Tax policy in Utah

in Utah

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Tax policy in Utah

Tax rates in 2017

Personal income tax: 5%

State sales tax: 5.95%

Corporate income tax: 5.00%

Tax revenues in 2016

Total tax collections: $7.08 billion

Tax collections per capita: $2,321

Total state expenditures • State debt • Utah state budget and finances

Utah generates the bulk of its tax revenue by levying a personal income tax and a sales tax. The state derives its constitutional authority to tax from Article XIII of the state constitution.^[1][2]

Tax policy can vary from state to state. States levy taxes to help fund the variety of services provided by state governments. Tax collections comprise approximately 40 percent of the states' total revenues. The rest comes from non-tax sources, such as intergovernmental aid (e.g., federal funds), lottery revenues and fees. The primary types of taxes levied by state governments include personal income tax, general sales tax, excise (or special sales) taxes and corporate income tax.^[3]

Tax rates[edit]

Personal income tax[edit]

See also: Personal income tax

Utah utilized a flat personal income tax rate of 5 percent in 2017.^[4]

The table below summarizes personal income tax rates for Utah and neighboring states in 2017.^[4]

Personal exemptions[edit]

States that collect a personal income tax allow individuals to claim personal exemptions on income taxes each year. The personal exemption indicates that only a person's income above a certain level is subject to taxation. ^[5]

Exemptions work by reducing the amount of an individual's taxable income. Both state and federal taxes allow exemptions. The state exemptions for Utah and its neighboring states as reported by the Tax Policy Center are reported in the chart below.^[6]

Capital gains tax[edit]

See also: Capital gains tax

A capital gains tax is a tax levied on the profit gleaned from the sale of a capital asset. Examples of capital assets include stocks, businesses, land parcels, homes, personal items and more. Capital gains are taxable at both the federal and state levels. While the federal government taxes capital gains at a lower rate than regular personal income, states usually tax capital gains at the same rates as regular income. ^[7][8][9]

The table below summarizes uppermost capital gains tax rates for Utah and neighboring states in 2015.

Sales tax[edit]

See also: Sales tax

Almost all states employ a statewide sales tax, which ranges from 2.9 percent in Colorado to 7.25 percent in California. Additionally, many states allow the levying of local sales taxes, which are then added to the state's tax.

Utah's state sales tax was 5.95% percent in 2017. The average local tax was about 0.81% percent, meaning that the average combined sales tax was about 6.76% percent. The table below displays the state tax rates, average local tax rates, and average combined tax rates for Utah and its neighboring states.^[10]

The table below summarizes sales tax rates for Utah and neighboring states in 2017 as well as the state's policy with respect to types of items commonly exempted from sales tax (i.e., food, prescription drugs and nonprescription drugs).^[11]

Excise taxes[edit]

See also: Excise taxes

Excise taxes, also known as selective sales or differential commodity taxes, are levied for the sales of specific goods or services. Excise taxes are considered indirect taxes because they are not charged directly to individuals. In most cases, the excise tax is paid by the producer or seller of an item. The cost of the tax is then included in the sale price of the item and passed on to the consumer. The tables below provide excise tax rates for motor fuel, alcohol and cigarettes in Utah and neighboring states.^{[12][13][14][15]}

Corporate income tax[edit]

See also: Corporate income tax

Utah levies a corporate income tax rate of 5 percent. The table below compares the corporate income tax rates of some of its neighboring states.^[16][17]

Property tax[edit]

See also: Property tax

Most often, property tax applies to real estate, although some states levy property taxes on other types of personal property, such as automobiles. Generally speaking, an individual's property tax liability is determined by the tax rate and the tax base, which is "determined by both the assessed value of the property and ... the share of the assessed value that is subject to tax." To learn more about property taxes, including tabulation methods, see this page. Property tax rates can vary substantially from locality to locality within a state.^{[18][19][20] [18][19]}

The table below provides the mean amount of property taxes paid in 2012, as well as property tax as a mean percentage of home value for 2014, in Utah and neighboring states.^[18]

