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House passes tax-reduction package with merged childcare and business credits
Summary
The House adopted a sequence of substitutes to House Bill 106 that reduced the income tax rate and rolled several tax provisions into the package, including a childcare-related credit and a business childcare facility tax credit; third-substitute HB 106 passed the House and will be sent to the Senate.
The Utah House on Feb. 27 approved third-substitute House Bill 106, a package of income tax revisions that the sponsor described as a modest rate reduction and as incorporating additional tax credits, including provisions intended to incentivize private investment in childcare facilities.
Representative Kristofferson said the bill decreased the individual and corporate rate from 4.55% to 4.5% and described the reduction as part of a multiyear program of measured tax cuts. After floor substitutions, Representative Thompson noted the third substitute also rolled language from earlier bills into HB 106: it incorporated the child-care-related provisions that expand or extend a child tax credit (reference to HB 316) and added a business tax credit for construction of center‑based childcare facilities (from HB 389). Thompson described the business credit as a 20% credit for qualified construction expenditures intended to spur creation of center‑based childcare supply.
Debate included supporters who said the package provides relief for families and an incentive to increase childcare supply; Representative Daley Provost and others expressed concern about continued income tax reductions in light of state spending needs and urged care in long-term fiscal choices. Representative Thompson said the measure was one tool among others and cited estimates of the economic cost of the childcare shortage in Utah.
The House adopted the third substitute and passed the bill by recorded vote: 61 yes, 11 no. The bill will be sent to the Senate for its consideration.
