House lawmakers will determine the fate of a sweeping tax reform package scheduled for debate today.
The bill, H.B. 441, proposes a host of new taxes for previously untaxed services, such as haircuts and real estate transfers, while lowering the overall tax rate to around 3 percent. It also includes a companion income tax cut of 4.75 percent from 4.95 percent.
Rep. Tim Quinn, R-Heber City, is the bill’s author and, with the help of Republican leaders and Gov. Gary Herbert, has been trying to rally support for the bill all week.
Speaker Brad Wilson, who’s also behind the effort, told House Democrats this week that they will be adding an additional $75 million sales tax cut to the package, in hopes of winning over more skeptics.
At a press conference late Wednesday, a group of small business owners and members of the conservative Utah Eagle Forum panned the bill over concerns that the process is being rushed and it would negatively affect local businesses and families.
“We’re being told by Gov. Herbert and Rep. Quinn that this a tax decrease, but when I do the numbers on what they’re quoting, I don’t get a tax decrease for me or my children,” said Tenna Hartman.
Hartman, who owns an online health care company based in Davis County, said she’s only just started parsing the 260-page bill and what it could mean for her business, which employs 15 people.
Democrats have also wavered this week. In a caucus meeting on Tuesday, House Democrats decided against taking a position on the bill, instead waiting to see an updated version.
Democrats and education advocates have expressed serious reservations about the proposed income tax provision, which they fear will lead to less money for schools. Income tax is earmarked for education purposes in the state of Utah.
“This whole proposal is a gamble. Our kids’ education must not be used as a political device just to make needed sales tax changes palatable,” UEA President Heidi Matthews said in a statement.
Republican leaders say tax reform is long overdue as Utah’s economy leans more toward services.
“It’s complex, I understand that. But it broadens the base in such a way that no one can feel like they’re being picked on,” Wilson said.
The bill is first on the House agenda beginning at 10:00 a.m.
