| Members Present: Sen. Howard A. Stephenson, Chair Rep. Steve Eliason, Chair Sen. Lincoln Fillmore Sen. Deidre M. Henderson Rep. Joel K. Briscoe Rep. Gage Froerer Rep. Ken Ivory Rep. Karianne Lisonbee Rep. Daniel McCay Rep. Jefferson Moss Rep. Marie H. Poulson Rep. Travis M. Seegmiller | Members Absent: Sen. Curtis S. Bramble Sen. Jim Dabakis Rep. Tim Quinn Rep. Douglas V. Sagers Rep. Brad R. Wilson Staff Present: Mr. Ryan M. Hunter, Policy Analyst Mr. Alex R. Janak, Policy Analyst Ms. Andrea Valenti Arthur, Associate General Counsel Ms. Shannon C. Halverson, Associate General Counsel Ms. Tracy J. Nuttall, Associate General Counsel Mr. Brent M. Gage, Administrative Assistant |
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Note: A copy of related materials and an audio recording of the
meeting can be found at www.le.utah.gov.
|
| 1. Committee Business |
| Chair Eliason called the meeting to order. |
| 2. Sales Tax Collection on Remote Sales |
| Chair Eliason gave an overview of the topics to be discussed during the meeting. |
| Ms. Arthur presented a brief overview of a recent Supreme Court case regarding online sales tax. |
| John L. Valentine, Chair, Utah State Tax Commission, and Rebecca Rockwell, Commissioner, Utah State Tax Commission, presented on the effects of a recent Supreme Court case regarding online sales tax. |
| Wayfair and Corp Fed Tax Rev Estimates |
| Ms. Halverson presented "Online Sales Tax Amendments" (2019FL0489). |
| 2a - 2019 General Session draft legislation "Online Sales Tax Amendments" (2019FL0489) |
| John L. Valentine, Chair, Utah State Tax Commission, and Rebecca Rockwell, Commissioner, Utah State Tax Commission, suggested the previous draft needed certain technical changes, but they need more time to review the current version. |
| Jonathan Ball, Director, Office of the Legislative Fiscal Analyst, spoke about the fiscal estimates resulting from the changes to the online sales tax laws. |
| Wayfair and Corp Fed Tax Rev Estimates |
| John L. Valentine, Chair, Utah State Tax Commission, clarified the usage of funds in the Remote Sales Restricted Account. |
| Ms. Arthur presented "Sales and Use Tax Amendments" (2019FL0329) |
| 2b - 2019 General Session draft legislation "Sales and Use Tax Amendments" (2019FL0329) |
| Rebecca Rockwell, Commissioner, Utah State Tax Commission, suggested a change for the bill. |
| 3. Potential Changes to Utah Income Tax Code in Response to Federal Tax Reform |
| Wayfair and Corp Fed Tax Rev Estimates |
| Mr. Janak presented "Income Tax Code Amendments" (2019Fl0328) |
| 3a - 2019 General Session draft legislation "Income Tax Code Amendments" (2019FL0328) |
| John L. Valentine, Chair, Utah State Tax Commission, and Rebecca Rockwell, Commissioner, Utah State Tax Commission, raised a few issues in the current version of the bill. |
| Matthew Weinstein, State Priorities Partnership Director, Voices for Utah Children, spoke to the bill and its effect on Utah children. |
| Phil Dean, State Budget Director and Chief Economist, Governor's Office of Management and Budget, spoke about maximum amounts for the federal tax credits. |
| Ms. Arthur presented an overview of the repatriation transition tax and the three bill options (2019FL0330, 2019FL0435, and 2019FL0498) before the committee. |
| 3b - Repatriation Transition Tax Legislative Options Table |
| 3b - 2019 General Session draft legislation "Repatriation Tax Amendments" (2019FL0330) |
