Dateline: BOISE, IDAHO, February 2021 — When you hit the neighborhood grocery store to do your weekly shopping trip for eggs, milk, bread, fruits and other staples, you pay the cost of the groceries plus an additional 6% in state sales tax which goes into the state general fund. The grocery tax brings in about $246 million to the state budget.
You may be surprised to learn that Idaho is one of only five states to fully apply sales taxes on grocery purchases. Of our six neighboring states, only Utah taxes groceries but does so at a lower rate than other purchases. This legislative session Idaho can and should repeal the sales tax on groceries. COVID has hurt many Idahoans and families are struggling through lost work opportunities and lost wages. Families need tax relief. Because so much federal money is flowing into the state, our budget is rolling in over $600 million surplus dollars and $180 million has built up in a fund dedicated exclusively to sales tax relief. The government doesn’t need more of your money.
Last week I presented a plan to exempt all groceries from the 6% sales tax while reducing or eliminating the grocery income tax credit. The proposal would provide immediate tax relief to every Idahoan, providing families around $130 million more to spend on other things. It is a $130 million tax cut! There would be more economic activity from increased grocery sales in Idaho and other increases from Idahoans who have more money left to spend in other parts of the economy.
The bill is a slam dunk, right? Well, not quite. Despite its amazing support, with even the Governor saying he would sign a grocery tax repeal, the chair of the House Revenue and Taxation Committee has so far declined to set a hearing for the bill. This is disappointing especially because so many Idahoans need lower taxes, want lower taxes, the budget is in great shape, and there is seemingly no need to keep so many tax dollars from hardworking Idahoan families.
Personally, I have no doubt the bill would sail through committees and both chambers if it were allowed hearings and floor votes. Hopefully the bill will be scheduled soon as Idahoans deserve tax cuts, especially after so much overspending the last few years and after such a difficult 2020. If you would like to see this plan go forward, please contact your representatives and the House Revenue and Taxation Committee chairman, Rep. Steve Harris. The time for grocery tax repeal is now!