Senate panel advances bill to extend sales-tax exemptions for energy inputs and add large energy-storage exemption

Senate Revenue and Taxation Committee Chair Senator Dan McKay said the committee would consider Senate Bill 223 on Feb. 2, 2026. The bill, sponsored by Senator Vickers, would extend an existing exemption for certain energy inputs through 2037 and add a targeted exemption for energy storage projects larger than 2 megawatts.

Vickers told the committee the proposal continues Utah’s longstanding approach of exempting business inputs from sales tax to promote in-state production and investment. “We feel like it’s important to bring it forward, especially since the time is running out on it,” he said.

An expert witness, Steve Young, told the committee the proposal aligns with common state practices and competes with neighboring states for capital investment. “This is consistent with our long standing practice in the state of Utah of exempting business inputs from sales tax so that we get more business outputs to impose that tax on,” Young said. He also cited one project with an investment of about $500 million on roughly 20 acres as an example of the scale of projects the exemption can support.

Committee members asked about the bill’s fiscal implications. Senator Harper requested an updated fiscal note; members referenced a prior fiscal estimate and discussed an amount confirmed in committee discussion as $2,000,000. Sponsor Vickers and staff indicated they did not expect the estimate to change substantially from the prior analysis.

With no members of the public offering comment, Senator Harper moved that the committee favorably recommend SB 223. The committee recorded the vote as passing 3 to 0.

The bill will now be sent to the full Senate for consideration.