Idaho Lt. Gov. Scott Bedke, R-Oakley, (left) and state lawmakers take a break from legislative proceedings on the Idaho Senate floor on Jan. 7, 2025. (Pat Sutphin for the Idaho Capital Sun)
The tax credit intended to offset the sales tax Idaho taxpayers pay when they buy food may be about to increase by $35 a year for most Idahoans.
Late Wednesday afternoon, the Idaho Senate voted 30-3 to pass House Bill 231, which increases the amount of the grocery tax credit to $155 for all Idaho taxpayers, their spouse and dependents.
Under current law, most Idahoans receive a grocery tax credit of $120 per year, while seniors receive a grocery tax credit of $140 per year. If the bill becomes law, all Idahoans would receive the same $155 credit. A fiscal note attached to the bill indicates it would reduce revenue by $50 million per year.
For a family of four, the grocery tax credit would be $620 per year. That would offset the sales tax paid on groceries, about $10,033 worth of groceries per year per family of four, or about $861 per month, according to the bill’s sponsors.
“Increasing the food tax credit is a practical and immediate solution that provides direct tax relief to Idaho families, helping them manage some of that of the rising costs of groceries today,” Sen. Tammy Nichols, R-Middleton, said.
Supporters of the bill said it is a way to help combat inflation Idahoans are experiencing at the grocery store while leaving the sales tax on food in place so that the state can collect sales tax revenue from millions of out-of-state residents who visit Idaho every year.
Sen. Christy Zito, R-Mountain Home, made an unsuccessful procedural move attempting to send the bill out for amendments. Zito said she favored repealing the sales tax on food entirely, but her motion failed on a vote of 5-28.
Senators who voted against Zito’s motion described it as a hostile motion with no path forward. Several also pointed out that if a bill is sent out for amendments, any senator could propose any amendment, whether or not it is related to the tax on food – meaning there are no guarantees the amendments would come out as Zito planned.
After a 40-minute debate, the Idaho Senate voted with bipartisan support to pass the expanded grocery tax repeal bill as originally written, without any changes or amendments.
The grocery tax credit bill was the second major tax cut the Idaho Senate passed in as many days. On Tuesday, the Idaho Senate voted 27-8 to pass House Bill 40, which reduces the individual and corporate income tax rates and reduces general fund revenues by $253 million.
The Idaho House of Representatives already voted 61-6 to pass the grocery tax credit bill, House Bill 231, on Feb. 14.
Once the grocery tax credit bill reaches his desk, Little will have five days – Sundays excluded – to act on the bill. Little can sign it into law or veto it within five days. Otherwise, the bill would become law without Little’s signature after the five-day timer expires.
If it becomes law, House Bill 231 is written so that it would take effect retroactively on Jan. 1. That means the expanded grocery tax credit would be available for Idahoans to claim when they file taxes next year.
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