Idaho one step closer to finding grocery tax fraud

Idaho one step closer to finding grocery tax fraud

by
Dustin Hurst
March 12, 2015
Dustin Hurst
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March 12, 2015

Idaho is one step closer to finding fraud in its grocery tax rebate program.

The House Revenue and Taxation Committee approved legislation Thursday to allow the Idaho State Tax Commission to retrieve information from the Department of Corrections and Department of Health and Welfare to crosscheck welfare recipients and prisoners with rebate applicants.

The state doesn’t have that power now, which means prisoners and food stamp recipients could be illegally receiving Idaho’s $100 grocery tax rebate, which residents apply for on annual income tax forms.

Incarcerated residents and welfare recipients cannot apply for the rebate for the months they’re in jail or receiving food stamps. Prisoners, the commission pointed out, have their meals provided for them, while food stamp recipients get their groceries tax-free.

Tax commission officials believe they’ll save somewhere around $150,000 a year, though that’s an educated guess.

“We really don’t have the information,” said the commission’s attorney, William Von Tagen. “The actual number might be more. The actual number might be less.”

Idaho is set to send out more than $140 million in rebate money this year.

Von Tagen said administrative expenses would likely be minimal because the tax agency will add the new check to existing procedures.

Darcy James, speaking against the measure on behalf of the Interfaith Roundtable Against Hunger, calling it hurried and suggesting the savings projections are overly optimistic.

“There will be administrative costs, even if you’re doing it by email,” James told the panel, adding that her group would be “amazed” if the state hits the savings goal.

While she didn’t take a hard stand against the entire concept, she suggested lawmakers kill the bill and open discussions with stakeholders before considering another version of the legislation.

“We don’t see how this bill is going to give you a broad picture of fraud on a statewide basis,” James said. “We believe it does not make sense when the majority follow the rules and use the tax credit as intended.”

The measure now heads to the House floor. Opposition was bipartisan, as Democrat Mat Erpelding of Boise joined with GOP Reps. Ron Nate of Rexburg and Heather Scott of Blanchard to vote against the measure.

 

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