Utah legislators keep evaluating very important tax policy even following several changes made during the 2021 General Session. 

State Tax Cuts and Federal Relief Funds

In its June meeting, the Revenue and Taxation Interim Committee received information following guidelines made by the U.S. Treasury Department that showed that Utah is easily in the clear to cut taxes in the future, while still accepting American Rescue Plan Act (ARPA) funds. 

Following tax cuts made during the 2021 General Session, totaling roughly $100 million in income tax cuts to those on social security, military retirement, and to families, questions began to arise whether Utah could make those cuts while still accepting federal relief money. Legislative staff, in their presentation, said that Utah is able to not only continue to enact these cuts passed earlier in the year, but can continue to cut taxes in future years due to Utah’s organic revenue growth. 

The Utah Taxpayers Association has been calling for an income tax cut for all Utahns throughout the year, and will make a concerted push to accomplish this in the 2022 General Session. 

Providing Tax Relief to Seniors That Need it Most

During the 2021 Session, the Utah Taxpayers Association advocated strongly in favor of a bill, sponsored by Senator Lincoln Fillmore that would have provided meaningful property tax relief to elderly homeowners. 

SB 52 would have allowed seniors that meet very specific conditions, such as a low income threshold, to defer their property taxes until the title of the property was changed. Following the change in title, the deferred property taxes would then become due, with interest. Again, the property taxes would still be owed, just at a later date. 

Unfortunately, due to some misinformation that floated around the House chamber, the bill died on the House floor on the last night of the Session. 

The Utah Taxpayers Association is determined to bring it back, and has been asking for discussion during the summer interim meetings. 

In June, the Committee discussed these deferrals during a presentation by Senator Fillmore. He described how property tax deferrals work and how various states have implemented them.

We are encouraged by the conversation following the Committee’s approval to open a bill file on providing similar relief for property taxpayers. 

Making Transportation Funding More Equitable

The Association has long stood for the principle that users of a service ought to be responsible for the payment to maintain and provide the service. In this circumstance, roads and transportation infrastructure.

When a traditional-fueled vehicle fills their gas tank, the tax on gasoline is automatically calculated into the total price of a gallon of gas. That gasoline tax is then used to pay for the maintenance of both state and local roads.

Alternate-fueled and electric vehicles do not pay the gasoline tax, and therefore are not contributing their share of the usage of the roads. While they do pay a registration fee which does contribute to the transportation infrastructure, it is not nearly to the point of equity with traditional-fueled vehicles.

In the 2021 General Session, Rep. Kay Christofferson sponsored HB 209, which would have required that these types of vehicles are contributing to the maintenance of the roads. This unnecessarily controversial bill unfortunately died on the House floor, even after making some amendments to phase in the participation over several years. 

One of the arguments against the legislation was wanting to see the results of an upcoming report from UDOT which would have looked into these types of issues that was being released in the summer. 

In its June meeting, the Transportation Interim Committee received the report and reviewed it, including examining the road usage charge (RUC) program. Road usage charge essentially charges people for how many miles they drive, as a way to replace the gas tax. This more directly impacts transportation funding by forcing those who use the roads more to pay more for it. 

In the report, UDOT states “Statewide research in Utah and other road usage charge studies across the country have shown that most people agree that every driver should pay their fair share.”

The Utah Taxpayers Association hopes that with the release of this report, legislators will see the importance of funding transportation infrastructure more equitably through charging those who do not pay for road usage, and ensuring that usage is more directly tied to fees or taxes charged. 

Auditing the Utah Rural Jobs Act Tax Credits

Back in the Revenue and Taxation Interim Committee, members heard a report about the Utah Rural Jobs Act after a review audit was done on the program. The Act provides tax credits for the creation of rural jobs in Utah by companies and their investors. Recommendations were made to strengthen the measurements and data in the program to gain a better idea of what the return on investment on the program truly is. 

Senator Lincoln Fillmore made a motion to open a bill file to add a sunset to the program and give authority to GOED and the Tax Commission to share more data. That motion passed unanimously.