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SALT LAKE CITY — Rep. Mike Noel, R-Kanab, said Thursday he's going to push to restore all of the state sales tax on food.
Noel said the $147 million expected to be collected from food purchases at the higher rate would be offset by a decrease in the overall state sales rate.
He announced his intent after the House Revenue and Taxation Committee heard a much more complicated proposal from Noel that also involved lowering property taxes and equalizing school funding.
At Noel's request, the committee took no action on HB72. He said the only problem pointed out in the bill was his intent to use the money raised by restoring the sales tax on food to reduce property taxes for schools.
"There hasn't been great concern about putting the sales tax back on food. I haven't heard a tremendous amount of angst about that portion of the bill," Noel told the committee.
He said he voted for reducing the sales tax off food, championed by former Gov. Jon Huntsman Jr., but has since seen negative effects, especially to rural areas where food sales are a key source of tax revenues.
Gov. Gary Herbert, who served as Huntsman's lieutenant governor, liked Noel's idea.
"I have not seen the bill, yet I agree in principle with the concept to broaden the base and lower the overall rate," Herbert said. "I will follow this bill with interest."
Noel said even though he understands the arguments against taxing food, a basic necessity, everyone needs to contribute toward paying for the benefits of living in Utah and the United States.
The poor already have access to food stamps, he said, and could be assisted further with the additional cost of taxed food by some sort of credit on their state income taxes.
Melissa Smith, an analyst with the Community Action Partnership of Utah, told the committee tax changes should not "be on the back of people already struggling to find food."
Smith said a family of four would probably spend an additional $260 a year if the food tax is restored, about half of a month's food budget for a low-income family.
"This is a tough time to hit them with an increase," she said.
The committee focused more on whether it was a good idea for schools to rely on sales tax, a less stable revenue source than property taxes. Noel said he came up with the idea for the bill initially to help lower property taxes, particularly for older Utahns.
But Noel said he was now more interested in putting the sales tax back on food. He said he'll substitute his bill to deal only with that issue.
"It's too complicated right now," Noel said of HB72.
The state sales tax on food was reduced to 1.75 percent over the 2006 and 2007 legislative sessions. The current state sales tax rate is 4.7 percent.
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