As many of you know, the Utah Legislature highlighted sales tax reform as an agenda priority in the 2019 session. The proposed verbiage was publicly shared two weeks prior to the end of the session and many citizens and private interest groups overflowed the Legislature with opinions for and against the changes. One of the largest concerns was taxing service providers such as plumbers, electricians, realtors, accountants, and yes, lawyers.
I am one of many people with strong opinions about many things, but it’s important for all of us, regardless of our opinions, to understand facts to base our opinions upon so we can create resolutions to meet the concerns of others, both actual and perceived. So, let’s learn about sales tax so we can be informed when we express our opinions.
What is sales tax? Currently, sales tax is a compounded (added-on) tax where the state has a base rate which the county and city can add additional rates. For instance, to sell a cup of coffee in Torrey requires a 7.01% sales tax cost but to sell a cup in Joseph is around 6.65%. However, selling grocery items is a state-wide 3% sales tax.
Sales taxes fund the State of Utah’s general fund which pays for state government services such as public safety, courts, social services, elections, air quality, and transportation. Sales tax does not fund education. Sales taxes also fund municipalities and with the transient room tax, provide budgets to county tourism offices.
Why does the state want to change sales tax? There are many reasons. Some include businesses who want “fair” taxing for services and products. Others have valid economic reasons such as the sales tax base has decreased nearly 57% since the 1980s while income and property tax grows. Many theories persist about the decreased sales tax revenue: online sales where tax is not collected, buying more services than goods, and increased exemptions. The other issue is how higher education is funded. The Governor’s Office of Management and Budget published an informative position statement about why sales tax should be reformed, check it out.
Should legal services be taxed? You can probably guess my opinion is “no” for many personal and professional reasons. But regardless of my opinion, I hope you now understand some of the issues faced by the state regarding its tax structure. I also hope you use this information to create your own informed opinion.
What’s your opinion? If you have opinions about changing the tax structure in Utah, the closest townhall to Garfield, Wayne, Piute and Sevier, County will be in Richfield on June 28th with a tentative start time of 6 pm. The location has not yet been published. Participate in your government. If you are unable to attend the townhall, contact your elected officials to express your opinions and how changes to the tax structure would affect your communities and businesses.
Disclaimer. As always, my column is not legal advice, instead merely insight into the law and legal profession. If you have a general question about the law or legal profession, please email me at email@example.com or call 435.610.1431.
This week, I’m starting my new serial: civics. Through January, will discuss basic civic information: the organization of the federal government and how a federal bill becomes a law, the organization of the State of Utah’s government and how a state bill becomes a law, the federal administrative state, the state administrative state, Utah county jurisdiction, and city jurisdiction.
If you have general civics questions, please email firstname.lastname@example.org or call 435.610.1431.
The federal government is composed of three parts: the legislative branch, the executive branch, and the judicial branch.
The constitution, its amendments, and its interpretation through time articulate the limited, enumerated powers of each branch.
The executive branch. This power is limited. Its role is to carry out and enforce federal laws created by the legislative branch (Congress) and interpreted by the judicial branch.
The branch includes the President, Vice President, the Cabinet, and agencies such as the Department of Agriculture, Department of Interior, and Department of Defense.
Congress can further limit executive power. For instance, previous presidents could declare war whereas now, only Congress can declare war on a foreign country. However, the executive branch can unilaterally order military action through its management of the Department of Defense. Executive and legislative power continually tug at each other in order to maintain a balance of power between them.
The legislative branch: Congress. As a limited power, it includes the House of Representatives and the Senate. House members from each state are determined by the population of the state whereas two senate seats are held by each state. The legislative branch maintains the power to create laws, investigate and impeach individuals, tax, and budget for the federal government.
The judicial branch. Federal Judges. This power is also limited. It facilitates the federal courts. Federal crimes and civil actions, constitutional questions, immigration, bankruptcy, public lands conflicts, administrative disputes, issues between states, and federal law interpretation are litigated in federal court.
Like state court, federal courts can have jury trials and opportunities to appeal. The constitution is silent about the number of federal judges, courts, or number of Supreme Court justices. A statute created passed by Congress (both the House of Representatives and Senate) and signed by the President require the Supreme Court to have nine justices. The Senate approves federal judge appointments.
How an idea becomes a law. Let’s say you want to make a new national holiday, the Friday after Thanksgiving. You could argue most public schools are closed, banking does not occur, and a majority of people try to take the day off, regardless to its status as a federal holiday so why not add the certainty of the holiday?
You name the proposal “The Thanksgiving Leftovers Act.” As a citizen, you would meet with your congressional delegates: the Congress member from your district or the two Senators from your state. They may tweak the proposal and propose it to a committee in either the House or Senate.
The proposal would be researched and approved by the committee then proposed to the entire House or Senate. If it passes the full floor vote, then it is sent to the other portion of House who hears it in a committee, modifies it, passes it on the floor of the House or Senate, then the bill is sent back and forth until the House and Senate have no more modifications.
Then it goes to the President. If the President signs the bill, it becomes law. If the president vetoes the bill, both the House and Senate must vote again and pass the bill by 2/3 of their entire body.
If the now law is controversial, it may be litigated by opponents as unconstitutional. The justice system would consider the law’s compliance with the constitution and other federal laws. If the law is upheld, the President and executive branch are required to enforce it through the administrative state.
And no, you will not be quizzed on this. Next week, I’ll discuss the federal administrative state and its role in the federal government.