HB 93: Sales Tax on Food – Permanent Exemption 2
2007 General Session

Sponsor: Rep. Pete Anderson (R-H10, Pine Bluffs)

Last year, after several years of trying, the Legislature passed a temporary sales tax exemption on the sales of food for domestic home consumption (i.e., groceries). The exemption passed last year was amended into the budget bill, and will expire at the end of the current two-year budget (in July 2008).

HB 93 permanently exempted groceries from sales taxation. As introduced, the bill would have altered the sales tax distribution formula to reimburse local governments for some of the estimated revenue decrease they would otherwise experience as a result of not applying sales tax to food.

Supporters of HB 93 argued that sales tax is a regressive form of taxation, especially when food and clothing are included, as they traditionally have been in Wyoming. When basic necessities that people have no choice about buying are taxed, low-income families end up paying a higher proportion of their money on items subject to sales tax. So, sales tax on basic necessities such as food disproportionately impacts poorer people.

The House Revenue Committee approved HB 93 over a similar bill (see HB 154), after recommending a sunset date of 2013 for the exemption, so legislators could see if revenue lost by local governments was being adequately addressed by the tax redistribution in the bill. The Revenue Committee voted to approve the amended HB 93, 7-2, with Representatives Ken Esquibel (D-H41, Cheyenne) and Mary Gilmore (D-H59, Casper) voting against the measure because they favored HB 154, which had better provisions for ensuring that local governments would be fully reimbursed for lost revenue.

The House Committee of the Whole took the unusual step of refusing to consider the bill as reported out of committee, instead sending it back to the Revenue Committee with instructions to simplify and clarify it.

The Revenue Committee then passed a substitute version of HB 93, to permanently repeal the sales tax on food with no provisions for making up lost revenue to local governments.

The House passed HB 93, 58-1 (1 excused), and the Senate passed the bill 25-3 (2 excused). The votes listed below are the House and Senate third reading (final passage) votes. A YES vote means the legislator wanted to permanently exempt groceries from the state sales tax. A NO vote means the legislator did not want to make the sales tax exemption on food permanent, at least not without provisions to reimburse local governments for lost revenue.

Engrossed