LEGISLATIVE UPDATE

THE PROFESSION SAW LICENSING, TAX ASSESSMENTS AND STATE TAX CREDITS AT THIS YEAR’S SESSION

BY CRAIG PETERSON AND RYAN PETERSON

On March 3, the 2023 Utah legislative session adjourned “sine die,” which, for those of you who aren’t familiar with that term, means without any future date being designated. It is the fancy way for the Legislature to end the legislative session at midnight on the 45th day.

This session saw the appropriation of a record $29 billion dollar budget and a number of impactful policy decisions. For the first time in recent memory, the Legislature finished their business a few hours early, and many legislative leaders have said that they felt that this was the most meaningful and effective legislative session the state has seen in years.

The session started with a bang as the Legislature debated and passed controversial bills dealing with transgender youth medical care and a school voucher program. Issues with significant press and public interest are typically saved until later in the session while stakeholders negotiate details and work out their differences. This year, the Legislature sent a message right from the beginning, letting people know that they were not going to spend the entire session on a few hot button “message bills,” and instead opted to get them out of the way early in order to focus on other important state issues for the bulk of the time.

Similar to last year, the health of the Great Salt Lake and water were major topics for the Legislature as the state experienced another difficult drought year and the levels of the lake continued to drop.

Even with record snowfall in the state, the Legislature wanted to make sure that the citizens of Utah knew they cared about the water situation and that they were willing to, quite literally, put their money where their mouth is on the issue. With the strong economy in the state, another marquee issue on the hill this session was tax cuts. There will be a nearly $800 million tax cut that Utahns should see on income, gas and Social Security.

There were a few issues during this session that were important to the CPA profession that we were able to work on alongside UACPA leadership. The UACPA and their representatives on Capitol Hill were able to connect quickly with legislators and other organizations to ensure that the interests of CPAs were protected and that the Association was consulted before making major decisions. Although the UACPA monitored and provided insight on many bills, a few specific bills of concern for the profession during the legislative session include the following.

• Senate Bill 35 Second Substitute – Reciprocal Professional Licensing Amendments. As we have seen over the past several years, Utah legislators and the governor’s office have been working to ensure that Utah is a business-friendly state. One way to accomplish that is by making sure that professional licenses provide for citizens’ safety and protection, while not creating barriers to entry for the workforce. SB35 amended the law to make sure that professionals moving into Utah from another state, or from outside of the country, could be issued a professional license if the scope of practice and other requirements were deemed by the Division of Professional Licensing (DOPL) to be similar. Sen. Bramble, the bill’s sponsor, is passionate about making sure that people are able to move into the state of Utah and have their licenses transfer, as long as it is safe to do so.

• House Bill 56 First Substitute – Tax Assessment Amendments. This is a bill that the UACPA Tax and SALT Committees have been active with. Although the bill requires county assessors to provide required information to the Utah State Tax Commission, the crux of the bill is to help clean up HB444, which passed last session regarding SALT tax reporting via our Pass-Through Entities (PTEs). We didn’t quite get everything we wanted in the bill, but we made some much needed-progress in being more specific as to how K-1s need to report income tax that will pass through to the individual level, what the fiveyear carryforward looks like, as well as how to track it. We received some great feedback and ideas from members that have made the outcome of the bill better than we could have hoped for.

• House Bill 407 Third Substitute – Incentive Amendments. This bill amends provisions relating to state tax credits. If passed, the bill would require state agencies that issue credits to link with the State Tax Commission, providing claimants and amounts of credits claimed and the Tax Commission to do the same. It would update the historic tax credit process to require the credit recipient to report how many jobs were created by historical rehabilitation and require a CPA to verify a taxpayer’s eligibility and calculate the amount of R&D credit for which they would qualify. This would, in essence, require an AUP to be submitted with the tax return. We worked very closely with the bill sponsor (Rep. Christofferson) and suggested several changes that would help him achieve the desired change without putting an unnecessary burden or requirement on the CPA community. We were able to get the bill changed to something that would have worked just fine, but the bill ultimately did not make it through the process. We will be watching for a similar bill to be drafted for next year’s legislative session and continue to work with the bill sponsor to ensure that the interests of CPAs are protected.

The UACPA is a strong, respected organization on Utah’s Capitol Hill. It is vital that the organization stay involved and that their voice is heard on many issues facing CPAs and the state as a whole. We will remain engaged throughout the interim and make sure that we are heard as topics are being negotiated moving towards the 2024 legislative session. n

Craig Peterson, senior partner of Peterson Consulting Group, has been involved in legislative processes for almost 40 years as a State Representative, State Senator, and Republican Senate Majority Leader. During the past 20 years, he has been a lobbyist, successfully representing a broad spectrum of clients.

Ryan Peterson is the managing partner of Peterson Consulting Group. He has been a contract lobbyist in the state of Utah for 12 years. He received a degree in economics from the University of Utah with a focus on statistics and econometrics. He is an avid golfer and resides in Salt Lake City.