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SALT LAKE CITY — A bill eliminating the state sales tax on food and raising the rate on all other purchases slightly to ensure no revenue is lost was approved Wednesday by the House Revenue and Taxation Committee.
The 8-3 vote advancing HB148, sponsored by Rep. Tim Quinn, R-Heber City, to the House came after a change requiring candy to be taxed at the full rate in an attempt to reduce consumption.
That change was from the committee chairman, Rep. Steve Eliason, R-Sandy, who said he was under no illusion it would have a big impact on diabetes and other health issues but could result in people eating a little less.
"This is a public health measure," Eliason said.
Much of the discussion about the bill was about how much it would help low-income Utahns. While the bill would remove the state's 1.75 percent tax on food, it would increase sales taxes on other purchases from 4.7 percent to 4.92 percent.
Quinn told the committee the bill is a tax shift that will help the needy, including young families and elderly people living on fixed incomes, who can spend as much as 40 percent of their income at the grocery store.
"I consider myself fairly conservative, particularly when it comes to fiscal matters," he said. "When it involves food, to me it's not an economic issue. It’s a moral issue."
Paying another $2.20 in sales taxes on every $1,000 of nonfood purchases is "a trade-off I think we should all make to help those who are struggling," Quinn said, promising it would make a difference to them.
But some committee members questioned whether the savings on food purchases would be lost by paying a higher rate on other items.
"I'm really struggling to understand how this measure will have the intended outcome," said Rep. Brian Greene, R-Pleasant Grove, noting that "those in vulnerable categories" will face higher taxes on other purchases.
House Majority Leader Brad Wilson, R-Kaysville, suggested lawmakers look for other ways to offer assistance because he has concerns about continuing to narrow the sales tax base.
Bill Germandson, representing the Make Hunger Visible project at Crossroads Urban Center, testified that he thinks "we all know deep down taxing basic necessities is wrong."
Adding the sales tax to candy purchases was opposed by Dave Davis, head of the Utah Retail Merchants Association. He said it would cause confusion at the cash register since some items like cotton candy would still be defined as food.
