Utah lawmakers consider axing food sales tax
Many talked about it, but legislators finally put forth plan
Gov. Jon Huntsman Jr. proposed during his gubernatorial campaign this past year removing the much-hated tax. But until now no one not Huntsman nor members of the state's Tax Reform Task Force have put together a specific proposal to do it or how to make up the roughly $260 million in lost revenue if they did.
Now House Speaker Greg Curtis and Majority Whip Steve Urquhart, among others, say they have a plan that could work, in large part by increasing state and local sales taxes by a combined 0.6 of a percentage point statewide on nonfood items everything from clothing to cars.
"This is a vile, regressive, morally reprehensible, unfair tax," said Urquhart, R-St. George. "We can remove it and we should."
Urquhart, a member of the task force, outlined the "back of the napkin" plan at Wednesday's task force meeting, saying several House leaders had discussed and supported it in a late Tuesday night meeting.
The current state sales tax rate of 4.75 percent would go up by 0.5 of a percentage point to 5.25 percent. Local governments' current 1 percent local option sales tax (almost all cities and counties levy the tax) would go up to 1.1 percent, Urquhart said.
Because the state is awash with surplus tax revenues and many conservatives want tax cuts next year, those rate increases would not totally offset the $260 million in lost sales tax revenue. Accordingly, citizens would see overall a tax cut of $44 million the state would lose $36 million and local governments $8 million among the 237 cities and towns and the 29 counties.
The plan would not affect the tax rates of so-called "boutique" sales taxes, like those for resort towns, or the zoos, arts and parks tax.
Because those smaller tax rates would be, as they are now, added on top of the state and local tax rates which would move from a base rate of 5.75 percent to 6.35 percent in Salt Lake City, for example, the total sales tax rate on nonfood items would go from 6.6 percent to 7.2 percent.
"The governor has not seen this new proposal," said Huntsman spokeswoman Tammy Kikuchi. "But he has supported for some time the removal of sales tax from food, as long as it is done in a fiscally responsible manner. We look forward to evaluating this new idea."
The task force has just finished a weeklong trip around Utah holding public hearings about a whole slew of possible tax reform ideas. Public support for removing food tax was voiced at the hearings but wasn't regarded or presented by task force members as a serious reform option. At the Oct. 19 hearing in Salt Lake, Urquhart stated his support for removing the food tax but was noncommittal when asked if he would sponsor a bill.
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