A House committee introduced a tax cut bill that would remove the sales tax on groceries on a 9-6 vote last week.
Among removing the grocery tax, the bill would cut individual income taxes by half a percent for all brackets, slash business income taxes for large corporations from 7.4 to 5 percent and eliminate the grocery tax credit.
“This particular option really reflects the best policy of Idaho,” said Rep. Vito Barbieri, R-Dalton, who sponsored the bill. “It helps families and it helps bring in business by reducing the tax rate.”
The bill is a response to Gov. C.L. “Butch” Otter’s $200 million tax cut bill that passed the House floor last week.
Barbieri’s bill does not address the issue of conformity to federal tax changes in 2018.
“There’s a concern about full conformity and the effects of that and I think that needs to be addressed as a separate manner,” he said.
House Majority Leader Mike Moyle pressed Barbieri in questioning on the bill’s 2.4 percent tax cut for large corporations, while only offering a half a percent tax cut for all smaller businesses.
Moyle said small business account for somewhere between 85 to 90 percent of jobs in Idaho.
“Yet, you penalize them with this bill and you give the big guy next door, you name your big corporation here, a substantial tax reduction while penalizing the guy who generates most of the jobs,” he said.
Barbieri responded his bill is not penalizing small businesses.
“We have to begin somewhere. The idea here is to make Idaho as friendly for business as possible, to draw them in for employment purposes…,” he said. “So, it’s not a matter of being all inclusive, but being selective so that we are helping Idaho businesses.”
Barbieri was among a group of 12 Republican legislators, the “liberty legislators,” who announced their alternative proposals at a press conference Friday.
Rep. Ron Nate, R-Rexburg, was also among that group.
“I think it’s great, we get the chance to look at some other tax cut options, specifically the grocery tax, which is vastly popular across Idaho and last year in both of the chambers,” he said before moving the committee introduce the bill.
The bill must now pass a full public hearing before going to the House floor.
Kyle Pfannenstiel covers the 2018 Idaho Legislature for the University of Idaho McClure Center for Public Policy Research.