ALEC Policy Champions Reduce Utah Income Taxes for Sixth Straight Year

ALEC is proud to recognize Sen. Daniel McCay and Rep. Steve Eliason for their continued work to reduce Utah’s personal income tax rate through Senate Bill 60, which lowered the rate from 4.50% to 4.45% retroactive to Jan. 1 of this year.

Signed by Gov. Spencer Cox in March, SB60 applied retroactively to the start of this year. The bill also lowered the corporate income tax rate from 4.5% to 4.45%, advancing economic competitiveness in the state. With its passage, Utah has now enacted six income tax rate reductions since 2021, when the rate was 4.95%. The Beehive State has continuously worked to simplify its tax code, moving from a progressive income tax in 2007 to a flat tax for both personal and corporate income. This has helped to spur economic growth and draw residents from neighboring states.

This reduction to Utah’s personal income tax rate is one of the many reasons the state has ranked first in Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index for the past 19 years. Rich States, Poor States identifies personal income tax rates as one of the most consequential policy decisions lawmakers can control in the competition for business, residents, and economic prosperity. Utah has set the standard by continuing to reduce its flat income tax, reforming its pension system, and leading the way with Truth in Taxation for property taxes.

Since 2021, 26 states have reduced their personal income tax rates, and several are moving toward complete elimination through phaseouts, such as Kentucky, Oklahoma, and South Carolina. By continuing to reduce its tax burden, Utah is demonstrating that there is always room to improve competitiveness.

Congratulations to Sen. Daniel McCay and Rep. Steve Eliason for taking another step to promote economic growth in Utah.