New numbers show Utahns’ federal taxes will go down, but state tax could go up

Posted at 6:25 PM, Jan 25, 2018
and last updated 2018-01-25 23:44:19-05

SALT LAKE CITY -- New numbers released by the Utah Tax Commission show Utah will get anywhere from $30 million to $80 million extra to spend as a result of the big federal tax reform bill.

Those numbers were provided to the Utah State Legislature on Thursday night, giving an idea of the impact of the bill pushed by President Trump and the GOP-led congress.

What it means for you depends on what lawmakers do next. The tax formula means average Utahns may see a federal tax break, but their state income tax goes up, Utah State Tax Commission Chairman John Valentine told FOX 13.

"The impacts will affect those in the lower and middle income brackets," Valentine said. "They see an increase if the legislature makes no changes."

To avoid it being seen as a tax hike, Valentine told FOX 13 the Utah State Legislature may need to cut state income taxes or create a personal exemption -- which the state doesn't have. It still remains to be seen how the federal income tax changes affect the average Utahn.

From his presentation to the Utah State Legislature:

The presentation to the Executive Appropriations Committee on the impact of the federal tax reform bill. (Photo by Ben Winslow, FOX 13 News)

But lawmakers are still unsure what to do. There's the impact to business, and all the needs that government funds from roads to education. Some in the legislature's Executive Appropriations Committee suggested waiting to see what happens in 2019.

Senate President Wayne Niederhauser, R-Sandy, told FOX 13 he was inclined to offer an income tax cut.

"This is a windfall for the state and I think we’ll look at trying to adjust our system so people get a little bit of a break," he said.

Utah State Tax Commission Chairman John Valentine speaks to the Utah State Legislature's Executive Appropriations Committee on Jan. 25, 2018. (Photo by Ben Winslow, FOX 13 News)

Taxes are still one of the most important issues facing lawmakers this year. On Thursday, religious leaders called on the Utah State Legislature to eliminate the tax on food. They said the tax harms working class families.

"They spend more that 65, 70 percent of their income on rent so that means there’s little left for food," said Rev. Vinetta Golphin-Wilkerson, who operates a food pantry out of the Granger Community Christian Church.

They have a friend in Rep. Tim Quinn, R-Heber City, who is running a bill to get rid of the tax.

"I don’t view this issue from a standpoint of economics. I think this is a moral issue," he said.

Other lawmakers are proposing tax credits and cuts that they argue help Utah families. A coalition of Republican and Democratic lawmakers held a news conference to argue for the changes.

Rep. John Westwood, R-Cedar City, is proposing up to $600 in earned income credit for needy Utahns and a cut to the tax on Social Security. Rep. Becky Edwards, R-North Salt Lake, is proposing tax credits to businesses that offer child care help or paid family leave. Rep. Susan Duckworth, D-Magna, wants to eliminate the tax on diapers, feminine hygiene products and incontinence products.

But as lawmakers grapple with paying for roads, schools, air quality improvements, and other critical needs, those cuts could be tough to make.

"I think as these are considered they will rise to the top of ways we can really use our taxes in the best way to benefit Utah’s families," Rep. Edwards said.