2022 Utah Legislative Update – Week 5 | What Local, Independent Business Owners Need to Know

By Carol Elliott (UIBC Advocacy Chair) and Jon Parry (UIBC Advocacy Co-Chair) | February 21, 2022

UIBC Reports on the 2022 Legislative Session

Summary of New Developments and Proposed Legislation Affecting Utah Local, Independent Businesses

Might the Sales Tax on Food End?  There is a recent news report in the Salt Lake Tribune on February 18 that legislative leaders might prepare a proposal for a constitutional amendment that would remove the earmark of income tax revenue for education funding and also have the effect of removing the state sales tax on food.  Currently state income taxes fund only K-12 and higher education, in addition to social services for children and those with disabilities.  The state sales tax revenue goes to the state general fund used to pay for all the other expenses of state government.  House Speaker Brad Wilson stated that the proposal would provide greater flexibility in budgeting.  Due to the impact on state aid to education, legislative leadership will reportedly discuss the idea with education leaders, including the Utah Education Association.  Apparently related to this proposal, SB 211, sponsored by Sen. Jerry Stevenson, would change the name of the Utah state “Education Fund” to the “Income Tax Fund.”

In related reporting, the State of Utah has an $800 million budget surplus, and how the legislature will deal with the surplus is expected to play out through the remainder of the legislative session, which ends in less than two weeks on March 4.

House Bills We Are Watching

HB 60, which we have been following and would prohibit private businesses from enforcing vaccine requirements on employees and patrons, received a favorable recommendation on February 15 in the House and has moved to the House’s third reading calendar.

In more recently-submitted bills, HB 364, sponsored by Rep. Clare Collard, would require an employer to pay a tipped employee at least the minimum wage without the computation of a cash wage obligation and tips or gratuities.

HB 425, sponsored by Rep. Joel Briscoe, would legalize the delivery of up to “four cases or 1,152 ounces” of beer by an “off-premise” beer retailer to individual “off-premise” customers between the hours of 10:00 AM and 11:59 PM.  This legislation is understood to be designed to make it possible for grocery stores and similar retailers to provide home delivery service.

HB 444, sponsored by Rep. Robert Spendlove, modifies the tax obligations of pass-through entities and pass-through entity taxpayers.  Among other things, the bill would authorize a pass-through entity to pay a tax on behalf of pass-through entity taxpayers who are individuals and would require an individual whose tax on income attributed to the pass-through entity taxpayer is paid by the pass-through entity to add the amount of tax paid to the pass-through entity taxpayer’s individual tax return.

Utah Senate Developments

Senate Imposes Restrictions on Press Access: On February 15, the Utah Senate passed a special rule limiting press access to the Senate chamber, halls, lounge, and committee rooms.  According to this new Senate Rule 1 (SR1) “News media may access non-public areas of the Senate, including the chamber, floor, halls, lounge, and committee rooms, if the news media: (a) have permission from the Senate media designee; (b) hold a Utah Capitol media credential; and (c) comply with the Senate’s media access and credentialing policy, SR2-4-102, and SR2-4-103.”  In addition, the rule states “When, with permission of the Senate media designee, news media enter a designated, non-public area of the Senate for the purpose of conducting a specific interview, a senator or the Senate media designee shall: (a) accompany the news media while in the designated area; and (b) after the news media complete the specific interview, ensure that the news media promptly exit the designated area.”  While the rule is focused on the “non-public” areas of the State Capitol, UIBC is concerned about the chilling effect this rule will have the public’s ability to have discourse with Senators on their important work.  

Turning to bills in the Senate, SB 176, sponsored by Sen. Jerry Stevenson, is an omnibus alcoholic beverage act that amends provisions of the Malted Beverage Act regarding (a) labeling and packaging and the power of the commission and department to classify flavored malt beverages; (b) amends the application requirements for a retail license;  and (c) permits various retail licensees to sell beer for off-premise consumption under certain conditions, among several other provisions.

