SB 116: Returning Surplus Revenue to Taxpayers

In some years, Utah collects more income tax revenue than it originally forecasted. When this happens, the state experiences a “windfall,” but instead of using this surplus to reduce income taxes, the extra money is sometimes spent. A more taxpayer-friendly approach would be to use these windfalls to lower income tax rates.

Fortunately, during this legislative session, Sen. Lincoln Fillmore is sponsoring SB 116 to address this issue. The bill proposes an automatic tax rate adjustment when the state receives a windfall. This change would ensure that taxpayers benefit directly from unexpected revenue surpluses. By automatically lowering the income tax rate, SB 116 introduces a fair and predictable mechanism to return a portion of windfall revenues to the people who earned it—Utah’s taxpayers.

Not only does this approach promote fiscal responsibility, but it also aligns with the principle of limiting government growth and ensuring that surplus funds are not treated as an opportunity for increased spending.