Utah

Utah lawmakers moving to cut taxes, but don’t expect income tax rate to fall this year

Published

4 years ago

February 5, 2021

SALT LAKE CITY — Though it’s been floated as an idea for the 2021 session, legislative leaders aren’t promising an across-the-board income tax rate cut this year, but they are aligned on reducing taxes in other ways.

House Speaker Brad Wilson, R-Kaysville, and Senate President Stuart Adams, R-Layton, won’t say an income tax cut is “off the table,” but as of Friday it’s not a direction they’re heading.

“Nothing is ever off the table until the last bill is run through the process,” Wilson told reporters. However, he added, lawmakers seem to be “coalescing” around legislation to cut Social Security and retired military income taxes, as well as expand the state’s current dependent exemption.

“Those combined are anywhere, depending on how we put them together, $80 million to $100 million,” Wilson said. “So we’ll see. I think to do a rate cut on top of that might be a little tricky this year, it would take a larger tax cut than what we’ve set money aside for.”

Lawmakers have budgeted $80 million for some type of tax cut this year, money saved after legislators initially made budget cuts amid fears of negative impacts from the COVID-19 pandemic. But as revenue projections have returned higher than expected thanks to Utah’s economic standing, lawmakers are eying that $80 million again to give back to Utah taxpayers.

Wilson wouldn’t go as far to say an income tax cut was “unlikely,” but “we’re not trending in that direction. At least not right now.”

Adams, who has called 2021 the “year of the tax cut,” said an income tax rate cut will “never be completely off the table,” but lawmakers are “for sure” focusing on the Social Security, military and dependent exemption aspects.