Utah House approves tax cut package; effort to remove food tax fails

SALT LAKE CITY, Utah (KUTV) — The Utah House of Representatives has passed a roughly $200 million tax cut package that would cut income and social security taxes while enacting a state earned income tax credit.

Senate Bill 59, sponsored by Sen. Dan McCay (R-Riverton) and Rep. Casey Snider (R-Paradise), passed 63 to 12 and heads back to the Senate for final approval because the bill has been amended since it previously passed there.

“There are those in this body that may not get everything they want on either side of this debate,” Snider said during the House debate Wednesday morning, “but what we’ve crafted here is fair, it’s equitable, it extends across all income brackets, and it makes everybody equally unhappy and happy.”

The bill lowers the state income tax rate from 4.95 to 4.85 percent, which is estimated to save a typical Utah family about $100 a year.

"As representatives of the people, we have an obligation not to over-collect taxes," said Rep. Adam Robertson (R-Provo). "In the area of income tax, we have over-collected."

The measure also spends $15 million to cut social security taxes and $25 million to enact a state match to the federal earned income tax credit.

Democrats tried to change the bill in the House. Rep. Rosemary Lesser (D-Ogden) proposed taking out the income tax cut and instead removing the state sales tax on food, which she and Rep. Judy Weeks Rohner (R-West Valley City) have been pushing to do this session.

"We know that food tax affects people more who are on fixed income and those who are living paycheck to paycheck," Lesser said.

Her effort failed, and the bill was not changed.

House and Senate leaders have repeatedly touted the earned income tax credit as a better way to help lower-income families than removing the food tax.

Rep. Joel Briscoe (D-Salt Lake City) also wanted to make the earned income tax credit refundable, but that substitute also did not pass.

The Senate could take a final vote on the tax cut bill as early as Thursday. Sen. Dan McCay (R-Riverton) did not say whether that body would pass the bill as it currently sits.

"I’d like to spend some time with my colleagues and make sure everybody understands what it is and what’s in the bill," McCay told reporters Wednesday afternoon. "I think there’s support behind the concepts and the principles in the bill."

A previous version of the tax cut measure passed by the Senate included about $6 million in exemptions for business expenses, but the House removed those. McCay said the Senate would not try to add those back in but would pursue those in a different bill.