Utah’s annual legislative session begins Tuesday, and although lawmakers have cut taxes every session for the last five years, several Republicans think there is room in the state’s budget for a little more tax trimming.
Last year, the Legislature lowered the state income tax rate to 4.5%, down from 4.55%. This year, Sen. Dan McCay, R-Riverton, is proposing SB60 would lower that rate further to 4.45%, and Rep. Kay Christofferson, R-Lehi, has made the same proposal in the House.
Another Senate bill, SB116, sponsored by Sen. Lincoln Fillmore, R-South Jordan, would lower income taxes when state revenues exceed forecast revenues, with the rate change based on the actual state revenues.
And in his own $30.7 billion budget proposal, Gov. Spencer Cox is not pushing for another tax break. Cox described his fiscal year 2027 budget as “tighter” after last year’s passage of a massive federal budget bill, the “Big Beautiful Bill.”
That legislation made permanent current federal income tax rates, which were originally passed in 2017 and set to expire at the end of 2025. That, rather than a state income tax reduction done via the Legislature, can offer tax relief for Utahns, the governor said.
“No taxes on tips, for example, that gets incorporated into what we’re doing,” Cox said last month. “There were also new tax reductions that go to businesses in that bill.”
Asked when he unveiled his proposed budget whether he would support an income tax cut should lawmakers push for one, Cox said he has supported such cuts in the past but is currently more focused on the state’s overarching tax policy.
And although he’s supported getting rid of the state income tax entirely, Cox said, “it’s impossible for us to get rid of the income tax and still be able to function as a state government. So what are we going to replace that with? I don’t think people want their property taxes to go up.”
Whether McCay’s tax reduction proposal will garner support from other lawmakers or legislative leaders, however, remains an open question. Spokespeople for House Speaker Mike Schultz and Senate President Stuart Adams did not respond to a request for comment regarding McCay’s bill and their approach to tax policy in the upcoming session.
At a legislative preview session hosted by United Way last week, House Minority Leader Angela Romero, D-Salt Lake City, pushed back on the idea of cutting taxes again.
“I also think maybe we don’t do another income tax cut. I think that also has played a huge role,” she said, referring to budget restrictions. “I’d rather [state funds] go into something that’s going to help people.”