2020 Bills

SB 41: Exempting Business Inputs from Sales Tax for Oil & Gas Industries

This bill never received a vote.

Libertas Institute supports this bill

Staff review of this legislation finds that it is aligned with our principles and merits support.

Utah likes to claim that it tries to avoid taxing business inputs that lead to double taxation and tax pyramiding. Unfortunately, the reality is Utah still has a long way to go until it truly eliminates taxation on business inputs, especially when it comes to sales taxes. Utah needs to continue that process until eventually it would be fiscally and politically possible for the legislature to extend sales tax exemptions for virtually all business inputs.

Oil/gas exploration and production is a vital industry to the economy of the Uintah Basin and should be added to the list of exemptions. Senate Bill 41 by Senator Ronald Winterton would accomplish this task.

It is important to remember that the vast majority of business inputs are already taxed each year through tangible personal property taxes. Tacking on a sales tax amounts to double taxation. Sales taxes should be reserved for final consumption and not levied on the intermediary phases of production.