Momentum growing for changes to Idaho's grocery tax
BOISE (AP) — Republican and Democratic leaders in the state House and Senate say momentum is building to either repeal Idaho's 6 percent sales tax on groceries or boost an existing state income tax credit to offset the surcharge residents now pay on food.
"There probably is more impetus today for removal of the sales tax on groceries than I have seen (since) I've been in the Senate," Senate Majority Leader Bart Davis, a five-term Republican from Idaho Falls, said Thursday at a legislative briefing sponsored by The Associated Press.
Whether a full removal comes to pass before the Legislature adjourns next spring remains uncertain, Davis conceded.
"Generally speaking, the legislative process defaults to the easiest approach," he said. "The easiest approach is to increase the grocery tax credit. If I would predict today, we will probably have that."
The tax credit is currently set at $20 and $35 for seniors.
Discussion among political leaders over whether leaving the tax on household necessities like food is fair to the state's poorest residents has grown louder after a special legislative session on Aug. 25 raised the sales tax by a percentage point to help offset $260 million in property tax cuts.
Former Gov. Jim Risch, whose seven-month term ended Dec. 31, recommended that the 2007 Legislature, which starts Monday, gradually eliminate the tax on food by cutting it 1 percent each year for the next six years. In all, it would cost about $30 million a year in state tax revenue, for a total of $180 million.
Meanwhile, new Gov. C.L. "Butch" Otter has said he prefers targeting grocery tax relief to low-income residents, but not doing away with the tax on groceries. That way, the state would give relief to those who need it most, while still reaping tax revenue from tourists who come to the state and buy food.
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Though Otter has been largely silent on what he'll say during his state of the state address Monday afternoon, lawmakers believe he'll provide additional specifics on his plan.
At least three North Idaho legislators support doing away with the grocery tax completely.
"That has been on the agendas for me and (Rep.) Bob Nonini (R-Coeur d'Alene) for a long time," said Rep. Frank Henderson, R-Post Falls. "You can be certain there will be major change in the current program."
Henderson said he would like to remove the grocery tax at a more aggressive rate than Risch's plan — like removing 2 percent a year instead of one percent. Rep. Phil Hart, R-Athol, said he supported Risch's plan because of its simplicity.
"It's inefficient to charge money and then give a rebate as opposed to the Risch plan that doesn't charge anybody for the tax," Hart said.
House Minority Leader Wendy Jaquet, D-Ketchum, said the majority of Democrats are in favor of "taking the 100 percent sales tax off groceries, though there are some people who would like to expand the credit."
House Speaker Lawrence Denney, R-Midvale, said he hasn't fleshed out a Republican position within his caucus. But he said a full repeal would benefit the economy of his community, located on Idaho's western border with no-sales-tax Oregon. Often, Idaho residents of towns such as Payette and Weiser whom he represents head across the Snake River to buy their groceries, rather than pay tax on food at home.
"We'd love to have the sales tax off groceries," Denney said. "I think it would help our economy in our border communities. But there are also reasonable arguments for (increasing) the grocery tax credits. I think both of those ideas will be put out there and debated, and what comes out is your guess."
Though positions on tax issues in Idaho often fall on partisan lines, lawmakers say the tax on food has become one that's uniting legislators of all stripes.
"I'm not sure it's a Democratic idea or a Republican idea, but I think it's an idea that citizens of Idaho support some movement on," said Senate President Pro Tem Robert Geddes, R-Soda Springs, who said another alternative would be to simply return Idaho's overall sales tax to 5 percent. "That's a very interesting concept."
—Staff writer Tom Greene contributed to this report