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State proposes food tax increase to raise revenue

By Richard Piatt | Posted - Nov 30th, 2012 @ 9:27pm

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SALT LAKE CITY — The state's proposal to increase the sales tax on food has some hungry for a fight.

Five years ago, the Legislature reduced the state's portion of the food sales tax to 1.75 percent. A new proposal would hike it back up to 4.7 percent, where it was before the decrease, to increase tax revenue. The bill would also create refundable tax credits for lower income Utahns, plus a federal earned income tax credit, to offset the rate increase.

The idea of boosting the sales tax on food faces some pretty stiff opposition on Capitol Hill, including from Speaker of the House Becky Lockhart. The bill will head to Legislative committees in the upcoming session.

Friday, Bill Woodie was stocking up on the basics at Saint Mark's Hildegarde's pantry. Unemployed and somewhat sensitive to financial challenges, he sees a higher food sales tax as just one more burden.

"Nobody should have to go hungry," he said.

Another patron of the pantry, Travis Westerman, agrees.

"Any increase like that is hard," Westerman said. "We're just getting by now, and if they raise it, it will be just that much harder."

Westerman and Woodie are among dozens of people who are grateful for this food pantry and a little worried about more sales tax on food they have to buy.

Tax attorney and Senator John Valentine says the reason for the increase is to create a more stable revenue stream for funding education.

"One of the challenges I've encountered is that people think it's a tax increase," Valentine said. "It is not. It is actually revenue neutral for the state, it has no actual tax increase for Utahns."


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