The table below lists per capita state and local property tax collections for Utah and neighboring states for fiscal year 2013.^[21]

Estate and inheritance taxes[edit]

See also: Estate and inheritance taxes

Estate and inheritance taxes are levied on the property of deceased individuals (decedents). Generally speaking, an estate tax is applied to the value of a decedent's property and is paid from the estate before distribution to any heirs. By contrast, an inheritance tax is paid by the heir or heirs of a decedent's assets.^[22][23][24]

Utah does not levy an estate tax, although residents are liable for the federal estate tax. The table below summarizes the estate tax rates for Utah and neighboring states in 2016.^[24]

Tax revenues[edit]

See also: Utah state budget and finances

The table below breaks down state government tax collections by source in 2016 (comparable figures from surrounding states are also provided to give additional context). Figures for all columns except "2016 population" and "Per capita collections" are rendered in thousands of dollars (for example, $2,448 translates to $2,448,000). Figures in the columns labeled "2016 population" and "Per capita collections" have not been abbreviated.^[25]

The table below lists 2016 tax collections by source as percentages of total collections. About 52.3 percent of Utah's total state tax collections came from income taxes.^[25]

Tax ballot measures[edit]

Voting on taxes
Ballot measures
By state
By year
Not on ballot
Local City taxes County taxes School taxes Property taxes Sales taxes Income taxes Other taxes

See also: Taxes on the ballot and List of Utah ballot measures

Ballotpedia has tracked the following ballot measures relating to taxes in Utah.

1. Utah Elimination of Sales Tax, Initiative A (1980)
2. Utah Sales Tax Limitation, Initiative B (1980)
3. Utah Property Tax Exemption, Amendment 1 (2006)
4. Utah Clean Water, Initiative 1 (2004)
5. Utah Property Tax Exemption, Amendment 6 (2002)
6. Utah Property Tax Exemption for Veterans, Proposition 1 (1996)
7. Utah Constitutional Tax Provisions, Proposition 2 (1996)
8. Utah End Food Taxes, Initiative A (1990)
9. Utah Initiative A (1988)
10. Utah Initiative B (1988)
11. Utah Property Tax Exemption for Water Facilities, Amendment C (2010)
12. Utah City Debt And Property Tax, Amendment 5 (2002)
13. Utah Review of Tax Commission Cases, Proposition 6 (1998)
14. Utah Military Property Tax Exemption Amendment, Constitutional Amendment B (2012)
15. Utah Severance Tax Amendment, Constitutional Amendment A (2012)
16. Utah Constitutional Amendment No. 2 (1960)
17. Utah Constitutional Amendment No. 1 (1962)
18. Utah Constitutional Amendment No. 2 (1962)
19. Utah Constitutional Amendment No. 1 (1964)
20. Utah Proposition No. 3: Inventory Tax Repeal (1968)
21. Utah Proposition No. 4: Agriculture Land Taxation (1968)
22. Utah Proposition No. 3: In Liue Uniform Tax on Tangible Personal Property (1974)
23. Utah Proposition No. 1: Tax Article Revision (1982)
24. Utah Proposition No. 1: Tangible Personal Property Tax Exemption (1984)
25. Utah Proposition No. 1: Tax-Exempt Hospitals (1986)
26. Utah Proposition No. 2: Tax-Exempt Farms (1986)
27. Utah Proposition 3, Medicaid Expansion Initiative (2018)
28. Utah Constitutional Amendment B, Tax Exemption for Property Leased by a Government Entity (2018)
29. Utah Nonbinding Opinion Question 1, 10 Cents per Gallon Gas Tax Increase for Education and Local Roads (2018)

Recent news[edit]

The link below is to the most recent stories in a Google news search for the terms Utah taxes. These results are automatically generated from Google. Ballotpedia does not curate or endorse these articles.

See also[edit]

• Utah
• Utah state budget and finances
• Personal income tax
• Sales tax
• Corporate income tax
• Property tax

External links[edit]

• Tax Policy Center
• Federation of Tax Administrators
• Tax Foundation

Footnotes[edit]

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