Utah – Utah Loses $650 Million Each Year Due To Sales Tax Exemptions

The Salt Lake Tribune
by Lee Davidson
July 3, 2017

In 1996, Utah offered 48 exemptions to its sales tax. Twenty years later, that has mushroomed to 91, a near doubling in two decades.

New estimates say all those tax breaks cost at least $650 million a year in lost revenue.

The Legislature’s Revenue and Taxation Interim Committee is beginning to study the array of exemptions — from hay to prescription drugs to collectible coins to ski-resort equipment to purchases by churches — and whether they still are justified or should be eliminated. It’s part of a wider look at overall tax reform.

In 1996, Utah offered 48 exemptions to its sales tax. Twenty years later, that has mushroomed to 91, a near doubling in two decades. New estimates say all those tax breaks cost at least $650 million a year in lost revenue. The Legislature’s Revenue and Taxation Interim Committee is beginning to study the array of exemptions — from hay to prescription drugs to collectible coins to ski-resort equipment to purchases by churches — and whether they still are justified or should be eliminated. It’s part of a wider look at overall tax reform.

Rep. Tim Quinn, R-Heber City, did some quick figuring and said that “16 percent to 17 percent of all goods sold in the state” are escaping sales tax. That means losing $1 of every $6 possible from the tax.


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