| 3b - 2019 General Session draft legislation "Repatriation Tax Modifications" (2019FL0498) |
| 3b - 2019 General Session draft legislation "Foreign Income Amendments" (2019FL0435) |
| The committee took a short break. |
| Rebecca Rockwell, Commissioner, Utah State Tax Commission, and John L. Valentine, Chair, Utah State Tax Commission, expressed some concerns the Tax Commission has with the current versions. |
| Thomas Young, Senior Economist, Office of the Legislative Fiscal Analyst spoke about the revenue forecast. |
| Nikki E. Dobay, Senior Tax Council, Council on State Taxation, gave COST's recommendations for the bills. |
| Steve Young, Partner, Holland & Hart responded to questions from the committee. |
| Jay Blain, Director of Policy and Research/UniServ Coordinator, Utah Education Association, spoke about the need to balance tax rates and education. |
| Sen. Stephenson moved to recommend file 2019FL0435 version 5 and to prepare the necessary amendments. |
| John L. Valentine, Chair, Utah State Tax Commission, spoke about the differences between the three bills under consideration. |
| Sen. Stephenson amended his motion to recommend file 2019FL0498 version 4 with any technical corrections that must be made. |
| Rep. Seegmiller moved to recommend file 2019FL0435 version 5 with clarifying technical amendments. |
| Rep. Seegmiller withdrew the substitute motion. |
| Sen. Stephenson withdrew the motion. |
| MOTION: Chair Eliason moved to direct staff to make any needed technical corrections to FL0330 for consideration at the next meeting. The motion failed with a vote of 3-9-5. | |||
| Yeas - 3 | Nays-9 | Abs-5 | |
| Rep. J. Briscoe Rep. S. Eliason Rep. M. Poulson | Sen. L. Fillmore Rep. G. Froerer Sen. D. Henderson Rep. K. Ivory Rep. K. Lisonbee Rep. D. McCay Rep. J. Moss Rep. T. Seegmiller Sen. H. Stephenson | Sen. C. Bramble Sen. J. Dabakis Rep. T. Quinn Rep. D. Sagers Rep. B. Wilson |
| MOTION: Chair Eliason moved to direct staff to make any needed technical corrections to FL0498 for consideration at the next meeting. The motion failed with a vote of 6-6-5. | |||
| Yeas - 6 | Nays-6 | Abs-5 | |
| Rep. J. Briscoe Rep. S. Eliason Sen. L. Fillmore Rep. K. Ivory Rep. J. Moss Rep. M. Poulson | Rep. G. Froerer Sen. D. Henderson Rep. K. Lisonbee Rep. D. McCay Rep. T. Seegmiller Sen. H. Stephenson | Sen. C. Bramble Sen. J. Dabakis Rep. T. Quinn Rep. D. Sagers Rep. B. Wilson |
| MOTION: Chair Eliason moved to direct staff to make any needed technical corrections to FL0435 for consideration at the next meeting. The motion passed with a vote of 10-2-5. | |||
| Yeas - 10 | Nays-2 | Abs-5 | |
| Rep. S. Eliason Sen. L. Fillmore Rep. G. Froerer Sen. D. Henderson Rep. K. Ivory Rep. K. Lisonbee Rep. D. McCay Rep. J. Moss Rep. T. Seegmiller Sen. H. Stephenson | Rep. J. Briscoe Rep. M. Poulson | Sen. C. Bramble Sen. J. Dabakis Rep. T. Quinn Rep. D. Sagers Rep. B. Wilson |
| MOTION: Chair Eliason moved to direct staff to make the changes recommended by the tax commission to FL0435. The motion passed with a vote of 12-0-5. | |||
| Yeas - 12 | Nays-0 | Abs-5 | |
| Rep. J. Briscoe Rep. S. Eliason Sen. L. Fillmore Rep. G. Froerer Sen. D. Henderson Rep. K. Ivory Rep. K. Lisonbee Rep. D. McCay Rep. J. Moss Rep. M. Poulson Rep. T. Seegmiller Sen. H. Stephenson | Sen. C. Bramble Sen. J. Dabakis Rep. T. Quinn Rep. D. Sagers Rep. B. Wilson |
| Ms. Arthur presented on global intangible low-taxed income and the two bills before the committee (2019FL0332 and 2019FL0443). |
