The City Council approved a 0.5 percent increase to the City’s portion of sales tax in May 2018. This increase will typically generate about $34 million a year in ongoing funding and is the first part of a funding strategy to address the City’s critical needs.
When legislators decided to build the new State prison in northwest Salt Lake City, they provided the City with a rare opportunity to raise its portion of sales tax by 0.5 percent (or a penny for every $2) to help compensate for the impacts. This option was made available in 2015, but the City waited to implement the change until it could be thoroughly researched and plans were developed.
Quick Facts about Sales Tax
Sales tax is paid on most purchases made in the City with the exception of groceries (unprepared foods) and large purchases (like cars and boats).
In Salt Lake City, about 60 percent of sales tax revenue is paid by non-residents including office workers, visitors and tourists.
Because sales taxes are paid by residents and nonresidents alike, the burden is shared more equitably by everyone who uses City services.
Sales tax revenue provides flexibility in spending since it can be used for a wide variety of ongoing needs (like public safety and street maintenance) and isn’t restricted to specific categories or projects like a General Obligation Bond or impact fees.