What problems did the Idaho AG flag with the proposed grocery sales tax exemption ballot initiative?

Subject

Certificate of Review on a proposed Idaho ballot initiative by Joseph Evans (Boise) that would have added a new Idaho Code § 63-3622H exempting "food sold for human consumption" from Idaho sales and use taxes. AG Raúl Labrador's office, with Deputy Attorney General Matthew L. Maurer drafting, identified two main concerns under Idaho Code § 34-1809.

This is the first of two grocery-tax-exemption initiatives reviewed in 2025; a revised version was submitted by a different petitioner (Howard Rynearson) and reviewed in June 2025.

Plain-English summary

Idaho's Attorney General reviews every proposed citizen ballot initiative under Idaho Code § 34-1809. The review is "advisory only," and the petitioner may accept or reject any recommendation. The AG addresses drafting and legal concerns; it does not pass on policy.

This Certificate covers a proposed initiative that would add a single sentence to Idaho's sales tax statute: "food sold for human consumption" would be exempt from sales and use taxes. The proposed text mirrors a recent legislative proposal, House Bill 260 (2025), which was considered but not enacted.

The AG flagged two main issues:

1. No definition of "food." The initiative does not define "food sold for human consumption." This matters because Idaho courts strictly construe tax exemptions against the taxpayer and in favor of the state. The Idaho Supreme Court in Idaho State Tax Comm'n v. Haener Bros., 121 Idaho 741 (1992), citing Hecla Mining and Canyon County v. Sunny Ridge Manor, holds that a "statute granting [an] exemption [will not] be extended by judicial construction so as to create an exemption not specifically authorized." Without a definition, narrow categories may slip out of the exemption. The Merriam-Webster definition (one of two listed) of "food" as "nutriment in solid form" would exclude beverages like milk and orange juice. Restaurant meals, prepared foods, and similar edge cases are also unclear.

2. Uncertain relation to existing food-tax provisions. Idaho already has a Grocery Tax Credit at Idaho Code § 63-3024A (a $155 income tax credit per most taxpayers and dependents that offsets the sales tax burden on groceries). The initiative's funding-source statement mentions "cost savings due to a reduction in processing the Grocery Tax Refund," suggesting the petitioner intends to replace the credit with the exemption. But the proposed text does not actually amend or repeal § 63-3024A. Both provisions could end up in effect simultaneously. The initiative also doesn't address two other existing food-related sales tax exemptions: § 63-3622J (school lunch program meals and meals for the aging) and § 63-3622FF (food purchased with SNAP benefits). A broad new exemption that overlaps with these existing exemptions creates uncertainty about how the provisions interact.

The AG's recommendation: define "food sold for human consumption" thoroughly, and explicitly address how the new exemption interacts with the existing Grocery Tax Credit (likely by repealing § 63-3024A) and with the school-meals and SNAP exemptions.

The AG explicitly stated: "This office offers no opinion with regard to the policy issues raised by the proposed initiative or the potential revenue impact to the state budget."

What this means for you

If you are an Idaho ballot initiative drafter or petitioner

The fix is straightforward, but the choices are policy-loaded:

• Define "food" precisely. A common approach is to peg the definition to an existing federal program. The June 2025 re-submitted version (different petitioner) chose 7 U.S.C. § 2012 (the SNAP definition). The choice matters because SNAP excludes hot prepared foods, alcohol, tobacco, and vitamins. Pegging to SNAP gives a clean line but excludes restaurant meals and similar items.
• Address the Grocery Tax Credit. If the intent is to replace the credit with the exemption, explicitly repeal § 63-3024A. If the intent is to keep both, say so. Leaving it ambiguous invites litigation.
• Address the school-meals and SNAP exemptions. If the new broad exemption already covers what § 63-3622J and § 63-3622FF cover, you may want to repeal those for cleanliness. But be careful: § 63-3622FF connects to federal SNAP rules under 7 U.S.C. § 2013, which conditions state SNAP participation on not collecting state sales tax on SNAP food purchases. Wholesale repeal of § 63-3622FF without preserving the SNAP-specific exemption could risk Idaho's SNAP eligibility.

