Here are some of the highlights from the Governor’s office FAQ’s on Utah’s new tax reform legislation S.B. 2001.

“Utah is the only state in the nation that reserves all revenue gathered through income tax for education spending. That means all other state funding has to come through the general fund, which is supported by sales tax.

In 1960, goods accounted for about 53 percent of consumer spending in Utah. Today, in our ever-changing economy, they make up 31 percent of consumer spending, with nearly 70 percent going to largely untaxed services. It’s not fair or moral to make a shrinking segment of our economy shoulder an increasingly larger burden. The new system begins the work of fixing this by broadening the sales tax to a variety of services that were exempted.” (emphasis added)  Source: FAQ: Answers to your questions on Utah’s new tax law

Sales tax on food will be increased from the current 1.75% rate to the Utah’s 4.85% state sales tax rate.  Local government taxes imposed on food are not included.

The new law continues to exempt food provided by WIC, SNAP and charitable organizations.

SB 2001 provisions for a grocery tax credit amounts to $125 a year, per person in a family of four, with an additional $50 dollars per additional child.  The credit begins to phase out when household income rises much above $45,000 under the current Federal Poverty level.

SB 2001 also:

• Directs a portion of growth in the amount of revenue collected from the sales and
  use tax on the sale of food and food ingredients be deposited into the Transit Transportation Investment Fund;
• Repeals certain sales and use tax exemptions;
• Provides a sales and use tax exemption for certain transactions paid for through a machine that only accepts cash;
• Enacts a sales and use tax exemption for tangible personal property consumed in the performance of certain taxable services;
• Establishes a repeal date for the sales and use tax exemption for construction materials used in the construction of a new or expanding life science research and development facility;
• Creates a sales and use tax exemption for menstrual products;
• Enacts a sales tax on motor fuel and special fuel other than diesel and an additional excise tax on diesel fuel;
• Increases the state motor vehicle rental tax;

Note: There are also changes in the taxability of services that should be reviewed.  See Section 59-12-103 which has been amended to read: “Sales and use tax base — Rates — Effective dates — Use of sales and use tax revenue.”

Disclaimer:  The above information is provided as a courtesy of Sales Tax Colorado, LLC.  Tax information is subject to change and varying interpretations.