SALT LAKE CITY — A few days ago, Ted Garcia and his son walked out of a grocery store with just two bags that rang up for $67.

His son turned to him and asked, "Dad, what did we buy?"

"Exactly," Garcia replied. "Something has to be done about this."

Garcia shared his experience with the House Revenue and Taxation Committee Tuesday, as it considered HB101, which would repeal the state food tax if Utah voters agree to lift the decades-old earmark on income tax revenue, which has historically been reserved for education but has been expanded for other uses in recent years.

"I'd like to bring to your attention not just the situation at the grocery store, but to those that actually serve our country that are financially in harm's way," said Garcia, who is a small-business owner and a service-disabled veteran.

"This house bill would actually help with these veterans especially that are retired that are on a fixed budget," he said.

Garcia, in an interview, said his concern also extends to active duty service members who in Utah "believe it or not, they are dollars away from being on welfare," and single moms struggling "half-paycheck to half-paycheck," subsisting on what remains after paying taxes and bills.

"So what's left, they have to be so, so careful how they spend their money. If there's a little, little sunshine of hope that there's no food tax, that makes shopping that much better. They know that, 'Hey, I didn't have to pay taxes,'" he said.

No one spoke against HB101, although Steve Erickson of the Crossroads Urban Center, which advocates for low-income Utahns, said the nonprofit organization was "agnostic" about the constitutional amendment, SJR10. The repeal of the state portion of food tax is contingent on the passage of the constitutional amendment in the 2024 general election.

"We support getting rid of the food tax and urge your support for doing the same, however you get it done," he said.

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Will Utah end sales tax on food? Community groups rally for support from lawmakers

Community and religious groups gathered at the state Capitol to urge lawmakers to do away with the state grocery sales tax, which they say is disproportionately burdensome to low-income Utahns.

Rep. Judy Weeks Rohner, R-West Valley City, who has worked on eliminating Utah's food tax for several years, said "Utahns have made it clear that removing the sales tax on food is their top priority."

Rising grocery prices have further spurred demands for relief. Some groups and individuals who previously opposed a repeal now support the bill.

Dave Davis, president of the Utah Retail Merchants Association, said previously the organization had "significant concerns about the removal of the sales tax on food because of the complexity that it would introduce in the system."

The association is now "very supportive" of HB101, he said.

"We have figured out the logistics of how to determine what is food, what is not food, what is prepared food. So our retailers that are charged with collecting this tax can make that distinction. We've figured out how to do it, we've got our systems programmed to do it," Davis said.

He continued, "So we feel like bringing this tax down is a good thing. It's supportive of, especially, those low-income people that are in need of this."

Utahn Ron Mortensen said repealing Utah's food tax will remove the "stigma" of Utah being among just 13 states that tax food.

"If the state sales tax on groceries is eventually eliminated, in many cases, it will actually benefit middle-income working families more than does cutting the income tax rate," he said.

The bill would remove the state tax imposed on food and food ingredients but does not include prepared food such as a rotisserie chicken roasted in the store. Sales tax would continue to be collected on non-food items such as household cleaning supplies.

Many critics of state food taxes consider them to be regressive.

According to the Center on Budget and Policy Priorities, low-income people pay much more of their income in sales taxes than higher-income people do because they must spend a very large share of their income to meet basic needs.

Rohner said eliminating the state sales tax on food will result in a $20 million total tax reduction.

"Removing the constitutional earmark for income tax revenue gives the state the flexibility to eliminate the state sales tax on food," Rohner said.

As income tax revenue continues to outpace sales tax revenue, "it's becoming increasingly difficult to fund all of our state's needs," she said.

Constitutional amendments require a two-thirds vote of the House and Senate to place the issue on the ballot. A majority of voters would need to approve the amendment for it to take effect in January 2025.

The House Revenue and Taxation Committee voted unanimously Tuesday to send HB101 to the full House for further consideration. SJR10, meanwhile, is currently assigned to the Senate Rules Committee.

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