House passes substitute to remove sales-tax exemptions and add tax on cable/satellite services, 39–32

The Utah House on March 4 passed the third substitute (as amended) to Senate Bill 213, a broad sales-and-use tax measure that removes or reduces a set of existing exemptions and adds a new tax category for multichannel cable and satellite services. The House adopted an amendment that expands the bill’s definition to cover "multichannel video or audio service" providers and related technologies, then approved the substitute as amended on a 39–32 roll call.

Sponsor Representative Becker described the package as a belated effort to address a long list of exemptions that the Tax Review Commission had recommended for repeal. He told colleagues many of the exemptions are "anachronisms" that no longer serve their original purpose and that the state has "been imposing tremendous cuts" in recent budget cycles. Becker argued the proposal shares budgetary pain more broadly: "Let's not just put the burden on the poor. Let's not just put the burden on the middle class that pays most of the taxes. Let's treat everyone fairly."

Members probed fiscal estimates repeatedly on the floor. Becker said the fiscal analyst's office estimated that removing the listed exemptions would raise $19,958,500 for fiscal 2004–2005 (ongoing). Other members cited alternative figures: one member read a fiscal-note figure of $14,000,000; representatives also said preliminary or commission figures had ranged up to about $20,000,000. The House record shows members repeatedly cautioned that these numbers were preliminary and derived from different sources.

The bill’s scope includes: vending machines for food and beverage, airline food, certain motion-picture/film and broadcast equipment, a temporary 50% reduction in the manufacturing exemption for two years, steel-mill equipment provisions, ski-resort electricity and equipment exemptions, and coin-operated amusement devices. Representative Steiler had offered a narrower third substitute limited to removing cable and satellite exemptions; Representative Becker and other supporters explained the adopted substitute allows members later to pull individual items from the list if they wish.

Representative Curtis offered Amendment No. 1 to replace the bill’s definition of "cable services" with a broader statutory phrase—"multichannel video or audio service"—and to enumerate technologies and providers (MMDS, SMATV, direct-to-home satellite, etc.). Curtis said the change was intended to capture comparable providers and avoid loopholes. On the floor members debated whether the expanded definition could sweep in Internet or streaming services; Curtis said he could not be sure about streaming in every technical configuration and that the amendment was meant to reflect what is commonly billed as a monthly cable/satellite service.

Opponents warned the measure would create a new tax affecting hundreds of thousands of households and argued the changes lacked ordinary committee vetting at session’s end. Supporters said many exemptions had been on the books for decades and that the state needed additional revenue amid deep budget cuts.

The House adopted the Curtis amendment and then passed the third substitute, as amended, on a recorded vote of 39 yes and 32 no. The bill will be sent back to the Senate for further consideration. The House adjourned and planned to reconvene the following morning.