Some leading Republican legislators want the Salt Lake Organizing Committee to pay sales tax on everything - on tickets, on hot dogs, on T-shirts.
GOP leaders question whether that would be the case under today's rules, since the committee is a tax-exempt organization.SLOC board chairman Robert Garff and the board's attorney, Jim Jardine, met with GOP legislative leaders Thursday morning and asked them not to pursue an overall Olympic tax bill this session.
House Majority Assistant Whip John Valentine, R-Orem, is ready to run a bill - not discussed before now - and said following the private leadership meeting that he would unless GOP leaders oppose him.
"I think the issue should be settled now. It could mean $10 million to $11 million in state and local revenues - maybe a lot more," said Valentine.
Before going into the leadership meeting, Garff said that "minor"
taxation issues could be settled later, not this year.
Garff said that SLOC never intended to lend its tax-exempt status in the area of hotel room taxes. SLOC is blocking out large numbers of rooms around the valley for the 2002 Games. If it held those rooms, and in effect sublet them to journalists or other visitors, the state and local governments would be out considerable funds.
"We aren't going to do that," said Garff.
But the real question, said House Majority Whip Kevin Garn, R-Layton, is what happens to sales tax on tickets and other sales that are directly made by SLOC.
"There are going to be considerable impacts on local and state governments (in hosting the 2002 Games), " said Garn. "And the sales tax is potential revenue to offset some of those costs that would be lost" if the Legislature doesn't do something.
Valentine, who is a tax attorney by profession, said if SLOC "was sneaky" about the way it structured its merchandising activities, it could avoid paying almost all sales tax - which is split between the state, the county and the city where the sale is made.
"I'm not saying (SLOC) is going to do that. But they are a complete tax exempt entity" and probably could find a way to pass that exemption down to its lessees, said Valentine.
For example, should a hot dog sold in the E Center during an Olympic hockey game be taxed? Valentine says yes.
Should a $300 ticket to the opening ceremonies have the current 6.25 percent sales tax applied? Valentine says yes.
Should the 2002 Games T-shirt - officially sanctioned by the Games - carry the sales tax? Valentine says yes.
The Olympics should be taxed "just like any other charitable organization that runs a swimming pool or park - they should all pay sales tax" on items that would otherwise be taxed by profitmaking businesses, said Valentine.
SLOC's Garff said before going into the private meeting that all appropriate taxes will be paid. He didn't elaborate.
SLOC officials asked that Valentine's bill not be run this year, Garn said. "They want time to study the matter and say they aren't selling enough items yet (without collecting sales tax) to make a difference," Garn said.
But Valentine said he will introduce his bill this year and then hold it to see what comes from further discussions. "Some of us think this is a major policy decision (concerning the Games) and should be decided now. Others think it can wait," said Valentine.
Garff, a former speaker of the Utah House of Representatives, said SLOC will fully comply with lawmakers' request that all taxes be paid on rooms SLOC is now reserving for January and February 2002.
E-mail messages in recent weeks have been sent to local media outlets asking the question of whether SLOC is attempting to sidestep local hotel taxes and sales taxes by using its tax exempt status to get the rooms.
"That was never our intent," said Garff before he went into the private meeting.
"We are reserving blocks of rooms. But the entities who ultimately use the rooms - the journalists or whoever - would pay the taxes like always,"
The Salt Lake County Commission is trying to get lawmakers to increase the commission's power to tax rental cars in the county - where most of the state's rental car agreements are made - in order to expand the Salt Palace convention center.
And hotel room taxes also support the convention center, along with general tourism and convention activities.
The Salt Palace will be used as the main press center, along with other activities, during the 2002 Games.
GOP leaders this session have been asking questions about how the Olympics may affect state expenditures, with a concern that taxpayers may be dinged for some indirect costs.
It's fostered an atmosphere of uncertainty.
Gov. Mike Leavitt flew back from Nagano earlier this week to conduct damage control measures after stories surfaced that he said the state may have to use more resources to take advantage of economic opportunities the Games will bring. Leavitt said his comments were misinterpreted by the Deseret News and other media organizations.