A Comprehensive Analysis of Tax Relief for Idaho Residents
By Rebecca Smith, MVLA Contributor, February 18, 2025
Idaho lawmakers continue to debate how best to provide tax relief to residents. The two
leading proposals are:
- House Speaker Mike Moyle’s tax plan, which focuses on income and property tax reductions while using online sales tax revenue to support
schools. - Repealing the grocery tax, which would remove the 6% sales tax on food purchases.
- Both approaches aim to put more money in Idahoans’ pockets, but they have different impacts in terms of cost savings, economic growth, and fiscal sustainability.
Estimated Savings for Idaho Residents
To understand how these tax relief proposals compare, let’s analyze their financial impact on an average Idaho family earning $70,000 per year, owning a $400,000 home, and spending $600 per month on groceries.
| Tax Cut Type | Estimated Annual Savings per Household |
|---|---|
| Grocery Tax Repeal (removing the 6% tax on food) | $432 |
| Income Tax Cut (reducing rate from 5.695% to 5.3%) | $277 |
| Property Tax Cut ($50 million relief fund) | $90 |
| Increased Grocery Tax Credit ($120 → $15 per person) | $140 for a family of 4 |
| Total Savings from Moyle’s Plan | $507 per year |
| Total Savings from Grocery Tax Repeal | $432 per year |
Key Takeaways:
Income and property tax reductions provide a larger financial benefit for most homeowners than repealing the grocery tax.
Grocery tax repeal provides immediate relief at checkout but does not
address the rising costs of housing and local taxes.
Moyle’s plan includes an increased grocery tax credit, partially offsetting the impact of keeping the grocery tax.
Pros & Cons of Each Approach
- Grocery Tax Repeal
✅ Immediate savings for all Idaho residents at checkout.
✅ Helps low-income families most since groceries take up a higher percentage of their budget.
✅ Reduces cross-border shopping, keeping more money in Idaho’s economy.
❌ Revenue loss of ~$250 million, which could lead to state budget cuts.
❌ Does not address property tax increases, which are a bigger financial burden for many families.
❌ Higher-income earners benefit equally, making it a less targeted relief method. - Mike Moyle’s Property & Income Tax Cuts
✅ Higher total savings for many Idahoans (especially homeowners).
✅ Addresses rising housing costs by reducing property taxes.
✅ Encourages business growth, attracting workers and investment.
❌ Less immediate relief compared to a grocery tax repeal.
❌ Higher earners benefit more from income tax reductions.
❌ Impact on renters is uncertain, as landlords may or may not pass on property tax savings.
Fiscal and Economic Considerations
Grocery tax repeal would require Idaho to replace $250 million in lost
revenue, which could lead to budget cuts in education and public services.
Income and property tax cuts can be phased in over time, ensuring that
state services remain funded while still providing relief.
Lowering income and property taxes makes Idaho more competitive,
attracting businesses and workers from states with higher tax burdens.
Conclusion: Which Tax Relief Plan is Better?
Both grocery tax repeal and income/property tax cuts provide financial relief, but they target different issues:
If the goal is immediate, across-the-board savings, grocery tax repeal is the better option.
If the goal is long-term economic stability, property tax relief, and income tax reduction, then Moyle’s plan offers greater benefits.
Ultimately, Idahoans must decide whether they prefer instant relief at the grocery store or broader, long-term tax savings that address housing costs and economic growth.
Which policy would benefit you the most?
House Bill 0040 – Lower Income Tax Rates. Read bill here.
House Bill 0074 – Property Tax Relief. Read bill here.
House Bill 0231 – Food Tax Credit. Read bill here.
TAKE ACTION NOW ON THESE BILLS AT THE MVLA WAR ROOM.
