ST. GEORGE — The governor signed a $193 million tax cut into law Friday that one of the legislation’s sponsors said “provides for everyone at some level” as it includes an income tax cut, earned income tax credit and Social Security tax credit.
Gov. Spencer Cox signed SB 59 into law along with two other bills Friday afternoon. The House passed the bill on Wednesday and had its final vote in the Senate Thursday.
“Altogether, these tax cuts will return hard-earned money to Utah families and alleviate current inflationary pressures,” Cox said in a statement Thursday. “These tax cuts are a tremendous win for Utah families and seniors.”
The bill lowers Utah’s income tax from 4.95% to 4.85%. and is projected to save one million Utahns up to $129 annually. The income tax cut is estimated to be a reduction of$164 million.
The bill also includes an earned income tax credit that will allow workers who make less than $57,414 to receive refunds for part of their state taxes. The threshold is the same as the federal Earned Income Tax Credit qualifying rule. The tax credit is estimated to be a $16.1 million tax reduction.
An additional $15.4 million in cuts comes in the form of a Social Security tax credit for seniors making up to $62,000. This a dump up from the $50,000 threshold passed in 2021.
“It is a broad-based tax cut,” Rep. Casey Snider, of Paradise, who was SB 59’s House floor sponsor, said during the House debate of the bill prior to its passing.
St. George Rep. Walt Brooks, who pushed for the Social Security tax cut, said on the House floor Wednesday that SB 59 was “very thoughtful and very thorough. What I really like about this bill is it’s all income based. We’re not taking anything out of sales tax.”
After it passed the House Wednesday, SB 59 returned to the Senate on Thursday where revisions and additions made by the House – namely the earned income tax and Social Security credits – unanimously passed.
“Cutting taxes just makes sense,” Sen Daniel McCay of Riverton, sponsor of S.B. 59, said. “We heard from numerous Utahns, especially those on fixed incomes, that inflation has increased their financial burden. These tax cuts bring needed relief to the people of Utah. This is a victory for our state.”
Passage of the cuts comes weeks after Senate President Stuart Adams declared 2022 the “year of the tax cut” for the second year in a row. Lawmakers’ choice to cut taxes came amid fresh revenue demands from state agencies adjusting to Utah’s fast-growing population.
Though some lawmakers initially preferred a plan that would have cut sales taxes on groceries, the package passed this week won bipartisan support for providing tax relief across income brackets.
“This is a good tax policy that benefits our seniors, benefits our working people and benefits basically every single person in Utah,” Brooks said.
Along with Brooks, Southern Utah Reps. Travis Seegmiller, Lowry Snow, Brad Last, Rex Shipp, Phil Lyman and Merrill Neslon voted for the bills. Southern Utah Sens. Evan Vickers, Don Ispon, David Hinkins and Derrin Owens also voted for SB 59.
The Associated Press contributed to this story.
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