Should Utah enjoy a sales-tax holiday?

Aug 18, 2023, 4:00 PM

Sales tax In a joint letter from both houses of the Utah Legislature on Friday, lawmakers announced...

FILE: “More Bread for Utahns!” members Bill Hooper, Sharon Roper and Margo Markowski rally to repeal Utah’s grocery sales tax at the Capitol in Salt Lake City on Thursday, Feb. 9, 2023. (Laura Seitz, Deseret News)

(Laura Seitz, Deseret News)

SALT LAKE CITY — Should Utah have at least one day — a holiday — without a sales tax? A Utah tax expert said tax relief is not meaningful if it is only temporary.

For 1 year (July 1, 2022 to June 30, 2023) Florida suspended any sales tax on all purchases of diapers and children’s clothing, according to a website listing states with sales-tax holidays in 2023. Utah was not on the list. But should it be?

Dave and Debbie discuss and speak with Rusty Cannon with the Utah Taxpayers Association about tax holidays.

Debbie asked if a sales-tax suspension — if even for a day — was a good idea for residents.

Cannon said the sales-tax holiday is a gimmick. All taxation is a reflection of government spending. So turning off taxes of any kind doesn’t make sense as long as government keeps spending, he said.

“All you’re doing is digging a deeper hole and logically causing higher tax rates in the future,” Cannon said.

But the state has billions of dollars in surplus and a rainy-day fund it can tap into for Utah taxpayers, so doesn’t tax relief make sense, Dave asked.

Temporary tax relief doesn’t make a difference because it doesn’t last. However, the state is taking steps toward providing long-term tax cuts. Cannon said income-tax reductions have been the most recent and will continue to happen in Utah.

For two years, from July 1, 2022 to June 30, 2024, Floridians will pay no sale taxes on hurricane hardened doors and windows.

Debbie asked if a similar tax holiday would make sense for Utah.

For an emergency such as a hurricane, it does make sense, Cannon said.

“Just handing them out willy nilly is just not a good idea.”

The U.S. states with no state sales taxes:

  1. Alaska (Even though Alaska does not have a state sales tax, localities can charge local sales taxes.)
  2. Delaware
  3. Montana
  4. New Hampshire
  5. Oregon

Dave asked if the residents of states without a sales tax still pay taxes.

“You’ll pay far higher property taxes in the zero income-tax states. But on the flip side, you have a lot more upside on your income,” Cannon said.

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


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Should Utah enjoy a sales-tax holiday?