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House approves tax deduction to help self‑employed buy health insurance
Summary
The House passed House Bill 404 to allow self‑employed and small‑business taxpayers to deduct a portion of health insurance premiums from taxable income (amended from 100% to 70% to reduce the fiscal impact). The bill passed 57–3 and will be sent to the Senate.
SALT LAKE CITY — The Utah House on Feb. 27 approved House Bill 404, a measure that creates a state tax deduction for premiums paid by self‑insured individuals and small businesses, with an amendment reducing the full deduction to 70 percent to limit the fiscal impact.
Sponsors argued the deduction creates an incentive for uninsured individuals and small businesses to buy health coverage, increasing overall coverage and potentially reducing public costs. The sponsor said the original 100 percent deduction would have carried an $8 million fiscal note; amending the deduction to 70 percent reduced the fiscal estimate to roughly $4 million.
Members debated the funding source for the deduction; the floor clarified that the reduction in income tax revenue would affect the uniform school fund because income tax is a dedicated revenue stream. The sponsor and others said the measure would promote fairness between those who receive employer‑based tax treatment and the self‑employed.
The House adopted the amendment and passed HB404 on a recorded vote announced 57 yes and 3 no. The bill will be transmitted to the Senate for further consideration.
