A bill that would allow Utah’s Military Installation Development Authority the ability to impose resort communities sales tax has made little progress in advancing through the state Legislature since it received a favorable recommendation from the Senate Revenue and Taxation Committee on Feb. 7.
Senate Bill 169, sponsored by state Sen. Jerry Stevenson of Layton, would allow MIDA to impose taxes that would apply within project areas even after MIDA’s agreements with local taxing entities have expired.
The bill, MIDA Chief Legal Officer Nicole Cottle assured the committee on Feb. 7, wouldn’t necessarily create the possible taxes, but would allow them to be imposed by MIDA’s board for “infrastructure-heavy” projects. She said the taxes would “provide a small layer of additional tool.”
According to the bill, these taxes could apply to any purchases for accommodations or services in a project area, whether the property is government-owned or privately owned, in which “a provider is providing a significant long-term benefit, including lodging but not including a benefit that is commonly provided, to members of the military at the property.”
This tax could be up to “15% of the amounts paid to or charged by the provider for accommodations and services” and could land squarely on the shoulders of consumers since the bill also allows providers to “recover an amount equal to the MIDA accommodations tax from customers, if the provider includes the amount as a separate billing item.”
When Senate Revenue and Taxation Committee Chair Daniel McCay asked Stevenson how long the MIDA accommodations tax would last, Stevenson specified that they wouldn’t come with expiration dates, but would either last indefinitely or would need to be removed by the same MIDA board.
“I worry about sales tax rates around the state,” McCay said. “Having the ability to add a tax on and then use it locally is good because MIDA is treated like a local government as much as anything else.”
Still, he recognized, this would allow MIDA’s appointed board to impose taxes on communities that don’t vote to determine its membership.
While the bill still passed unanimously for its favorable recommendation, it remains without a floor sponsor or Senate approval.
A motion to circle the bill and thus postpone any action passed on Feb. 12.