With more than 200 bills already numbered during the 2020 General Session, it may be hard to keep track of all the tax-related legislation. Thankfully, your Taxpayers Association tracks all these bills, and many more for you through our 2020 Legislative Watchlist.
Here are the major bills we’re working on so far this year:
Strengthening Truth-in-Taxation through the Property Tax Notice (HB 164)
Utah is unique in the nation when it comes to property tax laws, specifically Truth-in-Taxation (TNT). TNT requires that entities that look to exceed their certified tax rate (collecting more property tax revenue than the prior year, excluding new growth) advertise the impact of the proposed increase and hold a public hearing to allow their taxpayers to provide input on the proposed tax increase. Utah’s property tax system is based on revenue, rather than a static rate, like other states.
Utah’s Truth-in-Taxation law is regularly praised by national organizations, and is actively modeled in other states, including Iowa. But since first taking effect in 1986, your Taxpayers Association continues to refine Truth-in-Taxation to provide even more transparency to taxpayers.
HB 164, sponsored by Rep. Jeff Moss, requires additional information be included on the property tax notice, mailed by the counties each year.
Following the passage of HB 293 in the 2018 Session which froze the statewide uniform school tax rate, the Legislature did not put in place a transparent method of showing an increase to the property owner. While taxes for the property owner increased, the change year-over-year was shown as zero on the mailed notice. HB 164 will change this to reflect the true change in taxes for the statewide basic levy.
In addition, the deadline to appeal a property’s valuation, information about residential exemption, and the total taxable value of the property will also be required on the property tax notice under HB 164.
Your Taxpayers Association initiated this important legislation.
Easing Senior Citizens’ Tax Burden on Social Security Income (HB 181)
While the Utah Legislature did pass a bill that would have provided a tax credit for social security income, Utahns that signed the referendum on the tax reform package undermined this effort. However, Rep. Walt Brooks is looking to restore this credit in HB 181. If passed, the measure would eliminate state income taxes on certain social security income.
HB 181 would enact a nonrefundable tax credit for senior citizens receiving social security income up to certain income thresholds. While Utah already has a retirement tax credit, HB 181 would allow the option for filers to choose between the social security and retirement tax credits.
Your Taxpayers Association is supportive of this legislation.
Boosting Rural Utah’s Economic Power and Employment (SB 41)
Utah’s enviable business tax and regulatory climate, which has made Utah one of the best states to raise a family, was created by visionary policymakers. The state has also systematically eliminated tax pyramiding by removing sales taxes from business inputs in nearly all major NAICS code categories.
The Legislature’s decision to exempt solar and wind power generation equipment from sales taxes has led to billions of dollars of investment in Utah wind and solar farms, vastly increasing the property tax base of schools and local governments in Beaver and Millard Counties.
Passage of the 1995 manufacturing sales tax exemption ensured the Micron’s initial investment of more than $1 billion in Lehi and ultimately led to Utah’s Silicon Slopes tech boom. The three-year-life manufacturing exemption in 2018 ensures that manufacturers in northern Utah continue to provide jobs for Utah families.
However, the state still imposes punitive sales taxes on oil & gas exploration and production and non-renewable electric generation. Unfortunately, this has had an adverse effect on the eastern part of the state, most prominently the Uintah Basin counties of Duchesne and Uintah.
Fortunately, SB 41, sponsored by Sen. Ron Winterton, which was approved by the Public Utilities, Energy, and Technology Interim Committee, eliminates sales taxes on inputs for oil and gas, electrical generation and pipelines. =
Your Taxpayers Association is actively working with the Legislature to pass the bill.
Returning Money Back to Taxpayers Following Federal Tax Reform (SB 53)
When federal tax reform was passed in 2017, Utah received a windfall in taxes since it couples with the federal government on several tax policies.
Because of this coupling on the issue called Global Intangible Low Taxed Income (GILTI), some companies have seen a substantial tax increase, which provided significant new funding to the state, without the Legislature making any policy call as to whether it was appropriate or not.
Without decoupling from the federal law, businesses that engage in foreign commerce have seen an increase, creating an uneven playing field. Sen. Lincoln Fillmore is looking to finally decouple from federal law.
So far, 82% of states that levy a corporate income tax have decoupled from GILTI at a federal level. It’s Utah’s time.
Your Taxpayers Association strongly supports this bill.
Providing for Teachers When Purchasing Classroom Expenses (SB 69)
Sen. Jake Anderegg has a proposal to provide even more money for teachers when they purchase classroom expenses from their own pockets, through the form of an income tax credit. While there is already a tax credit on the federal level of $250, many teachers have said this is not enough.
Sen. Anderegg’s legislation would allow for a teacher to receive a state income tax credit for up to $1,000 for supplies purchased.
This is a very appropriate use of taxpayer dollars considering that teachers have greater control of the supplies purchased within the classroom, without having to wait for district support. The income tax credit, which is taken from the Education Fund, is being directly used to fund a student’s education.
Your Taxpayers Association is supportive of this legislation.
This is not all the Taxpayers Association is working on this legislative session. To see the full list and our positions, click here or visit utahtaxpayers.org.