SALT LAKE CITY — The Utah House has approved a measure implementing a 2% tax on funds wired abroad anonymously or by immigrants in the country illegally.
Utah Rep. Stephanie Gricius, R-Eagle Mountain, the HB141 sponsor, touts the measure as a means of putting a check on wiring of funds out of the United States by drug traffickers and cartels. House lawmakers approved the measure 58-15 on Tuesday, and it now goes to the Utah Senate.
“We’re hoping to go after the cartel money. We know we’ve had an increase in fentanyl coming through the state, other drugs,” she said when the House Revenue and Taxation Committee reviewed the measure on Jan. 29.
Rep. Hoang Nguyen, D-Salt Lake City, however, criticized the measure during Tuesday’s House debate, saying it would encourage some to use “unregulated channels” to send money to avoid the tax, undermining efforts to fight fraud and money laundering. She also said the tax would adversely affect those sending funds to family members living outside the United States.
“For many families, this money is not extra. It is a lifeline to pay for food, rent, medicine,” Nguyen said. “When you tax this money, you are cutting directly into families’ ability to survive. This tax would fall hardest on working-class families and immigrants, people who already live paycheck to paycheck.”
International remittances to Mexico and El Salvador, in particular, are large components of their respective economies.
The Utah House Democratic Caucus issued a statement critical of HB141, sounding concerns similar to Nguyen’s, and decrying what the Democratic lawmakers see as legislative moves targeting the immigrant community. A measure approved Monday by the House, HB136, takes aim at unlicensed drivers and immigrants are among those who would be impacted by the measure while additional proposals focused on immigrants await committee hearings.
“Today, the House passed another bill that would unduly harm immigrant families in Utah. HB141 directly targets undocumented immigrants by imposing a tax on financial support sent to family members abroad — even modest amounts,” reads the Democrats’ statement. “Taken together with other recent legislation, this bill signals a deeply concerning trend of policies that disproportionately target immigrant communities in Utah.”
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The federal government implemented a 1% tax effective Jan. 1 on certain international money transfers, specifically those using cash, money orders or cashier’s checks to send funds, according to Western Union. The 2% tax in Utah would apply only to immigrants in the country illegally or those who send funds anonymously. Those showing identification proving they’re U.S. citizens or in the country legally would not have to pay the Utah tax, and the bill language contains a list of acceptable IDs.
Some $656 billion is sent from the United States each year in the form of remittances, according to Gricius. “Even Venmo requires identification if you’re going to send more than $299, so I don’t think it’s too much … for us to say, ‘You can still send your money anonymously, but there’s a 2% (tax) off the top,'” she said.
The tax, if implemented, would result in a net tax revenue increase for Utah of $740,000 in fiscal year 2027, $3.21 million in fiscal year 2028, $4.3 million in fiscal year 2029 and $5.2 million in fiscal year 2030, according to the fiscal note for the measure. The money would go into the state’s general fund.
Gricius pursued similar legislation last year, but it stalled.
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