Senate passes $35 increase to grocery tax credit

BOISE — The Idaho Senate has approved a $35 increase to the refundable grocery sales tax credit. However, there was a failed move mid-debate to try and send the bill to what’s known as the amending order so that it could be changed to fully repeal sales tax applied to food.

House Bill 231 increases the grocery tax credit people receive annually from $120 to $155 per person. It also removes the higher rate for seniors — which is currently $140 or those 65 and older — and sets it at the same rate of $155.

The bill will now go to the governor’s desk for signature.

Those in favor said a grocery tax credit helps offset costs from sales tax applied to food while still collecting revenue from out-of-state visitors. Those who opposed it said that the state should instead fully eliminate the sales tax that’s applied on food purchase.

Sens. Doug Ricks, R-Rexburg, and Tammy Nichols, R-Middleton, presented the bill.

Nichols said she would support repealing the sales tax on food, but that the bill “was the path that we have.”

“I think it’s a good step in the right direction,” Nichols said.

Idaho has a 6% sales tax that applies to all goods, including food.

The current credit covers the sales tax applied to $2,000 worth of groceries per person over the course of the year. The increase would result in the refund of sales tax applied to around $2,583.30 worth of grocery purchases. The credit can be claimed for dependents.

During debate, Sen. Christy Zito, R-Mountain Home, made another motion to send the bill to the 14th order, in which any senator may propose any potential amendments to be voted on by the whole chamber.

Zito argued that Idaho was one of few states that charge sales tax on food and that the state should “allow people to keep their money” rather than the state giving it back later.

“Why is it OK for the government to take our money, hold on to our money, process our money, pay someone else to take care of it, and then divvy it back to us if and when we file our taxes or ask for the credit back,” Zito said.

Ricks responded that it was a “hostile move.”

“This was not coordinated with sponsors,” Ricks said.

Nichols also debated against the motion, saying there “was no path forward toward repealing the grocery tax.”

“We know that, so we’re at the point in this time where we’re either going to give the people of Idaho back something or nothing at all,” Nichols said.

Sen. Glenneda Zuiderveld, R-Twin Falls, who seconded Zito’s motion, argued that there was a path forward to repeal.

In 2017, the Legislature passed a bill to eliminate the sales tax on food, but it was vetoed by then-Gov. Butch Otter, who said the costs of the proposal were too high, KTVB reported at the time.

Sen. Phil Hart, R-Kellogg, debated against the motion. He said he sponsored previous legislation to repeal the grocery tax and believed another attempt would not go anywhere.

“I believe if we do not send (the bill) to the 14th order, we have a way to get some grocery tax relief this year,” Hart said. “I think if we do send it to the 14th order, we’re going to come up empty-handed.”

Sen. Brandon Shippy, R-New Plymouth, argued in favor of the motion to amend the bill. He said Fruitland can’t keep a grocery store because it borders Oregon, which has no sales tax.

The motion failed in a 28-5 vote with two members absent.

Debate returned to the passage of the bill.

Senate Majority Leader Lori Den Hartog, R-Meridian, said she remembers several of the previous attempts to repeal the sales tax on food and the work that went into it, which included defining food and working with retailers on how it would work at the cash register; she said all have failed “for various reasons.”

“What I’m interested in today is providing relief to the taxpayers of the state of Idaho,” Den Hartog said.

Sen. Camille Blaylock, R-Caldwell, said she was “bummed” the vote wasn’t to repeal the grocery tax.

“But I will be voting yes, and I hope you will as well, because, again, this is what’s in front of us,” she said.

The bill passed in a 30-3 vote, and will now go to Gov. Brad Little for consideration.

Guido covers Idaho politics for the Lewiston Tribune, Moscow-Pullman Daily News and Idaho Press of Nampa. She may be contacted at lguido@idahopress.com and can be found on Twitter @EyeOnBoiseGuido.

How they voted

Yes: Cindy Carlson-R, Dan Foreman-R, Phil Hart-R