Donald W. MEyers
October 22, 2010

The Utah Taxpayers Association is going to court to abolish the state’s restaurant tax.

The association, along with the Utah Restaurant Association and the owner of Iceberg Drive Inns, are suing Utah County, claiming the 1 percent tax targets restaurants while ignoring convenience stores that offer prepared food.

“It is unfair for restaurants to be burdened when other similarly situated businesses are not,” said M. Royce Van Tassell, taxpayer association vice president.

Van Tassell said that if he bought a breakfast sandwich and orange juice at a gas station, his purchase wouldn’t be subject to the tax. But, if he went down the road and bought the same meal at a fast-food joint, he would have to pay the tax.

The Utah County law exempts businesses such as convenience stores, where prepared food represents less than half the store’s business.

The taxpayers association wants the tax, which is assessed by 27 Utah counties, declared unconstitutional.

While the tax is sanctioned by state law, Van Tassell said counties have the option to enact it, and Utah County was chosen randomly as the target of the lawsuit.

Utah County collected $4.3 million from diners in 2009. The tax, formally known as the Tourism, Recreation, Culture and Convention Tax, has been used to fund grants for museums, cultural groups and the air-traffic-control radar at Provo Municipal Airport.

The Utah County Attorney’s Office would not comment on the suit Thursday because attorneys had not seen it.

Joel Racker, president and chief executive of the Utah Valley Convention and Visitors’ Bureau, concedes there are inequities in the law, but said getting rid of it is a bad idea.

Brent Gardner, Utah Association of Counties’ executive director, said scrapping the law would hurt not just Utah County but the state.

Gardner said many counties use the tax to fund programs that encourage tourism, and abolishing it would put them in a difficult position: raise property taxes or cut programs. He said 40 percent of the people who pay the restaurant tax are nonresidents.

Gardner said the taxpayers’ association’s real beef is with lawmakers, who gave counties authority to charge the tax. He pointed out that the taxpayers’ association’s president, Howard A. Stephenson, is a Republican senator from Draper.

“Now we have an individual suing Utah County because it is doing what he said to do,” Gardner said.

Van Tassell said the association has attempted to work with the Legislature on the law, but was unsuccessful.