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SALT LAKE CITY (AP) -- The Senate Republican Caucus backs a $100 million tax cut but is not keen on eliminating the sales tax on unprepared food.
Senate President John Valentine said removing the grocery tax would cut tax revenue by $167 million, making other legislative goals -- including road building and increased education funding -- impossible.
"I'm getting many messages that these two are adequately taken care of before we cut taxes," he said Thursday.
Instead, the Senate Republicans indicated support for giving poorer residents an income tax credit for the sales tax they pay on food.
Utahns overwhelmingly want the sales tax taken off food, according to polls. In June, 68 percent of residents surveyed by Dan Jones & Associates for the Deseret Morning News and KSL-TV said they favored removing the sales tax from food.
The Senate Republicans' support of a $100 million tax cut falls between Gov. Jon Huntsman's proposed $60 million proposal and the House Republicans' $230 million cut.
The governor and the House leadership want to remove the food tax.
"The governor remains committed to providing immediate relief for taxpayers at the check-out counter - not something that offers relief just once a year -- if they fill out a tax return," Huntsman spokesman Mike Mower said.
"When you buy that loaf of bread and gallon of milk, we want it to be tax-free," he said.
The governor, the Senate and the House want to use the tax cut to spur economic development, but disagree on how to do it.
"The House agrees on one thing: The vast majority of tax cuts must go into the pockets of individuals, not businesses," said Rep. Wayne Harper, who was the House co-chairman of the Tax Reform Task Force.
The Senate's refundable tax credit would reduce revenue by $69 million to $100 million, depending where the poverty level is set.
The refund would amount to $75 to $86 per person per year.
But critics say the refund would require that families file a tax return, even if they owe no tax.
The state is looking at a revenue surplus of about $1 billion. That amount could go up when the next revenue forecast is announced in mid-February.
"It's early in the session. I think there are a lot of tax proposals in play," Mower said, adding that "part of what's in play right now is what the February estimates will be. We recognize we aren't dealing with static numbers."
(Copyright 2006 by The Associated Press. All Rights Reserved.)
