Some Idaho legislators have been trying since 2014 to get rid of the grocery tax. Chances are, they will try again in the upcoming legislative session. Will this be the year they get their way?
In Idaho, people pay sales tax — currently 6 percent — on groceries. People against the grocery tax have a number of criticisms about it, such as that it is immoral to tax food, that only 13 other states tax food, and that a tax on food is hardest on the poor, because food is the one thing that even poor people have to buy. Getting rid of the grocery tax is also something that both Democrats and some Republicans can agree on.
The Legislature tried to make the grocery tax more fair to poor people in 2008 by setting up a grocery tax credit. The grocery tax credit gives people a credit on their taxes of up to $120 a year to pay them back for grocery taxes. Because people who buy their groceries using food stamps don’t pay taxes on them, they aren’t eligible for the grocery tax credit.
People against the grocery tax also point out that paying the grocery tax credit costs Idaho $147 million per year. If the grocery tax was eliminated, Idaho could stop paying the grocery tax credit.
People who support the grocery tax point out that it generates an additional $47 million of revenue every year. Plus, because everyone buys food, it comes consistently throughout the year. Many other kinds of tax rise and fall through the year, such as sales tax around holidays and income taxes around April, which makes it harder for the state to budget. In addition, some of the people who get the grocery tax credit like it because they get more back with the credit than they spend on the grocery tax in the first place.
In 2014, then-Rep. Cliff Bayer and Sen. Russ Fulcher put forth a bill to get rid of the grocery tax, but it didn’t get a hearing. In 2015, Rep. Mike Moyle had a complicated tax bill with several parts, including getting rid of the grocery tax, but it didn’t get out of the Senate. In 2016, a bill to increase the grocery tax credit passed the House, but didn’t pass the Senate.
Last year, both branches of the Legislature passed a bill to get rid of the grocery tax, but Gov. Otter vetoed the bill. But by the time he vetoed it, the Legislature had already adjourned sine die for the session, so they didn’t have a chance to override his veto. Some legislators also felt that the governor had missed the deadline for vetoing a bill, so they took the issue to the Idaho Supreme Court. The court had actually ruled on a similar issue in 1978, but the legislators who took the issue to court felt that the court had ruled that way because they had been appointed by Gov. Cecil Andrus and they had wanted to please him. As it turns out, this year’s court ruled that Gov. Otter’s veto was valid.
With this being an election year, it’s likely that legislators will want to pass some sort of a tax cut bill this session. Gov. Otter has already said he’s still against the idea. But getting rid of the grocery tax may be the one kind of tax cut that enough legislators can agree on to override the governor’s veto. On the other hand, all four Republican candidates for governor have said they support repealing it. So if it doesn’t pass? Wait’ll next year.