Agency: Tax Commission

Function

The primary function of the State Tax Commission is the collection of revenue for state and local governments and administering tax and motor vehicle laws. The Tax Commission handles revenue from about 40 taxes, surcharges, and fees; registers automobiles, regulates the automobile dealer industry, and provides direction and support to the local property tax process. In FY 2012, the Commission had 753 full-time equivalent employees and operated 12 offices across the state.

Mission Statement

The mission of the Tax Commission is to collect revenue for the state and local governments and to equitably administer tax and assigned motor vehicle laws.

Statutory Authority

The Utah Constitution, Article XIII, Section 6, Paragraph 3 details that the State Tax Commission shall administer and supervise the State's tax laws, ensure that properties are assessed and valued equally across county lines, review proposed bond issues, revise local tax levies, and have other powers as provided by statute. Most of the broad authority granted the Tax Commission in the Constitution is detailed in Utah Annotated Code Title 59, Chapters 1 through 27, and Utah Annotated Code Title 41.

Utah Annotated Code Title 59-1-210 lists the general powers and duties of the State Tax Commission. All of Title 59 is the State's Revenue and Taxation section of statute. The Title includes:

• Property Tax (59-2)
• Severance Taxes (59-5)
• Mineral Production Tax (59-6)
• Corporate Income Tax (59-11)
• Gross Receipts Tax (59-8)
• Insurance Premium Tax (59-9)
• Income Tax (59-10)
• Inheritance Tax (59-11)
• Sales Tax (59-12)
• Motor and Special Fuel Taxes (59-13)
• Cigarette and Tobacco Taxes (59-14)
• Beer, Wine, and Liquor Taxes (59-15)
• Mineral Lease (59-21)
• Brine Shrimp Tax (59-23)
• Radioactive Waste and Hazardous Waste Tax (59-24 and 59-25)
• Multi-Channel Video and Audio Services Tax (59-26)
• Sexually Explicit Business and Escort Service Tax (59-27)

Special Funds

The Tax Commission draws funding from four restricted accounts, which are:

• Tax Commission Administrative Charge Account. Consists of a percentage of revenues collected by the commission from each qualifying tax, fee, or charge. The total percentage remitted to the account is the lesser of either 1.5% of these administrative charges, or a percentage sufficient to cover the costs of administering the qualifying taxes, fees, or charges. Please refer to UAC 59-1-306.
• Uninsured Motorist Identification Account. Consists of a $1 uninsured motorist identification charge included in each motor vehicle registration fee collected by the commission; when an application has been submitted for such, a $100 registration reinstatement fee for each vehicle with a previously revoked registration; appropriations made by the Legislature; and interest earned on account funds. For further detail, please refer to UAC 41-12a-806.
• Tobacco Settlement Restricted Account. Consists of a statutory appropriation of $18,500 for ongoing enforcement of business compliance with the Tobacco Tax Settlement Agreement. For further detail, please refer to UAC 51-9-201.
• Electronic Payment Fee Account. Consists of fees collected on the purchases or renewals of various licenses, registrations, permits, license plates, etc. For further detail about specific licenses, registrations, permits, etc. that the commission is statutorily allowed to charge an electronic payment fee for, please refer to UAC 41-1a-121

Funding Detail

Major sources of finance for the Tax Commission are the General Fund and Education Fund. The Commission also draws funding from Dedicated Credits, Restricted Revenues, and the Transportation Fund.

In FY 2012 the General and Education Funds made up 55 percent of the department's total operating funding. Proceeds from dedicated credits and restricted revenue also represent large financing sources, accounting for approximately 34 percent of the commission's total operating funding in FY 2012. The Tax Commission is authorized funding from the Education Fund due to its role in collecting income and corporate taxes. The commission is also authorized funding from the Transportation Fund due to its function in collecting taxes for motor fuel, special fuel, motor vehicle registration fees, and other revenue sources that transmit to the fund.

Agency expenditures are largely comprised of personnel costs at 58 percent of the total budget. Current expenses are 20 percent, and data processing expenses are 11 percent.

The largest categories of current expenses are costs paid to vendors for credit card transaction fees and electronic transaction fees, postage and mailing costs related to sending returns, renewal forms, delinquency and correction notices and payment reminders, and contractual services (mostly with the 22 counties that perform motor vehicle registration functions).

The largest expenses for data processing costs include programmers who work on agency systems, computer desktop support and internet connection fees, and software maintenance fees paid to vendors.

Table 1: Operating and Capital Budget Including Expendable Funds and Accounts