2008 Legislation
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HOUSE BILL NO. 439<br /> – Income tax credit, groceries

HOUSE BILL NO. 439

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Bill Status



H0439...............................................by REVENUE AND TAXATION
INCOME TAX CREDIT - GROCERIES - Repeals and adds to existing law to provide
for income tax credits or refunds for certain resident individuals to
offset the cost of sales tax on groceries; to provide a maximum credit of
ninety dollars; to provide for adjustments to the credit to account for
inflation; and to provide for suspension of the increase in the credit or
refund if certain circumstances occur.

01/30    House intro - 1st rdg - to printing
01/31    Rpt prt - to Rev/Tax

Bill Text




                                                                       
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-ninth Legislature                   Second Regular Session - 2008

                                                                       

                              IN THE HOUSE OF REPRESENTATIVES

                                     HOUSE BILL NO. 439

                             BY REVENUE AND TAXATION COMMITTEE

  1                                        AN ACT
  2    RELATING TO INCOME TAXES; REPEALING SECTION 63-3024A, IDAHO CODE, RELATING  TO
  3        THE  GROCERY TAX CREDIT; AMENDING CHAPTER 30, TITLE 63, IDAHO CODE, BY THE
  4        ADDITION OF A NEW SECTION 63-3024A, IDAHO CODE, TO PROVIDE FOR INCOME  TAX
  5        CREDITS OR REFUNDS TO CERTAIN RESIDENT INDIVIDUALS, TO PROVIDE PROCEDURES,
  6        TO  PROVIDE  A  METHOD OF PAYMENT, TO PROVIDE A STATUTE OF LIMITATIONS, TO
  7        PROVIDE FOR THE DONATION OF CREDITS, TO  PROVIDE  FOR  CANCELLATION  OF  A
  8        FUTURE ADJUSTMENT AND TO PROVIDE FOR THE APPLICATION OF AN INDEX TO FUTURE
  9        CREDIT  AMOUNTS;  AND  DECLARING  AN  EMERGENCY  AND PROVIDING RETROACTIVE
 10        APPLICATION.

 11    Be It Enacted by the Legislature of the State of Idaho:

 12        SECTION 1.  That Section 63-3024A, Idaho Code, be, and the same is  hereby
 13    repealed.

 14        SECTION 2.  That Chapter 30, Title 63, Idaho Code, be,  and  the  same  is
 15    hereby  amended by the addition thereto of a NEW SECTION, to be known and des-
 16    ignated as Section 63-3024A, Idaho Code, and to read as follows:

 17        63-3024A.  FOOD TAX CREDITS AND REFUNDS. (1) Any resident  individual  who
 18    is  required  to  file  and  who has filed an Idaho income tax return shall be
 19    allowed a credit against taxes due under the Idaho income  tax  act  for  each
 20    personal  exemption  for  which a deduction is permitted by section 151(b) and
 21    (c) of the Internal Revenue Code, and which is claimed on the taxpayer's Idaho
 22    income tax return. The amount of the credit for tax year 2008 shall be as fol-
 23    lows:
 24    When Idaho taxable income is:           The amount of credit for each
 25                                            personal exemption is:
 26    $1,000 or less                                  $55.00
 27    Over $1,000                                     $30.00
 28        Subject to the limitations provided in subsection (13)  of  this  section,
 29    the  larger  credit  allowed by this subsection shall be increased to seventy-
 30    five dollars ($75.00) for tax year 2009, and ninety dollars ($90.00)  for  tax
 31    year 2010. Subject to the limitations provided in subsection (13) of this sec-
 32    tion,  the  smaller  credit  allowed  by this subsection shall be increased to
 33    forty dollars ($40.00) for tax year 2009, and fifty dollars ($50.00)  for  tax
 34    year 2010.
 35        Subject  to  the  limitations provided in subsection (13) of this section,
 36    for tax year 2011 and each year thereafter, both credits allowed by this  sub-
 37    section  shall  equal  the  index  created in subsection (14) of this section,
 38    rounded down to the nearest ten dollar ($10.00) increment,  provided  however,
 39    that  the amount of credit allowed shall not be adjusted by more than ten dol-
 40    lars ($10.00) in tax year 2011, as compared to tax year 2010,  nor  shall  the
 41    amount  of credit allowed be adjusted by more than ten dollars ($10.00) in any
 42    future tax year, as compared to the previous tax year.

