Fiscal Note - State of Utah - 2011 General Session

HB0282S01 - Sales and Use Tax and Income Tax Amendments

State Government (UCA 36-12-13(2)(b)):
This bill increases General Fund revenue to by $15,631,600 in FY 2012 and $10,491,800 in FY 2013. Due to the 5% nonrefundable Earned Income Tax Credit (EITC), this bill decreases revenue to the Education Fund by $13,500,000 in FY 2012 and $14,269,500 in FY 2013. The bill authorizes a transfer to the Education Fund from the General Fund in an amount equal to the EITC revenue impact.

Local Governments (UCA 36-12-13(2)(c)):
Certain local entities that saw an increase in revenue from the bifurcation of the food/nonfood bases will not see an increase in revenue. Local governments that saw a decrease in revenue from the food/nonfood base bifurcation are expected to see an increase in sales tax revenue of $17.6 million in FY 2012 and $18.8 million in FY 2013.

Direct Expenditures by Utah Residents and Businesses (UCA 36-12-13(2)(d)):
By decreasing the general sales tax rate and increasing the food tax rate, this bill shifts the tax burden from non-food purchases to food purchases. About 180,000 individuals qualifying for the federal EITC will now qualify for a nonrefundable state EITC equal to 5% of the federal EITC, reducing income tax liability by $13,500,000 in FY 2012 and $14,269,500 in FY 2013. Businesses are expected to see a decrease in the cost of complying with the sales tax statute by a minimum of $1,000,000 annually.