Bill to boost Idaho grocery tax credit by $20 passes House

By REBECCA BOONE

Associated Press

BOISE — A bill that would boost by $20 the amount Idaho residents can annually recover on grocery sales taxes passed the full House on Thursday after debate over whether it goes far enough to help people struggling with inflation.

Idaho residents under age 65 can currently get annual maximum tax credits of $100 for the money they spend on taxes at the grocery store. Older residents get a slightly higher amount.

The bill from Rep. Jim Addis would boost the annual credit for those under age 65 to $120 starting with tax returns filed in 2024, cutting about $32 million from state revenues. Addis said that for a family of four, the bill would provide tax relief on about $8,000 worth of grocery purchases a year.

“This is a good faith attempt to reduce the tax burden on Idaho citizens,” said Addis, a Republican from Coeur d’Alene.

But Idaho is experiencing a record-high budget surplus of nearly $2 billion and opponents on both sides of the aisle said the bill doesn’t do enough to put money back in taxpayers’ pockets as families cope with high inflation rates.

Rep. John Gannon, a Democrat from Boise, said the current inflation in Idaho and other mountain states stands at about 9%.

“Idahoans need inflation relief, not $20 in two years,” Gannon said. “It’s time to suspend or simply repeal this grocery tax ... I hope this body decides to take real, meaningful action.”

Rep. Ron Nate, a Republican from Rexburg, said the bill should be amended to add in a repeal of the state's 6% grocery tax. He noted none of the states surrounding Idaho tax groceries except for Utah, which taxes groceries at 3%.

“This $20 tax credit is breadcrumbs compared to the amount of money sitting in state coffers,” said Nate. “This is insulting to families whose hard work created this surplus.”

But Rep. James Ruchti, a Democrat from Pocatello, said he would also like to see more tax relief on groceries but reminded his colleagues that earlier in the session they voted to approve $600 million in income tax relief, using up about a third of the state’s surplus. He urged others to vote in favor of the bill.

“Now we’re in a position where we don’t have a lot more, if we’re going to do some of the things we’ve talked about doing for infrastructure and education,” he said. “I agree it’s not much ... but this is what we’ve got.”

The bill passed the House with a 40-27 vote and now goes to the Senate.