programs would be “sacrificed” in order to make the legislation work.
The credit increase would cost Idaho about $48 million to $49 million a year, which Bedke has proposed the state pay for by using its designed tax relief fund. That fund is made up of sales tax money that has been collected and remitted by out-of-state retailers who sell to Idahoans.
The average Idahoan pays about $125 each year in sales tax on groceries, according to the bill’s statement of purpose. The current rate is set at $100 per person and $120 for seniors.
House Bill 352 would set the rate at a flat $135 for everybody, regardless of age. That would mean $2,250 worth of tax-free groceries for each person annually, or about $187 per month.
“By increasing this Idaho tax credit instead of removing sales tax on what the state would determine to be groceries, we avoid creating another layer of bureaucracy by deciding what a ‘grocery’ is,” Bedke said in a statement. “This way, Idahoans determine what a grocery is rather than the government deciding for them.”