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Senate approves the repeal of state sales tax on food

A bill repealing the state sales tax on food over a three-year period has passed the Senate and is on its way to the House.

SB31, sponsored by Senate Minority Leader Scott Howell, was approved on a 15-12 vote Friday.A similar bill was introduced two years ago but failed to make it out of the Senate.

"We've made a lot of progress," Howell, D-Granite, said of the effort to make Utah the 32nd state without a sales tax on food.

Some senators worry about the bill's impact on the state's general fund. In the first year of the three-year phaseout, the state would lose $35 million in revenue. It would lose more in subsequent years.

The bill would have no impact on fiscal year 1999, which begins this July. But in 2000, it would compensate for sales tax paid on food purchases by giving every Utahn and dependent filing a state tax return a $40 credit.

The credit would increase to $80 the next year, then in the third year sales tax on food would be removed at cash registers statewide.