Subcommittee rejects bill to remove sales tax on labor for tangible property

Senator Lowe described Senate Bill 1465 as an effort to eliminate the remaining sales tax on labor applied to tangible property, distinguishing it from tax treatment of labor on real property. "This is the lone remnant of tax on labor that we still have in our tax code," Lowe said, and presented the measure as a potential tax-cut opportunity to help families and small businesses.

The chair announced a fiscal impact of $633,000,000. After brief discussion, Sen. Hale moved for a negative recommendation; Sen. Powers seconded. The roll call returned five ayes and the committee forwarded SB 1465 to the Finance Committee with a negative recommendation.

The sponsor asked the committee to consider the bill in the context of the legislature's broader tax-cut deliberations; committee members signaled concern about the bill's budgetary cost.