As we close out Week 5 of the 2026 Utah Legislative Session, the pace at the Capitol has only accelerated, with lawmakers processing a record volume of legislation while major policy debates increasingly narrow to what can realistically move before adjournment. This week also marked a key budget milestone as appropriations subcommittees wrapped up, shifting the focus to the Executive Appropriations Committee and the updated revenue forecast being released tonight. That forecast will set overall spending limits and shape final budget decisions in the remaining weeks of the session.
We continue to engage directly with legislators, bill sponsors and legislative leadership to raise concerns about proposals that could negatively impact Utah’s business climate and our Chamber members. At the same time, we are actively testifying in committees and working alongside policymakers to advance legislation that supports a competitive tax environment, responsible regulation and strong workforce development pipelines.
Your engagement remains essential as these policy decisions take shape. If you have questions, concerns or insights on legislation moving this session, we encourage you to connect with our policy team. Thank you for your continued partnership and commitment to strengthening Utah’s business community.
Noteworthy Bills to Watch
H.B. 587, Income Tax Amendments, sponsored by Rep. Steve Eliason
STATUS:
- Introduced and assigned to the House Rules Committee.
OVERVIEW:
- This bill would decouple Utah’s tax code from recent federal changes restoring immediate expensing of Research & Experimental (R&E) expenditures provisions in H.R. 1, the One Big Beautiful Bill Act.
- If Utah decouples, businesses would still be required to spread out their R&E expenses over multiple years for state tax purposes, increasing near-term taxable income and raising the cost of innovation in Utah.
BACKGROUND:
- For decades, federal tax policy has recognized research and development is an ordinary and necessary business expense:
- 1954 – Section 174: Congress clarified that R&E expenses could be deducted immediately after IRS efforts to classify them as capital expenditures created litigation and uncertainty.
- 2017 – Tax Cuts and Jobs Act: Included a delayed provision requiring businesses to amortize R&E expenses over five years beginning in 2022. This was widely viewed as a temporary revenue offset with the expectation Congress would later restore full expensing.
- 2025 – Federal Fix: Congress restored immediate expensing of domestic R&E costs in the year incurred for tax years beginning after December 31, 2024, through H.R. 1, signed into law on July 4, 2025. Under Section 174A of the Internal Revenue Code created by that law, taxpayers can again immediately deduct domestic R&E expenditures in 2025 and beyond.
- Now, some states, including Utah, are considering decoupling from the federal fix and retaining the amortization requirement at the state level. While this could generate short-term revenue, it would increase the upfront tax burden on companies investing in research.
CONCERNS:
- If the provision went into effect, this would make innovation more expensive, especially for small and growing businesses, which is why restoring immediate R&E expensing has become a major priority for the business community.
- Utah has several industries that rely heavily on R&E investment, including life sciences, manufacturing (including transportation and advanced manufacturing), aerospace and defense, making this issue especially important to the state’s economy.
- Because R&E investment is highly portable, increasing the cost of innovation risks pushing research activity, jobs and long-term growth out of Utah and into more competitive states.
ACTION NEEDED:
- Businesses that would be adversely impacted by this reduction in R&D expensing are encouraged to contact the Chamber’s policy team as soon as possible at policy@utchamber.com.
H.B. 294, Employer Verification Amendments, sponsored by Rep. Tiara Auxier
STATUS:
- Received a favorable recommendation from the House Business, Labor and Commerce Committee. Now on the House 3rd Reading Calendar.
OVERVIEW:
- Beginning July 1, 2027, the bill lowers the employer verification threshold from 150 or more employees to 100 or more employees, expanding the number of private employers required to use a federal employment verification system. It also clarifies existing criminal penalties related to the use of fraudulent identification.
H.B. 575 S1, Fuel Tax and Supply Amendments, sponsored by Rep. Calvin Roberts
STATUS:
- Received a favorable recommendation from the House Revenue and Taxation Committee (10-0-1). Now on the House 3rd Reading Calendar. The bill is still in ongoing negotiations with stakeholders.
OVERVIEW:
- Reduces the motor fuel tax rate by temporarily shifting from a percentage-based tax tied to fuel prices to a fixed cents-per-gallon rate, providing short-term relief and more price certainty for fuel consumers and businesses.
- Streamlines permitting and right-of-way coordination for midstream energy infrastructure, including pipelines, by establishing defined timelines and requiring cross-agency coordination to improve project predictability.
