Senate directs Tax Review Commission to study tax exemptions, adds state enterprises to scope

The Utah Senate on Jan. 29 adopted a second substitute to Senate Joint Resolution 6 that directs the Tax Review Commission to study certain tax exemptions and report back to lawmakers. Senator Stevenson moved the second substitute and secured an amendment to explicitly include state-operated enterprises in the Commission’s review.

Senator Stevenson said the substitute turns the previous proposal for a constitutional amendment into a directive: "the substitute…is to send this to the tax review commission for their complete study" and the amendment would ensure the commission ‘‘include any state operated enterprises that act like businesses and don't pay taxes.’’ Senator Wadipes supported the amendment, noting it was raised during committee and interim work.

Senator Wadipes had earlier proposed SJR 6 to allow the Legislature to consider taxing local governmental agencies that compete with private enterprise, but acknowledged there were not enough votes to place a constitutional amendment on the ballot. The adopted second substitute instead asks the Tax Review Commission to study the issue over a two-year period and make recommendations to the Legislature.

The amendment (the “Buff Amendment”) was adopted after floor discussion. A roll call recorded the second substitute SJR 6 as passed; the clerk announced that the measure had received 22 aye votes with seven senators absent and that it would be referred to the House for further consideration.

The immediate effect is referral for study rather than an immediate constitutional change; the Tax Review Commission will examine enterprises operated by cities, counties and the state that may compete with private businesses and evaluate whether changes, including legislative or constitutional action, are needed.