Lawmakers are already planning to cut Utah’s state income tax rate again during the 2024 Legislature, but Gov. Spencer Cox has something else in mind.

“I would love not to have income tax in the state,” the governor told more than 100 lobbyists, elected officials and others gathered Monday for the Utah Taxpayers Association’s annual legislative outlook conference.

Cox, responding to a question from an association leader about moving from a three- to a “two-legged” tax structure by shifting to just sales and property taxes, said he’s already said to legislative leaders “that’s a conversation we should have.”

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Looking at how to do away with Utah’s income tax “may be even better than just taking it down 10 basis points (a basis point is one hundredth of 1%) or 20 basis points every year, just kid of slicing away a little bit at a time like that,” the GOP governor said.

“I would rather get rid of the income tax altogether,” he said.

Cox said he “thinks that’s wiser” than another tax cut, without mentioning any specifics or timeline for joining the nine states that don’t impose an individual income tax, including Nevada and Wyoming.

“If that’s the direction we’re going in, and I think it is, I think that’s the direction most states are going, then let’s do that. Let’s talk holistically about tax policy,” he said, adding, “if we want to see income grow, then we should probably tax it less.”

Cox, who did not include a tax cut in his proposed $29.5 billion budget released last month, also pointed out the state doesn’t “have the revenues that we’ve had in the past going into this legislative session.”

Utah ended the previous budget year at the end of June with nearly a $50 million shortfall that forced lawmakers to dip into reserves, thanks to lower-than-anticipated income tax collections as the state’s economy adjusts after the COVID-19 pandemic.

Both the governor and legislative leaders are behind a proposed amendment to the Utah Constitution on the ballot this November to end the earmark on income tax collections for education and some social services.

Under legislation passed last year, approval of the amendment would remove the state’s share of the sales tax from food purchases, 1.75% of the 3% total tax charged statewide on food since 2008, about $200 million a year.

But the Utah Legislature’s Republican supermajority is gearing up for yet another drop in Utah’s income tax rate as well. Last year, the 2023 Legislature lowered the individual income tax rate from 4.85% to 4.65% as part of what was called an “historic” tax cut.

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New state House Speaker Mike Schultz, R-Hooper said tax cuts are “some of the things I’m most excited about.” The speaker said over the past three years, the Legislature has reduced taxes by almost $1.2 billion.

“We’re continuing to do that moving forward,” Schultz said, with $160 million already set aside for what will likely be another income tax cut during the 45-day session that begins Jan. 16.

“We’ll go through the legislative process, we’ll see what that looks like. It’s not final,” he said. “There’s still a lot of work that needs to be done, but we need to make sure we prioritize that.”

It’s important, the speaker said, because with other states also lowering rates, “if we want to keep a good, vibrant economy that creates opportunities for our kids and our grandkids, we need to make sure we focus on reducing our income tax.”

Schultz did not mention eliminating the state income tax in his presentation but made it clear to reporters afterwards he sees no reason that has to preclude another tax cut this session.

“We can walk and chew gum,” he said. “I want to focus on continuing to reduce income tax. Let’s also continue to have the discussion on getting rid of the income tax all together,” including how that revenue would be made up.

“We are committed to working on all of the above, but at the same time, people need that inflationary reduction right now. They need it in their pocketbooks,” Schultz said, calling the move to eliminate the income tax “a multi-year effort. It’s not going to change overnight.”

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Senate Majority Assistant Whip Kirk Cullimore, R-Sandy, who offered an overview of the state Senate’s priorities for the upcoming session, told the Deseret News incremental cuts are the way to go.

There’s talk among senators about what it would take to drop the income tax, Cullimore said, but “we’re certainly not there yet. There’s a lot that would need to be figured out. What that policy looks like — is it increasing property tax? Is it increasing sales tax?”

While he said It doesn’t hurt to be talking about those issues, “I think the approach that we’ve taken over at least the last three years is let’s just keep nicking away at it and as our economy continues to do well and we can afford to do that, that’s a better approach.”