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Time's running out to pass tax reform, but Utah lawmakers are 'going to go at it'

By Lisa Riley Roche, KSL | Updated - Feb. 27, 2019 at 10:26 p.m. | Posted - Feb. 27, 2019 at 7:33 p.m.

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SALT LAKE CITY — Senate President Stuart Adams said Wednesday there's still time before the 45-day legislative session ends in two weeks to pass a major tax reform plan that has just become public.

Still, the Layton Republican didn't sound completely convinced.

"Is there time? I’m not going to say there’s not. We all know it’s short and I'm not going to say there is. But we’ll see," he told reporters. "We’re going to go at it. If you don’t go at it, you’re not going to know."

His comments came after details of a bill sponsored by Rep. Tim Quinn, R-Heber City, were finally confirmed Tuesday following a presentation to House Republicans in a closed-door caucus meeting.

Quinn said the plan calls for expanding sales taxes to a wide range of services while lowering the state sales tax rate from the current 4.7 percent to 3.1 percent, and reducing income taxes as well.

His bill, HB441, was posted online late Wednesday evening. Quinn and Sen. Lincoln Fillmore, R-South Jordan, along with other lawmakers, including some Democrats, and Gov. Gary Herbert's budget staff have been working on it for months.

Adams said he'd hoped to see legislation sooner.

"We wanted it last week. We wanted it the week before," the Senate leader said. But he said "the next two weeks are like a year" and a lot can still be accomplished before the 2019 Legislature ends at midnight on March 14.

As that date nears, Adams said "you can hear the anxiety, you can hear the finality, you can hear the pressure. Sometimes under pressure and those types of situations, we're able to get some great things done. So we hope this is a great thing."

Fillmore said he is hopeful as "we are getting closer and closer, that more and more of the wrinkles will be ironed out."

Asked if tax reform might end up being left for lawmakers to study over the interim, he said "that's another way of asking, 'Am I 100 percent sure such a bill is going to pass?' My response would be, 'Now is the time we need to act.'"

Some see a motivation for lawmakers not to wait for the 2020 Legislature to take action on broadening the state's shrinking sales tax base because that will be an election year for all of the House and half of the Senate.

Fillmore said he agrees that it is easier for lawmakers to make that decision this year. "It's important to get that policy done now even if the implementation takes a little bit of time to work out," he said.

Is there time? I’m not going to say there’s not. We all know it’s short and I'm not going to say there is. But we’ll see. We’re going to go at it. If you don’t go at it, you’re not going to know.

–Senate President Stuart Adams

The bill delays the implementation of newly imposed sales taxes on services ranging from haircuts to cosmetic surgery to architectural designs until Jan. 1, 2020, at a rate of 3.9 percent, with a 0.8 percent drop possible on Oct. 1, 2020.

Quinn has said a cut in the state income tax rate from 4.95 percent to 4.75 percent would be retroactive to January, as would targeted income tax reductions aimed at families affected by federal tax changes, the poor and the elderly.

He said he doesn't see the delayed implementation of the sales tax expansion as political.

"I've never thought about an election and how that plays out," Quinn said.

Waiting ensures everyone is ready for the new sales tax collections, including taxpayers, he said. "If we do the sales tax first, that's going to be a hit to people's wallets before they take advantage of the income tax cut."

House Minority Leader Brian King, D-Salt Lake City, said "it's hard to know" the motivation behind the delayed implementation.

"Is there a political angle to it? Maybe," he said.

King said part of the reason to push through the legislation in the final days of the session may be that it limits the lobbying efforts by groups that will be taxed, including attorneys like himself.

That doesn't meant the long list of professionals and service providers affected won't take advantage of the delayed implementation of the new sales taxes.

Having that time may be helpful, Senate Minority Caucus Manager Derek Kitchen, D-Salt Lake City, said. "I think the delay is probably strategic and it's an opportunity for us to generate honest feedback."

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