From Deseret News archives:

Food tax on front burner

Utah GOP leaders wrangle over how to remove most-hated tax

Published: Monday, Nov. 7, 2005 11:47 p.m. MST
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GOP Utah House leaders issued a challenge to their legislative colleagues Monday: have the political guts to remove the sales tax from food.

Senate President John Valentine, R-Orem, did the same at a meeting of the Tax Reform Task Force.

"I move we remove the sales tax from food," he proposed. "If we have the political will, let's do it (straight) with no tax shift," which would mean no tax increases on non-food items to make up a $225 million loss in revenue to state and local governments if the tax on unprepared food is lifted.

But others on the task force aren't yet ready to make the big leap.

Task force co-chairman Sen. Curt Bramble, R-Provo, recommended the task force "continue this discussion" until its Nov. 28 task force meeting — when all final recommendations from the 15-member group must be completed. "We seem to be dealing with the emotion of removing the sales tax from food," he said.

Valentine said cuts in government programs could make up for the loss in revenue. The state ended the past fiscal year with more than a $100 million surplus and is projected to have a surplus of $220 million at the end of June next year if revenue collections continue at the current pace.

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House Majority Whip Steve Urquhart, R-St. George, stunned the task force a week ago when he brought word that House Republican leaders — led by House Speaker Greg Curtis, R-Sandy — wanted to remove the food tax, a political issue in Utah that has generated a lot of debate and no action. House leaders suggested a small increase in the sales tax on non-food items to make up the revenue loss.

Monday, Urquhart said he'd wished the task force had taken a vote on Valentine's motion. "Look's like we have the (Senate) president with us; let's run with it."

But the discussion got bogged down — as it has in earlier debates — in the minutia of what is a non-prepared food item, how small communities with one or two grocery stores can keep their sales tax revenues if 80 percent of their sales taxes (on food) disappear and on how Utah's poorest residents would feel about receiving a food tax break but paying a higher sales tax rate on non-food purchases.

"You've long known our concerns about" removing the food tax, said Roger Tew representing the Utah League of Cities and Towns. A representative from the Utah Automobile Dealers Association said too many Utahns are having their cars repossessed because they can't make payments, and fewer low-income Utahns would qualify to buy if the sales tax went up by 0.6 percentage points (on non-food items) as the Curtis/Urquhart proposal suggests.

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