2022 Utah Legislative Summary | What Local, Independent Business Owners Need to Know

By Carol Elliott (UIBC Advocacy Chair) and Jon Parry (UIBC Advocacy Co-Chair) | March 11, 2022

UIBC Reports on the 2022 Legislative Session

The Utah Legislature completed its 2022 Session on March 4.  This is the final installment of a series of updates UIBC has provided during the 2022 legislative session for our UIBC members and friends pertaining to legislation affecting our state’s local, independent businesses.  To see the updated running list of bills we focused on this session, see the list below.

Summary of 2022 Legislation Pertaining to Local, Independent Businesses

Overall, there were relatively few bills proposed during the 2022 Session that were directly focused on small businesses in Utah, though it is true that nearly all legislation affects businesses in one way or another. The biggest trend overall that we observed was the ever-increasing push from the super-majority Republican legislature to reduce the authority of cities, counties, and other local government bodies. From bills restricting counties’ authority to enforce health protection mandates to restricting municipalities’ power to regulate food trucks, it is increasingly the Utah Legislature that is setting the rules, for better or worse. Our request to the Legislature: “Hit the brakes on further impinging local authority.Trust our local governments to govern in the best interests of their local communities.”

The biggest “victories” during the session that we saw for UIBC members and friends included passage of two bills that further reduced the impact and hassles of the personal property tax, and the defeat of a bill that would have carved out a personal property tax refund for developers and producers in the oil and gas industry. Regarding that last issue, it’s our belief that our Utah Legislature should not be in the business of favoring industries or large companies that do well enough on their own.  All we ask for is a level playing field for our UIBC members and friends.

As for other bills that failed, legislation that would have reduced or even eliminated the sales tax on food purchases failed.  While that is the outcome, we believe such legislation will be offered again in the future as the Legislature continues to modify Utah’s tax law and how revenue is generated for public services and operation of state and local governments.

What follows is a brief recap of the outcome of bills we follow. Note that many of the bills that passed have yet to be signed by Governor Cox, so we recommend in the upcoming weeks to follow the news or updates on the bills on the legislature’s website to determine if the passed bills have actually become law.

House Bills We Focused on that Passed

HB 35 Economic Development Modifications. This bill modifies provisions related to economic development. In particular, it requires the Unified Economic Opportunity Commission, instead of the Business and Economic Development Subcommittee, to identify targeted industries for economic development in the state; and modifies provisions related to the issuance of economic development tax credits by the Governor’s Office of Economic Opportunity (GO Utah office), including by:

  • limiting tax credit eligibility to certain projects involving targeted industries, located within rural {counties} areas or approved by the Unified Economic Opportunity Commission;
  • repealing provisions allowing a local government entity or community reinvestment agency to receive a tax credit;
  • allowing a local government entity to create an economic development zone for the purpose of incentivizing projects within the local government entity’s boundaries; and,
  • allowing the GO Utah office to issue tax credits for projects that establish remote work opportunities in the state, among other provisions.

HB 63 Covid 19 Vaccine Exemptions. This bill exempts employees from COVID-19 vaccine mandates if they have a health care provider’s note that says they were previously infected with the virus (so-called “natural immunity”). The bill also prevents employers from keeping or maintaining an employee’s COVID-19 test results unless required by law, and makes it illegal for employers to refuse to hire prospective employees or terminate an employee solely due to their vaccine status. Importantly, the bill specifically provides that it “does not prohibit an employer from verbally asking an employee to voluntarily disclose whether the employee is vaccinated.

HB 146 Food Truck Licensing Amendments. This bill modifies a municipality’s and a county’s regulation and business licensing authority over food truck businesses, including the regulation and business licensing authority over a food truck business that has previously obtained a business license in another political subdivision; modifies health and safety inspection requirements for food truck businesses; modifies the authority of a political subdivision related to the licensing of a business, including a business that rents all-terrain vehicles.

