Utah Task Force Recommends Tax Reform Bill

SALT LAKE CITY, Utah – Tax Restructuring and Equalization Task Force members voted in favor of a tax reform proposal, bringing the state legislature one step closer to restructuring Utah’s tax system in a special session.

“We’re here tonight to say slow this down, do not have a special session,” said Heidi Matthews, president of the Utah Education Association, ahead of the public comment period during Monday’s task force meeting.

Lawmakers said the plan would give Utahns a net tax cut of $160 million by reducing the state income tax rate for individuals and corporations from 4.95% to 4.66%. The proposal would also create an income tax credit for certain Social Security retirement income and a “Grocery Tax Credit” for low-to-middle-income residents.

“Many Utahns will benefit from this,” said a woman during the public comment period.

The state would make up for the lost revenue by adding sales tax. But rideshare drivers worried about the long-term impact of the proposed tax on both rides and gas.

“People would think twice about ridesharing and that would impact my earnings at the end of the week,” said Victor Morales, who drives full time for Lyft.

Perhaps the most controversial item in the plan was the proposed sales tax on groceries, which opponents argued targets Utah’s most vulnerable.

“It’s going to impact your ability to pay for nutritious food for your family,” said Alex Cragun with Utahns Against Hunger.

According to the tax task force, a family of four with an income of $25,000 would see an estimated tax reduction of more than $300 per year. At an income of $60,000, the same size family would see an estimated $525 tax reduction per year. And at an income of $85,000, a family of four would see about a $120 cut per year.

“We recognize that such a large change in our tax code is complicated and will never universally be agreed upon,” another public commenter told lawmakers on Monday.

The meeting saw many supporters of the tax proposal who were encouraged by the cuts and lawmakers’ determination to get it passed in a special session before Christmas.

“We further support a special session this month which will sustain the momentum and ensure the 2020 session will not be a single-issue session,” one man said.

Monday’s 6-3 vote in favor of the proposal means the plan will be recommended to the full legislature. A special session could be called as soon as this week.