A week after the House gutted a proposal to repeal the tax by 2012, a replacement bill is taking shape in the Senate, where all 21 Republicans plan to sign on in support of the tax break, estimated to be worth up to $200 million.
Sen. Curt Bramble, R-Provo, said Thursday he already has rounded up unanimous backing among GOP colleagues for his bill, giving it more than the 15 votes needed to pass the Senate.
Bramble said his legislation was essentially the same proposal as House Bill 78, which was stripped of the repeal after House members said the cost to schools was too much. The measure's fiscal note said the tax cut would result in a loss of as much as $200 million to school coffers when fully implemented.
Huntsman's office counters that removing the tax would make Utah a more attractive place for businesses to locate and would work to strengthen existing companies. The economic advantage, Huntsman staffers say, would boost education funding in the end.
Huntsman spokeswoman Tammy Kikuchi says eliminating the tax is one of the governor's top priorities and he fully supports Bramble's efforts.
"We are pleased the Legislature is partnering on this vitally important economic development tool," Kikuchi said.
But it is not a done deal yet. While the proposal appears sure to pass the Senate, it may face strong opposition in the House.
"I think the House still has a concern with doing away with corporate income tax and the corresponding $200 million in revenue every year," said Rep. Jim Dunnigan, R-Taylorsville. It was Dunnigan who last week successfully moved to amend the House bill to remove the provision phasing out corporate income tax.
He said he has gained a few supporters of his position, but doesn't know if he lost any from the coalition of Republicans and minority Democrats who joined to amend the bill.
Rep. Wayne Harper, R-West Jordan, sponsored the bill that was supported by the governor's office before being gutted on the floor.
He said he plans to see the support in the Senate before taking up the battle again in the House.
"We have been talking," he said. "Are we there yet? No. The jury is still out on the repeal of the corporate income tax."
Even if the Legislature doesn't repeal the tax, it appears one piece of the governor's plan is locked in. The provision would allow for a "double weighted" tax formula, giving a break to Utah companies that export most of their goods. That change is expected to reduce revenues $7 million annually.
