Restaurant-tax bill still on back burner

A Senate committee sent back to its cooks a bill that would use part of the 1 percent restaurant tax to promote dining out at Utah eateries.

Meeting Wednesday, members of the Senate Workforce Services and Community and Economic Development Committee heard concerns about SB68. The committee took no vote on the bill.

The bill calls for counties collecting the tax to divert 10 percent of it, or about $3.3 million annually, to the Utah Restaurant Association, which would use the money to promote more dining out.

The bill's sponsor, Sen. Wayne Niederhauser, R-Sandy, said the tax, over time, has been used for things that have not benefited restaurants. He cited local recreation centers as an example. In another case, the money helped pay for a facility that has a kitchen and actually competes with local restaurants.

If promoting restaurants increases patronage there, counties would see a benefit from higher revenues from the restaurant tax, he said. "So this would be a great cause to promote the restaurant use," he said. "It would create some further jobs. It will be a benefit to the economy."

Melva Sine, the restaurant association's president, said 85 percent of patronage comes from locals and only about 15 percent from tourists, so the restaurant portion of the Tourism, Recreation, Cultural and Convention Facilities Tax "is really not a tourism tax."

The promotional campaign would let restaurants afford TV ads through a group purchase by the association and a Web site calling for people to eat more often at the state's 4,300 restaurants, she said. On average, Utahns eat out about five times per week. "We'd like it to be more," she said, as 1.4 more times per month would boost the restaurant tax revenues 4 percent.

"This would create a 4 percent increase in the overall revenue that goes to a county, so we're not asking for counties to give us money or take money away from other projects or do those kinds of things," Sine said. "This actually would be investment into our industry that would generate additional funds for counties."

Still, representatives of the Utah Association of Counties and the Salt Lake Valley Lodging Association expressed concerns about the bill, prompting the committee to hold off on a vote.

Majority Assistant Whip Sheldon Killpack, R-Syracuse, expressed a general frustration about tourism-related taxes, saying it seems to be an issue "every single year we're up here." Some people are disgruntled about how the taxes are spent, he said, leading him to believe there needs to be a better definition of "tourism."