- Juab County’s portion of sales tax would benefit greatly if people would shop in town
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By Myrna Trauntvein
Times-News Correspondent
Do not roam, shop at home.
Residents of Juab County need to stay in Juab County to spend their money.
The motto of a presentation made by Byron Woodland, county economic director, to Juab County Commissioners on a Monday and to Nephi City Council on a Tuesday, should be: “Do not roam; shop at home.”
“We need a lot of retail sales,” said Woodland. “We need to figure out a way to get local people to spend money in town.”
“If the same amount of money was spent on retail sales in Nephi, the city would get 52 percent but if that same amount of money was spent in Payson, Nephi would get 2 percent,” Woodland said.
Obviously, as the largest city in the county, Nephi benefits but so do all county residents.
For each $100 spent in Nephi, for example, results in Utah State receiving 4.75 percent or $4.75; Nephi receives 1 percent or 50-cents; Nephi City Highway Tax gets 0.25 percent or 25-cents; Juab County receives 0.25 percent or 13-cents; 1 percent results in the Restaurant Tax/Juab for $1.00 and the Transient Room Tax/Juab is 3 percent and results in $3.00.
“For illustration purposes, this assumes that $100 was spent at a restaurant or motel, but not both,” said Woodland.
Nephi City’s portion of the sales tax is calculated by the Utah State Tax Commission, he said.
“One-half of Nephi City’s 1 percent goes to Nephi City,” said Woodland. “The other half goes to a statewide pool that is distributed based on population.”
“This would be for tax collected at the direct point of sale and then sent to the state where it is put into a pool,” he said.
The tax collected by Juab County in January was $8,000.
For January 2009, Nephi City’s percentage of the statewide pool was .0019889. Juab County’s portion of their .25 percent County Option Tax was calculated the same way using the population percentage of .00361220.
“It takes quite a bit of money for the population factor to really show up,” said Woodland.
Those who build homes in the area give a good boost to the sales tax if they buy lumber and other house construction materials in Nephi, said Justin Seely, council member.
“The construction of five or so homes brings in much-needed revenue,” Seely said.
Utah has a 4.75 percent state sales tax. Currently the majority of Utah’s aggregate sales taxes are in the range of 5.5 percent to 7.0 percent.
Juab County does receive some sales tax and use tax dollars from money spent outside the county because of a formula used by the state which compares the population of Nephi City and of Juab County to the population of the state.
“All of Nephi City’s Highway Tax is restricted by ordinance to be used on street rehabilitation,” he said.
In order for the restaurant tax to be applied to individual sales, the individual or family should go inside to eat. The tax is calculated on food that is eaten at the point of sale.
Those who go to a drive up window at a fast food establishment are not calculated in the group who pay the tax and bring money back to the area.
Events that bring outside tourists to the community also help bring tax dollars to the county in the form of sales tax.
“I tried to put some figures together that would show the tax distribution for a family of four attending the Ute Stampede,” said Woodland.
“I calculated what would happen if the family spent $25 on fast food as they left town.”
Of that, he said, Utah State would get $1.18, Nephi City would get 13-cents, Nephi City Highway Tax would get 8-cents, Juab County would get 3-cents, the Restaurant Tax of Juab County would get 25-cents and the state sales tax pool would get 12-cents.
“The state tax pool is distributed to the cities and counties state-wide based on population,” he said.
The money coming to Nephi was calculated by multiplying Nephi City’s 1 percent by .5 and adding the city’s share from the state sales tax pool. The same formula was used for the county except the figure used in the calculation was .25 percent and then adding the county’s share of the state tax pool.
“One overnight stay for the family of four was calculated assuming they spend $75 for a room, $60 for dinner and $32 for breakfast at a restaurant,” said Woodland.
In this scenario, the state gets $7.85, Nephi City gets 84-cents, Nephi City Highway Tax gets 50-cents, Juab County gets 21-cents, the Transient Room Tax/Juab County gets $2.25, the Restaurant Tax/Juab County gets 92-cents and the state sales tax pool gets 83-cents.
“Now lets assume that the family of four stay three nights and spend $225 for a room, $180 for dinners at a restaurant, $96 for breakfast at a restaurant and $84 for lunch at a fast food restaurant,” said Woodland.
Utah State will receive $27.50, Nephi City will receive $2.93, Nephi City Highway Tax will receive $1.76, Juab County will receive 73-cents, the Transient Room Tax/Juab County will receive $6.75, the Restaurant Tax/Juab County will receive $3.60 and the state sales tax pool will receive $2.92.
“All of Juab County’s portion of the sales tax derived from the Restaurant Tax is restricted to use in tourism, recreation, cultural and convention facilities and tourism promotion,” Woodland said.
The reason the county option tax is called that, said Mark Jones, mayor, is that the county gave up some property tax money because commissioners at the time thought the benefit of the option tax would bring in greater revenue.
“We have had good success in obtaining grants to assist some of the businesses in town,” said Woodland.
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