| 3c - 2019 General Session draft legislation "Intangible Income Modifications" (2019FL0332) |
| 3c - 2019 General Session draft legislation "Intangible Income Amendments" (2019FL0434) |
| John L. Valentine, Chair, Utah State Tax Commission, gave the commission's recommendations for the bills on global intangible low-taxed income. |
| Nikki E. Dobay, Senior Tax Council, Council on State Taxation, Gave COST's recommendations for the bills. |
| Steve Young, Partner, Holland & Hart, spoke to the issue. |
| OFII letter to Revenue Taxation Interim Committee on 163(j) Decoupling.pdf |
| Phil Dean, State Budget Director and Chief Economist, Governor's Office of Management and Budget, expressed concern about base budget revenues. |
| Chair Eliason moved to recommend file 2019FL0332 version 5. |
| SUBSTITUTE MOTION: Rep. Lisonbee moved to recommend file 2019FL0434 version 3. The Substitute motion passed with a vote of 9-3-5. | |||
| Yeas - 9 | Nays-3 | Abs-5 | |
| Sen. L. Fillmore Rep. G. Froerer Sen. D. Henderson Rep. K. Ivory Rep. K. Lisonbee Rep. D. McCay Rep. J. Moss Rep. T. Seegmiller Sen. H. Stephenson | Rep. J. Briscoe Rep. S. Eliason Rep. M. Poulson | Sen. C. Bramble Sen. J. Dabakis Rep. T. Quinn Rep. D. Sagers Rep. B. Wilson |
| Ms. Arthur presented an overview of foreign derived intangible income and the bill before the committee (2019FL0440). |
| 3d - 2019 General Session draft legislation "Foreign Derived Intangible Income Amendments" (2019FL0440) |
| John L. Valentine, Chair, Utah State Tax Commission, and Rebecca Rockwell, Commissioner, Utah State Tax Commission, spoke about foreign derived intangible income. |
| Nikki E. Dobay, Senior Tax Council, Council on State Taxation, gave COST's recommendations for the bill. |
| Steve Young, Partner, Holland & Hart, gave his recommendations for foreign derived intangible income. |
| John L. Valentine, Chair, Utah State Tax Commission, gave the commission's recommendation. |
| MOTION: Sen. Stephenson moved to continue to the next item on the agenda. The motion passed with a vote of 12-0-5. | |||
| Yeas - 12 | Nays-0 | Abs-5 | |
| Rep. J. Briscoe Rep. S. Eliason Sen. L. Fillmore Rep. G. Froerer Sen. D. Henderson Rep. K. Ivory Rep. K. Lisonbee Rep. D. McCay Rep. J. Moss Rep. M. Poulson Rep. T. Seegmiller Sen. H. Stephenson | Sen. C. Bramble Sen. J. Dabakis Rep. T. Quinn Rep. D. Sagers Rep. B. Wilson |
| Ms. Halverson presented an overview of FDIC Premium Deduction Amendments (2019FL0337). |
| 3e - 2019 General Session draft legislation "FDIC Premium Deduction Amendments" (2019FL0337) |
| Howard M. Headlee, President, Utah Bankers Association, and Frank Pignanelli, Executive Director, National Association of Industrial Bankers, spoke about the banking industry in Utah. |
| MOTION: Sen. Stephenson moved to recommend file 2019FL0337 version 6. The motion passed with a vote of 12-0-5. | |||
| Yeas - 12 | Nays-0 | Abs-5 | |
| Rep. J. Briscoe Rep. S. Eliason Sen. L. Fillmore Rep. G. Froerer Sen. D. Henderson Rep. K. Ivory Rep. K. Lisonbee Rep. D. McCay Rep. J. Moss Rep. M. Poulson Rep. T. Seegmiller Sen. H. Stephenson | Sen. C. Bramble Sen. J. Dabakis Rep. T. Quinn Rep. D. Sagers Rep. B. Wilson |
| John L. Valentine, Chair, Utah State Tax Commission, and Rebecca Rockwell, Commissioner, Utah State Tax Commission, gave the commission's recommendations for interest deduction and contributions to capital. |