If you are an Idaho voter

A grocery tax exemption is a popular policy idea, but the difference between a well-drafted exemption and a poorly-drafted one is millions of dollars in implementation costs and potential disputes. Read the actual text before voting. Two specific things to look for: how is "food" defined, and does the initiative repeal the existing Grocery Tax Credit?

If voters approve a broad "food exemption" without a definition, the State Tax Commission and the courts get to decide what counts. Idaho's tax-exemption-construed-against-the-taxpayer rule means edge cases will probably resolve narrowly.

If you are an Idaho tax attorney or accountant

The Certificate's most useful practical observation: when legislation is enacted by ballot initiative, there is no legislative history to assist courts in interpretation. Combined with the strict-construction rule from Haener Bros., this means initiatives drafting tax exemptions need to be self-contained and explicit. Compare with the legislative approach (HB 260) which would have produced a fiscal note and committee record.

If a poorly-defined exemption passes, expect early Tax Commission rulings on contested categories (beverages, restaurant meals, hot prepared foods, vitamins, snack foods, candy) to set the practical scope. Plan for client questions on each.

If you are an Idaho state legislator

The Certificate is an instructive comparison between legislative and initiative paths to the same policy. A well-drafted bill (e.g., HB 260 with definitions) is structurally more durable than a sparse initiative. If the goal is grocery tax relief, legislative action is cleaner. If the legislature does not act, the initiative path is likely to produce a less precise result that the courts will have to resolve.

If you are an Idaho Department of Health & Welfare or Tax Commission staffer

Watch for whether the initiative defines "food" by reference to SNAP under 7 U.S.C. § 2012 or in another way. The cross-program implications matter: SNAP, school lunch, the Grocery Tax Credit, and any income-based tax credits all interact.

Common questions

Q: What is the Idaho Grocery Tax Credit?
A: Idaho Code § 63-3024A provides an income tax credit (currently $155 for most taxpayers and each dependent) intended to offset the sales tax paid on groceries. It is not a refund of sales tax actually paid; it is a flat credit available to most filers regardless of grocery spending. The proposed initiative does not address this credit.

Q: Does the initiative repeal the Grocery Tax Credit?
A: Not on its face. The funding statement language suggests the petitioner intended to replace the credit, but the operative text does not amend or repeal § 63-3024A. Without explicit repeal, both provisions would be in effect simultaneously.

Q: How is "food" defined under federal SNAP rules?
A: 7 U.S.C. § 2012 defines "food" for SNAP purposes as basically any food item for human consumption except alcohol, tobacco, hot foods sold for immediate consumption, and a few other categories. Many state grocery tax exemptions peg to this definition for consistency with SNAP processing.

Q: Why does the AG cite Haener Bros. so prominently?
A: Because Haener Bros. (1992) is the controlling Idaho Supreme Court statement of how courts construe tax exemptions: strictly against the taxpayer and in favor of the state. Combined with Hecla Mining (1985) and Canyon County v. Sunny Ridge Manor (1984), this rule means that an undefined or ambiguous tax exemption will tend to be read narrowly. Drafting matters.

Q: What happens if the initiative passes without defining "food"?
A: The Idaho State Tax Commission would have to decide on a case-by-case or rule basis what items qualify. Disputes would go to administrative review and ultimately to court. Under Haener Bros., courts would resolve ambiguities against the taxpayer. The practical result would likely be a narrower exemption than voters intended.

Q: Did this initiative reach the ballot?
A: A revised version submitted by a different petitioner (Howard Rynearson) was reviewed in June 2025; that version included a SNAP-based definition of food. Whether either version reached the ballot is a separate question of signature collection and verification.

Background and statutory framework

Idaho's sales tax statute is at title 63 chapter 36 of the Idaho Code. Existing exemptions include the Grocery Tax Credit (income tax credit at § 63-3024A), the school-meals exemption (§ 63-3622J), and the SNAP food purchase exemption (§ 63-3622FF). Various other category-specific exemptions also exist.

Idaho's tax-exemption strict-construction rule has been settled since Haener Bros. (1992) and earlier Hecla Mining (1985) and Canyon County (1984). The rule means that a person claiming an exemption bears the burden of showing the claimed item falls clearly within the exemption's text. Ambiguities are resolved in favor of taxation.

