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Show Local Sales Tax I Lucrative ' Revenue Smirro Cedar City received $100,016 v in revenue from the V of V c local option sales tax during the twelve-month period end-k)ed end-k)ed Feb. 29, 19C8. This fact r was reported in a special study prepared by Utah Foun-vs Foun-vs Ration, the private tax re-' re-' search organization. ft The foundation report points out that the local sales tax .(has become a major source of revenue for many Utah counties and municipalities. In Cedar City, sales tax re-..ceipts re-..ceipts were equal to 51.1 'r of p the property tax collections 0. for city purposes last year. If .the revenue derived from the yi local sales tax were to be replaced by a local property , tax, it would require an In-7- creased levy of 13.20 mills ($13.20 per $1,000 assessed val- uation). y Although the local sales tax Y Is imposed by the local units, it is by contract actually col- jj tected laong with the state . sales tax by the State Tax JK Commission. The local tax then is returned (after deduc-J deduc-J tiori of a 2Vi'r service fee) to the taxing jurisdiction from Sj which it was collected. fa Foundation analysts ob- serve that proposals have been made in each of the past J five legislative sessions to change the local sales tax law so that revenue would be dis-S dis-S tributed to all counties and S cities according to population, rather than, as now, on the . basis of where the ta,x Is lev-J lev-J led and collected, . ; J Four different attorney gen-p gen-p erals have e6fflflude6r' how ever, that such a proposal, if J enacted into law, would be held by the eourts to be unto un-to constitutional. Thus, the opln- ions indicate that all com-munities com-munities now receiving local k, sales tax funds would stand t to, lose this important rev-J, rev-J, enue source if a change were fto be made in the method of distribution. The local sales tax now is imposed In more than 3,200, communities located in six- j teen states, according to the foundation report. The use of the sales tax as a local revenue source has grown i rapidly during recent years, and most tax experts expect that this trend will continue in the years ahead. Recently, a proposal was made by Salt Lake City to increase in-crease the local sales tax rate from Wr to 17r. Opposition to any hike in the local sales tax stems mainly from the possibility that the State may again have to tap this lucrative lucra-tive revenue source. When the 1965 Utah Legis-laturo Legis-laturo switched from a "pay-as-you-go" to a bonding approach ap-proach to meet its capital outlay out-lay needs, it also transferred to general operations a V cent sales tax levy which had been earmarked for building purposes. pur-poses. While this action In- I creased the sales tax available avail-able for general operating purposes, pur-poses, no provision was made ,for the funds needed to service ser-vice the debt and also provide j for future state building needs. Utah's total sales tax rate now is 3 (3' state and Vi7c local). The report concludes con-cludes that If any increase is to be made in this rate, the legislature must determine where the need is most pressingat press-ingat the state or the local level. |