SALT LAKE CITY — Expect to hear a lot about taxes this legislative session and that could change how much you pay for things that you haven’t had to worry about before.
The bill for your haircut always comes in an even number, and you just add a tip. But think about it with a new tax. You hire out for landscaping… should that be taxed? Pest extermination, limo rentals or liposuction – The governor is proposing taxing more services.
It comes as our economy has changed from being more goods-based to more services-based.
“It used to be that 80 percent of our base was taxable. Now it’s closer to 40 percent,” said Kristen Cox, the director of the Governor’s Office of Management and Budget.
Cox says a proposal will be released soon listing which services could face a new tax. But it would come with a lowering of the overall sales rate, and a tax cut of $200 million.
“We could get it to 2, 2.5 percent. So everybody pays, but everybody pays less,” said Cox.
“A lot of services we use now do not have a tax attached do it,” said Utah Taxpayers Association Vice President Rusty Cannon, who is interested in seeing the full proposal.
“We support tax modernization but not if it’s an increase,” said Cannon. He says the government could do with some cutting, and this year’s huge surplus shows some money ought to be returned to taxpayers.
Legislative leaders think the income tax rate ought to be cut in this year of huge surplus.
“That would put Utah in a continued competitive position,” said Cannon.
Cox says they are willing to talk about that, too, but she says a sales tax cut will help lower and middle-income earners.
Cannon and Cox expect industries and representatives of different services to have plenty to say on the hill about this.
“Everyone will have a reason to be excluded,” said Cox. “We hope people will take a step back and see in the long run this is better for everyone.”