All transportation may be exempted from sales tax — for now.

The Utah Tax Review Commission approved a prospective bill Friday that would remove transportation from the sales tax statutes, primarily because almost all forms of transportation are already exempted from sales tax. Those exempted include taxicabs, horse-drawn carriages, limousines and airport shuttles.

Before the exemptions were actually removed, the bill would have to progress through legislative committee hearings and be passed by the full Legislature during next year's general session. If passed, it would amount to about $10,000 in lost sales tax revenue for the state.

By removing transportation from the sales tax statutes, however, the commission intends to tackle the issue of whether to tax all forms of transportation, which could total upwards of $4 million in additional sales tax revenue. Commission member Gary Cornia, a Brigham Young University professor, said that exempting all of the various forms of transportation does not make sense because they are not industries that would be significantly impacted by the increased prices caused by sales tax.

Additionally, limousines and taxicabs are heavily utilized by out-of-state visitors or higher-income individuals who are not going to be bothered by a dollar or two in taxes. And other transportation services, such as carriage rides or bus tours, are generally something people do on vacation or on a whim, and not something for which they will spend much time comparing prices.

"These are goods and services that have relatively inelastic demand. When you tax theses services, you are not creating a deadweight for the business," Cornia said. "Exempting these groups from sales tax is not an idea I understand."

Trent Woolston, general manager of Express Shuttle, said that his business is actually very sensitive to price fluctuations because often people are comparing the costs between a shuttle, a taxi or driving their own vehicle and parking. It is also not a business in which change is easily given, so prices have to be even dollar amounts — meaning that they would either have to absorb the tax as a company or raise their prices more than the tax dictates.

Besides, they provide a service to the entire community because "we reduce the number of vehicles on the road," he said. "We try to do what (the Utah Transit Authority) promotes with government funding. Except we do it privately."

The commission may look beyond taxicabs and carriages and may even consider recommending that public transportation be taxed as well. Ideally, any money raised by a new taxes would be used to fund improvements to the transportation infrastructure.

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E-mail: jloftin@desnews.com