Senate approves bill to index income tax brackets starting Jan. 1, 2001

The Utah Senate voted to pass Senate Bill 36 on Jan. 18–19, 2001, approving an adjustment to individual income tax brackets and directing automatic annual indexing going forward. Sponsor Senator Valentine said the measure would correct bracket drift beginning Jan. 1, 2001, and then index brackets annually to prevent taxpayers from being pushed into higher brackets by inflation.

Supporters framed the change as a modest, administrable response to rising incomes and federal changes. Senator Spencer said he was “in full support of this bill,” while urging lawmakers to consider even broader bracket adjustments in the future. Senator Allen added that many working families had effectively been shifted into the highest bracket over the past 25 years and endorsed the bill as a step toward fairness.

Senator Steele initially said he would vote no, warning that the legislature should first study broader tax policy and property- and fuel-tax options, but after floor debate he told colleagues he had been persuaded to change his position. During debate Steele said, “I will not vote for this” earlier in the exchange, though later he signaled support after hearing arguments on the floor.

The Senate approved SB 36 on a roll-call vote; the chair announced the bill had received 28 yeas, no nays and one absent and that it would be transmitted to the House for consideration. The fiscal analyst’s preliminary estimate discussed during debate placed the bill’s fiscal impact at roughly $3.9 million in reduced income tax receipts for the affected period, with senators noting competing factors tied to recent federal tax law changes that may increase state revenues.

The bill’s supporters said it addresses a predictable and recurring problem of bracket creep; critics called for a more comprehensive review of the state’s tax structure. The measure now goes to the House for further consideration.