Independent organization highlights tax bills introduced to '06 Legislature
The 2006 Utah Legislature continues to consider dozens of proposed tax-related bills.
In the event lawmakers pass the proposed legislation, the guidelines will impact residents throughout the state, pointed out the Utah Taxpayers Association.
Highlighting the legislation, the independent public policy organization indicated that the proposals introduced to the Utah Legislature include:
Senate Bill 29 exempts certain purchases and leases of telecommunications equipment from state and local sales tax.
Economic development depends heavily on investment in telecommunications infrastructure, noted the association.
Investment occurs where the rates of return are the highest. State and local governments are competing for telecommunications investment by offering sales tax exemptions and credits for purchases of equipment.
Many states already offer exemptions and credits in order to attract investment in telecommunications infrastructure, added the independent public policy organization.
Senate Bill 31 extends Utah's manufacturing sales tax exemption to encompass repair parts with useful life of three years or more.
Pursuant to existing state statute, replacement parts that extend the life of manufacturing machinery qualify for the sales tax exemption, explained the association. But repair parts do not qualify.
Senate Bill 33 extends the manufacturing exemption into the high wage, extractive industries.
Senate Bill 34 repeals the second gross receipts tax imposed on Intermountain Power and PacifiCorp by Utah lawmakers in 1995. No other companies or individuals pay the tax.
In 1995, the Utah Legislature reduced the statewide basic levy.
To prevent Intermountain Power and PacifiCorp from receiving a property assessment decrease, state lawmakers reportedly imposed the second gross receipts tax, pointed out the association.
With passage of SB-34, Inter-mountain Power and PacifiCorp will receive the tax cut implemented 11 years ago.
The tax reduction will be passed on to the rate payers, said the independent public policy organization.
House Bill 53 reduces taxes on Utah's high wage, exporting companies.
Tax reductions tend to attract and reward capital investment as well as promote economic growth, noted the association.
HB-53 allows corporations to choose between two apportionment formulas, explained the independent organization.
The two options include the evenly weighted three-factor or single sales factor formula.
SSF is a targeted reduction in corporate income taxes for businesses that employ and produce in Utah, but export goods and services outside the state.
Exporting industries like manufacturing, mining, biotech, and others pay wages that are higher than the state average, compete against companies in other states, and import wealth into the state. SSF is based on the same principle as last year's HB78 (Harper) which allowed corporations to select between evenly weighted three-factor formula and double weighted sales.
House Bill 256 cleans up and improves the existing Truth-in-Taxation advertisement with only minor changes to the advertisement's substance. If HB256 is approved, the advertisement will be more understandable, and more taxpayers will read the advertisement and become more informed about local government finances because the format and layout of the advertisement have been improved.
House judicial resolution 17 would amend - with voter approval - the Utah Constitution to prohibit the judicial branch from several actions.
The prohibited actions include requiring an appropriation of state funds, with limited exceptions; requiring the expenditure of funds by a political subdivision; and requiring the imposition or increase of a state or local tax.
Decisions regarding budgets, taxation and expenditures belong with the legislative and executive branches, not the judiciary, indicated the independent public policy organization.
For budget issue, a responsibility that belongs to the governor and the legislature.
House Bill 181 promotes bonus and differtial pay for teachers along with remediation for students who fail the Utah Basic Skills Competency Test.
House Bill 126 would allow Box Elder, Cache and Sanpete counties to impose a voter-approved 1/8 percent sales tax increase with revenues earmarked for open space preservation.
Called a "temporary pilot project" tax increase, the legislative proposal HB126 has several problems, indicated the association. First, sales taxes lack visibilit.
Utah's state and local sales tax burden as a percent of personal income is 35% higher than the national average and is 10th highest in the nation, largely due to Utah's large sales tax base which includes food and most repairs to personal property.
Spending groups prefer to increase sales taxes instead of property and income taxes because most taxpayers are unaware of how much sales taxes they pay. Unlike property and income taxes, taxpayers do not receive government notices indicating how much they have paid or are required to pay in sales taxes. Most taxpayers would be surprised to learn that they pay 60% to 70% more in sales taxes than they do in property taxes.
House Bill 338 will exempt personal property with fair market value of $500 or less.
The bill is designed to simplify the process of tracking personal property depreciation for small business owners and certain companies, concluded the Utah Taxpayers Association.