Tax Reform Bill Postponed, Herbert Says More Time Needed To Modernize Tax System

Mar 7, 2019

Credit KPCW Radio

The sales tax reform bill that has weighed heavy on the last half of the legislative session has met its end—at least for now. 

Utah Gov. Gary Herbert, flanked by House and Senate Leadership as well as bill sponsor Rep. Tim Quinn, announced Thursday afternoon that the tax modernization under House Bill 441 would be delayed.

The bill would have lowered the sales tax rate and placed sales tax on services, in an effort to fill a depleted state general fund.

Herbert says they’ve heard from business leaders and industry representatives affected by the tax bill, and everyone agrees on two things: that there’s a potential problem down the road with funding necessary state services and that the state needs to “broaden the base” of what is taxed.

“Now’s the time to act, to get some things done, not only for now but for future generations,” Herbert said.

As the main sponsor for the bill, Quinn says he’s learned a lot in the process of drafting this policy. He’s grateful for the business leaders who have engaged with him to improve the legislation.

“I appreciate their willingness to work with us," Quinn said. "We look forward in the months to come, as we continue to refine this process—because that’s what this process is about, is refining a piece of legislation to make it, at the end of the day, the best piece of legislation that we can pass—so in the coming months I look forward to continue to work with them as they put forth solutions to help us in what I believe is a critical issue for the state of Utah.”

At the beginning of the session, Herbert and legislative leadership expressed desire for a major tax cut to Utahns, to the tune of $225 million dollars. House Speaker Brad Wilson says that will probably happen once they’ve made changes to the tax policy.

"We are committed to a tax cut, but I think that you’re asking a tactical question, which is does the tax cut happen this session or does it happen when we land tax modernization?" Wilson said. "I think that, to do this wisely, we probably need to couple them at the same time, so you can look at holistically."

Herbert says he’s hoping to bring the Legislature back to the Capitol for a special session in the summer for further debate, or the reform might have to wait until the 2020 general session.