Privilege tax may be added to the Point of the Mountain

SALT LAKE CTY — A proposed bill may bring a privilege tax to the Point of the Mountain development.

SB166 modifies several provisions for the Point of the Mountain State Land Authority, including allowing a county treasurer to distribute a privilege tax to the Authority.

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In Thursday’s Senate Economic Development and Workforce Services Committee, bill sponsor Sen. Jerry Stevenson, R-Davis, explained why this tax is necessary.

“Because that is state property, there is no property tax. So what we need to do is we need to capture a property tax equivalent to help pay for the things we’re doing there, as if we were a private entity,” he said.

He continued, “We’ve established [that] we’ll collect a privilege tax and also [that] other taxes that aren’t taxes, they would be assessments because we can’t charge a tax on the state property.”

The privilege tax would be applied to any person with a lease agreement for property that is part of the Point of the Mountain state land.

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According to the bill, those who enter into a lease agreement for property on the Point of the Mountain state land will be subject to the privilege tax starting Jan. 1 of the year after they enter the lease, “if that property is used in connection with a business conducted for profit.”

Certain assessments and collection proposals in the bill would impose an ad valorem property tax, “regardless of whether the property is used in connection with a business conducted for profit.”

There are exceptions for properties used for use by the general public, agricultural permits, public agencies, and religious, charitable, or educational organizations.

The money from these taxes would go to the city of Draper and Salt Lake County to help pay for city services like fire protection, water, sewers, voting booths, and libraries.

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Taxes would be distributed based on the services provided, similar to the way cities and counties distribute finances.

The bill also proposes creating a new board of seven members:

• Three would be appointed by the governor with experience in economic development, corporate recruitment, workforce development, or real estate development.
• One member from the House of Representatives appointed by the House speaker.
• One member of the Senate appointed by the Senate president.
• The mayor of Draper.
• The mayor of Salt Lake County.

The bill states, “The authority shall prepare and its board adopt an annual budget of revenues and expenditures for the authority for each fiscal year.”

The Senate Economic Development and Workforce Services Committee unanimously provided a favorable recommendation for the bill on Thursday.

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