Idaho's grocery tax debate has run for decades. The legislature regularly considers grocery exemption bills (HB 260 in 2025 is the most recent example). The initiative process here is a workaround when legislative action stalls.

Citations and references

Idaho statutes:
- Idaho Code § 34-1809, Certificate of Review process
- Idaho Code § 63-3024A, Grocery Tax Credit (income tax)
- Idaho Code § 63-3622FF, sales tax exemption for SNAP food purchases
- Idaho Code § 63-3622J: sales tax exemption for school lunch and meals for the aging

Federal:
- 7 U.S.C. § 2012, SNAP food definition
- 7 U.S.C. § 2013: SNAP state participation conditions

Cases:
- Idaho State Tax Comm'n v. Haener Bros., 121 Idaho 741, 828 P.2d 304 (1992), strict construction of tax exemptions against the taxpayer
- Hecla Mining Co. v. Idaho State Tax Comm'n, 108 Idaho 147, 697 P.2d 1161 (1985)
- Canyon County v. Sunny Ridge Manor, Inc., 106 Idaho 98, 675 P.2d 813 (1984)

Source

• Landing page: https://www.ag.idaho.gov/office-resources/opinions/
• Original PDF: https://www.ag.idaho.gov/content/uploads/2025/04/25-96540-Response-COR.pdf

Original opinion text

April 14, 2025

VIA HAND DELIVERY
The Honorable Phil McGrane
Idaho Secretary of State
Statehouse
RE:

Certificate of Review
Proposed Initiative for Adding a New Section to Title 63, Idaho Code,
Providing for a Sales Tax Exemption for Food.

Dear Secretary of State McGrane:
An initiative petition was filed on March 18, 2025, proposing to amend title 63
of the Idaho Code. Pursuant to Idaho Code section 34-1809, this office has reviewed
the petition and prepared the following advisory comments. Given the strict statutory timeframe within which this office must review the petition, our review can only
isolate areas of concern and cannot provide in-depth analysis of each legal or constitutional issue that may present problems. This letter therefore addresses only those
matters of substance that are “deemed necessary and appropriate” to address at this
time and does not address or catalogue all problems of substance or of form that the
proposed initiative may pose under federal or Idaho law. Idaho Code § 34-1809(1)(a).
Further, under the review statute, the Attorney General’s recommendations are “advisory only,” and the petitioners are free to “accept or reject them in whole or in part.”
Id. § 34-1809(1)(b). This office offers no opinion with regard to the policy issues raised
by the proposed initiative or the potential revenue impact to the state budget from
likely litigation over the initiative’s validity.

Secretary of State McGrane
April 14, 2025
Page 2
MATTERS OF SUBSTANTIVE IMPORT
I.

Summary of the Proposed Initiative

The proposed initiative seeks to add a sales tax exemption for “food sold for
human consumption” to Chapter 36 (Sales Tax) of the Idaho Code. The proposed exemption is similar to a provision in a piece of legislation that was recently considered
by the Idaho Legislature. See proposed House Bill No. 260; https://legislature.idaho.gov/sessioninfo/2025/legislation/H0260/. In both the proposed legislation
and the proposed initiative, a new section (63-3622H) would add “food for human
consumption” to the list of goods and services that are exempt from Idaho’s sales and
use taxes.
The proposed initiative does not further specify what type of “food” would qualify for this sales tax exemption beyond simply noting that the exemption is for “food
sold for human consumption.” Initiative Pet. § 1.
The proposed initiative includes a “severability provision” whereby if any portion of the initiative is “declared invalid for any reason, such declaration shall not
affect the validity of the remaining portions” of the initiative. Id. at § 2.
Finally, the proposed initiative includes a fiscal impact statement and “funding
source statement.” The impact statement notes the potential for lost state revenue as
a result of no longer taxing food. The funding statement asserts that the initiative
would not require the expenditure of funds and that the “state general fund and the
Tax Commission may see cost savings due to a reduction in processing the Grocery
Tax Refund.” Id. at 3.
II.

