House approves limited withdrawal from multistate tax compact in 62-7 vote

The Utah House of Representatives on March 14 passed first substitute Senate Bill 247, a measure that would remove Utah from select sections of the Multistate Tax Compact that govern sales allocation and certain definitions.

Representative Gibson, the House sponsor, told colleagues the bill is designed to "control our own corporate tax policy here in the state of Utah" and cited concern that a recent court ruling in California could undermine state authority. Gibson said the change would withdraw the state from "sections 3, 4, and 10, which deal with sales" and include repeal language that functions as an "out clause" if Utah becomes involved in litigation.

Representative King questioned the process, noting the House had not held a standing Revenue and Taxation Committee hearing on the measure and asked whether the bill had been previously considered on the House floor. Gibson acknowledged the bill had been on the calendar but had not had a standing committee hearing in the House.

Sponsor and supporters pointed to work by the National Conference of State Legislatures (NCSL) and described the bill as a targeted response to preserve the state's authority over corporate and franchise tax rules. The Clerk reported the final tally: 62 yes votes and 7 no votes. The bill passed the House and was returned to the Senate for further consideration and signature.

The next step is Senate consideration of the House-passed substitute; the Clerk indicated the bill will be returned to the Senate for the signature of the President.