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Idaho’s grocery tax emerges as key issue in 2016 elections

Idaho’s grocery tax emerges as key issue in 2016 elections

by
Wayne Hoffman, IFF’s former President
April 29, 2016

My 15-year-old son, Julian, on his way Thursday to a school event in Reno, sent this unexpected text message, “Why is there no tax on food at this gas station just across the border into Nevada?”

Long-time readers will know the answer to this and the reason for my son’s confusion. Idaho is one of just a handful of states that have a sales tax on food. When Julian goes to the store at home for food, he’s used to adding 6 percent to the cost of everything; he’s not surprised by the bill when he gets through the checkout line.

Drive across the border to most of our neighboring states and you’ll find food is not taxed.  No need for extra calculation or consternation.

Idaho’s policy is made more problematic by the fact that our grocery tax doesn’t actually result in support for state services and programs. Idaho merely collects the sales tax revenue and then refunds the money to Idahoans in the form of an income tax credit.

Supporters of this policy contend that people merely passing through the state, not residents of Idaho, pay the tax, because Idaho residents eventually get their money back. (Nevermind that the tax presents an immediate hardship for poor people.) Grocery-tax opponents correctly note that the policy causes a number of Idahoans to shop just across the border where, not coincidentally, grocery stores have cropped up.

Last legislative session, a bill to get rid of the grocery tax was drafted and submitted to the House Revenue and Taxation Committee. However, the measure was denied a hearing, it wasn’t even introduced for discussion.

Such is one of numerous examples where the handful of powerful legislators in the Capitol oligarchy decide which topics should -- or shouldn’t -- be considered. That’s too bad, because for longer than my son has been alive, the idea of eliminating the grocery tax keeps coming up, and it tends to draw bipartisan support, and lots of it. Moreover, when the Associated Taxpayers of Idaho polled Idahoans in 2015 about tax policy issues, the top reform supported was grocery tax elimination.

Maybe that’s because there’s something unseemly about taking money from people who desperately need money today, only to return it to them later. If you’ve ever seen a low-income mom or dad have to unpack items from their shopping cart in order to keep their grocery bill on budget, you know what I’m talking about.

Eliminating the tax on groceries is so popular it keeps coming up in current candidate debates, most notably in the western Idaho border communities of legislative District 9. It’s a hot issue there because that legislative district, as much as any other, faces increased cross-border competition with Oregon, which has no sales tax on food. The issue has also come up at candidate forums in Coeur d’Alene and in eastern Idaho.

Please add the grocery tax issue to the questions you should ask candidates this election season. My son certainly seems to think it’s important. I told him, repealing the grocery sales tax is an important policy change that I repeatedly encourage Idaho lawmakers to approve, so that perhaps he could spend his hard-earned money on other things. In response, he approvingly texted, “Thank you.”

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