Utah House passes bill to remove sales tax on most food; debate centers on $166 million fiscal hit and local offsets

The Utah House of Representatives on Jan. 25 voted to pass House Bill 109, a proposal to remove the state sales tax on most food and food ingredients while slightly increasing municipal and county local sales tax rates to offset local losses. Representative Newbold, sponsor of HB109, said the state’s strong revenues — which he described as "$1,000,000,000 in new revenue" — made the change possible and argued the measure would return money to taxpayers.

"It is now time to remove the sales tax on food," Representative Newbold said in opening remarks, laying out three principal changes: add "food and food ingredients" to the list of sales tax exemptions, raise municipal rates by 0.1 percentage point, and raise county rates (the sponsor said county rates would go from 0.25 to 0.28) to hold cities and counties harmless under a base-year distribution formula. He cited a fiscal note estimating about a $166.7 million…