Utah Legislature: Democrats suggest repealing tax exemptions

SALT LAKE CITY — With the state's economy still stagnant and tax revenues down, Democratic legislators say the majority Republicans should consider, at least temporarily, repealing certain sales tax exemptions.

GOP leaders said Tuesday morning that they will take more than $80 million out of the state's Rainy Day fund just to balance out the current year's budget, which ends June 30.

That's because state tax revenue continues to lag.

House Minority Leader David Litvack, D-Salt Lake, says Republicans should not just be looking at cutting state budgets, "and these sales tax exemptions should be part of the discussion, also."

The state gives out millions of dollars in sales tax exemptions, from coin-operated laundries to manufacturing equipment.

Litvack has opened what's called a "boxcar" bill, HB458, that contains no wording. At the proper time this session, which ends March 11, Democrats may well propose a "temporary" repeal of some of those exemptions as a way to raise needed revenue.

"We are talking about doing away with the 12th grade. Privatizing state parks. Stopping school bus transportation. These are drastic cuts to programs many value," said Litvack.

If such actions are even considered, so should doing away with some sales tax exemptions "for some special interests," which have been put in the tax code over time.

"Why do we give a sales tax exemption to airline food? For me that makes little sense," said Litvack. "Let's look at the whole budget picture, cuts as well as special interest sales tax exemptions."

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