The 2021 General Session is well underway, and your Taxpayers Association is actively engaged at the Capitol. So far this year, the Association is participating with 42 bills, with that number expected to increase as more bills are released publicly.
To see the entire list of bills we are engaging on, you can find our Watchlist (updated weekly) on our website, utahtaxpayers.org.
There is another article in this newsletter outlining the Association’s push for a tax cut and the status of that at the Capitol. Here are some of the (non-tax cut) issues you need to be aware of.
Rep. Kay Christofferson
HB 209 – Vehicle Registration Fee Revisions (Christofferson)
This is one of the most talked about bills on the Hill right now. This legislation simply increases registration fees for electric, hybrid and plug-in hybrid vehicles.
The Association has long stood for the principle that users of a service ought to be responsible for the payment to maintain and provide the service. In this circumstance, roads and transportation infrastructure.
When a traditional-fueled vehicle fills their gas tank, the tax on gasoline is automatically calculated into the total price of a gallon of gas. That gasoline tax is then used to pay for the maintenance of both state and local roads.
Alternate-fueled and electric vehicles do not pay the gasoline tax, and therefore are not contributing their share of the usage of the roads. While they do pay a registration fee which does contribute to the transportation infrastructure, it is not nearly to the point of equity with traditional-fueled vehicles.
HB 209 simply asks that these types of vehicles are paying more of their contribution to the construction and maintenance of roads.
The Association certainly understands the benefits of electric, hybrid, and alternate-fueled vehicles to Utah’s air quality, and HB 209 continues to provide a discount for drivers of these cars. If HB 209 were to pass in its current form, these alternate-fuel vehicles would still see a roughly 30+% discount from their traditional-fueled counterparts.
Some have framed this as an attack against air quality and the environment, which it is not. This is simply about making sure Utah’s roads can be improved and paid for as alternate-fuel vehicles increase in popularity.
In addition, there is currently no financial motivation for electric vehicle drivers to enroll in the “Road Usage Charge (RUC)” program. Electric vehicle drivers can enroll in the program and track their mileage and pay on a per mile basis instead of paying the flat fee. If they drive less, they could pay less than the flat fee. However, based on the parameters of the program, if one drives more than 8,000 miles per year, it is better to just pay the flat fee and not bother with the tracking.
If fees are higher in order to make them fair and pay for their road usage, drivers will be motivated to enter the RUC and if they can prove they drive less, they will pay less, as they should. This will provide the momentum the RUC program needs to develop into the alternative to gas tax in the decades to come.
You can learn more about the fees by viewing this spreadsheet the Association has put together.
SB 95 – Sales Tax Revisions (Fillmore)
Sen. Lincoln Fillmore
Your Taxpayers Association has long argued for a broad sales tax base and a low sales tax rate. The exception to this is using these exemptions as tools to eliminate tax pyramiding. Economists from across the country, as well as the Taxpayers Association, have strongly urged against taxing business inputs, and Utah and its policymakers have generally followed that advice.
The term “business inputs” refers to purchases that businesses make as a part of their production or operations. Tax policy experts nearly universally agree that sales taxes should be imposed at the final stage of consumption only, and not during the various stages of production or development.
SB 95 looks to expand this exemption for the production of software. As Silicon Slopes Utah also has not eliminated sales taxes on business inputs on software services. As Utah’s tech sector continues to employ more and more Utahns, this exemption needs to be provided to continue the boom that the industry is experiencing.
SB 110 – Tax Commission Appeal Amendments (Fillmore)
SB 110 is a bill that will assist taxpayers who are tied up in complex legal matters by easing their burden during the process.
When a tax assessment is appealed in our country, the appeal generally involves one tax year, and other years involving the same issue are often pending before the first appeal is resolved.
For example, If the first case is appealed to court, cases involving later years before counties or administrative agencies are generally stayed to conserve the resources of taxpayers, state and local governments, and the judicial system. In virtually every situation, once the lead case is resolved in court, the parties are able to resolve all later periods by agreement. That system has worked well in Utah for decades.
SB 110 ensures this by maintaining the status quo and the long-standing practice where the lead case is decided first.
The system is already stacked against taxpayers as taxpayers have the burden to prove a tax assessment is incorrect. Forcing taxpayers to also face this burden on several battle fronts at the same time, and even to litigate about whether it should do so, is not right nor fair. Without SB 110, the government can spread the taxpayers resources thin, thus forcing the taxpayer to comply and/or give up its right to have the case heard by the constitutional tax court.
Things always change at the Capitol, so make sure to check out our constantly updated Watchlist for the latest.