The Utah Legislature enacted positive changes and Association priorities in the 2021 General Session, including tax cuts for senior citizens (HB 86), military retirees (SB 11), and families (SB 153), as well as assisting small businesses tax burden and liability (SB 18). Your Taxpayers Association also won a major joint rule change to enable revenue growth set-asides in December for tax cuts in the following legislative session.

HB 86 delivers a social security tax cut to Utah’s senior citizens, which raises the amount of income that is exempt from tax from $35,000 for joint filers to $50,000. This delivers an $18 million state income tax cut to those that are receiving those benefits.

SB 11 will eliminate state income tax on military retirement benefits in Utah. Utah will join 46 other states that do not tax those benefits as many retirees from the various branches of the military settle into retirement after completing their service to our country. Senate Bill 11 delivers a $24 million tax cut. 

SB 153 further restores the state tax exemption for dependents that was lost in the 2017 federal tax reform bill. That loss created a state income tax hike on Utah taxpayers with dependents. SB 153 raises that exemption from $565 per dependent to $1,750. This will provide a tax cut of $54 million to taxpayers with dependents.

The Association also advocated for a broader income tax rate reduction, but the Legislature decided the upcoming year was not the appropriate time to do it. Your Taxpayers Association will continue to push for tax cuts during the interim and heading into the 2022 Session. 

The Legislature also helped eliminate the burdensome personal property tax for thousands of small businesses, a much needed relief following the economic turmoil for many businesses in the past year (SB 18). This policy will carry forward even after a post-COVID-19 economic recovery. 

SB 18 is a major victory for taxpayers across the state. The bill raises the amount of property that is exempt from the personal property tax from the current $15,000 level to $25,000. The beauty of this tax cut is found in the details of who really pays the majority of this tax. While thousands of small businesses deal with the annual nightmare of counting their tables, chairs, computer terminals and knives and forks to pay a very small amount of tax, the vast majority of tax is paid by the very large property taxpayers. That is massive relief, not only from the burden of paying the tax, but also the burden of doing the inventory of items every year and being subject to pesky audits that often mean no meaningful change in the tax that is owed.

HJR 11 changes a rule regarding the long-standing requirement that before tax cutting legislation could be passed, the revenue loss had to be ‘funded.’ The change establishes a process for the Executive Appropriations Committee to set aside revenue in anticipation of tax cut legislation in the coming session. If this had always been in place, taxpayers may have avoided a 23 year delay in passing the 3-year life sales tax exemption and other tax cuts that might have been enacted earlier. 

The Legislature failed to pass SB 95, which would have provided a relief from sales taxes on business inputs used in the development of software, passed the Senate unanimously, but never received a vote in the House. In the past, the Legislature has been very supportive of the policy of eliminating sales taxes on business inputs, but has not provided this benefit to software development for the past two years this policy has been written into legislation.  

The Legislature also did not pass SB 52, which would have set a standard process for deferring property taxes for lower-income elderly. It would allow eligible homeowners to defer, or hold off paying property taxes until a title transfer. At that point, the taxes would be due with interest. All taxing entities, under a deferral, are held harmless and would still be able to collect the revenue. Interestingly, the Senate passed this bill unanimously, but the House rejected it following the counties’ objections. The counties, unfortunately, used misinformation to make it appear that this deferred revenue would never be collected.

Some bills the Legislature passed will directly harm taxpayers. SB 104 creates a separate levy for animal control services provided by a county. In Davis County for example, the cities pay the county from their general funds to provide animal control services. The county complained that sometimes they were not getting paid and had to take money from their own general funds to cover the needs of the department. By separating out the levy, the county can collect specifically for this purpose, and the cities are forced to lower their overall levies to ensure it is not an automatic windfall on the backs of taxpayers. Of course, this doesn’t stop cities from raising their property tax rates automatically the next year, arguing that they’re simply “bringing it back to where it was”. We will be speaking out strongly if any city tries to dupe their taxpayers with this unreasonable argument in 2022.

Annual Legislative Scorecard

The Utah Taxpayers Association annually releases a legislative scorecard ranking Utah’s legislators by their votes on the most important tax-related bills considered during the most recent legislative session. Out of 66 bills the Utah Taxpayers Association tracked during the 2021 session, 14 tax-related bills were used in rating Utah’s 104 legislators. The average score in the Senate is 74.2%, a drop from 79.3% the year before. The House average this year is 64.8%, a significant departure from 74% in 2020. These averages for both bodies have not been this low in more than five years. In the House, several bills included in this year’s Scorecard divided the body, which heavily contributes to the drop in the average. These splits are not rare, but definitely uncommon.

SB 132, which would have exempted sales tax for construction materials for child care centers, was split 34 – 34. This tie led to the bill not passing. SB 104, which creates a new property tax levy for animal control, passed with a vote of 38 – 34.

HB 209, a high priority for the Association, was also controversial among representatives. The bill would have increased fees for alternate fuel vehicles over the course of several years. The Taxpayers Association believes this is appropriate policy, to ensure those that use the roads are more equitably contributing to the maintenance of the infrastructure. That bill failed 27 – 44.

In the Senate, nine of the 13 bills we scored were unanimous, making only four bills in which only at least one member voted no. These four bills did not evenly divide the Senate, with votes with the Association adding up to between 7%, which is two votes, (HB 348) and 28%, which is 8 votes (HB 140).

Following our calculations on the 14 bills we used to finalize the Association’s Legislative Scorecard, only two legislators, both from the House, scored 100% this year.

Rep. Norm Thurston and Rep. Walt Brooks were the highest scorers in the House, both with 100%.  

Sen. Lincoln Fillmore was the highest percentage with the Utah Taxpayers Association in the Senate, at 92.3%.

Eight legislators will be receiving the “Friend of the Taxpayer” award, with those voting more than 90% of the time with the Taxpayers position. Those are Senators Lincoln Fillmore, Dan McCay and Jake Anderegg. Five members of the House won the award. Those are Representatives Norm Thurston, Walt Brooks, Steve Christiansen, Jeff Moss, and Travis Seegmiller.  Congratulations and thank you to these legislators for so strongly working to protect taxpayers! They will be receiving their awards at our 2021 Taxes Now Conference, being held on Thursday, May 13th.

See how your legislators ranked.