Grocery tax repeal debate: Vital funding or a burden on residents

IDAHO FALLS, Idaho (KIFI) – A voter initiative to repeal the grocery tax in Idaho is gaining traction in the state.

Every time you pay for bananas, carrots, bread and other groceries, you pay 6 percent sales tax to the state government.

Stand Up for Idaho hosted a public debate to discuss the merits and drawbacks of the proposal Wednesday in Idaho Falls.

Idaho Freedom Foundation President Ron Nate said the grocery tax is an unfair burden to taxpayers suffering from inflation.

“Families are hurting, the inflation during the Biden administration (was) over 30% – and I think that was an underestimate of the cost of food going up,” Nate said.

However, Rep. Rod Furniss, (R)-Rigby, said the sales tax on food provides an important revenue stream for education.

“We have about $3 billion in sales tax that we get throughout the state. Roughly, you know, 10.7 or 12.4 percent of it is grocery tax,” Furniss said. “So that generates around $200 million (in) revenue to the state. Sixty-five percent of that money goes to education.”

Furniss pointed out that each year, in-state residents receive a grocery tax credit of $155 per taxpayer on their tax returns, meaning these education funds are paid by out-of-state individuals.

“After we collect the sales tax, we get the money,” he explained. “We then give the (grocery tax) credit back and (with) the credit – the $155 – a family of four can roughly buy $10,333 worth of groceries.”

But Nate, who previously served in the Legislature, argued that the majority of legislators would support repealing the tax if leadership would back the measure.

“It is a dumb policy. It's an unfair policy. It's an unpopular policy, he said. “There's only a few key people in the Idaho Legislature who want to keep this tax in place. And unfortunately, they're in leadership. So they stop the bill before it even gets voted on.”

Idaho is one of four states that fully tax groceries, Nate pointed out.

Furniss argued that he would support removing the grocery tax if it were replaced with a revenue stream that primarily targets out-of-state buyers.

The debate is expected to continue, as supporters work to gather 70,000 signatures to qualify the grocery tax credit repeal voter initiative for November’s ballot.

For more information, you can view the full forum here.