A proposed bill would give Idaho families a larger tax credit each year for groceries.
Idaho Speaker for the House Scott Bedke and House Republicans introduced legislation this week to increase the Grocery Tax Credit for all Idaho residents.
“By increasing the Idaho tax credit instead of removing sales tax on what the state would determine to be groceries, we avoid creating another layer of bureaucracy by deciding what a ‘grocery’ is,” Rep. Bedke said. “This way, Idahoans determine what a grocery is rather than the government deciding for them.”
Under the proposed legislation, residents would receive a $135 tax credit per year – increased from the current $100 per year. Factored over the course of a year, residents could purchase up $187.50 in groceries per month tax-free for each eligible credit – $2,250 per year per family member.
Idaho’s 6% grocery tax has been a source of friction in the state since its introduction. While critics say that it places undue burdens on lower-income residents, proponents point out that it provides a vital source of revenue for the state. Multiple bills have been introduced over the years to repeal or modify the tax; however, reports indicate that completely eliminating both the tax on groceries and the tax credit would create a $100 million budget shortfall per year.
Rep. Bedke said that increasing the tax credit while keeping the grocery tax could alleviate financial stress on low-income Idaho families, while still retaining the revenue from purchases made by non-residents.
“This would be real tax relief for every man, woman and child living in the state,” he said. “Families across Idaho need us to do more to limit the strain taxes put on their budgets. That’s exactly what this bill will do.”
The bill was introduced in the House Revenue and Taxation Committee Jan. 22, and has been approved for printing.