Lawmakers say newly introduced grocery tax elimination bill goes too far

Posted at 2:45 PM, Feb 12, 2018
and last updated 2018-02-12 20:49:59-05

A bill to repeal Idaho's tax on groceries is back inside the Statehouse. The proposal, introduced Monday, garnered a cold reception inside the House Revenue & Taxation Committee.

The plan introduced by Rep. Vito Barbieri, R-Dalton Gardens, is an alternative to Gov. Butch Otter's $200 million dollar tax relief package already approved by the Idaho House.

"The 'BIG' tax cut plan would put 59 percent more money back in Idahoans' pockets than the Governor's plan," Rep. Ron Nate, R-Rexburg, said in a press conference Friday. "That's 'BIG' for business, income and grocery tax cuts for all Idahoans." 

Apart from eliminating the sales tax on food products, the bill also lowers individual income tax rates and corporate rates. 

Individual income tax rates would drop 0.5 percent in all tax brackets, and the corporate income tax rate would be reduced from 7.4 percent to 5.0 percent. 

"There is over $400 million of extra revenue coming into Boise," Nate said. "These are the working families' tax dollars and they need to be returned to Idaho families." 

If the legislation were to pass, the overall impact to the general fund is an estimated revenue decrease of $264.7 million.

"They're packaging together a series of tax cuts, large, large irresponsible fiscal policy cuts," Rep. Mat Erpelding, D-Boise, said. "The package they produced won't make Idaho better and will almost assuredly result in shortfalls in the near future."

Erpelding voted to introduce the legislation in committee, but says he doesn't support the bill.

"[Barbieri] has a right to have his bill introduced," Erpelding said. "We, as democrats, are not always treated with the same respect, and there are certainly times when I vote not to introduce a bill, but he represents 45,000 people, so as a result I chose to vote to introduce it."

The bill was introduced in committee on a 9 to 6 vote. It awaits a full legislative hearing. 

During the 2017 Legislative Session, the legislature passed a bill to repeal the state's grocery tax and eliminate the grocery tax credit, but that proposal was ultimately vetoed by Otter