HB 587 Utah House · 2026 General Session

Income Tax Amendments

HB 587 reduces Utah's corporate and individual income tax rates from 4.5% to 4.45% for taxable income. It directly affects corporations and individual residents subject to Utah income tax, applying the lower rate to all taxable income under sections 59-7-104, 59-7-201, and 59-10-104. The bill maintains the $100 minimum tax for corporations but makes no changes to tax exemptions or other provisions. It takes effect May 6, 2026, with retrospective application for tax years beginning January 1, 2026. The bill contains no new funding requirements.

Issues: ✓ Budget & Taxes

Bill status introduced 1 of 4 stages cleared

Introduction

Feb 2026

Committee Review

Floor Vote

Governor

Introduced Feb 19, 2026 Last action Mar 7, 2026

Maddy AI version diff · 2 comparisons

What changed between versions

Substitute #1 → Substitute #2 · 6 edits

MODERATE

This bill reduces Utah's corporate and individual income tax rates from 4.5% to 4.45%, effective May 6, 2026, with retrospective application to January 1, 2026. It removes the $88.5 million in capital project fund appropriations for fiscal year 2027 that were included in the previous version. The bill also eliminates provisions related to domestic research and experimental expenditures, which were previously added to taxable income with an option to amortize them over 60 months.

Scope change

The bill's scope was reduced by removing the research and development tax incentive provisions and the associated funding appropriation, while maintaining the core tax rate reduction across corporate, franchise, and individual income taxes.

FISCAL

Removed $88,461,800 in capital project fund appropriations for fiscal year 2027 that were previously allocated from the Income Tax Fund to Higher Education and Technical Colleges capital projects.

REQUIREMENT

Eliminated provisions allowing taxpayers to add domestic research and experimental expenditures to taxable income and subtract them according to a 60-month amortization schedule on state tax returns.

TIMELINE

Maintained retrospective operation to January 1, 2026, but removed the FY 2027 appropriations section which had no retrospective operation.

TECHNICAL

Removed Section 2 provisions from the original bill that detailed additions to unadjusted income for corporations, including specific rules about research expenditures, UTE tribal member income, and various federal tax adjustments.

Removed Section 3 provisions from the original bill that detailed subtractions from unadjusted income for corporations, including rules about capital losses, charitable contributions, and research expenditure amortization.

Removed Section 6 provisions from the original bill that detailed additions to and subtractions from adjusted gross income for individuals, including specific rules about research expenditures and UTE tribal member income.

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Committee

Feb 19, 2026

Introduced

House/ 1st reading (Introduced)

lower

1 primary · 1 co-sponsor