Legislation that would repeal Idaho’s 6 percent sales tax on food is unlikely to get an introductory hearing this session, despite being cosponsored by a majority of Republicans in the House and Senate.
More than a third of the 48 co-sponsors — out of 105 legislators total — held a press conference Thursday, hoping to build momentum for the bill.
“Sometimes there are mixed messages here regarding where support lies (for different tax policies),” said Sen. Cliff Bayer, R-Nampa. “We wanted to show that there’s strong support for this particular policy.”
Bayer was the primary sponsor of the 2008 grocery tax credit bill, which helped offset a portion of the sales tax people pay on food. That tax credit reached its maximum of $100 per person in 2016; it now costs the state about $140 million per year.
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That’s nearly as much as the state collects from the food tax, so Bayer and his co-sponsors — including Sen. Carl Crabtree, R-Grangeville, and Rep. Priscilla Giddings, R-White Bird – think it’s time to eliminate the credit and the tax.
“It seems crazy to me to pull money out of one pocket and then turn around and put it back in another,” Crabtree said. “We’re charging a tax and then giving most of it back.”
Giddings said the legislation will benefit rural economies.
“It gives money back to rural families,” she said.
The bill calls for a two-year phase out of the tax credit and food tax. The net cost on full implementation would be $67.3 million, including $44.7 million in lost state general fund revenue and $22.6 million in reduced sales tax distributions to local units of government.
Bayer said the bill has 16 cosponsors in the Senate and 32 in the House. All but one are Republicans, primarily because he wanted to demonstrate support by the majority caucus.
That nearly guarantees the bill would pass, if it were ever introduced. However, the list of cosponsors doesn’t include House Speaker Scott Bedke, R-Oakley; House Majority Leader Mike Moyle, R-Start; or House Revenue and Taxation Committee Chairman Gary Collins, R-Nampa.
Bedke and Moyle previously have indicated that they support lowering Idaho’s top individual and corporate income tax rates. They believe that’s a more effective approach to tax relief because it could help attract new businesses and bring more jobs to the state.
Bayer said eliminating the food tax also could benefit the economy, particularly in border communities where people drive out of state to buy groceries.
Sen. Abby Lee, R-Fruitland, agreed with that, but she supports the bill primarily as a matter of fairness.
“Food isn’t an appropriate revenue source,” she said. Eliminating the food tax “is something that impacts every Idahoan.”
Sen. Grant Burgoyne, D-Boise, remembers his daughter using coupons to buy $200 worth of groceries during the last recession.
“She had the $12 in cash to pay the sales tax,” he said. “But she saw people who didn’t. She saw them leave the store in tears. That’s not right.”
Good tax policy should focus on improving the economy and creating high-wage jobs, Burgoyne said, “but we also have to pay attention to the people who are being left behind.”
Similar grocery tax repeal efforts were stymied in 2014 and again in 2016. Nevertheless, in addition to the legislative cosponsors, Bayer noted that several service organizations support the bill, including the Idaho Interfaith Roundtable Against Hunger, Idaho Hunger Relief Task Force and Idaho Organization of Resource Councils.