SB 199, sponsored by Sen. John Johnson, would establish that an “on-demand labor contractor” is not an employee of a “labor marketplace platform company” if certain conditions are met.  A “labor marketplace platform company” is defined in the bill to mean an entity that uses an online software platform to connect an “on-demand labor contractor” (i.e., a temporary laborer) with a party seeking the service of the temporary laborer.  

SB 208, sponsored by Sen. Derek Kitchen, would require retail alcoholic beverage licensees and event permittees where alcohol is served to recycle glass bottles and require both licensees and event permittees to submit a recycling plan as part of the party’s application or license renewal.

SB 227, sponsored by Sen. Kirk Cullimore, and entitled the “Consumer Privacy Act,” appears to be a comprehensive bill intended to require certain businesses that “control and process consumers’ personal data,” and requires affected businesses to do a number of things, including the following:

• safeguard consumers’ personal data
• provide clear information to consumers regarding how the consumers’ personal data are used; and
• accept and comply with a consumer’s request to exercise the consumer’s rights under the bill

SB 227 would also allow the Division of Consumer Protection to accept and investigate consumer complaints regarding the processing of personal data; would authorize the Utah Attorney General to take enforcement action and impose penalties; create a right for a consumer to know (a) what personal data a business collects, (b) how the business uses the personal data, and (c) whether the business sells the personal data; and, upon a consumer’s request and subject to exceptions, require a business to delete a consumer’s personal data or stop selling the consumer’s personal data.  

SB 227 was just recently introduced on February 17 and presently has been referred to the Senate Revenue and Taxation Committee.  Given this bills comprehensive nature, there might not be sufficient time remaining in this session for the legislature to fully consider it.  This bill may rather drastically alter the duties and responsibilities of our local, independent businesses and they must deal with electronic data. UIBC is studying this bill and working to determine its potential impact on UIBC members and friends.

Other House Bills We Are Watching

HB 35 Economic Development Modifications [click here to see the bill]

HB 44 Business And Labor Reporting Requirements [click here to see the bill]
This bill includes adjustments to Workers Compensation statute.

H.B. 57 Government Records Access Amendments [click here to see the bill]
This bill would essentially protect a government official from having a personal device searched for a public record even though the proposed statute confirms that a public record can be determined to be saved on a personal device.

H.B. 60 Vaccine Passport Amendments [click here to see the bill]
This bill appears to prohibit an employer from requiring an employee to obtain a vaccine.

H.B. 146 Food Truck Licensing Amendments [click here to see the bill]

H.B. 156 Sales and Use Tax Refund Amendments [click here to see the bill]
This bill would enact a refund of the sales and use tax paid pertaining to purchase or lease of machinery, equipment, normal operating repair or replacement parts, or materials, by an oil and gas extraction establishment or a pipeline transportation establishment. UIBC strongly opposes this bill, as it is designed to specially favor the oil and gas industry. UIBC member businesses would continue to owe their sales and use taxes.

H.B. 165 Food Sales Tax Amendments [click here to see the bill]
This bill would remove the sales tax on food.

H.B. 199 Tangible Personal Property Tax Amendments [click here to see the bill]
This bill removes the current requirement that a taxpayer file a signed statement after the first calendar year in which a taxpayer qualifies for a property tax exemption for tangible personal property if the taxpayer continues to qualify for the exemption for consecutive subsequent years.

H.B. 202 Employment Selection Procedures Act [click here to see the bill]
This bill would prohibit an employer from asking for a prospective employee’s compensation history.

H.B. 203 Food Sales Tax Modifications [click here to see the bill]
This bill would also eliminate the state sales tax on food.

H.B. 307 Earned Income Tax Credit Amendments [click here to see the bill]
This bill enacts a nonrefundable state earned income tax credit and provides for apportionment of the state earned income tax credit.

H.B. 322 Public Transit Capital Development Modifications [click here to see the bill]
Transfers authority of development of large transportation infrastructure development to UDOT from UTA.

