2022 Bills

HB 125: Making Permanent a Temporary Tax Increase

This bill passed the House 67-2 and passed the Senate 25-0.

Libertas Institute opposes this bill

Staff review of the legislation finds that it violates our principles and must therefore be opposed.

Five years ago, the Utah Legislature created the Outdoor Recreation Grant Program, which imposed a new, additional 0.3% tax on those staying in hotels or short-term rentals in Utah to fund grants for outdoor recreation that build recreational infrastructure, “promote outdoor exercise,” and advertise “the beauty of Utah’s outdoors.”

We opposed the bill, which ultimately passed despite a split vote, in light of many recent tax increases that had already been happening. However, the bill had a five-year sunset, which expires this year.

Representative Carl Albrecht is sponsoring House Bill 125 to remove the sunset, thereby making the tax permanent. Effectively, this is a new tax increase, since the one created five years ago was going to expire this year. And the fiscal note is a bit deceptive, showing no new revenue for the government, which is simply not true. The bill that passed five years ago predicted generating nearly $5 million annually in new tax revenue. And the latest annual report shows numbers in excess of that prediction; in 2021, $7.5 million was taken from taxpayers to fund a variety of projects.

In addition to past tax increases, Utahns are dealing with additional financial challenges through an “inflation tax” that is heavily eroding the purchasing power of their dollars. Perpetuating this tax on a permanent basis adds further financial constraints on individuals unnecessarily; the tax should be sunsetted as was planned five years ago.