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Tax Cuts Would Save About $320 for Average Utah Family

Tax Cuts Would Save About $320 for Average Utah Family

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Samantha Hayes ReportingThe biggest tax cut in state history came out of this Legislative session. Overall, the bill reduces taxes by $220 million. Samantha Hayes breaks that down for the average Utah family.

For these calculations we considered an average family of four with an income around $50,000. Most of the savings will be felt in state income tax but not until you file for 2008.

The flat rate was moved from 5.35% to 5.00%. So, where our family has been paying on average, $5,102, with the income tax reform it will be $4,891. The savings will be $211.

The Governor's office of Planning and Budget says income tax relief was also needed to be competitive with surrounding states.

Neil Ashdown, deputy chief of staff: "Other states in the region have been dropping their rates, so we were hoping to remain competitive and at the same time creating better policy."

That same family of four can expect to save a little more on sales tax, too. The general sales tax was 4.75%. That was lowered to 4.65%. So if you planned to buy a car for $20,000, $950 of that would go to the state. Now $930 would go to the state, a small savings of $20.

The sales tax on food was reduced from 2.75% to 1.75% If our family were spending $5,200 on groceries for a year, the tax reduction will save $78.

Robert Spendlove, Governor's Office of Planning and Budget: "The average tax relief will be $320, so it's going to be a good tax relief for the average family."

This change goes into effect January 1, 2008, but of course you won't see the income tax reduction until you file for 2008, and you'll have to wait a little while for that.

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