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Monday, November 28, 2005

The Tax Review Commission

By Senator Lyle Hillyard
District 25: Cache and Rich Counties

Many commissions make a significant impact working to develop public policy in our state. The Tax Review Commission is a good example.

In 1983, Mark Buchi encouraged Governor Matheson to create the Tax Review Commission (Mark was then working for the State Tax Commission and served as Chair of the Recodification Commission). This new commission was charged to begin task of updating the Utah Tax Code. The tax code at that time was out-dated and many provisions were unclear or contradictory. One sentence, for example, was 243 words long.

Rod Brady, past President of Weber State University and then CEO of Bonneville Broadcasting, chaired the Commission. Vice Chair was Jim Lee, a prominent tax attorney. Membership included practitioners, business leaders, and academic leaders. Four legislators served on the 14-member board (two from each house, one from each political party). Mark Buchi and I have served on the commission since its inception, for the past 22 years. Former senators who have served include George Mantes, Ron Allen and now Brent Goodfellow. House members on the commission include current Senate President John Valentine (when he served in the House), Frank Knowlton, Judy Buffmire with Wayne Harper and Roz McGee currently serving.

The format used by the commission has become a model for revising complex and controversial sections of the code. In the past, when groups have addressed controversial areas, they have become bogged down and nothing important has been concluded.

As a commission, we have adhered to a three-step process. First, we went through the code and updated or deleted sections that were clearly wrong. Second, we went through again and addressed areas that needed change but could be resolved without major opposition. At this point, we also redrafted the format of the code so that sections and cross references could more easily be found. We then formed subcommittees comprised of professionals to review each section and give recommendations.

We could never have afforded all the time these professionals volunteered to the state and this cause. As a result, the commission can now focus attention on the more controversial areas and make recommendations to the legislature. We also respond to specific requests.

The commission is currently drafting code changes governing the sales and use tax exemption for isolated and occasional sales. We are considering situations such as the following:

We all know that JC Penney collects sales tax on items they sell. However, what if they are remodeling and sell a cash register, an item that is not part of their inventory and not regularly sold as a part of their business, to an employee? What if someone organizes a garage sale every Saturday?

We have asked a group of professionals to redraft the law for income taxation for trusts and estates. There is little statutory law in this area and most practitioners adapt the normal income tax rules in these and other similar situations.

The Tax Review Commission usually meets once a month on the second Friday at 1:00 pm in room W125 at the Capitol. The next meeting, however, is tomorrow
Tuesday, November 29, 2005
Utah State Capitol’s West Building
Room W130
12:00 p.m.
You may want to follow their agenda on the legislative website and possibly even attend some of their meetings.

We would love to hear your input.

1 Comments:

Blogger Mark Towner said...

I think the following ammendment should be attached to any tax reform legislation. When enrolling students each year, the parent must
show proof that they have filed a state income tax for
the previous year, and that ALL the kids they are
registering for school must be on the return. If they
have not lived in Utah for 1 year and not filed a
return, then they must show proof that they filed
either in another state that has income tax, or at least their Federal Income Tax return that shows the names of dependent children.

Parents now must prove that their kids have had their immunizations to be enrolled, why shouldn't parents show they at least file their tax returns.I believe that everyone that works legally in Utah should file a tax return regardless of income. Many people who do not owe any taxes receive refunds or work credits. Since the funding mechinism for public education is state income tax,
plus property tax, the least any parent should be required is to provide proof they actually filed a tax return. I do not think this is asking too much of
anyone...

I did some research on this matter today and I really think my
proposal has merit.

Let me state my case before you just click to the next message OK?

1. I never said any child or children would be restricted from
getting an education.

2. This is how the proposal would work. When you file a tax return,
(everyone who works in this state must file, it's the law folks)
would be in the system as a taxpayer. The Tax Commission would
simply include a certificate of complience with the yearly tax
notification. All somebody would have to do is go to the Tax Office
and fill out a form to get into the system. If they don't work for a legal company that is withholding income tax, then they should be
required to send in quarterly estimated tax. If they just do this
much, I would have a lot less heartburn about their kids receiving a subsidized education by other taxpayers.

3. This actually could be attached to the tax reform proposal H3,
which will change how we all file our taxes anyway to a small 1/2
page form. They would not have to hire anyone to do their taxes, so
no additional costs.

4. The parents would simply bring a copy of their Tax Complience,
along with everything else they need to register their kids. So
what's the big deal?

If you are reading any of this Senator Bramble, how about attaching an ammendment that accomplishes this. There would be no fiscal note needed, as this would be handled by computer in the Tax Commission.

5. Whats the worst that can happen? A parent goes down to the Tax Office, fills out a form, gets a certificate and enrolls their kids. Or they say to themselves, maybe some other State would be better to call home.

Mark E. Towner

11/30/2005 2:24 AM  

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