Idaho’s Grocery Tax Debate Continues Heading Into the 2025 Legislative Session
By Greg Pruett • August 6, 2024Idaho is one of thirteen states that currently taxes groceries.
The debate in Idaho has been whether to repeal the grocery tax, increase the rebate, leave the current system alone, or increase the tax. Idaho’s tax on groceries is the 6% rate currently charged for statewide sales tax.
First, here is some background about what has happened in the state legislature regarding the grocery tax over the past eight years.
Part of the debate occurred when former Governor Butch Otter and then Lt. Governor Brad Little disagreed on the grocery tax repeal in 2017. Otter vetoed a grocery tax repeal, which Little had encouraged him to sign. It would be the last time a repeal bill ever reached the governor’s desk.
Otter said at the time that the cost was too high. He said that part of his reasoning for vetoing the bill was because everyone uses the grocery store, which made it a reliable source of taxes to balance out potential shortfalls in other areas of state tax collection.
Governor Brad Little, then running for governor as the Lt. Governor, encouraged Otter to sign the legislation on his desk late in the 2017 legislative session. But Otter ultimately vetoed the bill, and a legal dispute ensued over the timing of the veto, which the courts ultimately upheld.
Despite expressing support for the repeal during his gubernatorial run, a grocery tax repeal bill has not reached the governor’s desk.
In 2019, Little said he wanted the grocery tax eliminated in his State of the State address. Specifically, Little said,
“I propose working together with you to set the stage next year – using our budget surplus – to eliminate the
grocery tax once and for all.”
Multiple bills were introduced during Little’s first term to either repeal the grocery tax or increase the grocery tax credit. Bills to repeal the tax have failed to reach Little’s desk.
In 2022, a grocery tax credit increase was signed by Little that raised the credit to $120 for people under 65 and to $140 for people 65 and older.
Chris Cargill, President of the Mountain States Policy Center, argued that an increase in the credit is better for Idahoans. He posted on the MSPC website that,
“Sales taxes are more stable and pro-growth than other forms of taxation – especially income taxes. Policymakers can better serve citizens by adopting higher yearly grocery tax rebates and focusing additional tax relief on reducing income taxes.”
Proponents of the increased grocery tax credit say that Idahoans will get more by increasing the credit they see on their tax returns. However, those who favor repealing the tax say Idahoans need the money now, not when they file their taxes.
The Idaho Freedom Foundation is one organization that has pushed for repeal of the grocery tax for several years. Last year, IFF Policy Director Niklas Kleinworth said in a post on the IFF website,
“Given the 6% tax rate, a family can expect to pay more than $50 per month on grocery taxes alone. Though some of these families may qualify for the Gem State’s $100 per person grocery tax credit, families only get this benefit in a lump sum during tax season, leaving them on the hook for the remainder of the year.”
Other arguments about the debate over the years have also surfaced, with some arguing that there should not be a special “carve out” for the grocery tax and that the state should focus on cutting other taxes, such as the income tax. Some have also argued that defining which items are considered taxes would be difficult, while others have argued that current rates are fine and changes are unnecessary or that the current rate is not high enough. Finally, some have argued that the tax should be eliminated and the credit maintained.
Where do you stand on the grocery tax debate? Let us know in the comments below.
Tags: Brad Little, Butch Otter, Chris Cargill, Grocery Tax, Grocery Tax Rebate, Idaho Freedom Foundation, Income Tax, Mountain States Policy Center, Niklas Kleinworth, Tax
8 thoughts on “Idaho’s Grocery Tax Debate Continues Heading Into the 2025 Legislative Session”
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The governor is always crowing about the surplus. They are over taxing as it is. Enough of making taxpayers tighten their belts.
Repeal the grocery tax today.
Special interest projects can beg for free money elsewhere.
Here in big bad blue crazy liberal Oregon we have NO SALES TAX and NO TAX ON GROCERIES.
Taxing groceries is insane, regressive and hits working poor the hardest.
Since Idaho promotes itself as a conservative utopia maybe it should walk the talk and abolish all sales tax.
SHOW US HOW IT’S DONE YOU CONSTITUTIONAL CONSERVATIVES!
there are many Democratic states that tax groceries. I’ve lived and worked in both types of run states. California has some of the highest taxes and taxes everything.
$120 back? $140 back? Those returns were, and are an insult to Idahoans and proponents of keeping or increasing the tax on groceries know it full well. Besides, it seems glaringly obvious to me that those who want it left in place are those whose pockets are deep enough that it makes no difference to them whatsoever!
We all may have the same depth of pockets, but the length of our arms differs wildly…that tax should never have been put in place to begin with. Repeal it now!!! 🙁
Idahoans aren’t the brightest lights on the string. Property taxes are the crime on the century . The government owns our property. Grocery taxes are a way of making the costliest people in society pay their fair share.
the lower income people costs the taxpayers the most of any income group in hand outs of stolen taxpayer income and with the crime they commit.
I don’t care about the sales tax on food but I do care about the communist property taxes. You don’t own your property as long as you have to pay property taxes. Basically your renting the property from the state. Abolish property taxes.
I agree with Ron and Paul, property taxes are the most vile of the current taxes on the books. Many people, especially elderly folks, own their homes and property outright. However, do they really? IF you cannot pay those property taxes, then that home/acreage you think you owned outright will be snatched away pronto! So, DO YOU REALLY OWN IT? NO! Not while those taxes are on the books.
This is precisely why California passed their Proposition 13 back in the 70s. It made it possible for older folks to remain in their homes because their taxes couldn’t be raised over and over again with the influx of people buying all around them and increasing the tax base. Idaho needs to do something about this and SOON.
While I do believe that taxing people on something that is absolutely needed to sustain life — FOOD — is immoral, taking people’s homes away because they are not able to pay highly inflated taxes is just as immoral.
Conservative “tax think tanks” have researched the “tax groceries and give tax rebate to citizens” or “remove tax off groceries”. Regarding the poorer citizens, many receive SNAP which is as most know “food stamps” which cost is paid by those who pay federal income taxes. Those out-of-State visitors buying groceries pay the sales tax. The “tax think tank” states the benefit to the citizens of the State is best served with the tax credit. Again the SNAP receivers seldom pay income tax; so the lower income citizens are not penalized by the grocery sales tax.