Senate President Adams called 2022 a year of the tax cut, but what did those tax cuts end up being? In December, $160 million was set aside for a tax cut, and the Utah Legislature kept that commitment and more.
A number of proposals did not come to fruition, including a potential compromise to eliminate the sales tax on groceries while eliminating all limits on how income taxes can be used. Another proposal — which Libertas Institute supported — would have eliminated the property tax rate freeze a year early, providing much-needed tax relief to Utahns. Unfortunately, that bill, HB 478, did not pass the full Legislature.
Taxpayer advocates proposed a much larger income tax cut (4.5% instead of 4.85%), but that proposal also did not come to fruition. Further cuts to the income tax rate will continue to be on the table as long as Utah’s economy does not falter. The following are the tax cuts that were passed:
- Senate Bill 59, sponsored by Sen. Dan McCay, provides for a cut in the corporate and personal income tax rate from 4.95% to 4.85%, raising the threshold for eligibility for exemption from income tax on social security benefits, and enacting a state earned income tax credit for low-income Utahns. The changes result in an ongoing tax cut of $193 million. These tax changes will start to apply in the 2022 tax year.
- Senate Bill 147, sponsored by Sen. Wayne Harper, reduces future cell phone fees and taxes.
- Senate Bill 93 and House Bill 199 — sponsored by Sen. Lincoln Fillmore and Rep. Robert Spendlove, respectively — both helped reduce the burden of the tangible personal property tax on business owners.
Yes, Utahns will be able to keep more of the fruits of their labors going forward, but not quite as much as taxpayer advocates wanted.