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Urgent: We Need Your Help With HB441

Saturday, March 2, 2019   (0 Comments)
Posted by: Amy Spencer
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We need your help!

Yesterday, the tax on services bill (HB 441) cleared its first procedural hurdle and is now on the fast track to ultimate passage. The bill may be found here

We appreciate the efforts by our legislators to undertake the task of tax reform; however, many critical questions remain unanswered and we disagree that a bill of this magnitude can be vetted in such a short period of time.  As CPAs, our strengths lie in growing businesses, applying rules and regulations, and strategizing with our clients.  This is a robust matter of public policy that will affect every citizen and every entity in the state and our legislature needs to hear our expertise.  We believe that input from CPAs is vital to ensure the legislation makes sense and is viable.  We urge you to contact your legislator and voice your concerns. Find your legislator.

Some points you may wish to consider:

  • If Utah passed such legislation, it would be the only state in our region (Idaho, Arizona, Colorado, Nevada and Wyoming) to tax services.  In fact, states in our region are rejecting the idea of a state tax on services.  For example, Arizona passed a ballot measure that struck down any taxes on services. Numerous states, besides Utah, previously attempted to broaden the tax base by taxing services and failed. States including Minnesota, Michigan, Florida, and Massachusetts passed service taxes, and all were quickly repealed by the legislature, oftentimes before enactment. Should this bill pass, Utah would be the only state, relative in population size, to tax professional services.

  •  House Bill 441 would put Utah at a competitive disadvantage with our neighbors for new business and new industry. This legislation discourages expansion and relocation of business, new construction, real estate growth and opportunities, which greatly affect the Utah economy.  With a tax on professional services we could potentially invite an out-migration of business and uninvite businesses that are currently looking to relocate to Utah.

  • This bill would also tax accounting services. Everyone that uses a CPA for audits, reviews, tax services and more would see their bills increase. HB441 affects everyone from individual tax payers to small businesses. Taxing tax preparation services, essentially means people would be taxed for paying their taxes.

  • There are many more questions than there are answers under this bill.  Although tax rates are being lowered, the burden to calculate taxes are increased substantially as additional overhead will be needed to track 300 jurisdictions and 19 different tax rates.
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Thank you for taking the time to help us out – many of you are hard at work pounding out tax returns, issuing audits and wrapping up year-end issues along with keeping up with your daily duties as CFOs and controllers. I was able to express concerns regarding the bill as it affects 60+ code sections, enacts 10+ code sections and repeals 1 code section, but your legislators need to hear from you!

 


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