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State lawmakers reveal first look at major sales tax changes

SALT LAKE CITY – Lawmakers revealed some of the proposed changes in a possible major sales tax overhaul Tuesday.

“We talked about what was in the bill, as far as who is being taxed, and the very few who are not,” said the bill’s sponsor Rep. Tim Quinn, R-Heber City. “We wanted to make this as broad as possible so we didn’t pick winners or losers by this policy.”

More services would be taxed, but the overall rate would go down. Hair cuts, lawn care, private lessons, health insurance premiums, legal services, some real estate transactions and more are all on the list for new or increased sales taxes.

“It’s probably much easier,” Quinn said, “to talk about what’s not taxed.”

The proposal is to drop the sales tax rate to around 3.1 percent (the current rate for Utah is 4.7 percent). Also the state income tax rate would drop from 4.95 percent to 4.75 percent, and offer more credits.

Governor Gary Herbert praised what he saw of the plan in a statement Tuesday. He says state revenue is shrinking as consumer spending shifts.

He said he “very proud of our legislators for their foresight on behalf of Utah’s middle class. Today’s monumental tax reform bill will make Utah’s tax system more fair and stable, keeping Utah on the path of economic prosperity.”

Lawmakers do expect to hear from every service sector to come argue why they should not be taxed when the proposal gets its first hearing. This would be a huge change for Utahns and Utah businesses who are not used to paying sales tax right now.