The House Revenue and Taxation Committee on Monday recommended two tax cut measures for debate by the full House. Both bills are likely to face scrutiny in the Senate where the Republican majority opposes further reduction of sales tax, instead wanting to concentrate on revamping income tax.

HB123, sponsored by Rep. John Dougall, R-Highland, would not only lower personal income tax rates and offer tax credits to encourage people to switch to a flat tax, it would remove the remaining state share of the grocery tax.

The bill's income-tax component would expand the dual-tax system approved in special session last fall, using nonrefundable tax credits to encourage more families to take the flat-rate option. Dougall's bill would lower the flat rate from 5.3 percent to 4.9 percent to make the state more competitive with Western neighbors.

The measure echoes one proposed last month by Gov. Jon Huntsman Jr. that would offer a refundable filing credit to lure families to a 5 percent flat tax. Huntsman's proposal, which could bring about 60 percent of Utahns under the flat tax, would return about $100 million to taxpayers.

Dougall's would cost $110 million in school tax revenues and induce far fewer families to take the flat-rate option.

In January, the state nearly halved its share of the sales tax on food, reducing it from 4.75 percent to 2.75 percent. County and local options remain in place, so the total sales tax on groceries varies by location; it's about 4.6 percent along the Wasatch Front. Dougall's bill would strip away that remaining state share.

While low-income activists support any further reduction of the grocery tax, they panned the income-tax half of Dougall's scheme because it would have little impact on most families with less than $50,000 income.

"The governor's is a big enough credit to help people at the low end. Dougall's isn't big enough to make a difference," said Sarah Wilhelm, an analyst for Voices of Utah Children.

Meanwhile, Rep. Merlynn Newbold, R-South Jordan, introduced HB282, which would trim local option sales taxes - such as transit, resort and arts and cultural support taxes - from groceries. The bill would create a uniform food sales tax of 2.75, in the place of 97 different rates levied by towns and cities across the state.

"This is much simpler," said Newbold of her proposal, adding, "The sales tax is extremely regressive and this would help people in lower incomes and be more fair."

Newbold's plan would cost towns and cities about $17 million to $21 million in revenue. But the bill would allow municipalities room to increase some local options on other retail sales to recover some of the loss. The bill also would provide $403,000 from the general fund to protect four rural hospitals that depend on the local option sales taxes.

Roger Tew, a lobbyist for the League of Cities and Towns, said its members likely would oppose reductions to a vital source of revenue. "The League membership last September passed a resolution that they would oppose further removal of the food tax," he said.

Senate President John Valentine said his chamber will soon launch its own proposals, but they won't emphasize sales-tax cuts. Instead, they will target $125 million in cuts through income tax adjustments and other credits for such things as business research and development and alternative-energy use.

Newbold's concept to simplify sales tax rates would be well-received, Valentine said. "A bill that is trying to achieve a uniform rate on the tax on food is something the Senate will take up."