SALT LAKE CITY — Caution was the reaction Thursday to a complicated report on the impact of the new federal tax changes on Utah income tax collections that showed the state can expect an extra $25 million to $80 million.
"There's a lot of dust to settle, it seems to me," House Majority Leader Brad Wilson, R-Kaysville, said after a presentation to the Executive Appropriations Committee. Wilson called the impact "a moving target."
Senate Majority Whip Stuart Adams, R-Layton, said he was "really concerned" about counting on spending even the low end of the forecast from the Utah State Tax Commission, Gov. Gary Herbert's office and legislative fiscal analysts.
The amount of extra tax revenue depends on how lawmakers choose to handle a federal tax break for sole proprietorships and other small businesses, Tax Commission Chairman John Valentine told the committee.
Little was said about what could be done to reduce the impact on other Utah taxpayers. Valentine said the elimination of personal exemptions in the plan passed by Congress last month will increase collections from individual taxpayers.
Valentine used the example of what he called an "Average Joe" taxpayer who is married with three children and filing a joint return on $70,000 in income and will pay $2,607 in state income taxes in 2018, about 10 percent more than in 2017.
He told reporters later the same group that agreed to the numbers released Thursday are still looking at what a state personal tax exemption would need to be to ensure no extra revenue is collected from individuals.
But he suggested it may take time for the full impact on individual and corporate taxpayers to be clear and said lawmakers may want to wait before going beyond dealing with the small business tax break and a few other specific issues.Comment on this story
His focus at the meeting was spelling out three options for dealing with the tax break on what's known as qualified business income. If lawmaker choose not to give the same break on state income taxes, an additional $80 million would be collected.
Giving the tax break only to those taxpayers who itemize deductions would bring in an extra $50 million and letting all taxpayers who qualify take it would still mean an extra $25 million to the state.
The committee asked a number of questions but moved on to the next agenda item without taking any action.