H.B. 364 — Minimum Wage Amendments [click here to see the bill]
Would require an employer to pay a tipped employee at least the minimum wage without the computation of a cash wage obligation and tips or gratuities.

H.B. 425 — Beer Order and Delivery Amendments [click here to see the bill]
Would legalize the delivery of up to “four cases or 1,152 ounces” of beer by an “off-premise” beer retailer to individual “off-premise” customers between the hours of 10:00 AM and 11:59 PM.>

H.B. 444 Income Tax Revisions [click here to see the bill]
Would modify the tax obligations of pass-through entities and pass-through entity taxpayers

Senate Bills We Are Watching

S.B. 16 Licensing Amendments [click here to see the bill]
This bill establishes a professional license review process to occur every 10 years.

S.B. 26 Division of Consumer Protection Amendments [click here to see the bill]
This bill alters provisions pertaining to franchise business opportunities.

S.B. 39 Mobile Workforce Income Tax Amendments [click here to see the bill]
This bills appears to eliminate income tax on out of state persons who work 20 or fewer days in UT.

S.B. 59 Income Tax Amendments [click here to see the bill]
This bill would reduce the state income tax rate to 4.85% from 4.95% and would remove the personal property tax on certain “supplies” used in business. It also provides $15 million in ongoing money pertaining to individual eligibility for the Utah Social Security tax credit and $25 million in ongoing funding for the state’s non-refundable earned income tax credit.

S.B. 93 Business Tax Amendments [click here to see the bill]
This bill would exempt supplies used in the course of business from personal property tax; exempt certain tangible personal property consumed in the performance of a taxable service from sales and use tax; and exempt certain tangible personal property used or consumed in the production or development of taxable computer software from sales and use tax. UIBC would favor this bill.

S.B. 95 Limitations on Employer Liability [click here to see the bill]
This bill addresses liability of an employer for negligently hiring, or failing to adequately
supervise, an employee that has been previously convicted of an offense.

S.B. 125 Hospitality Employee Tax Credit [click here to see the bill]
This bill would allow restaurant and bar employees to claim a one-time $1,250 state income tax credit if they work a minimum of 1,560 hours during 2022.

S.B. 175 Daylight Saving Time Modifications [click here to see the bill]
Mandates that the State of Utah exempt all areas of the state from standard time; and provides that the year-round observed time of the entire state and all of the state’s political subdivisions is mountain daylight time

S.B. 176 Alcoholic Beverage Control Act Amendments [click here to see the bill]
This is an omnibus alcoholic beverage act that amends provisions of the Malted Beverage Act regarding labeling and packaging alcoholic beverages, and classification of flavored malt beverages; (b) amendment of the application requirements for a retail licenses;  and (c) allowance of certain retail licensees to sell beer for off-premise consumption under certain conditions.

S.B. 199 Gig Workers Amendments [click here to see the bill]
Would establish that an “on-demand labor contractor” is not an employee of a “labor marketplace platform company” if certain conditions are met.

S.B. 208 Alcoholic Beverage Recycling Requirements [click here to see the bill]
Would require retail alcoholic beverage licensees and event permittees where alcohol is served to recycle glass bottles and require both licensees and event permittees to submit a recycling plan as part of the party’s application or license renewal.

S.B. 227 Consumer Privacy Act [click here to see the bill]
This bill titled the “Consumer Privacy Act” would enact requirements for the safeguarding of consumers’ personal data; provide information to consumers regarding how the consumers’ personal data are used; and would implement requirements for a business to accept and comply with a consumer’s request to exercise the consumer’s rights under the act.

Be Informed and Get Involved!

UIBC encourages everyone to both keep informed about the legislature’s work and, even more importantly, communicate with your individual senators and representatives to voice your opinion on the legislative bills being considered.

Visit the Utah Legislature’s website at https://le.utah.gov/ to get access to all the bills, committee hearings, and contact information for all the legislators. You can watch and listen to legislative committee and floor proceedings in real time or view proceedings from finished meetings using the website’s streaming portal here. Identify and get contact information for all the legislators here.