Do Utah’s real estate professionals really support food, gasoline and property tax increases? Why don’t you ask them?
Ronald Mortensen, Ph.D.
The Utah Association of Realtors (Realtors) provided key
support for Utah’s so-called tax reform legislation that was passed during a
special session of the legislature just days before Christmas. This column provides
background on Realtor activities and concludes with a series of questions for
real estate professionals.
The Realtors have been heavily involved in the efforts to
reform Utah’s tax system. Unfortunately, many of the so-called reforms that
they support negatively impact the vast majority of Utahns. They support the state
sales tax on food, the state sales tax on gasoline and the taxation of additional
In addition, Realtors expressed support for new and much higher
property taxes even though this would severely impact current homeowners and further
increase the price of housing.
For example, in March, 2019, a lobbyist for the Utah
Association of Realtors told listeners of Utah’s Red
Meat Radio that an entirely new state property tax was the solution to
Utah’s tax modernization efforts (March 11, 2019 podcast at 15:30 in the
discussion). According to the Realtor’s lobbyist, a new state property tax that
automatically brings in more revenue as home values increase would raise
between $300 million and $700 million in new, stable, broad-based,
discretionary revenue (that’s right, “discretionary” revenue) for the state.
As tax reform efforts progressed, the property tax discussion
was deferred to the 2020 general session of the legislature. By that time Republican
state Senator Ann Millner is expected to have a bill ready that would automatically
increase school district property taxes by the rate of inflation every year
without a truth-in-taxation hearing.
It’s important to recognize that either a new state property
tax or automatic school district property tax increases would quickly wipe out
any tax savings Utahns may have realized in the past as property taxes shoot up.
Will the Realtors support this property tax change? If so, can anyone say Proposition
13 and Homie?
In any case, as the tax reform discussions wrapped up, the
Realtors threw their full support behind the bill that was eventually
passed during the special session of the legislature on
December 12, 2019.
The Realtors reportedly spent over $100,000
to develop a website titled Support
Utah Tax Reform and on a mailer sent out to 90,000 voters across the state.
The website and mailer supported re-instating
the state sales tax on food, imposing a new state sales tax on gasoline
(roughly 10 cents a gallon to begin with) and imposing sales taxes on a wide
range of services such as pet boarding, ride sharing services, shipping and
handling charges, dating services, identity theft protection, parking lots, the
installation of tangible personal property when part of a taxable sale, etc.,
According to the draft minutes of the
December 9 meeting of the Tax Restructuring and Equalization Task Force, “Christy Vail, Utah Association of Realtors, expressed gratitude
and spoke in favor of the draft legislation” that taxed food, gasoline and additional
services. That draft legislation was basically what was passed by the
legislature during the special session and signed by the Governor.
Questions for Real Estate Agents
This raises the question of where individual real estate agents
stand on tax reform. So, it wouldn’t hurt to ask your friends in the real
estate business if they agree with their
Associations’ actions. Also, ask them if they will support the citizens’
referendum to give voters the opportunity to vote for or against the tax reform
bill that was passed during the special session.
Here are some questions you may wish to ask:
1. Did you know that the
Utah Association of Realtors reportedly spent over $100,000 to mail out 90,000 postcards and to create a website in order to generate
support for the sales tax on
food, the sales tax on gasoline and the sales tax on additional services such
as pet boarding, Uber/Lyft, shipping and handling charges, dating services,
identity theft protection, parking lots, the installation of tangible personal
property when part of a taxable sale, etc.?
2. Are you aware that legislative
leadership and the governor are considering imposing sales taxes on still more services?
Do you support imposing sales taxes on realtor services?
3. Do you support a new state property
tax as proposed by the Realtors’ lobbyist and do you support automatically
increasing school district property taxes each year by the rate of inflation
without a truth-in-taxation hearing?
4. Do you support putting
the implementation of the new sales taxes and the reduction of the state income
tax rate on hold until the citizens can vote on these changes in November,
2020? If yes, will you join those supporting the referendum and help collect
signatures by going to this Facebook page and signing up: Utah 2019 Tax
5. Will you call the Board members of the Utah Association of
Realtors and the board members of your local association to express any
concerns you have with the positions they have taken on tax reform?