Gov. Butch Otter on Tuesday vetoed the legislature’s bill to repeal the state’s grocery tax.
To offset the sales tax on food, Idaho issues an annual grocery tax credit. The bill would have eliminated both the credit and the tax, with a staggered implementation that delays the full financial impact until July 2018.
In a letter to the Legislature, Otter stated “Everyone benefits from some kind of government service. Everyone eats. The income derived from a tax on groceries helps to even out the more dramatic ups and downs in our state revenue stream so that government avoids disruptive and dysfunctional shortfalls and funding holdbacks needed to balance the budget.”
He wrote in the letter that while the state would be returning about $149 million to Idaho taxpayers with the grocery tax credit in fiscal year 2019, removing the sales tax on groceries would reduce the state’s general fund by more than $201 million in fiscal year 2019.