The Utah State Legislature abandoned a proposal that would have expand the state’s Sales and Use Tax to services, including those provided by travel advisors.
Lawmakers initially proposed a reduction in the state’s Sale and Use Tax from 4.7% to 3.1%, along with an expansion of the tax on food, gas and some services.
According to ASTA, the legislation would have impacted 152 travel agency retail locations in Utah that contribute 1,695 full-time jobs in the state, imposing a “triple taxation” on those businesses when added with state and federal income taxes.
After pushback from ASTA and its members, the state legislature sent the bill to a task for review. The new bill, which passed last night, includes services such as pet boarding, towing, parking lots, Uber and other ride-hailing apps, and dating referrals, but does not include travel advisors.
“This is great news and – at least for the time being – brings to an end a long debate about taxing services in the state of Utah. We appreciate every Utahn who participated in our grassroots campaign this spring – 193 people sending close to 600 messages to legislators – and preventing this new tax on our industry,” ASTA said in a statement.
ASTA thanked one member in particular, Brian Hollien of Morris Murdock in Salt Lake City, who represented the advisor community at the state legislature including at tax reform task force meetings.
“Without his efforts, our chances of avoiding a tax increase would have been much reduced,” ASTA said.
The effort is another major victory for ASTA and advisors—in 2019, the community was able to secure in California’s Assembly Bill 5 (AB5) that allowed the state’s advisors working independent contractors (ICs) to continue to do so, and scored other big legislative wins including Texas Hotel Tax, Connecticut Sales Tax, Nebraska Sales Tax, and Washington B&O Tax, and more.
Currently, ASTA is engaged in two ongoing battles in New York and New Jersey that would produce a result similar to what ASTA was able to avoid in California.