A new bill would give Idahoans more money back for their groceries but would keep the state’s practice of taxing food sales.
On Monday, Majority Leader Rep. Jason Monks, R-Meridian, introduced a new bill that will increase the grocery tax credit from $120 to $155 per person when Idahoans file their taxes. This bill would also allow a resident to keep turning in their itemized receipts if they feel they are entitled to a higher reimbursement of up to $250, which is capped in order to prevent restaurant owners and others who order in bulk from taking advantage of the credit.
Monks’ bill also removes the extra $20 credit for Idahoans over 65.
“There is a disparity for individuals 65 and older to receive additional funding, which I always found odd,” he said. “Anybody who has raised teenagers knows teenagers eat much more than somebody over 65 and the budget requires additional expenditures on that. Having had a number of teenagers move out of my house, my wife and I found an excess of milk in our fridge.”
Whether or not Idaho should apply its 6% sales tax rate to groceries has been a hot topic in the Idaho legislature for years, including in recent weeks on social media posts. Some of the body’s most conservative lawmakers have repeatedly brought up the idea of repealing it with the hopes of providing tax relief for residents, while more mainstream Republicans in leadership have pushed the idea of the credit instead. This way the state can provide residents relief while also collecting millions from tourists who flock to Idaho for recreation.
The House Revenue & Tax Committee voted unanimously to put forward the bill for introduction.
Estimates on grocery tax revenue fuzzy
Idaho is one of 13 states that tax groceries, according to the AARP. Monks estimates increasing the credit to $250 per person will provide $50 million in tax relief for Idahoans statewide.
The grocery tax credit provides tax relief back to Idahoans for groceries they buy when they file their annual tax return. Right now, the $120 each person can deduct from their taxes owed is equivalent to $2,000 worth of groceries tax-free. Monks told the committee that hiking the credit entitles each person to $2,583 in tax-free groceries. Someone’s tax-free grocery purchases can go north of $4,000 if a resident itemizes their receipts.
One of the criticisms of the grocery tax credit as a tax relief solution for low-income Idahoans who already struggle to afford food is the state’s lowest-income residents often owe no income taxes already due to their income. But, removing this income source could have a hit on the state’s budget which it uses to fund roads, schools, parks, the Department of Health and Welfare, and other programs.
Monks said it’s unknown exactly how much the state makes on sales tax on groceries. This is because when stores like Walmart or Fred Meyer send their sales tax figures to the State of Idaho they do not break out how much of the sales tax revenue came from specific types of products these stores sell, like electronics, clothing or grocery items.
