Calls to remove sales tax on food, lawmakers say it’s complicated

Feb 9, 2023, 5:31 PM

salt lake chairman letter...

Calls for a ban on food sales tax grew louder on Thursday. Photo credit: Paul Nelson.

SALT LAKE CITY — Calls for Utah to get rid of the state’s sales tax on food this year grew louder Thursday, with groups gathering to rally arguing “everyone deserves food.”

The same day, Senate leaders said the cut needs to be part of larger tax policy conversations.

Sen. Ann Millner (R-Ogden) told reporters that the income tax fund has grown at “10 times” the rate of the General Fund. That’s where sales tax goes.

“If you take the sales tax off of food, the problem we create is we have lots of other needs,” she said. “…all the way from the social services, public safety, courts, prisons, corrections, parks, etc. How do we accommodate that by taking a cut on [the sales] side when we don’t have flexibility on the other side with use of that income tax.”

Income tax is earmarked for education needs, and Utah voters struck down Amendment G this past year to change that.

“Unless we have more flexibility with the use of income tax funds, it makes it very difficut [to not collect sales tax],” Millner said.

Furthermore, it would take amending Utah’s constitution to change how Income tax is used.

“Those discussions are happening,” Millner said.

Democrats push for some food tax cuts

Democratic leader Sen. Luz Escamilla (D-Salt Lake City) has a bill to get rid of the sales tax on WIC purchases.

SB164 “exempts from sales and use tax amounts paid or charged for an item eligible for purchase… under the Special Supplemental Nutrition Program for Women, Infants, and Children.”

“We just feel it’s important to have those basic food items taken care of as a first step of addressing taxes on food,” she said.

Income tax cuts

As for those promised income tax cuts, Senate leaders say those are in the works.

Sen. President Stuart Adams (R-Layton) didn’t commit to what the rate might be. However, he joked it would be “lower.”

He did say that they’ve set aside a chunk of money to lower Utah’s income tax rate. 

“It will be at least $400 Million dollars,”Adams said. 

Leaders say they expect to settle on the rate in the next week and a half.

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Calls to remove sales tax on food, lawmakers say it’s complicated