Food-tax hike is dead in Utah’s Legislature

First Published      Last Updated Mar 08 2017 08:57 am

Scramble » Other tax, fee proposals still are debated with three days remaining in the 2017 session.

The sales tax on food will not be raised, at least this year.

With time running out on the legislative session that ends at midnight Thursday, Senate leaders were pushing hard to bring back the full state sales tax on food, which was slashed during the tax reforms of a decade ago.

A highly unusual joint House and Senate tax committee hearing was scheduled for Tuesday night to expedite the bill, which still has not been publicly released.

But the House has been reluctant to go along with the tax hike. After meeting for hours in a series of closed-door caucuses over the last several days, House Speaker Greg Hughes confirmed Monday evening that there would be no food tax hike this year.

He said lawmakers had the "political will," to pass tax reform. But modeling suggested the benefits to the state would be less significant than anticipated.

"At the end of the day, you have to reflect on why you're doing it."

Senate President Wayne Niederhauser, R-Sandy, said discussion on tax reform — including the sales tax on food, income tax exemptions and other tax credits — will continue over the summer months ahead of potential legislation next year.

There is still a need to stabilize the state's shrinking General Fund, he said, but analysis showed the sales tax on food had a relatively small impact on overall sales tax receipts.

"Thankfully we found that out today before we jumped off that cliff," Niederhauser said.

Pamela Atkinson, an advocate for low-income and homeless Utahns, said she trusted lawmakers to "do the right thing" on tax reform.

"We do need to find more money, but we need a process to allow the people who are being affected to have their input and the legislators are willing to listen," she said. "That's what makes our state so great."

Republican leaders, Neiderhauser chief among them, had sought to restore the full sales tax on food — up from the current 1.75 percent — and lower the rate on other, non-food purchases — which is now at 4.7 percent. Under the proposal, the new sales tax rate would be set at about 4.4 percent and it would mean almost no change to the state's overall tax revenue.

But getting the numbers to add up had proven difficult and the bill had been delayed for weeks as Republican leaders in the House and Senate tried to iron out the wrinkles.

Hughes said lawmakers were committed to receiving public input, but finding a working proposal for both chambers took time in the short, 45-day legislative session.

"If we had come together on a plan there would have been public hearings," Hughes said. "We are late in the session, but that is not unique to difficult legislation."

Evelyn Everton, president of the Americans For Prosperity Utah, which generally opposes tax increases, said she was glad to hear the bill wouldn't be considered this session.

"We have never really weighed in on the policies being discussed, but we've always said it shouldn't be done the last three days of the session," she said. "We have a process for a reason."

There are, however, other increases proposed for the state gasoline tax, the state's markup on alcoholic drinks, phone service, and driver license renewal fees.

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