After a wave of student support and a reinterpretation of state tax codes, U college textbooks will be tax-free starting April 1, 2008.
ASUU Government Relations Director Marko Mijic said the tax change is the result of students statewide taking ownership of the initiative.
“In the end, it’s a victory not just for the U, but for all student governments across the state,” Mijic said. “We achieve more when working with all students.”
With the backing of all Utah colleges and universities and about 10,000 student signatures in support of the action, the Associated Students of the University of Utah originally planned to introduce a bill at the Utah State Legislature that would exempt college textbooks from sales tax. But through research, student leaders discovered that they could qualify for the exemption under current tax codes.
According to state tax law, the U is considered both a state institution and a charitable organization. Although textbooks are tax-exempt in grades K-12, state institutions of higher education do not have this exemption. Because the U is interpreted as a charitable organization and recognized by the Internal Revenue Service, the U can receive tax exemptions for items that are a part of its mission statement and regular functions.
“It’s hard to argue that textbooks are not central to a university’s mission,” said Student Body President Spencer Pearson.
ASUU leaders met with bill sponsor Rep. Greg Hughes, R-Draper, U administrators and tax specialists to discuss how to get the exemption, but they decided it would be more effective to work through the Utah State Tax Commission instead of lobbying in the legislature to change sales tax laws.
“We learned we didn’t need the legislation process,” said Kim Wirthlin, vice president for government relations. “There was a solution that already existed.”
The tax commission sent a letter to the U confirming the clarification and making the exemption official. The U tax department and University Campus Store decided to make textbooks tax-free starting April 1, in time for the beginning of Summer Semester.
Shane Girton, associate director of the U Campus Store, said the exemption would be easy to implement if it applies to all textbooks required or recommended by professors, which it will. The bookstore will just need to change the tax code in the system to make all textbooks tax-exempt, he said.
“This is fantastic,” Girton said. “The big thing is (it provides) direct cost savings to students on the overall cost of textbooks. It doesn’t drop the actual cost but it alleviates additional costs.”
Without the tax, Utah students will save about $4.7 million annually and each student will save about $60 every semester.
ASUU Director of Student Services Alex Zuhl said saving money for students was the No. 1 reason they wanted the exemption.
“We set out to help students to save on one of the most burdensome costs of education and we were able to do it,” Zuhl said.
The tax exemption will apply to all universities that qualify as a charitable organization, said Laura Howat, associate director of Accounting Operations & Controls over the U tax department. All schools will be able to obtain this status, and ASUU will now work with other universities and their bookstores to make them aware of the exemption and help them receive the letter from the tax commission so they can implement it.
Next week Pearson will meet with all student body presidents to explain the exemption. ASUU will host a press conference at the Capitol to announce the exemption to legislators and community members March 12.
Mijic said the most rewarding part of the process was the “massive student support” in favor of the exemption. ASUU worked with the student governments of all institutions of higher education statewide. At the U, students were able to sign a petition in the bookstore supporting the exemption, and in the first week alone, they received 4,000 signatures, he said.
“This shows we’ve taken initiative as a student body,” Mijic said. “In the end, it will bring something every student can see.”