Huntsman reveals part of tax reform plan

Details of Gov. Jon Huntsman Jr.'s plan for reforming Utah's tax structure began to emerge Monday, including phasing out corporate income tax and possibly taking the sales tax off food.

The new governor started his second week in office by describing some aspects of his plan at a Utah Taxpayers Association conference held at the state Capitol. Huntsman said tax reform is key to his campaign pledge to revitalize the state's economy.

"If we're going to keep pace in terms of competitiveness with our neighbors we have to stay sharp as it relates to how we go about taxing individuals, businesses and services," he told the 100 or so lawmakers, lobbyists and others gathered for the conference.

It's the first time Huntsman has offered his own ideas about overhauling the state's tax structure since former Gov. Olene Walker, a fellow Republican, made her tax reform recommendations public just weeks before she left office.

Walker, who worked for a year with a panel of experts on her recommendations, also proposed phasing out corporate income tax as well as establishing a flat rate for individual income taxes and extending sales taxes to services, including health care.

Huntsman said his plan, which has yet to be revealed in its entirety, will differ from Walker's. So far, the major difference appears to be that he is considering taking sales tax off food. Walker decided it couldn't be done.

Sen. Howard Stephenson, R-Draper and president of the taxpayers association, said he was surprised that Huntsman offered as much detail as he did. Stephenson said he liked what he heard.

Eliminating the corporate income tax, Stephenson said, would go a long way toward boosting Utah as an attractive place to do business. "His description of himself as the economic development governor is really coming true with what he is doing already," he said.

Tax reform will take time to accomplish, though — as long as two sessions, Huntsman said. However, he suggested lawmakers can get a good start during the upcoming session that convenes Jan. 17.

That start should focus on corporate income tax, the governor said, proposing that for now the current formula for calculating the tax be changed to favor business. Phasing out the tax could take three to six years, he said.

Also targeted for elimination is the state's capital gains tax, which the governor said drives away successful entrepreneurs. He also called for the creation of a commission made up of small business owners and state regulators to ease red tape.

Huntsman said he might not seek action on individual and sales taxes this session.