by Logan Finney, Idaho Reports
After years of debating whether the state should keep its tax on food, a bill introduced Tuesday could increase the food tax credit by $20.
The House Revenue and Taxation Committee introduced the bill Tuesday morning.
Sen. Steve Vick, R-Dalton Gardens, presented House Bill 509. He said it is an effort to more accurately reflect the amount of sales tax that an average Idahoan pays on food.
The food credit is intended to offset sales tax paid on food by Idahoans while still collecting the tax from out-of-state visitors. The credit is currently $100 for most Idaho residents and $120 for those age 65 and older.
The bill would raise those amounts to $120 for residents and $140 for seniors starting next year.
The food credit is a refundable tax credit, which means that residents who file an Idaho tax return qualify for the full amount regardless of how much tax they owe. The cost of the increased credit under Vick’s bill would be funded from the legislature’s tax relief fund.
Rep. John Weber, R-Rexburg, said in his opinion he is not sure that increasing the food credit is the proper use of that relief fund, which consists of revenues from online sales tax.
Rep. Ben Adams, R-Nampa, described increasing the credit as a “consolation prize” in lieu of removing the sales tax on groceries, but supported introducing the bill.
This year there has been an increased focus among lawmakers on exempting food from Idaho’s 6% sales tax, also known as repealing the grocery tax. The legislature passed a bill to do just that in 2017, but it was vetoed by then-Gov. C.L. “Butch” Otter.
Gov. Brad Little has indicated that he would support repealing the grocery tax if lawmakers are able to pass such a bill and get it to his desk.
The House tax committee in 2020 approved a bill from Republican leadership to raise the credit to $135 for Idahoans of all ages, but that proposal did not gain enough support for a vote on the House floor.
“The mentality [in the past] was we only had a limited amount of money,” House Speaker Scott Bedke, R-Oakley, told the committee at the time, “so we bumped the amount for seniors up [to $120], knowing that we would come back later to negate the effects of sales tax on food for all citizens.”
The bill will be scheduled for a full hearing at a later date, where the committee will accept public testimony.
This article was updated to include the bill number assigned to this legislation.