Nov 19
Repeal of 1% Restaurant Tax Receives Unanimous Approval
2009 at 9:53 am | posted by Rep. Craig Frank 9 comments
Rep. Craig Frank (R-Cedar Hills) has proposed a Draft Bill in the Revenue and Taxation Interim Committee yesterday that would repeal the 1% sales tax placed on restaurant food purchases. The Draft Bill was endorsed unanimously by the bi-partisan committee yesterday during the last scheduled legislative meetings before the 2010 General Legislative Session begins on the fourth Monday of January next year.
Although the Bill proposal removes the 1% sales tax on restaurant food, the Bill also gives Counties throughout the state an option of levying a 1/10 % (one-tenth of one percent) general sales tax in its place. Many counties have used the current restaurant tax’s revenue stream to bond for projects such as convention centers and other “cultural” venues.
Rep. Frank has stated that “it’s not (his) intent to put at risk those Counties who have already leveraged themselves against the previously ‘guaranteed’ revenue stream, but to take the tax from a less logical collection point and place it in a tax base that makes more sense.”
Royce Van Tassell, from the Utah Taxpayers Association, testified in the tax committee hearing that time-tested, sound tax policy “lowers the rate and broadens the base,” sharing the state’s tax burden among a greater percentage of Utah taxpaying citizens. According to figures provided by the Utah Restaurants Association, 85% of people eating in Utah restaurants are Utahns. The original intent of the Restaurant Tax, according to Tom Ginny of Gastronomy Restaurants, was to create a revenue stream for local projects with restaurant proceeds collected from visitors to our state. That’s clearly not what’s been happening here.
Links to additional local media articles:
November 19th, 2009 at 1:04 pm
This is good as long as you don’t also raise the general food tax. If you’re going to tax food, it should be prepared (restaurant) food, not unprepared food.
November 19th, 2009 at 1:27 pm
This proposal doesn’t change the reduced sales tax on “non-prepared” foods. There are other proposals (by other legislators) out there to change that.
November 19th, 2009 at 2:20 pm
Rep, Frank,
How much income does the restaurant tax produce in a year now, and how would you propose to replace that income for the state?
November 19th, 2009 at 7:54 pm
The current restaurant sales tax (1%) is a County option. The revenue stream developed from this tax goes to pay for a number of different uses (i.e. Recreational, Community, Cultural, and Airport Facilities). The current tax will be “replaced” with a County option general sales tax (.1%). THIS PROPOSAL IS REVENUE NEUTRAL.
November 19th, 2009 at 9:21 pm
there’s a lot of talk of upping the sales tax on unprepared foods, even if this bill does nothing on that front, you are aware of the other proposals. so how should this be seen as something other than shifting of tax from restaurant food to grocery store food.
November 19th, 2009 at 9:47 pm
Rep. Craig,
If the restaurant tax is replaced by a “general sales tax”, you are shifting a tax from restaurant patrons to grocery store customers and others. I don’t see how that can be revenue neutral. Can you provide the supporting data for that claim? It would seem that a general sales tax would raise significantly more revenue than a tax only on restaurant sales.
As I see it, this actually a SECOND proposal to raise sales tax on groceries. How is this good for anyone except the restaurant industry?
November 19th, 2009 at 11:35 pm
http://www.ksl.com/?nid=148&sid=8729456
November 20th, 2009 at 3:48 pm
@bekkjeann
While just a subtle difference, there is a difference between 1% and .1%…
November 23rd, 2009 at 1:26 pm
I realize .1 is a tenth of 1%, but the new tax base under an increased sales tax becomes huge by comparison to only a restaurant tax.
If this tax helps to support convention centers and other cultural venues, then a restaurant tax truly targets the “base that makes more sense”, as you put it. Whether the restaurant tax is paid by instate or out of state visitors, makes no difference. It makes far less sense to begin spreading that tax over the entire population. Taxing food is always the easy way out. People will always have to buy food.
This is nothing more than bowing to the restaurant industry that is hurting in the tough economic times. One can’t blame them for trying. But this is just wrong.
Also, Rep. Frank, I don’t see where that KSL article says anything about the tax being ‘income neutral’, and I would think you would quote a different source besides KSL anyway. That’s a very circular reference. Please provide more information about the ‘income neutral’ claim.