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House advances research tax credits amid debate over school-fund impact
Summary
Lawmakers passed substitute bills creating research and R&D tax credits (SB47, SB220) with carry-forward provisions; sponsors estimated combined reductions to the Uniform School Fund of roughly $5.3 million, while proponents argued the incentives will attract high‑paying jobs.
The Utah House on March 4 advanced a package of bills creating or modifying research and development tax incentives, approving substitutes that include an income/franchise tax credit and study provisions.
Floor sponsors described the proposal in SB220 as a 6 percent income and franchise tax credit for machinery and equipment used for qualified research done in-state, with a carry‑forward provision of up to 15 years and a mechanism where the credit is earned in one year and claimed in the next. Sponsors said the fiscal impact of SB220 would be roughly $2,000,000 in fiscal year 2000; companion measures (including SB47) carry additional reductions to the Uniform School Fund. The sponsor estimated the two bills together would reduce the Uniform School Fund by about $5,300,000.
Supporters argued the credit is an investment to retain and repatriate R&D jobs and attract high‑quality businesses to Utah; they said interim studies by the Tax Review Commission and the interim Revenue and Tax Committee would evaluate whether the credits produce the intended economic benefits. Opponents cautioned that such tax breaks risk eroding the tax base and urged careful study before broad implementation.
After floor debate and summation, the House substituted and passed the research tax-credit measures (votes recorded for SB47 showed 60 yes and 10 no); the bills will proceed to the Senate for further action.
Floor discussion included explicit fiscal figures tied to the Uniform School Fund and repeated assurances that interim studies are required to evaluate effectiveness before long‑term policy commitments are finalized.
