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Show For O Against Q Initiative A REMOVAL OF STATE AND LOCAL SALES TAX FROM FOOD Official Ballot Title: Shall a law be enacted, to remove state and local sales taxes from food, except food prepared pre-pared for immediate consumption and food sold through vending machines? Impartial Analysis Initiative A eliminates sales taxes on food except "food normally nor-mally prepared for immediate consumption on or off the premises prem-ises of the retailer and food sold through vending machines." In Utah, sales of both food and non-food items, rentals, and some services, such as repairs, are taxed. The state rate is 5, the county and municipal rate is 1, and the Utah Transit Authority Au-thority rate is 14 where the imposition of this tax rate has been approved by voters. The resort communities of Alta, Brian Head, Park City, and Springdale may charge an additional 1 rate. In addition, the revenue generated by a 164 rate on the state portion and a 164 rate on the county and municipal portion por-tion is earmarked to the Utah Sports Authority to build Winter Olympic facilities. If food is removed from the sales tax base, the amount of money generated from sales taxes would be reduced, thereby reducing re-ducing the amount of money for use by the state, counties, municipalities, mu-nicipalities, resort communities, the Utah Transit Authority, and the Utah Sports Authority. In analyzing Initiative A, the following definitions must be considered: 1 . "Food" is defined by Initiative A as "food for human consumption which is eligible for purchase with food coupons issued by the United States Department of Agriculture, regardless regard-less of whether the retailer from whom the food is purchased or the purchaser participates in the Food Stamp Program." 2. "Retailer" is defined in current law as a "person engaged en-gaged in a regularly organized retail business . . . who is selling to the user or consumer and not for resale." 3. "Immediate consumption" is not defined in current law nor by Initiative A. Food actually purchased through the food stamp program is currently exempt from sales taxes and would continue to be exempt whether or not Initiative A is approved by voters. Sales taxes would still be paid on all non-food items in grocery stores. Effective Date Initiative A takes effect July 1, 1991. Fiscal Impact The removal of sales taxes on food would reduce government govern-ment revenues by approximately $113,000,000 each year. The annual breakdown is as follows: State $90,000,000 Municipalities and Counties 18,400,000 Utah Transit Authority 4,000,000 Utah Sports Authority 600.000 TOTAL $113,000,000 Includes resort communities 15 |