Bill exempts food donations from Idaho use tax

Sean Ellis

Capital Press

A bill that easily passed the Idaho House would ensure that farmers and ranchers who donate food to individuals and non-profit groups don't have to pay the state's 6 percent use tax.

BOISE — A bill that would exempt Idaho farmers who donate food to non-profit groups or individuals from having to pay the state’s 6 percent use tax has easily passed the House.

The bill, which passed the House by a vote of 67-0 Feb. 28, is awaiting a hearing in the Senate Local Government and Taxation Committee.

It would amend Idaho law so the state’s use tax doesn’t apply to food and beverage donations to individuals or non-profit groups.

“In a sense, (the tax) criminalizes somebody for being a good neighbor to someone else and that’s wrong,” said Idaho Heartland Coalition Executive Director Roger Batt, a private consultant and lobbyist who is guiding the bill through the Idaho Legislature. “This legislation would exempt that.”

A lot of commodity producers donate food and beverages to their neighbors, churches and other groups, and those donations are technically subject to the state’s 6 percent use tax.

“A lot of farmers produce a lot of products and are very generous about the gifts they give to people,” Batt said. “I really feel this law wasn’t created to apply to something like that.”

The bill is being widely supported by the state’s agriculture industry, including Idaho Farm Bureau Federation and Food Producers of Idaho.

“It’s important for all of agriculture to be able to donate their products and not have to pay the use tax on that,” said Wyatt Prescott, executive vice president of the Idaho Cattle Association.

The bill continues an effort to amend Idaho tax code to ensure the use tax doesn’t negatively impact the state’s agricultural industry.

Any Idaho business that consumes, stores or uses tangible personal property is liable for paying the 6 percent use tax.

Batt said the effort was sparked in 2011 when Idaho wineries received a letter from the Idaho Tax Commission saying they needed to go back through their records the past three years and pay the tax on any free samples they had given out.

The following year, Idaho’s wine industry was successful in getting legislation passed exempting free beverage samples from the use tax. In 2013, the legislature passed a similar bill backed by the IHC that exempts free food samples from the tax.


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