- Requires confidential refinery production reporting to the Office of Energy Development for statewide planning purposes, with strict protections to prevent disclosure, regulatory use or enforcement based on the reported data.
While the bill provides short-term fuel tax relief at the pump as well as some improved permitting coordination, it relies on temporary policy changes and adds new requirements that may increase uncertainty for some businesses. Enactment of this bill would result in a $40 million one-time reduction in the transportation fund for FY 2027.
S.B. 293, Consumer Pricing Data Amendments, sponsored by Sen. Heidi Balderree
STATUS:
- Assigned to the Senate Business and Labor Committee, but has not yet been scheduled for a hearing.
OVERVIEW:
- This bill creates a new Consumer Pricing Act that restricts how businesses may use consumer data to set prices for goods and services in Utah.
- It generally prohibits suppliers from using personal, biometric or purchase-history data to determine individualized pricing, while allowing data use for loyalty programs and discounts.
- While aimed at preventing unfair or discriminatory pricing, the bill’s expansive definitions of consumer data and pricing inputs may unintentionally sweep in common and legitimate business practices, creating uncertainty, compliance costs and risk for a wide range of Utah employers.
S.B. 287, Targeted Advertising Tax, sponsored by Sen. Michael McKell
STATUS:
- Received a favorable recommendation from the Senate Revenue and Taxation Committee (4-2-1).
OVERVIEW:
- This bill creates a new statewide tax on targeted digital advertising delivered in Utah by large advertising platforms and establishes a dedicated revenue stream to fund specified youth and community programs.
- The bill:
- Imposes an annual tax on targeted advertising for entities that meet defined in-state and global revenue thresholds, based on gross receipts tied to Utah impressions.
- Requires annual reporting and remittance to the State Tax Commission, which is granted rulemaking and enforcement authority to administer the tax.
- Creates a restricted account to direct tax revenue toward child literacy initiatives, youth programs, mental health services for children and public spaces.
- The bill is modeled in part after a similar law passed in Maryland, which is currently facing ongoing constitutional litigation. While lawmakers have cited concerns about the impact of social media on children, critics warn the proposal could raise legal, economic and competitiveness issues for businesses, particularly given unresolved questions about constitutionality and implementation.
H.B. 507 S1, State Coordination of Regional and Local Economic Development Projects Amendments, sponsored by Rep. Calvin Roberts
STATUS:
- Received a favorable recommendation from the House Economic Development and Workforce Services Committee bill (10-0-1).
OVERVIEW:
- This bill impacts Utah’s economic development tools by reshaping how tax increment and regional development incentives are coordinated, governed and reported statewide. It also emphasizes greater state oversight, transparency and long-term fiscal accountability for large development projects.
- The bill:
- Creates a State Reinvestment Restricted Account to receive a share of revenues from certain economic development projects for statewide reinvestment.
- Establishes regionally significant development zones that allow approved projects to capture tax increment under a new state-coordinated framework.
- Updates public infrastructure district rules, including governance, dissolution and required disclosure of projected tax impacts.
- Expands transparency by requiring statewide tracking and public reporting of the Governor’s Office of Economic Opportunity (GOEO)’s tax increment use.
- Limits new economic development zones after 2028, signaling a shift toward fewer, more centralized incentive tools.
- There is a growing view within the Legislature that Utah’s economic development incentive structure needs recalibration. This perspective underscores the importance of approaching any changes thoughtfully, as adjustments to incentive policies could affect Utah’s ability to compete for major investments, influence local decision-making and shape the long-term returns these tools have historically supported.
WORKFORCE DEVELOPMENT BILLS:
S.B. 241, Early Literacy, sponsored by Sen. Ann Millner
STATUS:
- Received a favorable recommendation from the Senate Education Committee (6-1-0). Now on the Senate 2nd Reading Calendar.
OVERVIEW:
- This bill establishes a statewide framework to strengthen early literacy instruction in kindergarten through third grade.
S.B. 195 S2, Workforce Development, sponsored by Sen. Ann Millner
STATUS:
- Passed entirely out of the Senate and has been assigned to the House Economic Development and Workforce Services Committee.
OVERVIEW:
- This bill establishes a statewide youth apprenticeship governance council and authorizes Utah’s participation in the federal Workforce Pell Grant program to expand short-term, workforce-focused education and training.