Utah Abandons Effort to Tax Advertising

Governor Gary Herbert and Utah legislative leaders abandoned their efforts to pass a sweeping new tax on services, including advertising, by sending House Bill 441 to an interim study committee yesterday, effectively killing the proposal for this legislative session.

The decision follows ANA’s letter to the governor and leaders of the Utah legislature criticizing the proposal to tax advertising and highlighting the jobs and economic activity that advertising brings to the Beehive state’s economy.

HB 441 would have dramatically broadened the state’s tax base through imposing new sales taxes on service-based business, including advertising and marketing.

Following weeks of closed-door negotiations on the tax overhaul, the legislation was finally released last week and fast-tracked for passage prior to the legislature’s scheduled adjournment on March 14.

Legislative leaders committed to continuing discussions on taxing services over the next several months. The governor vowed to “keep at it” and announced that he hopes to reconvene the legislature in special session by this summer when the proposal can be reconsidered. While this is an initial important victory, the battle is clearly far from over and ANA and our members need to continue to provide information to the legislature on why an ad tax would harm both the broad range of Utah businesses and consumers who would likely have higher costs passed on to them due to the tax.