Utah Legislature approves $193 million tax cut. Gov. Cox says he’ll sign it

The Capitol in Salt Lake Metropolis is pictured on Wednesday, Feb. 9, 2022. A invoice to provide Utahns a $193 million tax lower — together with a $163 million earnings tax fee discount — has received ultimate approval from lawmakers.

Laura Seitz, Deseret Information

A invoice to provide Utahns a $193 million tax lower — together with a $163 million earnings tax fee discount — has received ultimate approval from lawmakers.

With out debate, the Senate voted 28-0 on Thursday to concur with the Home of Representatives’ amended model of SB59, which received approval from the Home on Wednesday.

It now goes to Gov. Spencer Cox, who stated he’ll signal the laws because of the addition of a primary kind of tax lower for Utah: a nonrefundable earned earnings tax credit score.

“As a freshman legislator 9 years in the past, I supported an earned earnings tax credit score to profit low- and moderate-income Utahns,” Cox stated in a ready assertion issued Thursday after the vote. “Yearly since I've labored to get the EITC signed into legislation. I couldn't be extra excited to lastly get this piece of laws throughout the end line.”

Cox, in his price range suggestion earlier this 12 months, advisable lawmakers use the $160 million they put aside for tax aid for a grocery tax credit score. However Thursday, he applauded lawmakers for his or her method this 12 months.

“I additionally stay up for signing into legislation earnings tax cuts for all Utahns along with expanded Social Safety tax cuts for Utah’s most weak seniors,” Cox stated. “I applaud the Legislature on their efforts in arriving at this bipartisan and balanced final result.”

The invoice features a $163 million across-the-board earnings tax fee lower for all Utahns, dropping Utah’s earnings tax fee from 4.95% to 4.85%, plus a $16 million nonrefundable earned earnings tax credit score and a $15 million growth for the state’s Social Safety tax credit score, in response to its sponsor, Sen. Dan McCay, R-Riverton.

“Good tax lower,” Senate President Stuart Adams, R-Layton, stated after the vote, applauding the invoice and McCay’s work.

The tax lower will value the state about $193 million complete in ongoing funds, plus $29.5 million in one-time funds. As a consequence of its retroactive efficient date on Jan. 1 of this 12 months, it is going to affect subsequent 12 months’s price range by about $210.9 million.

“All collectively, these tax cuts will return hard-earned cash to Utah households and alleviate present inflationary pressures,” Cox stated. “These tax cuts are an incredible win for Utah households and seniors, and I stay up for signing this invoice into legislation.”

Legislative fiscal analysts estimate over 1.1 million Utahns will see tax financial savings of about $129 on common through the 2022 tax 12 months. The expanded Social Safety tax credit score may lead to a mean yearly tax financial savings of about $210 for about 71,000 Utahns, whereas the nonrefundable state earned earnings tax credit score could give a mean of about $194 again to about 81,000 Utahns, in response to the invoice’s fiscal observe.

Particular person tax financial savings, after all, will fluctuate primarily based on submitting standing, household dimension, earnings and different elements.

Home lawmakers added into the invoice the earned earnings tax credit score and the Social Safety tax credit score in a committee assembly final week, trying to present extra “focused” tax cuts to low- and moderate-income Utahns.

Home Republicans on Wednesday applauded the inclusion of a nonrefundable earned earnings tax credit score. They stated it will higher goal Utahns on the decrease finish of the earnings scale whereas additionally incentivizing work.

Whereas some Democrats voted towards the invoice within the Home after unsuccessful makes an attempt to alter the invoice to repeal the state’s portion of the gross sales tax on meals, the tax lower confronted no opposition within the Senate. All current Democrats voted in favor of it.

The addition of the earned earnings tax credit score and Social Safety gave the impression to be sufficient to win Democratic senators’ votes.

“It’s interesting now,” Senate Minority Whip Luz Escamilla, D-Salt Lake Metropolis, advised reporters in a Senate management availability on Wednesday after the Home accepted the invoice. “It wasn’t interesting earlier than,” she stated, when it solely included an earnings tax fee lower that might disproportionately profit increased incomes Utahns.

Because of the Home’s additions of extra focused cuts for Utahns on the decrease finish of the state’s earnings scale and for retirees on fastened incomes, the invoice noticed broader help within the Senate.

The proposals all took form in closed-door caucus conferences as Republicans have favored them as add-ons to an earnings tax fee lower — extra so than the governor’s suggestion to provide Utahns a tax lower within the type of a $160 million grocery tax credit score, and decidedly greater than Democrats’ and poverty advocates’ desire to repeal the state’s portion of the gross sales tax on meals.