Constitutional amendment on November ballot could lead to removal of Utah food sales tax

SALT LAKE CITY — After years of pressure to remove the food sales tax in Utah, it could happen soon – if voters give the green light to change how the state can budget its money.

While the November election is still a few months away, the Kem C. Gardner Policy Institute is out with new information about the ballot question that will decide how income tax revenue is allocated and whether the food tax goes away.

Decoding the Income Tax Earmark: Proposed Changes to Utah’s Constitution by cprice on Scribd

“We don’t have a position one way or another on it,” Phil Dean, chief economist at the Gardner Institute, said. “We just want to make sure as people go to the ballot, they have the information they need so that they can decide.”

Background on the plan

In 2023, the Utah Legislature passed HB54, which removes the state portion of the sales tax on food.

But it came with a condition. Voters would also have to OK a constitutional amendment allowing income tax revenue to be used for other things besides education and programs for children and people with disabilities.

That question will be on the ballot in November.

Groups like the Utah Education Association oppose the change, saying it threatens protected funding for schools.

Andrea Brandley, senior education analyst at the Gardner Institute, said most of Utah’s income tax revenue has gone to public education since 1947.

“This is changing what income tax revenue can go toward,” Brandley said. “It’s not necessarily stipulating any sort of level changes in public education funding.”

Brandley also said the constitutional amendment would establish frameworks for public education funding in the Utah Constitution “which has not existed previously.”

That framework, she said, would provide for funding despite changes in student enrollment and inflation while also establishing a rainy day fund.

Goodbye to the food sales tax?

If voters approve the constitutional amendment in November, the 1.75% state sales tax on food will go away.

Dean, the Gardner Institute economist, estimates doing that would save the average Utah family a little over $100 a year, while the local sales tax on food would remain.

“Food tax is collected a nickel and a dime and a dollar at a time, so I’m not sure how much people will notice,” Dean said.

But, he added, “for those at low-income levels in particular where budgets are tighter, there could be meaningful impact there.”

When it comes to paying taxes on food, Bountiful resident Ronald Mortensen is strongly against it.

“We all have to eat, and it doesn’t matter what our income level is or anything,” Mortensen said.

He’s pushed for removing the food tax over the years, and he plans to vote in November for the constitutional amendment – even though he doesn’t love the entire proposal.

“I do have some concerns in giving the Legislature still more tax money to spend,” Mortensen said, “because they have shown that whenever they get money, they spend it.”

But ultimately, Mortensen believes axing the tax will help those who need it most.

“I just find it wrong that they would be taxing a necessity of life,” he said.