Western Meats customers often are surprised when they find out they owe the 6% Idaho sales tax on the custom processing and packing services the Grangeville business provides.

“When they come in to get an animal cut and wrapped, they have to pay tax, but they view it as a service,” owner Sheila Crawford said. “It is a frustration to the customer.”

Idaho exempts many services from sales tax, but not custom butchers. House Bill 496 now before the Idaho Legislature would exempt certain custom meat-processing services. The House Revenue and Taxation Committee on Feb. 17 voted to send the bill to the full House with a do-pass recommendation.

HB 496 would exempt from state sales tax custom processing or packing services on meat that the customer furnishes and does not plan to resell. Under current law, this customer is charged tax on something he or she owns already, said sponsor Linda Wright Hartgen, R-Twin Falls.

“Everything we do including beef, pigs and game is already owned” by the customer, said Crawford, who owns Western Meats with her husband, Ken Crawford. “They are coming to us to provide the service of processing.”

Many big-game hunters come through Grangeville, which is on a north-central Idaho prairie surrounded by forests. Hunting seasons from August through year’s end provide Western with significant volume, Sheila Crawford said.

Some big-game customers, including out-of-state hunters required to transport only processed animals into their home states, express surprise that they must pay sales tax on the service, she said.

Local customers also are affected. “You buy a pig from 4-H and you are charged sales tax on cut-and-wrap,” Crawford said.

Idaho exempts some livestock sales, including animals auctioned at a 4-H event, from sales tax.

HB 496, if passed, would cost about $200,000 in annual revenue no longer flowing into the state General Fund, an attached fiscal note said.