Utah lawmakers voted Wednesday to give a $5 million income tax cut to families of military reservists and National Guardsmen who are on active duty.

The money would come from the state's $70 million surplus in tax revenue. And lawmakers agreed the tax break should be dealt with during the special session Gov. Olene Walker is expected to call this summer.

"They could get some nominal tax relief this year," said Sen. Curt Bramble, R-Provo, co-chair of the Legislature's Revenue and Taxation Interim Committee which approved a bill by Rep. Darin Peterson, R-Nephi.

The 2004 Legislature didn't approve Peterson's bill, and Bramble sponsored a similar bill in the 2002 Legislature. The idea is to give active-duty reservists and guardsmen a break on their state income taxes on their military pay while they are away from their regular, private employment.

In 2002, fiscal analysts estimated it would have cost the state $504,000 to give the tax cut, as few reservists were anticipated to be called up. Today, with hundreds of Utah reservists and guardsmen serving in Iraq or elsewhere, its estimated cost to state coffers is $5 million.

Bramble said new Tax Commission revenue estimates show a healthy surplus this year that could fund the tax cut.

"It's the least we can do," said Rep. Judy Ann Buffmire, D-Salt Lake. She said she's talked to the families of some Utah reservists who "can't get groceries or any other (financial) help" while a father or mother is away.

Bramble said many reservists and guardsmen's military pay is way below their regular jobs' earnings.

While some employers either continue the regular pay for the absent employee or make up the difference between the two salaries, legislators have been told in the past that is not always the case. For self-employed reservists and guardsmen, there may be no one to make up the lost private-sector pay.

Peterson said his bill only waives state income taxes on an active-duty person's military pay, not on any salary he may be receiving while away from his employer. "You have to make something like $35,000 a year in military pay to get much of a tax break, and few (reservists) make that much from the military," said Peterson.

Just as the cost of Bramble's original bill has escalated in two years, Rep. Wayne Harper, R-West Jordan, warned that Peterson's bill could end up costing the state $10 million or $15 million down the road, depending on how many people are called up.

But that is worth it, he said.

The tax break could be as little as a few dollars for a reservist's family who has no state income taxes owed, said Bramble, a CPA and tax expert. "It could range upwards of $2,500 or even $3,000 in a rare few cases" of higher-ranking officers.

"The amount a person would get depends on their individual tax circumstances and their military pay."

Peterson's bill passed with a unanimous vote, with Bramble saying should Walker call a special session the Legislature will ask her to place it on the call.


E-mail: bbjr@desnews.com