| Ms. Halverson presented Interest Deduction Amendments (2019FL0335). |
| 3f - 2019 General Session draft legislation "Interest Deduction Amendments" (2019FL0335) |
| Nikki E. Dobay, Senior Tax Council, Council on State Taxation, spoke in favor of the bill. |
| MOTION: Sen. Stephenson moved to recommend file 2019FL0335 version 6. The motion passed with a vote of 12-0-5. | |||
| Yeas - 12 | Nays-0 | Abs-5 | |
| Rep. J. Briscoe Rep. S. Eliason Sen. L. Fillmore Rep. G. Froerer Sen. D. Henderson Rep. K. Ivory Rep. K. Lisonbee Rep. D. McCay Rep. J. Moss Rep. M. Poulson Rep. T. Seegmiller Sen. H. Stephenson | Sen. C. Bramble Sen. J. Dabakis Rep. T. Quinn Rep. D. Sagers Rep. B. Wilson |
| MOTION: Rep. Froerer moved to approve the minutes of the June 20, 2018, meeting. The motion passed with a vote of 12-0-5. | |||
| Yeas - 12 | Nays-0 | Abs-5 | |
| Rep. J. Briscoe Rep. S. Eliason Sen. L. Fillmore Rep. G. Froerer Sen. D. Henderson Rep. K. Ivory Rep. K. Lisonbee Rep. D. McCay Rep. J. Moss Rep. M. Poulson Rep. T. Seegmiller Sen. H. Stephenson | Sen. C. Bramble Sen. J. Dabakis Rep. T. Quinn Rep. D. Sagers Rep. B. Wilson |
| Sen. Stephenson discussed the Utah State Tax Commission's recommendations for the nexus standard for collecting Utah sales tax on online transactions. |
| MOTION: Sen. Stephenson moved to have staff modify 2019FL0489 so that, going forward, all the online sales tax collected from sellers licensed after the Supreme Court decision in the South Dakota v. Wayfair case will go into the Remote Sales Restricted Account. The motion passed with a vote of 12-0-5. | |||
| Yeas - 12 | Nays-0 | Abs-5 | |
| Rep. J. Briscoe Rep. S. Eliason Sen. L. Fillmore Rep. G. Froerer Sen. D. Henderson Rep. K. Ivory Rep. K. Lisonbee Rep. D. McCay Rep. J. Moss Rep. M. Poulson Rep. T. Seegmiller Sen. H. Stephenson | Sen. C. Bramble Sen. J. Dabakis Rep. T. Quinn Rep. D. Sagers Rep. B. Wilson |
| Sen. Stephenson spoke about implementation requirements for expansion of manufacturing sales and use tax exemption. |
| MOTION: Sen. Stephenson moved to recommend file 2019FL0328 version 6. The motion passed with a vote of 8-4-5. | |||
| Yeas - 8 | Nays-4 | Abs-5 | |
| Rep. J. Briscoe Rep. S. Eliason Sen. L. Fillmore Rep. G. Froerer Rep. K. Ivory Rep. J. Moss Rep. M. Poulson Sen. H. Stephenson | Sen. D. Henderson Rep. K. Lisonbee Rep. D. McCay Rep. T. Seegmiller | Sen. C. Bramble Sen. J. Dabakis Rep. T. Quinn Rep. D. Sagers Rep. B. Wilson |
| The committee discussed the effect of tax cuts and policy on Utah families. |
| MOTION: Rep. McCay moved to open a committee bill file to address the child tax credit. The motion passed with a vote of 12-0-5. | |||
| Yeas - 12 | Nays-0 | Abs-5 | |
| Rep. J. Briscoe Rep. S. Eliason Sen. L. Fillmore Rep. G. Froerer Sen. D. Henderson Rep. K. Ivory Rep. K. Lisonbee Rep. D. McCay Rep. J. Moss Rep. M. Poulson Rep. T. Seegmiller Sen. H. Stephenson | Sen. C. Bramble Sen. J. Dabakis Rep. T. Quinn Rep. D. Sagers Rep. B. Wilson |
| 4. Other Items/Adjourn |
| MOTION: Rep. McCay moved to adjourn. The motion passed with a vote of 12-0-5. | |||
| Yeas - 12 | Nays-0 | Abs-5 | |
| Rep. J. Briscoe Rep. S. Eliason Sen. L. Fillmore Rep. G. Froerer Sen. D. Henderson Rep. K. Ivory Rep. K. Lisonbee Rep. D. McCay Rep. J. Moss Rep. M. Poulson Rep. T. Seegmiller Sen. H. Stephenson | Sen. C. Bramble Sen. J. Dabakis Rep. T. Quinn Rep. D. Sagers Rep. B. Wilson |
| Chair Eliason adjourned the meeting. |