Opponents are urging lawmakers to shut down a new tax bill in Utah that will add a state sales tax to services. The House Revenue and Taxation Committee voted
12 to 2 on Friday
to move HB441 ‘Tax Equalization and Reduction Act’ forward. HB441 enacts a sweeping tax on services that will apply to both small and large businesses and everything in between, with few exceptions. Evans Family Media owner Steve Evans attended Friday’s hearing and was one of three people selected to represent Utah’s broadcast industry. Evans spoke specifically how the proposed tax will negatively affect the economy in rural Utah and that the tax adds an additional cost for oil and gas companies choosing to do business in Utah at a time when they are already operating on extremely thin margins. Rikki Hrenko-Browning, President of the Utah Petroleum Association, offered more details to the potential impact to the oil and gas industries saying that the bill would implement a form of tax pyramiding. This would result in layers of taxes owed as there can be an abundance of service contractors that are fundamental to having one well drilled, yet the tax would apply to each contractor. Likewise, refineries can have sometimes hundreds of contractors on site during day to day operations and the tax would apply to each one. Federally mandated environmental services would also fall under the umbrella of a service entity to be taxed. Hrenko-Browning asked the committee to allow industry to offer input and calculations of an accurate number of service providers used in industry and also expressed concern with an implementation date of
January 1, 2020
, saying that she sees complications with that time frame. The bill is receiving resistance from a wide variety of Utah businesses, many asking for more time to offer input and for lawmakers to further consider the potential far reaching effects. HB441 will be on the House Floor this Friday.
