by Howard Stephenson
Although the Utah Legislature is no longer in session, some of its most important work goes forward. During the interim between regular sessions, the various committees of the legislature are empowered to study issues and draft legislation for the coming session. Some of this work occurs in interim committees which are similar to the standing committees of the regular legislative sessions.
Citizens would do well to pay attention to what happens in these meetings because some of the most sweeping legislation of the next general session will be crafted in these interim committees. Since these joint committees include members of the House and Senate, the proposals they make are often given less scrutiny by the standing committees during the forty-five day legislative sessions.
Task forces and commissions also meet throughout the year, preparing legislation for the next legislative session. The agendas and minutes of all of these can be found on the Utah Legislature website at www.le.state.ut.us Here are some of the tax-related issues to be studied by the various committees, task forces, and commissions this year:
The Legislature’s Government Revenue and Tax System Task Force is in its second and final year. This task force is charged with examining revenue sources of local governments. The committee’s attention has been focused by the League of Cities and Towns and the Association of Counties on the sufficiency of the current tax structure for municipalities and counties.
The Tax Review Commission, a “blue ribbon” panel of citizens, has been directed through the passage of SJR 6 to study the taxation of government enterprises which compete with the private sector but do not pay the taxes of their private sector counterparts. One of the questions the commission will ask is whether there is a rational basis for collecting school taxes through the rates for private sector services, but when government provides those same services, the rates do not have school taxes embedded in them.
Another “blue ribbon” citizen panel, the Constitutional Revision Commission, will be studying “substantive changes” to the Tax Article of the Utah Constitution following this year’s passage of non-substantive modernizations to the article.
The interim committees, which meet the third Wednesday of most months, are given their study assignments through passage of the Master Study List which was contained in SJR 15. Of the 188 items receiving study, the following are tax-related:
o Fee Analysis – to study the creation of a task force to study fees charged by state agencies.
o Ballot Question on Tuition Tax Credits – to study whether to place on the ballot a statewide opinion question regarding whether to allow tuition tax credits in Utah.
o Impact of Universal Tuition Tax Credit – to study and develop an economic model illustrating how a universal tuition tax credit would affect the state public education system.
o Telecommunications Taxes – to study whether to grant a sales tax exemption for telecommunications equipment and the taxation of long distance telephone service.
o Allocation of Local Tax Interest – to study whether to allocate to counties, cities, and towns the interest earned on taxes collected by the State Tax Commission that are imposed by a county, city, or town.
o Capping Property Taxes – to study whether putting a constitutional cap on the amount of property tax increase a person may be required to pay and on the amount of property taxes that a taxing entity may collect
o Corporate Franchise Tax – to study the elimination of the Corporate Franchise Income Tax.
o County Option Tax on Lands – to study a county option sales and use tax to fund the preservation of agricultural land, open land, and watersheds.
o Exemption for Agricultural Products – to study whether to have the Tax Review Commission, as part of its review of sales tax exemptions in 2002, study the exemption for agricultural products with emphasis on the definition of agricultural products
o Exemption for Corrective Lenses – to study whether to exempt sales of prescription eyeglasses or contact lenses from sales and use taxes
o Inheritance Tax – to study revisions to the inheritance tax in light of changes to the federal estate tax.
o Judgment Levies and Refunds – to study the disposition of refunds if the state ever imposed a general fund property tax.
o Property Tax Appeal Standards – to study whether to subject counties to the same standards as taxpayers in property tax appeals
o Property Tax Appeals – to study the process for appealing property tax assessments.
o Property Tax Filings – to study under what circumstances applications or other filings should be required for an exemption from taxation or a reduction in value. (H.B. 305)
o Property Tax Relief for Seniors – to study property tax relief for senior citizens.
o Secondary Residence Property Tax – to study issues related to secondary residence property tax including whether they should receive the 45% exemption given to primary residences.
o Tax Credit for Education Donations – to study whether to allow a 50% tax credit for donations to public and higher education.
o Tax Credits for Manufacturing – to study whether to provide nonrefundable tax credits for certain manufacturing capital investments in the state. (H.B. 149)
o Tax Deduction for Military Service – to study whether to provide an individual income tax deduction on military pay for service performed outside the state.
o Tax on Sleeping Accommodations – to study the taxation on rentals of public sleeping accommodations.
o Tax Relief for Higher Education Expenses – to study the availability and need for tax deductions or tax credits for higher education expenses.
o Taxing Pass-Through Entities – to study issues related to the taxation of pass-through entities.
o Truth-in-Taxation Advertising Requirements – to study whether to require taxing entities operating on a January 1 through December 31 fiscal year to publish only one advertisement rather than two advertisements before budgeting an increased amount of property tax revenue. (H.B. 146)
o Unemployment Insurance Exemption – to study an optional exemption from the unemployment insurance tax for corporate officers.
o Use of Highway and Motor Fuel Fees and Taxes – to study whether to amend the Revenue and Taxation Article of the Utah Constitution to expand the allowable uses of highway user and motor fuel fees and taxes to include mass transit. (H.J.R. 8)
o Unemployment Insurance – to study unemployment insurance issues, including benefits, eligibility, and taxes.