SALT LAKE CITY – Senator Lyle Hillyard (R-Logan) made clear that the proposed tax reform bill unveiled Thursday was only a draft that would not be voted on yet. But that did not stop dozens of people from voicing their concerns during a public hearing at the Utah State Capitol.
Steve Garrett is a father of six from Herriman who feels Utahns are taxed enough and that there’s no need for an overhaul when the state has an overall budget surplus.
“I’ve seen my property taxes go up, and I’m taxed on every cotton-picking thing I buy online now…On the state website…Revenue Summary Final Fiscal Year 2019 through 2020 through three months sales and use tax [is] up 7.4%. But yet the sky is freaking falling? No it is not,” Garrett said.
The first draft of the tax reform bill would raise sales taxes on food to 4.85%. Gas taxes would also go up around 11 cents per gallon. Services from plumbing to Hulu to fortune-telling would also be hit with sales taxes for the first time.
Some people who spoke at Thursday’s hearing, like Vicky Samuelson, worry if the elderly and those with lower incomes can afford the new taxes.
“The thing that’s frustrating is that seniors are on fixed incomes. There’s a lot of people out there that can’t afford personal services or can’t afford, particularly, a food tax,” Samuelson said.
Others questioned why certain services like plumbing repairs were taxed, while others like plumbing installation on a home remodel were not. Lawmakers were also asked why they did not wait for the final results of the online sales tax collection before drafting a bill.
Lawmakers say the state needs to broaden the tax base because of a multi-million dollar deficit in the general fund.
However, there are some tax reductions. Under the current draft, business and individual income tax rates would be cut to 4.58%. People making less than $45,000 would qualify for a $125 grocery tax credit to offset the increase in food sales taxes. The child income tax credit would also be raised.
One concern lawmakers say they will be addressing is how to fully fund education if income taxes go down. They may also try to change a Constitutional amendment earmarking income taxes exclusively for education.
The next meeting on the tax bill is scheduled for November 21, 2019.
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