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Senate advances broad sales‑tax exemption expansion despite missing fiscal note
Summary
The Utah Senate passed a second‑substitute of Senate Bill 33, expanding a manufacturing sales‑tax exemption to additional ‘basic industries’ and phasing the change in over four years; senators advanced the measure under suspension of rules while the fiscal note remained incomplete.
The Utah State Senate on the morning calendar passed the second‑substitute of Senate Bill 33, a measure to expand an existing sales‑tax exemption for manufacturing inputs to additional sectors including mining, software publishing, computer system design, research and development, and life sciences. Senator Stevenson, who moved to uncircle the bill and presented the substitute, said the change was intended to complement the USTAR initiative and be phased in over four years to limit near‑term fiscal impact.
Why it matters: The expansion would remove sales tax on many business inputs used by industries the state considers core to economic development. Sponsors said the phase‑in is intended to reduce the initial fiscal hit and give policymakers time to evaluate effects before later years.
Sponsor remarks and fiscal‑note debate: “The purpose of the substitute is to provide for a phase‑in of the expansion … by phasing it in over 4 years, that gives us the opportunity through that phase‑in process to evaluate,” Senator Stevenson said in floor remarks. Several senators expressed concern that the fiscal analyst’s formal note was not yet available. Senator Stevenson referenced earlier fiscal notes and estimated past notes “about $55,000,000 in 02/2007 and $58,000,000 in 02/2008” and said the current bill would be smaller, but he acknowledged the official fiscal note was not on file.
“It’s important for us to have … those pieces of the puzzle that may or may not become a part of our budget before us,” Senator Maine said during debate, urging caution as lawmakers assemble the budget.
Procedure and final action: Because the Senate lacked a complete fiscal note from the fiscal analyst and tax commission, members debated circling the bill until the note arrived or proceeding under suspension of the rules. The body ultimately moved SB33 to the third‑reading calendar and, after a motion to suspend the rules, passed the second substitute and transmitted it to the House for further action. The vote on the motion to pass the second substitute was recorded in the transcript as 26 yes, 0 nay, with 3 absent.
What’s next: The bill will be considered by the House. Fiscal analysts and the tax commission were reported as still preparing information; sponsors and opponents said the final budget process and discussions with the House will determine whether the measure remains part of a final tax package.
