Salt Lake City, Utah – February 11, 2021 – Utah Tax Commission data vindicates last year’s historic sale tax referendum.
Shortly before Christmas 2019, Utah lawmakers passed a controversial Bill that sought to radically shift Utah tax policy by applying sales tax to a handful of services in Utah, as a first step to taxing all services. The Bill, which also re-instated the sales tax on food and imposed the sales tax to gasoline, was passed during a short special-session of the Legislature, over the objection of thousands of Utah citizens, and warnings by government economists that the data used to support the measure was false. In response, Utah citizens launched a historic referendum, gathering more than 120,000 signatures from around the State in just a few short weeks, prompting the legislature to overturn the law.
Lawmakers and the Governor’s office claimed that Utah was facing a sales tax “fiscal crisis,” and had no choice but to pass the controversial measure. And, in order to make their case, they deliberately disregarded huge amounts of online sales tax revenue.
A year later, actual sales tax data vindicates the referendum, and debunks the claim of crisis. Contrary to the dire predictions of government “experts,” Utah sales tax collections soared to all-time highs of nearly $3.1B during the 2020 fiscal year. Utah sales tax collections continue the decade long trend of growing nearly four times faster than Utah population. This, coupled with historic income tax collections, has produced billion-dollar surpluses for multiple years. Hardly the crisis predicted by elected officials.
It’s been said that the “whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by an endless series of hobgoblins, most of them imaginary.” H.L. Mencken. Such was the case for the sales tax debacle of 2019. Utah’s tax system is not broken. There is no need to impose a new tax on all services in Utah. Luckily, Utah referendum law allowed discerning Utah citizens to veto one of the worst pieces of tax legislation in Utah history