Show Widely Used Adoption of the local salci salet tax as a method of financing rising local government costs is spreading rapidly across the tte nation ACCORDING to Utah Foundation Foundation Foundation Foun Foun- dation the private tax research research research re re- re- re search organization the sales tax now is imposed by more than local units cities counties school districts and special districts located in twenty-seven twenty different states For many of these units the sales sale tax has become an important factor in balancing their local budgets DURING THE 69 1968 fiscal fiscal fis fis- fis cal year the local sales tax produced 16 billion in revenue revenue reve reve- nue for the units throughout the nation that imposed the tax The Foundation report notes that this amount still is far below the billion in property taxes collected by local governments but is the largest local tax source outside the property tax Of course in addition to revenue derived from their own sources loc local l units rely heavily on financial assistance from state and Federal govern govern- ments More than 36 percent of total local government revenue revenue revenue reve reve- nue last year was obtained from state and Federal aid FOUNDATION analysts attribute attribute attribute at at- tribute the growing popularity I of the local sales tax tar to the continuing need of local units for increased funds and the mounting resistance to further property tax hikes Between 1946 and 1959 local government government government govern govern- ment costs across the nation multiplied eightfold The study observes that in earlier years the sales tax has been regarded primarily as a state revenue source Itis It Itis Itis is currently imposed by 45 of the fifty states and is the leading tax revenue source in 36 of these states DURING the 69 1968 fiscal year the state sales tax produced produced produced pro pro- billion or nearly 30 percent of all tax revenue collected by the states In most cases the local sales tax is in addition to the one imposed imposed imposed im im- im- im posed by the state Alaska is the only state without a state sales tax that permits local units to levy the tax LOCAL SALES tax rates range from of 1 percent in a number of local units to toa toa toa a high of 5 percent in Fairbanks Fairbanks Fairbanks Fair Fair- banks Alaska The most common common common com com- mon local rate is 1 percent Approximately three-fourths three of all local units imposing the tax have a 1 percent rate Total state and local sales tax rates now range up to 7 percent New York State recently raised its state rate to 4 percent Since a number of local units in New York also impose a local sales tax of 3 percent the combined rate in these areas is now 7 percent New York however however however how how- ever does exempt food and drugs from the tax THE TilE Foundation analysis notes that some of the most pressing financial problems for local units are inthe in inthe inthe the larger cities of the nation As a result many of these cities have been among the first to turn to the local sales tax as a means of solving their fiscal problems Ten of the nations nation's fifteen largest cities now impose a local sales tax Utah first authorized its lo local local local lo- lo cal units to levy a Ih of 1 percent local sales tax on a wide county-wide option basis in 1959 Since that time cities and towns and 26 counties throughout the state have adopted the tax The tax currently produces approximately approximately approximately 12 million a year for these local units DURING THE recent session session session ses ses- ses- ses sion of the 1971 Utah Legislature Legisla Legisla- ture the local sales tax became became became be be- came the subject of extensive debate when an effort was made to raise the limit of the local sales tax from the present level of Ih of 1 percent to toa toa toa a full 1 percent The measure was turned down by the Legislature The Governor Governor Governor Gov Gov- has indicated however that the matter may be revived revived revived re re- re- re if a special session is called later this year |