HB 375: Reducing the Annual Tax on Business Supplies
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Over the past year there have been many discussions about tax credits for major corporations, a variety of tax increases (including an income tax increase via ballot initiative), but few have been talking about helping small businesses. A large percentage of Utahns are involved in or outright own a small business.
These include home-based businesses, mom-and-pop shops, start-ups in their infancy, short-term rentals, the list goes on and on. When it comes to tax relief, these types of business are often forgotten, as are the onerous taxes that they have to pay. One such tax is known as the “Tangible Personal Property Tax.”
When a Utah business buys new equipment, machinery, or office furniture it doesn’t just pay tax on those items at the point of sale. Utah law also requires businesses to pay an additional tax every year on this already-purchased property.
This means counting up every desk, chair, computer, machine, etc.—and if the government doesn’t think you did it quite right, you’ll probably be audited. Often times the amount of tax revenue generated from taxing one business is less than the cost it took to collect the tax in the first place.
Enter Representative Dan McCay with House Bill 375. His bill would raise the current aggregate exemption from about $10,000 to $250,000 worth of property. It would also exempt every item of property valued at $2,500 or lower from the aggregate total. Finally, it removes a provision that requires exempt businesses from still having to fill out a form and send it in to the county accessor.
HB 375 would save businesses millions in taxes every year, while reducing the onerous burdens of reporting and audits. Instead of counting up tables and chairs, businesses should be allowed to focus on delivering the best product or service for their customers. Utah needs to remove these hurdles for small businesses and help them thrive.