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Senate passes tax package with income-tax change debated and substitute proposed
Summary
The Utah Senate passed Fourth Substitute House Bill 106, a tax-relief package that includes a 0.5% income tax reduction and child-related credits; an amendment to remove the income-tax cut was proposed and debated but the package in its fourth-substitute form passed the Senate.
Fourth Substitute House Bill 106, a multi-part tax package, passed the Utah Senate after floor debate on March 4, 2025. The bill includes a variety of measures described by the sponsor as income-tax reductions and expanded child-related tax credits.
Senator McKay, the bill sponsor, described the package as "tax cuts for all Utahns at every stage of life," including a 0.5% reduction in individual and corporate income tax rates, a provision exempting Social Security income for joint filers up to $90,000 in certain measures, an expanded child tax credit, and tax credits to encourage businesses to build child-care facilities. He said the total package amounted to approximately $127 million in tax relief.
A substitution vote and debate: Senator Escamilla offered a motion to substitute in a fifth substitute that would remove the income-tax reduction while keeping the other child and business tax credits. Escamilla said the Democratic caucus supported the non-income-tax pieces and asked colleagues to "keep those childcare income taxes together and remove the income tax." Sponsor McKay opposed the substitute and asked colleagues to reject it, calling the substitute "not friendly." Other senators discussed fiscal constraints, including an unexpected Medicaid issue and revenue estimates; Senator Eby urged caution and asked colleagues to prioritize funding for services and safety nets.
Outcome: After floor debate, the Senate proceeded to final passage of the fourth substitute. The clerk announced: "Fourth substitute House Bill 106, having received 23 yay votes, 6 nay votes, 0 being absent, passes this body and will be returned to the house for further consideration."
Next steps: The bill will be sent back to the House for further consideration; sponsors and opponents noted the ongoing discussion about the state fiscal situation and concurrent bills addressing Social Security taxation.
