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.
“Those three are pretty much for sure,” Adams said. “The others, the income tax cut, is probably not a high priority, but (I) wouldn’t say it’s down and out quite yet. But it’s not probable.”
A bill that would eat up about half of the $80 million set aside — to the tune of about $43 million — has already cleared the Senate. Sen. Wayne Harper’s SB11 would reduce income taxes for Utahns on Social Security and military retirement. It’s waiting to be heard in a House committee.
Another bill, Rep. Walt Brooks’ HB86, would enact a tax credit for retirement and Social Security income, which could result in an annual tax savings of $280 for an estimated 63,220 Utahns next year. It would cost the state about $17.7 million, according to the bill’s fiscal note. It’s waiting to be heard in the Senate.
Sen. Lincoln Fillmore, R-South Jordan, and Rep. Jefferson Moss, R-Saratoga Springs, are also working on a bill to expand the states’ existing dependent exemption so middle-income families can get “significant relief,” Wilson said.
“There seems to be growing and broad support for that,” Wilson said.
Senate Majority Assistant Whip Kirk Cullimore, R-Sandy, said lawmakers are still discussing their options, but hinted that an income tax rate cut may be an issue for another year.
“If there is room to do an income tax (cut) then maybe that’s a discussion we have,” Cullimore said. “But maybe we tackle those (other proposals) and see coming out of the pandemic if the economy is still roaring for us. Then maybe that’s something we can address in future sessions.”
Contributing: Ashley Imlay
from Deseret News https://ift.tt/3rswnIU
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