SB 122, the Sales Tax on Food Amendments, removes Utah’s state sales and use tax from amounts paid or charged for food and food ingredients beginning January 1, 2026. The bill keeps local sales taxes on food in place, but it changes the statewide sales tax rate upward to offset the revenue loss from eliminating the state portion of the tax on groceries. It also makes technical and conforming changes throughout the sales and use tax code, including updates to definitions and cross-references that align with the new tax structure.
The bill amends several sections of Utah Code, most notably Section 59-12-103, which governs the sales and use tax base and rates. It removes food and food ingredients from the state tax base while preserving local taxation on those items, and it adjusts related provisions governing tax deposits, rate changes, bundled transactions, and special revenue distributions. The bill also updates Section 63N-2-502 to reflect the removal of the state tax on food in the definition of state taxes for the qualified hotel incentive program, and it makes conforming changes in Section 59-12-108 and other provisions tied to tax collection and distribution.
Impact
The bill would reduce the state tax burden on grocery purchases while shifting part of the revenue responsibility to the general sales tax rate. In practical terms, consumers would no longer pay the state portion of sales tax on food and food ingredients, but local sales taxes would still apply. The measure would affect the Utah State Tax Commission, sellers collecting sales tax, and state revenue allocations that depend on the existing sales tax structure, while also requiring conforming updates to statutes that reference the state sales tax rate or state taxes on food.
Sentiment
No committee transcripts or recorded votes were provided, so there is no direct evidence of debate, amendments, or formal support/opposition in the supplied materials. Based on the bill text alone, the measure appears to be framed as a tax relief proposal for food purchases paired with a revenue-neutral or revenue-offsetting adjustment to the general sales tax rate. The overall tone of the bill is policy-driven and technical, with an emphasis on restructuring rather than creating a new program or appropriation.
Contention
The main policy tension is between eliminating the state sales tax on food and raising the general sales tax rate to make up the lost revenue. Supporters are likely to emphasize grocery affordability and tax relief, while opponents may focus on the broader tax increase, the continued application of local sales taxes to food, and the complexity of changing the tax base while preserving revenue for the General Fund. Another possible point of contention is the effect on lower-income households, since the bill reduces taxes on a basic necessity but spreads the offset across a wider range of taxable purchases.