                                       2

  1        If taxes due are less than the total credit allowed, the taxpayer shall be
  2    paid a refund equal to the balance of the unused credit.
  3        (2)  A resident individual who is not required to file an Idaho income tax
  4    return and for whom no credit or refund is allowed under any other  subsection
  5    of  this  section  shall,  subject to the limitations of subsections (3), (4),
  6    (5), (6), (7) and (8) of this section, be entitled to a refund in  the  amount
  7    provided in subsection (1) of this section.
  8        (3)  A resident individual who has reached his sixty-fifth birthday before
  9    the  end  of  his  taxable year and who has claimed the credit available under
 10    subsection (1)  of this section, in addition to the amount of credit or refund
 11    due under subsection (1) of this section, shall be entitled to twenty  dollars
 12    ($20.00)  which  shall  be claimed as a credit against any taxes due under the
 13    Idaho income tax act. If taxes due are less than the total credit allowed  the
 14    individual shall be paid a refund equal to the balance of the unused credit.
 15        (4)  Except  as  provided  in  subsection (9) of this section, a credit or
 16    refund under this section is only available if the individual for whom a  per-
 17    sonal exemption is claimed is a resident of the state of Idaho.
 18        (5)  In  no  event shall more than one (1) taxpayer be allowed a credit or
 19    refund for the same personal exemption, or under more than one (1)  subsection
 20    of this section.
 21        (6)  In  the event that a credit or refund is attributable to any individ-
 22    ual for whom assistance under the federal food stamp program was received  for
 23    any  month  or part of a month during the taxable year for which the credit or
 24    refund is claimed, the credit or refund allowed under this section shall be in
 25    proportion to the number of months of the year  in  which  no  assistance  was
 26    received.
 27        (7)  In  the event that a credit or refund is attributable to any individ-
 28    ual who has been incarcerated for any month or part of a month during the tax-
 29    able year for which the credit or refund is  claimed,  the  credit  or  refund
 30    allowed  under  this section shall be in proportion to the number of months of
 31    the year in which the individual was not incarcerated.
 32        (8)  No credit or refund shall be paid that is attributable to an individ-
 33    ual residing illegally in the United States.
 34        (9)  Any part-year resident entitled to a credit under this section  shall
 35    receive a proportionate credit reflecting the part of the year in which he was
 36    domiciled in this state.
 37        (10) Any  refund  shall  be  paid  to such individual only upon his making
 38    application therefor, at such time and in such manner as may be prescribed  by
 39    the  state tax commission. The state tax commission shall prescribe the method
 40    by which the refund is to be made to the taxpayer. The refunds  authorized  by
 41    this  section  shall  be paid from the state refund fund in the same manner as
 42    the refunds authorized by section 63-3067, Idaho Code.
 43        (11) An application for any refund which is due and payable under the pro-
 44    visions of this section must be filed with the  state  tax  commission  within
 45    three (3) years of:
 46        (a)  The due date, including extensions, of the return required under sec-
 47        tion  63-3030,  Idaho Code, if the applicant is required to file a return;
 48        or
 49        (b)  The fifteenth day of April of the year following the  year  to  which
 50        the application relates if the applicant is not required to file a return.
 51        (12) The  state  tax  commission  shall provide income tax payers with the
 52    irrevocable option of donating credited funds accruing pursuant to  this  sec-
 53    tion. Any funds so donated shall be remitted from the refund fund to the coop-
 54    erative  welfare  fund,  created  pursuant  to section 56-401, Idaho Code, and
 55    shall be used solely for the purpose of  providing  low-income  Idahoans  with

                                       3

  1    assistance in paying home energy costs.
  2        (13) The  credit  adjustment  required  by  subsection (1) of this section
  3    shall not take place if a majority of the membership of each house of the leg-
  4    islature adopts a concurrent resolution requesting that the governor issue  an
  5    executive  order directing the state tax commission that the credit allowed in
  6    this section remain unchanged for the tax year in which the requesting  legis-
  7    lature  is  meeting,  and if the governor concurs and issues such an executive
  8    order, the credit shall remain unchanged for that tax year.
  9        (14) The state tax commission shall establish a per capita food tax index,
 10    beginning at ninety dollars ($90.00) for tax year 2010.  For  each  subsequent
 11    tax year, the state tax commission shall modify the index as follows:
 12        (a)  Adjust the index by the percentage change in the state sales tax rate
 13        by  dividing  the  new rate by the old rate, and multiplying the result by
 14        the current index dollar figure.
 15        (b)  Adjust the index by the percentage change  in  the  average  cost  of
 16        food,  as  measured  by  the  United States department of labor's consumer
 17        price index for all urban consumers (CPI-U). For this measure,  the  state
 18        tax commission shall use the average of the twelve (12) most recent months
 19        available  at the time that income tax forms are prepared for publication,
 20        as compared to the average of the same twelve (12) months from  the  prior
 21        year's period.

 22        SECTION  3.  An  emergency  existing  therefor,  which emergency is hereby
 23    declared to exist, this act shall be in full force and effect on and after its
 24    passage and approval, and retroactively to January 1, 2008.

Statement of Purpose / Fiscal Impact


                          STATEMENT OF PURPOSE

                               RS 17707C1

The income tax credit provided to Idahoans as an offset for the
sales tax they pay on food consumed at home has not kept up with changes
in the sales tax rate or inflation.  Current law fails to provide even
this partial offset for the poorest Idahoans, since most are ineligible
to receive the credit unless their incomes are high enough to owe state
income taxes.

This legislation addresses the inadequacies of the current law by
incrementally increasing this "Food Tax Credit" starting with an increase
to $55 for the poorest Idahoans, $30 for all other Idahoans, and an
additional $20 for seniors for tax year 2008.  The credit continues to
develop each tax year and ties to an index in tax year 2011 and each year
thereafter, eventually offsetting, on average, the state sales tax on
qualified foods.

This legislation also helps the poorest Idahoans by allowing
virtually all citizens to file for the credit, even if incomes are too
low to incur an income liability.


                              FISCAL NOTE

The total fiscal impact is negative $23.8 million to the General
Fund for FY 2009; $18.1M for FY 2010; $16.4M for FY 2011; $11.1M for FY
2012; $11.1M for 2013; $11.1M for FY 2014; and $11.1m for FY 2015.




Contact
Rep. Bayer, Rep. Vander Woude, Rep. Eskridge, Rep. Henderson; Rep. Nonini;
Rep. Anderson; Rep. Chadderdon; Rep. McGeachin; Rep. Mathews; Rep. Roberts;
Rep. Labrador; Rep. Kren; Rep. Hagedorn; Sen. Fulcher; Sen. Keough; Sen.
McKenzie; Sen. Goedde; Sen. Broadsword; Sen. Hammond
Phone: 332-1000


STATEMENT OF PURPOSE/FISCAL NOTE                                  H 439