Panel simplifies food tax bill

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CHEYENNE - House Revenue Committee members unanimously approved a bill to permanently repeal the state food tax Friday, after the committee's first attempt at eliminating the tax was deemed too complex by the House of Representatives.

The committee approved a bill last week that would have permanently eliminated the food tax, but the bill included a complex package of amendments including a provision to reconsider the food tax repeal in 2013. The bill also called for a reimbursement formula to compensate cities and counties for anticipated lost revenue from the repealing the tax.

The House sent the bill back to the committee Tuesday for simplification.

"The (substitute bill) as proposed is simply to repeal the tax on food," said Rep. Tom Lubnau, R-Gillette. "It doesn't include any 'backfill' provisions or indemnification provisions for cities and counties. That isn't to say we're not going to indemnify cities and counties, but I don't think this is the right bill to do this."

Some committee members initially objected to passing a measure that would not include a plan to compensate cities and counties for lost revenue.

"Promises, promises," said Rep. Mary Gilmore, D-Casper. "I am just not comfortable doing this without sending something out to backfill (local governments)."

Committee chairman Rep. Rodney "Pete" Anderson, R-Pine Bluffs, said the committee usually deals with elimination of taxes on items and compensation for lost revenue in separate measures.

"Historically we have removed the sales tax from items all along the way … and we've never backfilled it in the same bill," Anderson said. "This to me is the way to go about it. Certainly I don't think there's anybody here who wants to hurt cities and counties."

Other legislators said they wanted to wait until more data is collected on the tax's effects before deciding how to compensate local governments for lost revenue.

"It is a wild guess," Rep. Del McOmie, R-Lander, told the committee. He later promised to back a bill at the next session to restore lost funds to local governments.

"I'm concerned about the lack of discretionary funds. But I think this is a vehicle that starts us down the road because we don't have the data that we need at this point," McOmie said.

Dan Noble, administrator of the excise tax division of the Wyoming Department of Revenue, told the committee he had already started making the initial calls to collect data on the food tax's effects. "We need to develop a good model for this, and we're fully on board to make that happen," Noble said.

Gilmore said she grew more comfortable with the measure after listening to colleagues who argued in favor of it. After voting to approve the bill, she urged McOmie to "take very good care of yourself in the next year" so he could fulfill his promise to restore lost revenue.

The Legislature last year included a two-year repeal of the grocery tax in its general budget bill. But unless the tax is repealed permanently, it will return in 2008.

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