Utah leaders postponed a plan Thursday that would have made sweeping changes to the state’s tax system after a backlash from businesses and other groups.
Republican Gov. Gary Herbert said lawmakers will study the complicated issue over the coming months and likely return in a special session, possibly in the summer.
Herbert said it’s still essential to bolster a shrinking sales-tax base with the addition of new taxes on services on things ranging from haircuts to legal work.
“We want to make sure we’ll have good economics going into the future,” he said at an abruptly called news conference backed by legislative leaders.
The governor made the tax plan the centerpiece of his budget proposal, and also promised a large tax cut in the form of a lower sales tax rate.
He said a rate cut will still be in the mix as a plan is finalized, though the exact amount is still unclear. Others support an income-tax cut instead.
Republican House speaker Brad Wilson said lawmakers plan to meet with people across the state as they figure out how to solve a looming revenue crisis.
“We can’t wait. This is something that’s urgent,” Republican Senate President Stuart Adams said.
But the Legislature’s short, 45-day session didn’t give businesses enough time to review the plan and figure out how it would affect them, said Abby Osborne with the Salt Lake Chamber. She applauded the effort to take more time with the plan.
The session ends next week.