Shouldn't someone who owns a Mercedes pay more property tax than a Chevy owner?
Why can't manufacturers in Utah hang onto the tax exemptions that help make them profitable? And how will the terms "good will" and "other intangibles" change the monumentally confusing law related to intangible taxes? What did lawmakers hope to accomplish?Taxes, taxes, taxes. Nearly 300 people gathered Tuesday to talk about the issues that affect taxpayers at a half-day Utah Taxes Now forum sponsored by the Utah Taxpayers Association and Thiokol Corp.
And lawmakers who tinkered with the formulas during this winter's legislative session ended up answering for their actions.
Sponsoring SB50, which replaced vehicle property taxes with a fee schedule based on a car's age, was an "enlightening" experience according to Sen. George Mantes, D-Tooele. "I've been called everything from a bright light voice of reason in the tax discussion to a slimy, scum-sucking car dealer who is going to benefit from the bill he passed."
The audience was full of business owners, lobbyists and representatives from various industries, legislators, state officials and city and county leaders - all there to be updated about recent changes in the way taxes are figured.
"We are constantly asked to reduce taxes," said Senate President Lane Beattie, R-West Bountiful, during a discussion of sales tax exemptions. If the state eliminated all tax breaks to big business, it could reduce the sales tax by 25 percent.
The trick is to develop policy that helps business but also considers the needs of the state and its residents, he said.
"We are trying to do a balancing act that enhances the rest of tax policy for our citizens," Beattie said.
Some apparently have a hard time seeing the "enhancements" to the system.
"The biggest problem is that people don't understand Senate Bill 50," Mantes said.
His bill, which uses a five-tiered fee schedule to figure property tax on vehicles, will benefit car dealers because the old property tax schedule was hard for consumers to stomach. But car dealers generate the greatest amount of sales tax revenue in the state, so it's OK to do something that benefits them, he said.
And yes, a Mercedes owner may pay less than a Chevy owner, depending on the year of both cars. But in some cases, people may pay less than they expected.
It's not clear whether radio talk show host Bob Lee understood SB50 or not, but Mantes said he was disconnected during an on-air discussion on the topic. "I called back and said, "Yes, this is Sen. Mantes and I was cut off by mistake." They told me, `No, Sen. Mantes, you were not cut off by mistake. Bob was done with you.' "
Someone else tried to pin Mantes down: Now that money paid on cars is a "fee," not a "tax," is it deductible? Mantes said he didn't know.
Although the legislative session is over, discussion continues about two controversial bills.
A Utah manufacturers representative asked lawmakers to reconsider their action on SB185, which scaled back the industry's tax breaks.
Companies were given a tax break, and now it is being taken away, said Larry Bunkall, president of the Utah Manufacturing Association. "There has to be some stability and predictability in exemptions."
Rep. John Valentine, R-Orem, who is also a tax attorney, defined disharmony about HB370, which changes the way the state will tax "intangible" property.
"There is clearly dysfunction in the family," he said. "I encourage those of you who are members of the industry to (take action) that settles things down instead of adding additional litigation, appeals and dysfunction to the system."
Counties, which will lose some money in the deal, will challenge the new law. One company has threatened to sue, and Tax Commission Chairman Val Oveson said he expects nearly 100 percent of companies to appeal their assessments of taxes due this year.
"We're going to batten down the hatches and prepare for this to go into the future." He hopes all parties can get together and work something out, but he isn't optimistic.
"I see the controversy raging on."