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Utah's New Food Tax as Screwy as Our Liquor Laws


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Utah prepares for food tax decrease



Associated Press writer Wednesday, December 27, 2006



SALT LAKE CITY -- Shoppers buying groceries beginning Monday can expect a slightly lower sales tax, but they shouldn't expect all the food and drinks they buy to be taxed at the same rate.


That's because when lawmakers agreed to cut the state's portion of the sales tax on unprepared food from 4.75 percent to 2.75 percent, they also had to define what unprepared food meant. That resulted in some seemingly odd distinctions.


A soft drink in a bottle is taxed at the new, lower rate. A soft drink from a fountain machine doesn't get the discount.


The difference? The fountain machine soda is served with "utensils" -- a cup, lid and straw.


The same goes for deli items such as sandwiches and salads. If it comes with a fork, expect to pay the higher sales tax.


"It seems stupid. It seems kind of random, but it's not like it makes that much of a difference, really. I probably won't even notice it," said Emily Martinez, 19, who was going grocery shopping at a downtown Albertsons in Salt Lake City.


And while hot dogs and sandwiches sold at convenience stores will be taxed at the higher rate, bargain hunters can save a few cents by buying the ingredients and making sandwiches themselves.


Sometimes, a napkin makes the difference in price. Bagels and doughnuts sold with a napkin don't get the discount, but those in a box do.


Even vending machines aren't uniform in their tax rules.


A bag of chips, chewing gum and soda will be taxed at the lower rate. A premixed cup of hot chocolate, sandwich or a slice of pizza are taxed at the full rate.


That's because each of those have more than one ingredient.


For people like Derrick Jones, who is unemployed, taxing any food is maddening.


"Why are they going to tax me? I can't afford it. They're crooks. That's what they is -- crooks," Jones said while waiting for a bus.


In 2006, Gov. Jon Huntsman sought to completely remove the state's portion of the sales tax on food. He had the support of the House, but Senate leaders considered it bad tax policy. So they compromised on reducing the rate.


In 2007, Huntsman isn't planning on touching the sales tax on food, instead focusing on reducing income taxes. But House Speaker Greg Curtis, R-Sandy, has said he'd like to see the tax removed. Once again, Senate leadership has said it's opposed to the measure.


Rep. Craig Frank, R-Pleasant Grove, said while House Republicans haven't decided how they would allocate $300 million in tax cuts they're proposing, it's likely removing the sales tax on food will be part of the mix.


One obstacle -- reprogramming grocery stores computers to identify items that should be taxed differently -- is already taken care of, he said.


Grocery stores such as Winegar's Supermarket in Bountiful have said accommodating the new tax system has been very labor intensive. John Burton, Winegar's office manager, said it took each of the chain's three stores about five hours to recalculate the new tax rates.


The Legislature allocated $6 million to reimburse businesses to switch over to the dual sales tax. Frank said that probably wouldn't be necessary again.


"It should not at this point cause any more frustration when it comes to lowering or removing additional sales tax percentage on non-prepared foods," he said. "They've already made that switch."


Customers like Martinez, however, may continue to be frustrated by the oddities of the two-track sales tax. Especially if they go to a movie theater.


"Candy isn't taxed but popcorn is? That's weird," she said.

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Come to Montana where there isn't any sales tax.

Montana does have a relatively easy tax system. But they still have to have screwy stuff like this:

automobiles, trucks and business equipment.

• The amount of property tax owed is not determined solely by the property's value. The property's value is multiplied by a tax rate, set by the Montana Legislature, to determine its taxable value. The taxable value is then multiplied by the mill levy established by various taxing jurisdictions -- city and county government, school districts and others.






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