Analysis of the Proposed Initiative
1. No Definition of “Food for Human Consumption”

The most obvious potential problem with the initiative is that it fails to provide
a definition of “food for human consumption.” This creates ambiguity in interpreting
and applying the statute, and raises the possibility that the initiative’s intent will not
be fully realized. For example, does this definition include or exclude food purchased
at a restaurant? Similarly, categories the petitioner may have intended to include,
such as beverages (like milk), may not be covered by the proposed exemption.
For example, the second entry for “food” in Meriam-Webster’s online dictionary
is: “nutriment in solid form.” https://www.merriam-webster.com/dictionary/food. This

Secretary of State McGrane
April 14, 2025
Page 3
definition would exclude beverages from the definition of food, even common grocery
staples like milk and orange juice.
Beyond the potential problem of possibly not capturing the petitioner’s intent,
the failure to define “food” within the initiative poses potential issues for courts interpreting the initiative, if it were enacted. Typically, Idaho courts strictly construe
tax exemptions against the taxpayer and in favor of the state. Idaho State Tax
Comm'n v. Haener Bros., 121 Idaho 741, 744, 828 P.2d 304, 307 (1992) (citing Hecla
Mining Co. v. Idaho State Tax Comm'n, 108 Idaho 147, 697 P.2d 1161 (1985)). And
“a statute granting [an] exemption [will not] be extended by judicial construction so
as to create an exemption not specifically authorized.” Haener Bros., 121 Idaho at 744
(citing Canyon County v. Sunny Ridge Manor, Inc., 106 Idaho 98, 675 P.2d 813
(1984)).
The above principles notwithstanding, sometimes courts will view a tax exemption “in light of the legislative intent.” Haener Bros., 121 Idaho at 744. But when
legislation is enacted by ballot initiative, as is proposed here, there is no legislative
history to discern legislative intent.
It is recommended, therefore, that the initiative include a thorough definition
of “food sold for human consumption” to reflect the petitioner’s intent as to the scope
of the proposed sales tax exemption.
2. Uncertain Relationship to Other Food Tax Provisions

The proposed initiative mentions a possible “cost savings due to a reduction in
processing the Grocery Tax Refund.” Initiative Pet. at 3. However, the proposed initiative does not actually address Idaho’s current “Grocery Tax Credit,” which is not a
true refund, but rather an income tax credit—set at $155 for most taxpayers and each
dependent—that offsets Idahoans’ income tax. Idaho Code § 63-3024A. Although the
goal of the “Grocery Tax Credit” is the same as the proposed sales tax exemption for
food—to alleviate the tax burden on food purchases—the two provisions are distinct
methods of accomplishing that goal and could both be in effect.
If the petitioner’s intent is to replace the “Grocery Tax Credit” with the proposed tax exemption, as seems to be the intent, that should be made clear in the
initiative’s provisions, likely by proposing an amendment to repeal Idaho Code section 63-3024A.
Finally, it is unclear what effect the proposed initiative would have on the various other sales tax exemptions involving food. For example, Idaho Code section 633622J provides for a sales tax exemption of “meals by public or private schools under
the federal school lunch program or under programs that provide nutritional meals

Secretary of State McGrane
April 14, 2025
Page 4
for the aging.” And section 63-3622FF exempts “[p]urchases of food made with benefits provided under the federal supplemental nutrition assistance program (SNAP).”
The proposed initiative, with its broad exemption of “food sold for human consumption,” would seem to overlap with the provisions noted above. But the failure to
address these other provisions raises some uncertainty as to how the proposed initiative would affect the current laws. Again, a more thorough definition of “food sold
for human consumption” could potentially address this issue, specifically by consulting other sources, including Idaho Department of Health & Welfare SNAP provisions.
See
https://healthandwelfare.idaho.gov/services-programs/food-assistance/aboutsnap.
CERTIFICATION
I HEREBY CERTIFY that the enclosed measure has been reviewed for form,
style, and matters of substantive import. The recommendations set forth above have
been communicated to the Petitioner via copy of this Certificate of Review, deposited
in the U.S. Mail to Joseph Evans, P.O Box 1904, Boise, ID 83701.
Sincerely,

RAÚL R. LABRADOR
Attorney General
Analysis by:
Matthew L. Maurer
Deputy Attorney General