HB 355: At Last, A State Income Tax Cut
This bill was passed on too late in committee and never made it to a House or Senate vote.
Ever since congress passed the Trump Tax Cuts, state officials have known that this would bring additional state income tax dollars to the state. It may seem counterintuitive, but because Utahns now pay less federal income tax, that means that Utahns have more net income that automatically falls under the state income tax.
This has led to a debate about how to use the money. Some have suggested using the funds to cut certain business taxes, while others have suggested giving teachers a pay raise. There are even a few who have suggested that all that money is already spoken for within the state’s ever-growing budget.
Thankfully Representative Dan McCay has an alternative: just give the money back to Utah taxpayers. Instead of spending the money, lower the state income tax by a small margin. This is exactly what House Bill 355 does. The bill lowers the state individual and corporate income tax rates down from 5% to 4.925%, resulting in an $80 million tax cut for Utahns.
At a time when the Utah Legislature has been raising many different taxes, HB 355 is a welcome change of pace.