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Show PACK SIX THE DAILY RECORD WEDNESDAY. JULY 15. Office, of the Attorney General Wl State of Utah I OPINION NO. July . by the Attorney General's Office regarding legally permissible methods of collecting and distributing the cent sales tax. These opinions have not dealt with the method of levying the tax but this office sees nothing wrong with the way Cache County 72-0- 27 1, 1972 levies its tax. However, these opinions have dealt with the distribution methods of the local sales tax. The problem arises because of Article XIII, Section 5, of the Utah Constitution, Requested by: B. H. Harris Cache county Attorney Prepared by Vernon B. Romney, Attorney General . , Questionsi G. Blaine Davis, 1. which provides : Assistant Attorney General , to collect the local option sales tax and distribute it to the Cache County continue May cities and towns on the portionate share of the basis of their pro- totel population? -- 2. May Cache County obtain either a restrain ing order or an injunction preventing Logan City from imposing the local option sales tax? . If repeals its local option sales tax ordinance, would Logan Ciry be precluded from collecting the local option sales tax? 3. 4. If Cache County logan concluded city repealed its sales tax ordinance, officials If Logan City repealed its ordinance and the county continued to levy the I cent sales tax ap'l continued tc distribute it according to population, what governmental units are legally responsible, and would any officials incur personal liability as a result of L:. v This enabling power has been construed, in issued by the present Attorney General as well as inopinions opinions issued by previous Attorneys General, to prohibit legislative interference with the taxing powers of subordinate unite of government, in Opinion No. Attorney General E. R. ter, now the Chief Justice of the Utah Supreme Court, 59-0- 21, would either the city or its elected be subject to liability as a result? ' to If Logan City repealed its ordinance, could the county determine the point of sale to be cache County and use the salea tax revenue to provide municipal services throughout the county on a per capita, or other nondiscriminating basis? the municipalities and the county agree to levy the Jj cent sales tax and designate the county, or any other agency, as administrators of these funds to provide needed services to the county and municipalities, such as police protection, fire protection, garbage collection, street maintenance, etc.? 8. if all of the municipalities enacted the sales tax ordinance, could the municipalities and county enter into an under the Interlocal cooperationagreement Act to pool the revenues and provide governmental ervices with the sales tax revenue? Can l. no. 2. No. 3. This as it "The implied restriction is that a county may not be empowered to assess and collect taxes for the purposes of a city or town, nor the city or town for county purposes. . . , The Legislature has power to vest in the authorities of the the power to assess and collect taxes for thecounty purposes of such county only, which, by implication, prohibits the Legislature from in the corporate authorities of a county vesting the power to assess and collect taxes for the purposes of a city, town or other municipal corporation." 71-0- page 338: 16, its constitutionality ... that cities is No. no and noted at legislative authority over granted to counties. . , , The 4. No. 5. See Opinion. 6. No. 7. See Opinion 8. Yes (see opinion) . or "In our opinion Section 5, Article of the Constitution, . . . limits local or taxation to local county purposes. . , county office has received a the till 4ACC?rdingly' the above opinions have been, requested th8re iS 3 way in "hich the Problem, ol 8e! tOWnS can be solved ?itleS "ithout a substantial iceS Provided. and without requiring a substar increase i?erV property taxes to replace the lost local sales ta lt0 tutionalhS CUnty' accordin9 to population, would be unconsti- - QUESTION 2 Section Utah code Annotated, 1953, provides 11-9- -3, as follows: a -- tax inj accordance with the provisions of this Act; provided, however, that a city or town may not initiate such a tax until the levy county within which it is situated has initiated a sales or use tax levy pursuant to the provisions of this Act . " and a use I According to the above statute, once a county has enacted an ordinance which imposes the tax within the in that county may levy a sales and use tax.county, any city with i Therefore, it is the opinion of this office that county would be unable to obtain either a restraining order PreVenting L9an Cit le"3?S! local option fr" T Since the uniform Local Sales and the use Sales Tax passed in 1959, various opinions have been issued 13 ' .. uus orrice th?t the t distribution of local sales tax revenue by a county, to cities Cache Within CaCh C0Unty have not enacted an fn,POSeS that t3X' and the countV receives al frm the State Tax Commission and distri QUESTION a . taxation unit of government is permitted tooyBiein interfere with the taxing power of another, or "keep strings attached" would run into serious difficulties if challenged in the courts, m v tate stanfrd, 24 Utah 148, 66 P.1061 (1901) S!8' on !arifir 161, the court stated: whereby one i Of Utah was issued by former 54, Attorney General Pratt Keeler, this office reached a similar conclusion when concluded that sales tax collected under the Act could not be it used for purposes other than those of the governmental unit authorized to collect the tax, and that opinion was also based upon the fact that it would violate Article XIII, .Section 5, of the Utah Co- P.2d 991 (1961), upheld andtowns within the county on the basis of L9an an ordinance which w ?ty has now enacted within City, and the win therebva0ral.!!ali8large majority of local sales tax a: and t0WnS Within Cache of' V County "ill be depri' th but "ill revenues' havi oblioatiorf1 P?rJi?,f the services which it has heret( rovJdng'taxbut will not have the revenues from the option available with which to pay for those serv! t)H. 62-0- legislation grants to counties the right to levy taxes for their own purposes, with a correlative power in the cities to do likewise." fV ffic undetands It1 til In Opinion No. Finally, tbe onY Utah Supreme Court case the Act, Merkely v. state Tax Commission. 11 Utah 2dconsidering 336, 359 facts, county present iy enacted an ordinance which imposes the local optic 3f.Chapter 9 of Title 11 of the Utah Code Annot it were enacted which empowered a county Again, in 1971, Opinion No. the present Attorney General, Vernon B. Romney, concluded that a law requiring that the local option sales tax be distributed on the basis of population would be unconstitutional. request for several opinions questions which relate to the local option sales tax is presently being distributed in Cache County. on numerous bill nstitution. I Concluaionsi a sales tax, but then required the county to distribute the sales tax revenues to municipalities within the county according to their proportionate share of population, such legislation would violate the above constitutional provision. At page 2 of that opinion it is noted: 6. all that if impose a this procedure? 7. "The Legislature shall not impose taxes for the purpose of any county, city, town or other municipal corporation, but may, by law, vest in the corporate authorities thereof, respectively, the power to aeaess and collect taxes for all purposes of such corporation." Question a This question has been previously, answered by an Opinion |