Utah Gov. Gary Herbert’s plan to cut sales tax comes with a price

SALT LAKE CITY — New particulars, together with a hefty price tag, emerged Monday about Gov. Gary Herbert’s plan to provide Utahns a $200 million sales tax reduce and scale back the state price whereas increasing the bottom by including taxes to some providers.

The plan the governor outlined in his $19 billion finances proposal final month and pitched Monday in the course of the Utah Taxpayers Association’s annual convention is predicted to be entrance and middle when the 2019 Utah Legislature begins meeting Jan. 28.

On the conference, the cost of dropping the state gross sales price from 4.7 % to under three.9 % was estimated at $800 million — money that Herbert’s price range director, Phil Dean, informed individuals would come from broadening the tax base.

That would embrace taxing providers similar to limousine rides, cosmetic surgery and landscaping, as well as eradicating exemptions in the regulation for some purchases, together with automotive washes, although no particular suggestion has been made.

The governor informed the legislative, business and group leaders gathered on the Little America Lodge that the state’s shrinking gross sales tax base have to be broadened so “everyone is, in truth, required to pay their justifiable share.”

The good news about what he is calling his tax modernization plan, Herbert stated, “is that if we broaden the base, we have now the power to lower the speed and in so doing, everyone can pay less taxes.”

Legislative leaders stated Monday they have been prepared to talk concerning the governor’s plan however stopped in need of backing a tax minimize or adding new taxes on providers and removing present exemptions.

Rep. Tim Quinn, R-Heber City, stated throughout a dialogue of taxing providers the same as items that he believes Home Republicans are extra occupied with decreasing the state revenue tax price than slicing sales taxes.

Whereas Quinn stated lawmakers need to see the gross sales tax base expanded, “the devil is within the details.” Decreasing the gross sales tax price, nevertheless, would exacerbate the problem with the declining gross sales tax base, he stated.

Herbert advised reporters his $200 million sales tax reduce can be among the many largest ever. The most important — $400 million beneath former Gov. Jon Huntsman Jr. — changed the state’s 7 % prime revenue tax fee with a 5 % price for all taxpayers.

Final yr, lawmakers trimmed that price again, to four.95 %.

He stated he didn’t know the exact numbers associated with decreasing the state gross sales tax fee, calling it “a math recreation … that is like Whack-A-Mole,” as a result of there shall be a tax improve on some providers despite the fact that he needs a internet decrease.

“The hope is that general, we discover that right optimal quantity, where everyone, actually, has a discount of their general tax obligation, each household, each household, each individual. So that’s the aim,” the governor stated.

As for slicing the revenue tax price as an alternative, Herbert stated, “Who is aware of. I assume that would happen. That could possibly be a part of the discussion.” However he stated the narrowing gross sales…

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