Businesses in Utah are among the least taxed

Millions of dollars in tax breaks to help Utah's ski industry compete with Colorado. Millions more to help industry defray the costs of pollution-control equipment. Millions more for this and millions for that.

In all, the state grants hundreds of millions in various tax exemptions and incentives to help Utah businesses. But a new report from the pro-business Council on State Taxation, based in Washington, D.C., is fueling debate on Utah's Capitol Hill that the state has gone too far in creating a tax-friendly climate for business.

The report, compiled by the accounting firm of Ernst & Young, uses a variety of formulas to measure tax burdens. And in every case, Utah ranked among the four states in the nation with the lightest tax burden for business.

"You have to ask why our citizens are among the highest taxed in the nation but our businesses are among the lowest," said Sen. Ed Mayne, a West Valley Democrat who is sponsoring legislation to repeal some tax breaks. "And if tax incentives are such a good idea, there shouldn't be any unemployed people in the state, and businesses should be flocking to Utah. But they are not. Why?"

The issue of tax breaks has been a volatile one on Capitol Hill for years. Various task forces and legislative committees have studied a variety of repeals and promised reforms.

But majority Republicans have dug in their heels. Last year, Mayne introduced a bill to repeal some business tax breaks to generate tens of millions of dollars during a cash-strapped year that saw education funding decline for the first time in two decades. But Republicans promptly replaced Mayne's bill with a sales tax on cable and satellite television subscribers.

This year, Nucor Steel in northern Utah is lobbying lawmakers to renew a $100,000 per year tax break instituted several years ago, even though the company is profitable.

"It's criminal," Mayne said. "We're talking about $100,000 of taxpayer money into the pocket of Nucor shareholders."

Maybe so, but that hasn't stopped Democrats from supporting tax breaks of their own. Mayne is a co-sponsor of a tax break for companies using alternative fuels to generate energy. And Senate Minority Whip Ron Allen, D-Stansbury Park, is sponsoring legislation to give tax breaks to Utah's motion picture industry.

According to the Council on State Taxation study:

• When the business tax burden is measured as a share of all taxes paid, Utah ranks 49th among all 50 states.