Herbert: Tax Law Changes Likely In 2018

Feb 16, 2017

Education advocates and others who want to see reform of Utah’s tax policy will most likely have to wait until 2018 to see any changes.

Our Schools Now has given the Legislature an ultimatum to either raise the income tax themselves or let the increase be decided by a popular vote in 2018. Gov. Gary Herbert said that he expects a reform in the state’s tax policy by the end of that year’s legislative session.

“The Our Schools Now is saying, ‘You need to do more and if you don’t, we’re going to take it to the people.’ It’s certainly got everybody’s attention, as I think why we have the energy about tax reform today. Let’s capitalize on that,” Herbert said. “There’s six or eight different options out there. We might two or three of them, but it’s going to take us some time to get to where we needed to do it. My deadline is by the end of the next legislative session that we have something in place that becomes new tax policy.”

Another area of tax law that has been a keen interest of Herbert’s is the online sales tax. Despite getting large online retailers such as Amazon to collect state sales tax, Herbert maintains that Utah is still losing out on around $200 million in uncollected money. He said that the state’s tax law needs to adapt to a changing economy.

“The data tells us that where we used to have 72 percent of our GDP being taxed, now it’s down to about 40 percent. So, there is a lot of our economy that is not part of the tax policy. That’s why I say you want to broaden the base so we can lower the rate,” he said. “Makes it easier for all of us and it doesn’t have the dampening effect on a growing economy that you could have otherwise if you have a big tax increase on income.”

A recent poll shows that support for the Our Schools Now initiative changes depending on whether the tax hike is described as being seven-eighths of one percent, as supporters do, or whether it is referred to as an increase of over 17 percent by its critics. Both figures are accurate.

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