Food advocate says modified food tax bill is ‘palatable’

A modified food tax bill that would add gross receipts tax to non-staple food is poised to become part of the budget package, it’s sponsor, Sen. Bernadette Sanchez, D-Bernalillo, said in a statement issued late Monday.  While the New Mexico Food and Agriculture Policy Council took a position against the imposition of a food tax earlier in the year and hasn’t discussed this bill, the coordinator of the policy council, Pam Roy,  told The Independent she thought this bill was “palatable.”

“[Sen. Sanchez] is really trying to look at what options are important to people’s health,” said Roy, who also works with Farm to Table, a group that works to increase access to affordable, nutritious, and culturally appropriate food.

In the lead up to the legislative session, the option of imposing gross receipts tax on food—which was eliminated just a few years ago—received considerable attention, with a variety of advocacy groups as well as Lt. Gov. Diane Denish opposing the idea, and the Albuquerque Chamber of Commerce in favor. The Chamber has since come out in opposition to any tax increases.

Roy said she was concerned that the bill slices food into categories, which complicates things, but said she sees why it may be popular, because it taxes non-nutritious foods while exempting foods that promote good health.

The bill, SB 10, would apply gross receipts tax to non-staple foods, with an estimated $138 million raised for the state general fund. The bill defines non-taxable foods as those covered by the Department of Health’s nutrition program for women, infants and children, commonly referred to as WIC, plus fresh or frozen meat, poultry or fish with no additional ingredients or only minimal additional ingredients.

“Our current food tax exemption was not intended to apply so broadly, but it was intended to provide families assistance in accessing healthy foods,” said Sanchez.  “This legislation will promote better health in our population, and fiscal health in our state government.  I think that’s why the bill has garnered considerable attention, and considerable support.”

Another Senator expressed her support for the bill in a newsletter to her email list.

“This is actually better than my bill which rolls back the gross receipts tax exemption on soda, a loophole that we inadvertently left a few years ago,” said Sen. Dede Feldman, D-Albuquerque.

According to the fiscal impact report prepared for the bill, 31 states and the District of Columbia exempt food for home consumption from the state tax rate. Seven other states tax food consumption at a lower rate than their state sales tax rate. Five states tax food at the state level but allow a rebate or income tax credit to compensate poor households. New Mexico both excludes food and has a low-income rebate.

The report also provides data about poverty and hunger in New Mexico, provided by the state department of health, that says New Mexico ranks 5th in the nation as a “food insecurity state.” This means 14.5 percent of New Mexicans don’t know where their next meal is going to come from, or are chronically hungry:

The 2008 U.S. Census Current Population Survey (CPS) states 16.7 percent of New Mexicans are living in poverty. And that New Mexicans living in poverty spend a larger proportion of their disposable income on food as compared to wealthier New Mexicans. New Mexico ranks 5th in the nation as a Food Insecurity State, which means 14.5 percent of New Mexicans are not sure where their next meal is coming from or chronically hungry. Twenty percent of New Mexico’s children regularly miss meals because of inadequate family income.