Utah tax reform is in slow lane

Tax reform might not be ready for Utah's 2006 Legislature after all.

"We're getting delayed and don't know if we can get it done that quickly," Sen. Curt Bramble, R-Provo, the co-chairman of the Legislative Tax Reform Task Force, told a Tuesday gathering of the Utah Taxpayers Association.

Restructuring the state's tax system is seen as a key piece of Gov. Jon Huntsman Jr.'s economic development effort. The governor unsuccessfully pushed last session for a phase-out of the corporate income tax, now among the proposals the task force will study.

But not all of the members of the task force have been named yet. A change in the makeup of task forces approved during last week's special session gave the House an additional two seats on the 15-member tax reform panel.

Bramble had said earlier this year that the task force needed to get a quick start and should get together in March. Tuesday he said it would be mid-May at the earliest before the panel can hold its first meeting.

He's questioning whether that leaves enough time to deal with all of the issues.

Bramble told the business-oriented association that "everything ought to be on the table," including the constitutional provision that sets aside state income taxes for schools.

Especially since any proposed legislation from the task force would need to be reviewed by the Revenue and Taxation Interim Committee — which will likely hold its last meeting in November.

"We're going to make every effort to have something ready in November. But . . . ," Bramble said in an interview after his presentation.

However, the governor's chief of staff, Jason Chaffetz, said the 2006 session is still the goal.

"I think it is a legitimate concern. It is a very complicated and complex issue," Chaffetz said of putting together a new tax structure for the state before the next general session begins in mid-January. "We'll remain optimistic we can hit 2006."

Chaffetz declined to speculate on whether the governor would be willing to advance portions of a tax reform plan if everything isn't ready. Lawmakers had been reluctant to pass his corporate income tax phase-out without seeing what would happen to other taxes.

"It's still very premature," the chief of staff said. "We're going to cover a lot of ground between now and the first of the year. We'll have to make those assessments as we get closer to the end of the year."

The task force isn't starting from scratch — former Gov. Olene Walker came up with her own plan to restructure Utah taxes shortly before leaving office. That plan included extending sales taxes to services as well as goods, including doctors visits and other health care.