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OPINION: Don’t hold your breath on tax reform this legislative session

House Speaker Greg Hughes, R-Draper, speaks during the opening session of the legislature at the Capitol in Salt Lake City on Monday, Jan. 22, 2018. It's looking like tax reform will have to wait until a future legislative session, amid conflicts between voters, the legislature and the governor's office. Photo credit: Deseret News

This is an editorial piece. An editorial, like a news article, is based on fact but also shares opinions. The opinions expressed here are solely those of the author and are not associated with our newsroom. 

Tax reform is out and it probably won’t be coming back anytime soon.

“It was a gut punch,” said Rep. Tim Hawkes, R-Centerville. “We’ll hit the reset button and start all over again.”

Okay, but when?

What’s in the tax reform package?

S.B. 2001 has quietly made its way onto Utah’s Mount Rushmore of controversial bills — carved alongside medical marijuana, Medicaid expansion, and whatever else you’re most passionate about.

Here’s the 10th grade Cliffs Notes version of the tax reform bill that passed in December 2019 and will be repealed in January 2020.

First, I’ll start with what people thought was bad in the bill.

  1. Increasing the sales tax on unprepared foods from 1.75% to 4.85%. If you’re asking what unprepared foods are—think fresh fruits, vegetables, and meats. 
  2. Gas tax increase– roughly, a dime per gallon of gas. 
  3. Sales tax on some services—think Uber rides, but not yoga classes. I could never figure out why a business was/wasn’t taxed without looking at a very, very large list. 

Here’s the good that gets thrown out with the bad. 

  1. $160 million tax cut on your state income tax returns. The average Utah family of four could have expected to keep an extra $500 at tax time. 
  2. No tax on Social Security payments for low-income households. 
  3. Increased dependent exemption from $565 to $2,500. 

The bill was 238 pages, so these were just some of the highlights — or lowlights, depending on your point of view.

When will this come back up?

If you’re sick of tax reform talk, don’t worry. It will be a hot minute before legislators try to tackle this gorilla again.

Here’s why:

If tax reform is in Utah’s future, it won’t happen until a new governor is elected in November 2020.

None of the current candidates liked the bill.

“Since all these candidates for governor just completely opposed what we did,” said Rep. Paul Ray, R-Clearfield, “it will be nice to dump it in their lap and let them figure it out.”

Once elected, the new governor would need to make it a top priority, legislators would need to write a bill, take it on road to garner support, then pass it.

Doing some quick timeline calculations and we’re looking at two years away — at the earliest.

“We’re probably two years away from this being a serious problem,” said House Speaker Brad Wilson.

Good. At least that matches with the timeline.

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