She and others worried HB78 would actually result in a huge tax shift — with low- and middle-income Utahns picking up the tax burden.

"Seventy percent of the (state) corporate tax burden is borne by out-of-state interests," said Wilhelm, quoting a Utah Tax Commission report.

Yes, Utah wants to be business-friendly, she said. But it is better to give a targeted tax break to get Wal-Mart to locate a large distribution center here than to give an across-the-board tax cut to all businesses and hope that will attract new economic development, she said.

HB78 was also opposed by the school district association and the Utah Education Association, the main teacher union.

But one after another, various pro-business groups testified that removing the corporate income tax is the best way to jump-start Utah's economy and better compete with surrounding states.

Harper said he knows of businesses that moved to Wyoming, which has no corporate or personal income taxes, to do business. His own father-in-law moved his Portland, Oregon-based business across the Columbia River to Washington state because Washington has no state corporate income tax, he said.

"How will we educate our school children?" Huntsman's deputy chief of staff Neil Ashdown asked rhetorically. For too long, he said, legislators have fought over how to divvy up the state tax pie. Huntsman proposes to just grow the pie.

"This is (Huntsman's) initial, critical piece as we move tax reform down the road," Ashdown said.

After the committee hearing, several legislators, even some Republicans, said adopting HB78 in the 2005 Legislature locks in big tax cuts for businesses, despite promises that it could be revisited in two years. And, they said, as lawmakers face revenue shortfalls for public education, future legislators will be more likely to impose the sales tax on services, raise tax rates on personal income taxpayers or make other hard choices without raising taxes on businesses.

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