Senate Republicans Secure Grocery Tax Relief with Passage of H231

BOISE, ID – [March 5, 2025] – The Idaho Senate successfully passed House Bill 231 today, a significant expansion of the state’s grocery tax credit that will provide direct financial relief to Idahoans. By increasing the credit and offering an alternative itemization option, this legislation ensures residents keep more money in their pockets while maintaining state and local revenue from visitors.

Expanding the Grocery Tax Credit: What H231 Delivers

H231 increases the annual grocery tax credit from $120 to $155 per person, with seniors receiving an increase from $140 to $155. Additionally, taxpayers now have the option to itemize their grocery purchases and receive a refund based on actual sales tax paid, up to $250 per person, with submission of receipts.

“This legislation prioritizes Idaho families, ensuring they receive the tax relief they deserve while preserving revenue generated by guests to our beautiful state,” said Senate Majority Leader Lori Den Hartog. “By increasing the tax credit for all Idahoans, H231 puts this money back in the pockets of hardworking Idaho citizens.”

Why Not Outright Grocery Tax Repeal?

While a full repeal of the grocery tax might seem like a straightforward solution, proposals have faced practical concerns. Exempting groceries from state sales tax would force businesses to follow complex guidelines to differentiate between acceptable groceries and non-groceries, which could burden businesses. There are also broader fiscal implications. A 2024 study, The Economic Impact of Travel in Idaho, estimated that visitors spent $304 million at Idaho food stores in 2023, which means a contribution of up to $18.2 million in grocery-related sales tax revenue to the state. Additionally, research from the Associated Taxpayers of Idaho indicates that those residing in Idaho illegally contribute an estimated $5.8 million in grocery sales tax each year.

Repealing the grocery tax entirely would result in a loss of at least $24 million in state and local revenue — funding that supports roads, emergency services, and education. By expanding the grocery tax credit instead, H231 refunds Idahoans while ensuring non-residents continue to help pay for the Idaho services and resources that they enjoy.

Real Savings for Idaho Families

Data from the U.S. Bureau of Labor Statistics and the Associated Taxpayers of Idaho suggests that the average family of four in Idaho pays approximately $515 in state grocery sales tax per year. Under H231, this same family will receive a $620 credit—netting them $105 in tax relief. For families who prefer to track their expenses, the itemization option provides an alternative means to ensure they are fully reimbursed for their grocery tax burden.

“This bill is a common-sense approach to tax relief,” said Senate President Pro Tempore Kelly Anthon. “Idahoans are made whole, and our state remains fiscally responsible.”

Next Steps

With H231 now approved by both chambers of the legislature, it heads to Governor Brad Little’s desk for final approval. Upon signing, the enhanced grocery tax credit will take effect retroactively for the 2025 tax year, providing direct and timely relief to Idahoans.

Senate Republicans remain committed to reducing taxes, promoting economic freedom, and ensuring smart fiscal policies that benefit hardworking families. Future legislative efforts will continue to prioritize policies that strengthen Idaho’s economy and uphold conservative fiscal responsibility.

For more information on H231 and other legislative actions, visit legislature.idaho.gov.