Veterinarians resist Utah's plan to tax care

Proposal calls for assessing 4.85% tax on veterinary services

November 8, 2019 (published)
By Jennifer Fiala

VIN News Service screenshot
Members of the public addressed Utah lawmakers on Thursday in Salt Lake City regarding a proposal to add or increase sales taxes on dozens of services, veterinary care included. Dr. David Gardiner, a veterinary pathologist, told local news station Fox 13 that taxing veterinary care could have negative consequences.

A newly proposed revenue plan in Utah aims to cut the state's income tax while assessing sales taxes on food, gas and services such as Uber rides, video streaming and lawn care.

A 4.85% sales tax also would apply to veterinary care, anticipated to generate $20 million in annual tax revenue. 

The proposal comes via the Tax Restructuring and Equalization Task Force, a committee of lawmakers formed earlier this year by the Utah Legislature to revamp the state's revenue system. Gov. Gary Herbert recently called lawmakers into a special session to consider the task force's proposal, laid out in a 182-page reform bill.

If lawmakers enact the plan, reforms could take effect Jan. 1.

Critics say such sweeping changes deserve more thorough consideration due to the potential for unintended consequences. The bill's latest revisions were released six hours ahead of a public meeting held by lawmakers on Thursday.

Dr. Jaime Griffith, president of the Utah Veterinary Medical Association, scrambled to digest the bill and its potential impact on veterinary medicine. Under the latest version, she said, non-emergency veterinary care is subject to sales tax. Agricultural animals are exempt. Whether the tax applies to the care of horses is a "gray area," she said.

"We are actively advocating against this," Griffith said. "The way it's worded now, preventative care, exams, vaccines, diagnostics — virtually all veterinary services — will be taxed.

"Our concern right now is that this will worsen the pet overpopulation problems," she added. "I feel this will deter people from going to see their veterinarian."

Veterinary medicine traditionally is spared from state sales taxes, like healthcare in human medicine and dentistry. However, the exemption is being challenged. During the past decade, lawmakers across the country have targeted animal health as an untapped means for generating revenue.

Hawaii, New Mexico and South Dakota apply sales tax to veterinary services, and lawmakers in Kentucky voted last year to do the same. Veterinarians now are required to pay a 6% tax on gross receipts of small animal veterinary services, according to the American Veterinary Medical Association, which provides a rundown of all state taxes imposed on veterinary services and sales.

Similar proposals have reared in California, Ohio, North Carolina and Connecticut, but they have not passed. 

In hopes of keeping Utah's proposed tax on veterinary services at bay, Griffith encourages the state's 700 or so veterinarians to contact lawmakers and share their concerns with clients. "To defeat this," she said, "we need veterinarian and client involvement."

Following the public meeting on Thursday, Dr. David Gardiner, a veterinary pathologist and Utah resident, spoke with local media about the potential pitfalls of taxing veterinary care. 

"What they're proposing is to increase the tax burden on services that veterinarians are providing, that aren't a luxury," he said. "Taxation is obviously going to drive behavior, and if people are going to take less care of their pets, it's very likely that more pets are going to get surrendered."

Lawmakers will hold a final public meeting at 5 p.m. Nov. 21 at Capitol Hill in Salt Lake City.

Update: The Utah Veterinary Medical Association announced Nov. 13 that veterinary medical procedures and treatments now are exempt from the tax proposal, per its latest draft. Pet boarding, grooming and daycare, however, remain included in the proposal. "We know that this will still create a burden on our pet and veterinary famiies but are grateful to the legislators for exempting the preventative and lifesaving medical procedures and treatments of veterinary medicine," UVMA President Dr. Jamie Griffith said by email. 

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