On January 29, 2020, the Governor of Utah signed H.B. 185, repealing S.B. 2001 in its entirety.1 S.B. 2001 was enacted on December 18, 2019.2
S.B. 2001 would have brought about multiple tax changes in Utah, including the following:
- Decrease the corporate franchise and income tax rate and the individual income tax rate
- Amend the calculation for certain income tax credits
- Modify the calculation for the Utah personal exemption for purposes of the taxpayer credit
- Repeal certain sales and use tax exemption
- Make more services taxable
- Increase the state sales and use tax rate on food and food ingredients to 4.85 percent from 1.75 percent
- Enact a sales tax on motor fuel and special fuel other than diesel and an additional excise tax on diesel fuel
- Increase the state motor vehicle rental tax to 4 percent from 2.5 percent.3
Many of the changes were supposed to take effect April 1, 2020.4
The changes proved to be so unpopular with the people of Utah that on January 23, 2020, Governor Gary Herbert, Utah Senate President J. Stuart Adams, and Utah House Speaker Brad Wilson issued a joint statement stating that when the Legislature was back in session, there would be a full repeal of S.B. 2001.5 They stated that many people had strong concerns about the bill to the point where they were signing a petition to include a referendum on the ballot later this year to repeal the bill.6 The Legislature promised that once the bill is repealed, “the legislature will begin work under the reinstated tax code to prepare the fiscal year 2021 state budget. The repeal of S.B. 2001 will enable the legislature to draft the fiscal year 2021 budget without the uncertainty of a referendum potentially changing the tax code midway through the budget year.”7
For up-to-date information on sales tax in Utah, as well as other states, please refer to Ryan News & Insights.
1 Utah H.B. 185 (https://le.utah.gov/~2020/bills/static/HB0185.html). The House voted 70 to 1 to repeal the bill. The Senate voted 27 to 0 to repeal the bill. Utah H.B. 185 (https://le.utah.gov/~2020/bills/static/HB0185.html).
2 Utah S.B. 2001 (https://le.utah.gov/~2019s2/bills/static/SB2001.html).
3 Utah S.B. 2001 (https://le.utah.gov/~2019s2/bills/sbillenr/SB2001.pdf) pages 1–3.
4 Utah S.B. 2001 (https://le.utah.gov/~2019s2/bills/sbillenr/SB2001.pdf) page 237.
5 Utah Senate, Gov. Herbert, President Adams, and Speaker Wilson Announce Full Repeal of S.B. 2001 (https://senate.utah.gov/majority-newsroom/2020/1/23/gov-herbert-president-adams-and-speaker-wilson-announce-full-repeal-of-sb-2001).
6 Id; Per the Salt Lake Tribune, a bipartisan group had gathered about 152,000 signatures from Utahns in favor of putting the tax legislation on the ballot for potential repeal. 60% of Utahns were opposed to S.B. 2001, and 25% supported it, while the other 15% did not have an opinion. The Salt Lake City Tribune, “Utah’s Legislature, governor announce plan to repeal controversial tax reform law,” January 23, 2020 (https://www.sltrib.com/news/politics/2020/01/23/utahs-legislature/).
7 Utah Senate, Gov. Herbert, President Adams, and Speaker Wilson Announce Full Repeal of S.B. 2001 (https://senate.utah.gov/majority-newsroom/2020/1/23/gov-herbert-president-adams-and-speaker-wilson-announce-full-repeal-of-sb-2001).
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