The cost of living has risen substantially in recent years, making it difficult for Idahoans to afford their everyday essentials. However, Idaho’s grocery tax exacerbates the problem by tacking on another 6% to the cost of food. Idahoans contribute about $406 million annually to the state in grocery taxes alone. This only benefits the state government, which collects a cut of an ever-expanding grocery bill.
Idaho is quickly becoming the outlier with the grocery tax. The Gem State is one of only four states that still fully tax groceries. We also have the second-highest tax on food in the nation —- only behind Mississippi. The only other states that still fully tax food are South Dakota and Hawaii, which are one and a half and two points lower than our rate, respectively.
Due to this disparity in who taxes groceries, many Idaho businesses struggle to compete with the lower cost of essentials in Idaho’s neighboring states. Many Idahoans take their business to Washington, Montana, Oregon, Nevada, and Wyoming, which have no tax on food, or Utah, which taxes food at less than half the rate in the Gem State.
Idaho should repeal the grocery tax to provide $350 million in immediate tax relief to Idahoans. This amount constitutes merely 4% of all state spending. Idaho’s government doesn’t need it, either, especially because spending is up by 54% in just the last five years. Given the amount of bloat in Idaho’s budget, it wouldn’t be difficult to find enough cuts to accommodate a 4% cut in tax receipts.
