SALT LAKE CITY — With the future of national tax policy at stake in Washington, D.C., local business leaders are appealing to Utah lawmakers to make updating the state’s tax policy a top priority in the upcoming legislative session.
The Salt Lake Chamber Thursday unveiled a new effort calling for the modernization of Utah’s tax code. Leaders of the state’s largest business association said adapting Utah’s tax code to the current business environment is among the most urgent matters the Legislature should address in the next session.
“Now is the time for tax modernization,” said Lane Beattie, president and CEO of the Salt Lake Chamber. “In order to ensure the kind of future Utahns want to see for our children and grandchildren, real investments are required. Investments in education and infrastructure are necessary as our state continues to grow."
He said continuing to rely on the existing tax code 'just won’t cut it.'” Noting that the sales tax base has changed over the years, local tax revenues have been squarely impacted by the digitization of goods, legislative exemptions and changing retail buying patterns, he said.
Speaking during a news conference in downtown Salt Lake City, Beattie said that as one of the fastest-growing states and innovative economies in the country, Utah should devise an upgraded tax code that secures the resources necessary to meet future needs.
"As a leader, we support tax policies in the state that strengthen Utah's economy," Beattie said. "It's important that we have a properly balanced approach, tax simplification and revenue sufficient that is fair for all of the citizens of Utah."
Beattie was joined by chamber executive board members Cindy Crane, Rocky Mountain Power president and CEO, and Vance Checketts, Dell EMC vice president and general manager. They said the campaign is an effort to raise the profile of this critical issue and help the public understand the need to update the state tax code, and encourage the Legislature to take action.
Checketts added that providing adequate education funding is one of the reasons the tax code needs to be modernized. He said that if the state wanted to continue its current economic growth trend, a concerted effort must be made to ensure Utah can supply the educated workforce needed by employers today and in the years to come.
"We are a high-profile, high-growth state, and we have to provide companies like (Dell EMC, Rocky Mountain Power) and thousands of others the workforce that has the skills of our current century," he said. "We have to do this to maintain our competitiveness."
He added that for the next generations of workers to be prepared, the state will have to devise ways to generate tax revenues that will support "the quality workforce of the future."
"Relying on the same old tax code and the fiscal constraints to invest in our future just won't cut it any longer," Checketts said. "For instance, sales tax has eroded significantly in recent decades. Our tax base is shrinking, due in part to changes in the economy and remote sales that have made Utah's tax code a thing of the past."
Since 1980, the state's sales tax base has shrunk relative to the economy by nearly 30 percent, a news release stated.
"Modernizing the tax code is an opportunity to not just catch up to the new economy," he said. "It's a chance to enhance Utah's overall funding for education and to ensure that we're investing in the future to have the talent that companies need to compete."
He added increased tax revenue would also provide for needed infrastructure improvements needed for the state's growing population.
Crane said the state needs to position itself for the future, and upgrading the tax code is a good way to get started, especially as it competes with other states to lure economic development.
"While we have an extremely competitive tax climate in Utah, our state still trails many of our competitors in truly creating the economic environment that's necessary to attract large headquarter businesses and advanced manufacturing businesses," she said. "We need to make sure that as other states are catching up with us that we stay ahead of the curve and keep our competitive position. It's absolutely critical as we move forward."
She said improving the Utah tax code would create a fairer system that evens the playing field and ensures the taxes collected "are spent very wisely."
Additionally, modernization would keep the state's tax climate among the nation's best, she said.
"Keeping up with the changing economy (would) ensure that we could make the strategic investments that we need to keep our economy leading the nation," Crane said.