Full sales tax on groceries one possibility as legislators discuss tax reform

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SALT LAKE CITY (ABC4 News) – Utah’s economy is booming and the state has a budget surplus…so why are legislators seeking to change the way the government collects and spends our tax dollars?

The simple answer is that Utah’s population is rapidly growing while sales tax revenue is dwindling, the result of a changing economy.

Senator Lyle Hillyard (R – Logan) is the Co-Chairman of the Tax Restructuring and Equalization Task Force. He says that when the sales tax was implemented in the 1930s 76 percent of what we bought was taxed. Now with people buying more services that goods, that number is down to 34 percent. 


Sales tax goes to the state’s General Fund, paying for things like roads, law enforcement and the justice system while all income tax revenue is dedicated public education, something that came up often in the Task Force’s eight public meetings around the state.

“There was a lot of question about the dedication of income tax to public and higher education because that’s really tying our hands right now,” Sen. Hillyard told ABC4 News Monday before a meeting of the Task Force. “So there will be some discussion whether we want undedicate that.”
Another possible change? Restoring the full sales tax on groceries.

“We tax food at about 5 percent as opposed to 7 percent for everything else. The question is can we do that more effectively?” Sen. Hillyard said. “When we took food out of the base, that part of the food,  it made our revenues not as stable so putting it back in will help us.”

Representative Joel Briscoe (D – Salt Lake City) is also on the Task Force and disagrees.

“If we add sales tax back (on groceries) then a person who’s really struggling to get by, trying to not go homeless at the next emergency doctor bill or bill in their house pays a much higher percentage of their income to purchase food than someone who’s not worried about losing their home,” Rep. Briscoe said. “So why is it so easy for us to talk about bringing the sales tax back on food for those people?”
Rep. Briscoe says the Task Force needs to take its time, do more research and get tax reform right.

“Measure twice, cut once. That’s just sawing a 2×4,” Rep. Briscoe said. “How much more important is it to measure carefully when we’re readjusting taxes on thousands of businesses, millions of individuals?”

Depending on how these Task Force meetings go, the Legislature could call a special session in the Fall or address the issues in the regular 2020 session.

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