SALT LAKE CITY — The Utah Supreme Court will decide if some of the state's largest businesses and retail outlets are entitled to tax relief as a result of the COVID-19 pandemic.
At a hearing on Wednesday, the state's top court heard an appeal led by the Larry H. Miller Company, which operates its Megaplex Theaters and the Delta Center; the Grand America and Little America hotels; Kohl's Department Stores; Thanksgiving Point; and the operators of a number of malls across Utah. They are challenging decisions made by county Boards of Equalization and the Utah State Tax Commission to not grant them a tax break because of a loss of business during the height of the pandemic.
"Specifically, whether the COVID-19 pandemic qualifies as an access interruption under the plain language of Utah Code," said Nate Runyan, an attorney arguing on behalf of the companies.
The issue is that a public health emergency isn't explicitly in Utah statute as a qualifying condition for tax relief. That's what the Utah Supreme Court justices honed in on in more than an hour's worth of arguments on Wednesday.
"I don’t know if we need to decide, for example, is COVID-19 an access interruption," said Justice Jill Pohlman. "I think the question is whether it’s a circumstance under the statute."
Runyan pointed to then-Governor Gary Herbert's health directives, arguing it did impede access.
"Governor Herbert said you couldn’t gather in large gatherings, you couldn’t go to places of entertainment, you couldn’t have travel other than emergency travel," he told the Court. "Even when the theaters... when it opened up, it didn’t have normal access because you had social distancing and patrons couldn't sit next to each other like you could in a normal theater. You had to be six feet apart."
Chief Justice Matthew Durrant raised questions of a slippery slope and other problems businesses might face.
"What do you do with the tax commission’s argument that, under your theory, an economic downturn might qualify as access interruption?" he asked.
"I think the slippery slopes arguments are, the argument there is a policy argument," Runyan replied.
The Utah Attorney General's Office and the Salt Lake County District Attorney's Office argued that businesses were not ordered to close under state COVID-19 directives.
"Can you help me understand why a health order that would arguably prevent access to and from a business is that different from road construction, a traffic diversion or vandalism?" asked Justice John Pearce.
"Road construction, vandalism, traffic diversion — those aren’t government orders to shut down a particular business," countered assistant Utah Solicitor General Stanford Purser.
Justice Diana Hagen pressed lawyers about whether the governor specifically issued orders to close businesses.
"I believe those are guidelines," said deputy Salt Lake County District Attorney Victoria Turner. "There were no sanctions in place if people didn’t follow these. I think everyone has a clear recollection of what happened during the pandemic and these were just guidelines to help slow the spread of COVID."
The justices took the case under advisement. The impact of the Utah Supreme Court's decision could be worth millions of dollars in taxes due to counties and the state, but it could also set precedent and impact even more businesses.
