Will Delta get a tax break?

Leading Utah legislators are talking about giving Delta Air Lines a multimillion-dollar income tax break in an effort to keep the airline's valuable hub at the Salt Lake City International Airport as Delta talks to other airlines about possible mergers.

Speaking Wednesday to the Deseret Morning News editorial board, Senate President John Valentine, R-Orem, said GOP senators like the idea of changing the corporate income tax to give specific breaks to the transportation industry, which would include Delta Air Lines, which has its Western hub in Utah.

Meanwhile, Gov. Jon Huntsman Jr. said he is "fully engaged" in trying to keep Delta — or its corporate successor should the Atlanta-based airlines merge with another carrier — here. But, the governor warned, as valuable an asset as Delta is to Utah, state officials still must be careful not to get into a tax-cutting bidding war that could ultimately harm state revenues so much that it would not be worth it.

Delta Air Line officials did not immediately return calls seeking comment.

Delta is reportedly considering merging with either Northwest Airlines or United Airlines — both of which have their own hubs at airports outside of Utah. United is in Denver, while Northwest's nearest hub is in Minneapolis/St. Paul.

Valentine said that among various tax cut proposals to be considered by lawmakers when the Legislature meets in general session starting Monday, one idea liked by his GOP Senate colleagues is to give a corporate tax cut via a complicated change in how business taxes are figured.

Called the "single-weighted" tax, the proposal is to let Utah businesses figure their corporate income tax based only on the amount of sales they do in the state. Taking out of the formula both businesses' employees salaries and their capital items would encourage businesses to keep both their physical assets — like airplanes — and their employees in Utah and not move them to other states.

Senate Majority Leader Curt Bramble, R-Provo, said such a tax incentive — which would be good for all Utah businesses, but is too costly to do across the board — "does not directly address the Delta merger."

But giving the tax break to only transportation businesses could be one more argument in Utah's favor should a new, and larger, Delta have to decide whether to keep its Salt Lake hub or move those operations to a hub of its new partner.

House Republicans have already decided that they want to give a $100 million tax cut this year.

Senate Republicans are looking at giving some kind of tax relief, but Valentine said Wednesday that it would not be a large tax cut like the Legislature gave in 2007 and 2006, which totaled hundreds of millions of dollars.