State taxes: Utah

Utah overhauled its tax system, effective as of the 2008 tax year. Rather than applying multiple tax rates on income, the Beehive State now collects a single-rate income tax of 5%. More on Utah taxes can be found in the tabbed pages below.

Personal income tax

With the 2008 tax year, Utah eliminated its traditional tax method of multiple brackets and now collects a flat 5% income tax from its residents.

Most taxpayers will be able to claim 1 or more new nonrefundable credits, including a taxpayer tax credit and a retirement tax credit.

Utah tax returns are due April 15 or the next business day if that date falls on a weekend or holiday.

Utah has enhanced its return processing in an effort to reduce tax identity theft refund fraud. Some returns are flagged, meaning the taxpayer will get an Identity Protection letter asking the filer to complete an online verification process. If the taxpayer is successful in confirming his identity online, he will know immediately, and the return will be processed. If the online verification fails, the taxpayer must mail the Utah State Tax Commission documents proving his filer’s identity. Refunds will not be issued until the process, either online or by mail, is successfully completed.

Sales taxes

Utah’s state sales tax, effective Jan. 1, 2009, is 4.7%.

The state’s sales tax on food and food ingredients is 3%. The Utah State Tax Commission’s website has more information, including a flow chart and product list.

There is a uniform 1% local sales tax rate. Utah cities and counties levy additional local sales taxes that vary among the municipalities.

Personal and real property taxes

Property taxes are assessed and collected locally. Utah’s website has information on property tax rates.

The taxable value of a property is 100% of its fair market value, minus any exemptions that may be permitted. For example, the Utah Constitution permits the Legislature to exempt up to 45% of the fair market value of primary residential property from property taxation. A primary residence with a fair market value of $100,000 would be valued, for property tax purposes, at $55,000.

Prior to May 22 each year, county assessors ascertain the names of the owners of all property and assess the property based on its value on Jan. 1 of each tax year.

In order to value personal property, the Utah State Tax Commission provides a number of personal property classification categories, which are used by all county assessors in Utah. The commission’s website provides details on Utah’s personal property taxation system.

The Utah State Tax Commission’s property tax division administers a variety of exemptions of real and personal property from taxation.

Inheritance and estate taxes

Utah does not impose an inheritance tax.

Because of the phaseout of the federal estate tax credit, Utah’s estate tax is not imposed on estates of people who died in 2005 or thereafter.

Other Utah tax facts

Utah taxpayers can choose from a variety of nonprofit groups to which they can make contributions via their tax returns.

A Utah resident who donates an organ may claim a tax credit for up to $10,000 of qualified expenses incurred for the donation of human bone marrow or any part of an intestine, kidney, liver, lung or pancreas for transplantation in another individual. Qualified expenses include taxpayer expenses for travel and lodging as well as any unreimbursed lost wages.

Utah has its own Taxpayer Advocate Service that helps people who have been unable to successfully resolve a state tax issue for more than 45 days or by the date promised. The advocate’s office can be reached by phone at (801) 297-7562 or email at taxpayeradvocate@utah.gov.

For additional information, contact the Utah State Tax Commission at (801) 297-2200, or visit its website. Utah also provides an automated service for ordering Utah tax forms at (801) 297-6700.

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