Idaho’s Grocery Tax is a Regressive Burden on Those Who can Least Afford It

For years I have been writing about why the Grocery Tax must be repealed because it hurts those Idahoans who are on the lowest rungs of the economic scale. Our staff has taken the time and effort to do the research on how this regressive tax came about and have turned it into a book so that our legislators can read about its history understand why it has prevailed and why it still exists after 96 years and more importantly why it needs to be repealed. You can read the entire story of its history here: https://idahogrocerytax.com/chapters/ This longer version has also been sent to several of our conservative legislators so they can spread the word and maybe get enough support to repeal this terrible regressive tax on those who can least afford it.

For those of you who don’t have the time or just don’t care about how you are being unfairly taxed, I offer you the shorter version below. We would appreciate your comments and ask you to contact Governor Little and your legislators to let them know that you want this tax repealed before this legislative session ends.

Repeal the Damn Grocery Tax!

Idaho stands alone among western states as one of only six in the nation that fully taxes grocery items at the standard sales tax rate. While lawmakers recently increased the grocery tax credit from $120 to $155 per person annually, this modest offset does little to address the fundamental regressivity of taxing food—a policy that disproportionately punishes Idaho’s lowest-income families.

The mathematics of regressive taxation are straightforward and brutal. A family of four earning $30,000 per year spends roughly 15-20% of their income on groceries—approximately $4,500 to $6,000 annually. At Idaho’s 6% sales tax rate, they pay $270 to $360 in grocery taxes each year. Even with the $155 per person credit ($620 for a family of four), they still face a net tax burden on food. More importantly, that $270-360 represents a meaningful portion of a tight budget where every dollar counts.

Compare this to a family earning $150,000 annually. While they may spend more on groceries in absolute terms—perhaps $12,000 per year—this represents only 8% of their income. The $720 in grocery taxes they pay is offset by a $620 credit, leaving a modest net tax of $100. But here’s the critical difference: that $100 is barely noticeable in their budget, while the $270-360 paid by the low-income family might mean choosing between adequate nutrition and paying the electric bill.

The bottom 20% of Idaho households pay an effective tax rate of 9.3% of their income—nearly 2% higher than the 7.4% rate paid by the top 20% of earners. The grocery tax is a major driver of this upside-down tax system. Food is not optional. Unlike purchasing a boat or vacation home, families cannot choose to forgo groceries when money is tight. Low-income families spend a larger share of their income on necessities like food, meaning they bear a disproportionate burden when those necessities are taxed.

The grocery tax credit, while intended to mitigate this impact, fails to adequately address the problem. At $155 per person, the credit assumes each Idahoan spends approximately $2,583 on groceries annually ($155 divided by 6% tax rate). Yet USDA data shows that families often spend significantly more, especially with recent food inflation. A family purchasing $6,000 in groceries pays $360 in taxes but receives only $620 in credits for four people—leaving them undertaxed by the credit’s logic but overtaxed in reality when considering their limited means.

Moreover, the poorest Idahoans face an additional barrier: they must file an income tax return to claim the credit. Families earning below the filing threshold—currently $17,500 for married couples or $8,750 for single filers—are generally ineligible for the credit unless they’re elderly, disabled veterans, or blind. This means Idaho’s absolute poorest residents, who feel the grocery tax burden most acutely, often cannot access the very program designed to help them. While this was partially addressed in 2025, the legacy of excluding the poorest families highlights the fundamental disconnect between policy and reality.

Other states have recognized the moral and economic problems with taxing groceries. Even Illinois eliminated its 1% grocery tax in 2026, with Governor Pritzker noting that ‘every dollar counts’ for struggling families. Oklahoma eliminated its grocery tax, with Governor Stitt explicitly calling it ‘one of the most regressive taxes’ that affected ‘people on the lower income bracket much more.’ Even conservative states are moving away from grocery taxes, recognizing that taxing food forces families to choose between adequate nutrition and other basic needs. Why isn’t Idaho’s governor Brad Little doing something to give relief to those who are fighting to feed their families?

Idaho collected $405.7 million from grocery taxes in fiscal year 2026. While this represents meaningful revenue for state services, it comes at the cost of fairness and places the heaviest burden on those least able to bear it. A single mother working minimum wage pays the same 6% tax on milk and bread as a wealthy executive, but that 6% represents vastly different sacrifices.

Idaho can and should do better. Other states prove that eliminating the grocery tax is feasible without crippling state budgets. As food prices continue rising—up roughly 20% since 2021—the grocery tax becomes an ever-heavier anchor on working families trying to keep their heads above water. The time has come for Idaho to join the overwhelming majority of states in recognizing that taxing groceries is not just bad policy—it’s a fundamentally unfair burden on those who can least afford it.