Tuesday’s report urges lawmakers to “right-size” the base by taxing personal services, such as dry cleaning, haircuts, lawn care and construction. Business-to-business services should be exempted, according to the report, to ensure only final products are taxed and avoid double taxation.
The report largely aligns with one completed last year by the Utah Foundation. The foundation pointed out that during the past 45 years, Utah has seen the nation’s second-biggest decline in taxable sales as a proportion of consumer services. That’s been happening as society has shifted from a goods-based economy to one emphasizing the purchases of services, which are largely exempt from sales tax, the Utah Foundation said.
Utah Gov. Gary Herbert has also repeatedly stressed the need for the state to broaden its tax base and at the same time lower its tax rate.
