At the very bottom of a new “summary” of the large draft tax reform bill are some interesting numbers: Individuals will actually get a $132 million tax cut, and businesses will pay $52 million more.
That is how Tax Reform Task Force co-chairs, House Majority Leader Francis Gibson, R-Mapleton; and Sen. Lyle Hillyard, R-Logan; come up with an overall tax cut of $80 million.
But it is unclear, says legislative budget director Jonathan Ball, how much of the businesses’ tax hikes will be passed on to individual consumers.
Ball readily admits that is just an unknown, that will be determined later as those businesses deal with either losing their current sales tax exemption under the draft bill, or are service providers who now aren’t in the sales tax base, but would be under the proposed legislation.
For example, car washes, now not in the sales tax base, will have to pay the state sales tax of 4.85 percent, plus any local city and county sales tax, if they are in locales that assess that local tax.
So, since a coin-operated car wash takes quarters or dollar bills, it can’t raise its cost by 4.85 percent, but either must eat the new sales tax it has to collect or raise its rates by a quarter or more.
Some services who are not now in the sales tax system may deal with collections better — by just assessing the new sales tax on their base cost, and thus pass it along to consumers.
The 182-page bill can be seen here, but it is easier to read the crib “summary” at the same site.
Gibson told Thursday night’s meeting that the Nov. 21 meeting likely won’t be the last.
Not yet debated much by the task force is the proposal that the Legislature pass a constitutional amendment decoupling corporate and individual income tax monies from supporting only public and higher education.
A different working group is now talking with pro-education advocates to come up with some kind of “promise” — perhaps in law — that would basically guarantee income tax receipts would go to schools.
The Nov. 21 task force hearing will debate the constitutional change. But it is unclear whether that proposal will come to the task force or to an interim legislative committee for a public hearing before the Legislature takes it up, either in a December special session or the general session, which starts the end of January.