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House Bill 360 — Sales tax, food exemption

House Bill 360 — Sales tax, food exemption

Lindsay Atkinson
January 27, 2020

Bill description: HB 360 would remove the sales tax on food.

Rating: +2

Does it directly or indirectly create or increase any taxes, fees, or other assessments? Conversely, does it eliminate or reduce any taxes, fees, or other assessments? 

HB 360 removes the sales tax currently imposed on food in the state of Idaho. The definition of “food” in this legislation is consistent with federal code on the Supplemental Nutrition Assistance Program (SNAP) as it is written “on January 1, 2020.” Thus the definition of food includes all consumable products with the exception of certain items, including alcoholic beverages, tobacco, and some hot and ready-to-eat food.  

Ready-to-eat meals prepared for seniors or those with disabilities are eligible for the sales tax exemption, however. So are meals prepared at drug and alcohol treatment centers, meals at shelters for women and children, and meals prepared for the homeless.


Does it increase government redistribution of wealth? Examples include the use of tax policy or other incentives to reward specific interest groups, businesses, politicians, or government employees with special favors or perks; transfer payments; and hiring additional government employees. Conversely, does it decrease government redistribution of wealth? 

HB 360 also repeals the grocery tax credit. The repeal of this tax credit actually works to decrease government redistribution of wealth. Presently, Idahoans who file income tax returns are eligible for a certain tax credit that is supposed to represent the amount of money they spend in taxes on food each year. This amount is $120 for seniors over the age of 65 and $100 for nonseniors. 

This system, whereby grocery tax relief is given out in the form of a tax credit, has resulted in instances of redistributing wealth. The tax credit is “refundable,” meaning that Idahoans who owe taxes in an amount less than the allowed grocery tax credit, they will receive the difference after filing a tax return. This payment will come from the tax dollars that other Idahoans pay. 

Eliminating the sales tax on food would be a welcome change, offering specific relief to the amount of money Idahoans spend on food taxes, instead of an estimate in the form of a tax credit. 


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