Throughout April, the Utah Legislature has met in a pair of special sessions to address the state’s response to the recent pandemic, as well as two bills that were vetoed by Governor Herbert after the general session ended.
2020 General Session Vetoed Policies
Instead of holding a veto override session, the Legislature came to an agreement with Governor Herbert on two bills and passed them during the special session.
HB 4002, Rail Fuel Sales Tax Amendments, sponsored by Rep. Joel Ferry, will add sales tax to fuel purchased by rail carriers. This bill is another attempt at putting this terrible policy in place after Governor Herbert vetoed HB 356 in March. Your Taxpayers Association fought against HB 356 (2020 General Session) which would have the same effect as HB 4002 and fought this version tooth and nail. Unfortunately, the Legislature opted to enact this tax increase.
Utah’s state sales rate of 4.85% tax will be pyramided and passed down to all of Utah’s manufacturing, mining, retail, and other industries that ship goods over the rail lines under HB 4002. It is a step in the wrong direction for Utah, and moves in the opposite direction of what the Legislature has been working towards in eliminating business inputs. Your Taxpayers Association continues beating the drum to eliminate business inputs wherever it exists, and to remove this newly implemented version.
HB 332, the Special Needs Opportunity Scholarship legislation (passed during the 2020 General Session) creates a new scholarship which provides funds for education of special needs students, but the bill was vetoed by Governor Hebert. HB 4003, at the request of the governor, was modified to keep the scholarship intact, but adds a cap to the annual amount and creates additional transparency to show how much money the scholarship saves school districts money. Your Utah Taxpayers Association supported the original bill and the negotiated version passed in April.
Utah’s Response to COVID-19
Following federal action, Utah has also opted to delay the filing of income tax and alters other deadlines, such as filing income tax extensions with the passage of HB 3003.
Utah lawmakers have also voted to allocate billions of dollars in COVID-19 related federal funds. A majority of that funding will shore up the state unemployment insurance fund to help address the additional $600 per week that is given to claimants from the federal CARES Act. The CARES Act also provided an extra 13 weeks of benefits for those that have exhausted them and coverage for the self employed and independent contractors.
The total amount is around $4 billion for fiscal years 2020 and 2021. Similar to what is happening across the nation, Utah is seeing all time record unemployment claims that will put the unemployment insurance fund to the test.
With SB 3007, the Legislature helped shield businesses that want to re-open without fear of being sued by customers that catch the virus, an important step in getting the economy back open in order for those that are currently claiming unemployment insurance or furloughed can return to their jobs. They also passed a bill (HB 3005) that would require the governor to give 24 hours notice to the Legislature before implementing some executive orders during a pandemic.
Your Utah Taxpayers Association remains vigilant and continues to work with policymakers to make sure the measures taken to adjust budgets and get the economy reopened do not include any other tax hikes or other poor tax policy decisions. To view a brief summary of bills the Legislature considered during the third special session, click here.