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Legislators make one last push for grocery tax repeal

Legislators make one last push for grocery tax repeal

Dustin Hurst
March 20, 2014
[post_thumbnail]Sen. Monty Pearce, R-New Plymouth, is urging lawmakers in the closing days of the session to consider a repeal of the state's tax on groceries.

Desperate to give the effort one last shot, a bipartisan group of legislators urged their colleagues Wednesday to hold a hearing on a bill to repeal the state’s tax on groceries.

The push comes just days after a financially attuned social network knocked Idaho for being one of just a handful of states that still levies the tax on groceries.

Led by Sens. Monty Pearce, R-New Plymouth, and Cliff Bayer, R-Boise, the group asked legislative leaders to cut through political red tape to give the bill a hearing.

“We have a lot of support across the aisle,” Bayer said, touting the bill’s red and blue credentials. “This is a nonpartisan issue.”

The measure, which has yet to be formally introduced into the House Revenue and Taxation Committee, would eventually repeal the state’s grocery tax, which would cost approximately $172 million. To pay for it, the group wants to use the funds allotted for the grocery tax credit, which Idahoans receive when they file their individual income taxes each year.

Sen. Steve Vick, R-Dalton Gardens, urged leaders to look at the repeal bill as a way to help all Idahoans. “This is a tax cut that helps every resident of Idaho,” Vick said, adding that the GOP mantra means that lawmakers should allow taxpayers to “keep more of their own money.”

Just days ago, WalletHub.com, a social network dedicated to the fiscally minded, released a study of the best places for taxpayers to live. Idaho checked in at No. 35 in the raw score, though that ranking jumped to No. 27 when the site adjusted for living costs.

One reason for Idaho’s poor score: the tax on food products. Some 38 states now exempt food from income taxation, including several of Idaho’s neighboring states: Washington, Montana and Oregon.

Traditionally Republican states fared much better than the Democratic states, but Idaho nears the bottom of the red state list. Only Nebraska, in at No. 49 overall, fared worse than Idaho among the red states.

Wayne Hoffman, president of the Idaho Freedom Foundation, has urged lawmakers to “be bold” and repeal the grocery tax.

“Eliminating the tax on groceries and the grocery tax credit would be good for the economy, good for Idaho consumers and would keep state politicians from picking winners and losers in the marketplace,” Hoffman wrote in a recent column.

“Everyone buys groceries, so everyone benefits.”

Not everyone’s on board with the idea.

Sen. Marv Hagedorn, R-Meridian, opposes the repeal bill because he believes the plan would force Idaho to lose out on extra revenue from tourists and illegal immigrants. Because tourists and illegal immigrants don’t file Idaho tax returns,
Hagedorn argued, they don’t receive tax credits, supplying the state with extra cash for schools, roads and other government projects.

Particularly important for Hagedorn is targeting illegal immigrants. “They don’t have to pay any taxes at all,” Hagedorn said. “We know they have to eat.”

Bayer disagreed with the idea that tax policy should be married to and decided by immigration policy. He added that the consideration for tourists and immigrants should be “of minor consequence.”

Ben Davenport, president of Associated Taxpayers of Idaho, suggested that repealing taxes on groceries and the grocery tax credit would be more efficient in administrative terms for the state.

For broad relief, Davenport suggested looking at reducing the income tax. “The income tax is something that touches everyone here in Idaho,” he told IdahoReporter.com

On tourism, Davenport also disputed the idea that tourists should dictate Idaho’s tax policy. “I don’t know about you, but a lot of people don’t go to the grocery store when they go on vacation,” he said.

With just days left in the legislative session, it’s unlikely that Bayer, Pearce and others will get their wish and receive a hearing on the measure. Bayer told IdahoReporter.com that he’s tried to discuss the bill with key House leaders to no avail. House Speaker Scott Bedke, R-Oakley, has said he’s not a fan of the repeal tax bill.

Note: IdahoReporter.com is published by the Idaho Freedom Foundation.

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