Heated debate over Utah HB 441

Heated debate over Utah HB 441

News Update – Because of significant public and business outcry over the details of HB 441, the Utah State Legislature Thursday tabled the bill for now and will revisit it during a special session later this year.  The Governor and other legislative leaders have expressed an interest in meeting with concerned business leaders and the members of the public to arrive at a more equitable approach to the tax reform problem. 

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There is heated debate over HB 441, The Utah Tax Equalization and Reduction Act on Capitol Hill in Salt Lake City with only a week remaining before the Legislature closes their regular session for 2019. The GOP sponsored bill backed by Gov. Herbert promises a $250 million-dollar tax cut by reducing state sales tax from 4.7 % to 3.10% and personal state income tax from 4.95% to 4.75% over a period of 3 years. Supporters of the bill say it implements a new tax structure based on a 21st Century economy to ensure Utah has resources to maintain Utah’s vibrant economy. The intent of the Tax Reform bill is to expand the sales tax base to include all services with limited exceptions.

There is wide-spread opposition to the bill from most businesses in the state and groups such as the Utah Education Association. The bill would put a 3 to 4% sales tax on thousands of large & small businesses including lawn care, pest control, music lessons, haircuts, some electrical and plumbing services, media & advertising, funeral services, legal services, tax preparation and accounting services, computer & IT services, travel agencies, home and business remodeling, some real estate transactions just to name a few. Opponents argue that the bill, which is being promoted as a $250 million-dollar tax cut is in reality, a tax redistribution bill and according to the state’s web site, will actually result a general tax increase of over $231 million dollars by the year 2022 when the proposed bill would be fully implemented. The Utah Broadcasters Association, representing all radio and TV stations in the state, is adamantly opposed to bill saying that it will put undue burden on them by giving on-line & out of state advertising media such as Amazon, Google, Pandora, and Yahoo an unfair advantage since by law they cannot and would not be taxed. Attorneys, CPA firms, Travel and Ad Agencies say they would lose their business to out of state firms. Utah businesses are also opposed to the bill because it implements a business to business sales tax which actually slows the economy according to research.

Governor Herbert indicated in a meeting with Utah Broadcasters on Tuesday that he feels strongly that the legislature should pass the Tax Reform Bill now during the regular session and work out the details later. Broadcasters urged the Governor and legislature to delay passing the bill until all the details are worked out even if it means calling a special session later in the year once all the research is done and the details have been worked out. Meanwhile, Utah House and Senate members are receiving thousands of phone calls and emails from their constituents expressing their opinions on this very controversial Tax Reform Bill.