Revenue Committee shelves changes to sales tax exemptions

Revenue Committee shelves changes to sales tax exemptions

It seems we have an answer to my previous question about sales tax exemptions and their part (if any) in the Revenue Committee’s 2020 legislative property tax proposal. So far, it looks like the committee won’t be including a proposal to remove sales tax exemptions right off the bat, instead relying on currently projected increases in state receipts.

Besides good timing, political realities about gaining 33 votes or avoiding a showdown with the governor are factors in that decision without a doubt.

But I wouldn’t say we’ve heard the last of sales tax reform, and I’m not just speaking for myself!

While the Unicameral will only be in session to debate this point through April, the property tax issue will stay with us regardless of the action taken by senators. We’ll learn in July whether a property tax voter initiative qualifies for the ballot and then we may see a campaign into November.

Whether the Legislature plans to fund a larger reduction in property taxes down the line, or if voters force a more fundamental change, senators won’t be able to count on significant increases in state receipts for reducing our property taxes forever.

If voters approve the property tax ballot initiative, it would be hard to imagine a scenario that didn’t include senators eliminating sales tax exemptions, given the need to come up with over $1 billion of room in their budget.

The more ambitious and immediate a reduction in property taxes, the more senators will have to consider major reforms to the tax structure and government spending.

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