Idaho Legislature takes a big step in the right direction on grocery taxes | Opinion

We would rather see a complete repeal of the sales tax on groceries in Idaho, but a bill to increase the tax credit is at least a big step in the right direction.

According to the Idaho Statesman’s Ian Max Stevenson, the bill would raise the annual grocery tax credit from $120 to $155 per person.

But keep those grocery receipts.

If passed, the bill also would allow residents to receive a tax credit of up to $250 per person if they submit itemized receipts.

One of our big complaints about the tax credit is that it wasn’t enough.

A tax credit of $120 per year amounts to $2,000 worth of groceries per year, or just $38 per week. Spend more than $38 per week for one person, and you’re paying more in sales tax than you’re getting back in the tax credit.

A family of four could buy $8,000 of groceries per year, or about $154 per week.

We don’t know about you, but spending $154 per week for a family of four is not a lot.

Idahoans simply aren’t being made whole by the current tax credit.

And because the Idaho Legislature was so stingy with raising the credit, we have argued that the state should just get rid of the tax altogether. Idahoans should not be paying taxes on food.

The new proposal from House Majority Leader Jason Monks, R-Meridian, is much more generous than what’s in place.

A $155 tax credit translates to $2,583 in groceries per year, or about $50 per week per person. A family of four could spend $10,333 per year on groceries, or almost $200 per week.

If you save your receipts, though, a family of four could spend $320 per week on groceries, a much more realistic number.

We’d still like to see legislators index that credit to inflation so that we don’t have to go through this every couple of years, and so that Idahoans don’t pay more sales tax on food than the credit they receive when prices spike.

We’re also not keen on the fact that Idahoans have to pay the tax and then wait until they file their taxes the next year to get their hard-earned money back.

And let’s not forget that many people, particularly very, very low-income individuals, don’t even file income taxes, so they wouldn’t benefit.

But there are notable benefits to doing a tax credit.

Perhaps chief among them is that out-of-staters visiting Idaho contribute revenue to the state coffers when they pay the sales tax on groceries, but they don’t get the credit. That sales tax revenue trickles down to the cities and counties, which get a share of sales tax revenue.

A total repeal of the sales tax on groceries would diminish that amount, leaving the state with two choices: find the money elsewhere to keep cities and counties whole, or tell cities and counties, “Tough, you just don’t get as much anymore.”

A tax credit maintains at least some of that revenue.

Further, this is a progressive credit that benefits lower-income residents.

If the credit exceeds what someone owes in taxes, they receive a refund.

People who spend a lot on groceries may end up paying more in sales taxes than the credit they receive.

Monks’ proposal is not perfect, but it’s an improvement and an acknowledgment that the current credit is insufficient.

And it’s a move in the right direction.