Utahns won’t pay state income taxes on billions of dollars in federal COVID-19 relief, under a new bill advanced Thursday at a special session of the state Legislature.
SB6005 gives a tax exemption for a host of forgivable business loans, grants and individual stimulus checks paid out by federal, state and county governments since late March, including relief funded under the Coronavirus Aid, Relief and Economic Security, or CARES Act.
Under SBA rules, those paycheck protection loans do not have to be paid back if they are used to cover payroll and other approved business expenses.
The bill drawing initial approval on Thursday also exempts the pandemic-related $1,200 relief checks and $500 stipends for dependent children, sent out to eligible Americans starting April 15, Harper said.
With widespread hardship created by COVID-19, business closures, job losses and other negative effects, Harper called SB6005 “the gem bill of the entire special session.”
“It’s the right thing to do,” he told Senate colleagues. “It supports families.”
The exemptions, Harper said, apply to COVID-19 relief funds paid out directly by the U.S. government as well as those allocated though the state and Utah’s counties.
Legislative analysts estimated that SB6005′s exemptions would mean the state will give up at least $50 million in future potential tax collection. But under questioning from other senators, Harper noted that money had not been included in any state budgets or revenue projections.
“We’re just acknowledging the fact we are not going impose a tax on this,” he said.