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Show Bountiful Agrees On Sales Tax By GARY R. BLODGETT BOUNTIFUL City officials here have decided unanimously to go along with a proposal by the Utah League of Cities and Towns to support a revised distribution system for the states's sales tax. THE PROPOSED redistribution system will go before the state legislature during the January budget session and, if approved, will become effective July I . The proposal would allow cities to assess an additonal one-quarter percent optional sales tax. The decision to do this, however, would be in the hands of each city council, it was explained. APPROVAL OF the optional tax would merely allow cities and counties to approve the tax increase if they desire. "But I don't know of any cities in Davis County that wouldn't use the optional tax," commented Bountiful City Manager Tom Hardy. "It's a good source of revenue for all cities." BUT JUST as important as the proposed sales tax increase is the proposed method of distribution of all sales taxes that is the three-quarter of one percent portion that is returned to the cities. Presently, all of the cities' portion of sales tax is based on point of collection or the location of where the sale is made. UNDER THE present tax distribution method, three-quarters of one percent of the total five percent sales tax is given back to the cities based on point of collection. The remaining one-quarter percent is earmarked ear-marked for the Utah Transit Authority. The new proposal calls for the three-quarten three-quarten of one rercent to renWn with the cities but redistributed under another method as follows: THE FIRST (July I, 1982) the money would be reimbursed on population would be increased 10 percent and the point of sale decreased 10 percent until a 100 percent per-cent population is reached over a 5-year period. This money must be used for public safety, safe-ty, it was explained. However, public safety safe-ty under the proposal has a very broad definition that includes not only fire and police protection, but also includes street repairs and street lighting. THE ONE-quarter optional sales tax, for those cities which decide to use it, may be applied to the general fund for any legitimate legiti-mate purpose. But without approval of the optional tax increase by the state legislature, there will be no increase in sales tax revenue either to the state or the cities Mr. Hardy noted. "ALL CITIES will benefit from the additional addi-tional one-quarter percent optional sales tax. but there will be a few cities which will suffer a financial loss under the proposed redistribution system," Mr. Hardy said. He noted that Salt Lake City, Sandy, Logan, Ogden and Orem would have a substantial sub-stantial loss in sales tax revenue because they presently have a very high rate of sales and collect handsomely from the sales tax reimbursement. PARK CITY, Alta and other "resort communities" with small populations and large sales will also suffer a substantial reduction re-duction in sales taxes. But many cities with almost no commcr- PLEASE TURN TO PAGE 2 Bffl. Agrees On Sales Tax CONTINUED FROM FRONT rial business like Clinton, West Point and Fruit Heights will receive a tremendous "windfall" from the new proposal. CLINTON, FOR example, could receive an annual sales tax reimbursement after five years of up to $250,000 because of the sales tax return being based on population. Presently, Clinton has almost no sales tax. Mr. Hardy said "virtually all" of the communities within the state have expressed express-ed a desire to add the optional sales tax for discretional use by each city and to support the proposed method of sales tax redistribution. "EVEN SALT Lake Mayor Ted Wilson and mayors of other communities destined to suffer at least a temporary setback have agreed to support the redistribution plan," said Mr. Hardy. "We have the support of the city officials, offi-cials, but now we must convince the state legislators, who are usually reluctant to raise taxes under any condition, that the plan is a good one and has the support of city officials from throughout the state." THE REVISED method of distribution, if approved, might also entice residents of unincorporated areas to annex into cities, the city manager explained. At the same time, with the redistribution based on population the annexation would not be such a detriment of the city. |