By Representative Christine Watkins, District 69
I can’t believe the 2021 General Session has almost reached the halfway point. Last week, HB188 State Stone Design passed committee with a favorable recommendation. It will be heard on the House Floor soon, which is very exciting.
I cosponsored HB86 Social Security Tax Amendments. This bill enacts a tax credit for social security benefits that are included in the claimant’s federal adjusted gross income. It also provides that an individual who claims the tax credit for social security benefits may not also claim the retirement tax credit. This bill, if passed in the Senate and signed by the governor, will go into effect Jan. 1, 2021. It also gives an age requirement; you have to have been born on or before Dec. 31, 1952.
Another great bill I cosponsored is HB161 Military Retirement Tax Amendments. It allows a nonrefundable income tax credit for military retirement pay. It too has the requirement of being born on or before Dec. 31, 1952. This bill allows this tax credit for all military branches, including the National Guard. Both of these bills have a number of stipulations that your tax preparer will have to know. Both of these bills have an adjusted federal income cap.
I have been asked about PPP Loans and the tax liability of businesses. The policy the State of Utah has in place protects Utah businesses from paying state tax on the Paycheck Protection Program funds they received. The following is the latest from the Federal Government and our state reaction to protect Utah businesses.
On Dec. 27, 2020, the federal government changed its policy to exclude PPP loan forgiveness in taxable income and also allow expenses paid with that tax-free revenue to be deductible. This allows the small percentage of companies that received PPP loans to double dip, getting free money plus a tax reduction.
Utah law is tied to the federal law, allowing PPP expenses to be deducted, so to maintain our policy of only taxing regular income minus out-of-pocket expenses, Utah law adds back the PPP revenue to taxable income. We are committed to business-friendly policies, but not limiting those policies to the companies deemed worthy of support by the federal government.
Many Utah businesses did not receive a PPP loan and we have opted not to further disadvantage them by allowing their competition to double-dip. To be clear, the only companies that will owe Utah income tax are those that made a profit last year. Businesses that lost money last year will not owe state income tax and businesses that just broke even last year will not owe state income tax, just like any other year.
We are in the last week of sub-appropriation committee work. I sponsored a Request for Appropriation (RFA) for the USUE and Dustless Ash partnership. The have been working together to have classes for students to learn 3D printing. The request was for funding to buy bigger 3D printers.
I also sponsored a RFA for a pilot program to help with staffing and equipment issues with our Southeastern Association of Governments and the Six County Association of Governments. I have my fingers crossed for both of them. We have a limited amount of money and not every request gets funded.
I found out on Friday afternoon that we could have the plexiglass guards that are around our desks removed if we wanted. I was so happy to request that mine be taken down. The plexiglass guards will be donated to the Salt Lake City School District. They were hard to see around and they made it difficult to hear other legislators. We can be tested daily for COVID-19 and I am diligent about frequent testing.
I apologize if I have not responded to everyone: our emails have been blown up by several controversial bills and emails get buried quickly.
Contact:
Email: christinewatkins@le.utah.gov
Cell: (435) 650-1969
Facebook: Representative Christine Watkins