HB 199 Tangible Personal Property Tax Amendments. This bill removes the current requirement that a taxpayer file a signed statement after the first calendar year in which a taxpayer qualifies for a property tax exemption for tangible personal property if the taxpayer continues to qualify for the exemption for consecutive subsequent years.

HB 322  Public Transit Capital Development Modifications. This bill transfers authority of development of large transportation infrastructure development to UDOT from UTA.

HB 444 Income Tax Revisions (Pertaining to Pass-through Closely-Held Businesses). Modifies the tax obligations of pass-through entities and pass-through entity taxpayers. Among other things, the bill authorizes a pass-through entity to pay a tax on behalf of pass-through entity taxpayers who are individuals and would require an individual whose tax on income attributed to the pass-through entity taxpayer is paid by the pass-through entity to add the amount of tax paid to the pass-through entity taxpayer’s individual tax return.

And House Bills that Failed

HB 57 Government Records Access Amendments. This bill essentially would have protected a government official from having a personal device searched for a public record.

HB 60 Vaccine Passport Amendments. This bill would have prohibited a place of public accommodation to “discriminate against” an individual based on the individual’s immunity status, and other aspects of the bill pertaining to prohibiting employers from requiring vaccination requirements were in included in HB 63 that did pass.

HB 156 Sales and Use Tax Refund Amendments. This bill would have enacted a refund of the sales and use tax paid pertaining to purchase or lease of machinery, equipment, normal operating repair or replacement parts, or materials, by an oil and gas extraction establishment or a pipeline transportation establishment.  UIBC strongly opposed this bill, as it was designed to specially favor the oil and gas industry.

HB 202 Employment Selection Procedures Act. This bill would have prohibited an employer from asking for a prospective employee’s compensation history.

HB 364  Minimum Wage Amendments. This bill would have required an employer to pay a tipped employee at least the minimum wage without the computation of a cash wage obligation and tips or gratuities.

Senate Bills We Focused on that Passed

SB 39 Mobile Workforce Income Tax Amendments. This bill eliminates income tax on out of state persons who work 20 or fewer days in UT.

SB 59  Income Tax Amendments. (Already signed by Gov. Cox into law)  This bill reduces the state income tax rate to 4.85% from 4.95% and removes the personal property tax on certain “supplies” used in business. It also provides $15 million in ongoing money pertaining to individual eligibility for the Utah Social Security tax credit and $25 million in ongoing funding for the state’s non-refundable earned income tax credit.

SB 95  Limitations on Employer Liability.  This bill limits liability of an employer for negligently hiring, or failing to adequately supervise, an employee that has been previously convicted of an offense.

SB 227 Consumer Privacy Act. This bill requires various protections for the private information and electronic data of persons interacting with a business’s website and other electronic communication, but the legislation pertains only to very large businesses that do business in Utah and have annual revenues of $25 million or more.

SB 248  BCI Background Check Amendments. This bill further restricts use of criminal history record information derived from the Utah Criminal Investigations and Technical Services Division to “qualifying entities” that include businesses or other entities that employ or utilize volunteers who deal with national security interests, fiduciary trust responsibility over money, or the provision of care, treatment, education, training, instruction, supervision, or recreation to children, the elderly, or individuals with disabilities.

And Senate Bills that Failed

SB 125 Hospitality Employee Tax Credit. This is a Covid recovery-related bill that would have allowed restaurant and bar employees to claim a one-time $1,250 state income tax credit if they work a minimum of 1,560 hours during 2022.

SB 175 Daylight Saving Time Modifications. This bill would have made the State of Utah exempt all areas of the state from standard time and provided that the year-round observed time of the entire state and all of the state’s political subdivisions would be mountain daylight time.

SB  199 Gig Workers Amendments. This bill would have established that an “on-demand labor contractor” is not an employee of a “labor marketplace platform company” if certain conditions are met.

SB 208 Alcoholic Beverage Recycling Requirements. This bill would have required retail alcoholic beverage licensees and event permittees where alcohol is served to recycle glass bottles and required both licensees and event permittees to submit a recycling plan as part of the party’s application or license renewal.