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Utah

The Facts on Utah’s Tax Climate

Last updated July 1, 2009

Here are some basic facts on Utah’s tax system and how it compares to other states:

Tax Freedom Day Arrives on April 13 in Utah 2009
Tax Freedom Day is the day when Americans finally have earned enough money to pay off their total tax bill for the year. In 2009, Utah taxpayers had to work until April 13 to pay their total tax bill, ranking it 13th highest in the nation. That's the same day as national Tax Freedom Day (April 13). The Tax Freedom Days of neighboring states are; Idaho, April 12 (ranked 18th); Nevada, April 8 (ranked 29th); Arizona, April 10 (ranked 23rd); New Mexico, April 2 (ranked 43rd); Colorado, April 12 (ranked 16th); and Wyoming, April 5 (ranked 35th).
Full study of Tax Freedom Day, nationwide and in each state

Utah's State/Local Tax Burden Slightly Below National Average
Utah's state and local tax burden ranks near the national average. Estimated at 9.6% of income, Utah's state/local tax burden percentage ranks 22nd highest nationally, just below the national average of 9.7%. Taxpayers in Utah pay $3,446 per capita in state and local taxes.
Utah's State-Local Tax Burden, 1977-Present
Other States' State/Local Tax Burdens
Historical Chart Comparing All States' State/Local Tax Burdens from 1977 to 2008

Utah's 2010 Business Tax Climate Ranks 10th
Utah ranks 10th in the Tax Foundation's State Business Tax Climate Index. The Index compares the states in five areas of taxation that impact business: corporate taxes; individual income taxes; sales taxes; unemployment insurance taxes; and taxes on property, including residential and commercial property. Neighboring states ranked as follows: Idaho (18th), Nevada (4th), Arizona (28th), New Mexico (23rd), Colorado (13th) and Wyoming (2nd).
50-State Comparison of Business Tax Climates (data only)
2009 State Business Tax Climate Index, Sixth Edition (full study)

Utah's Individual Income Tax System
Utah's personal income tax system consists of a 5% flat rate on all income. This rate ranks the state 30th highest among states levying personal income taxes. Utah also offers taxpayers the option of paying a 5.35% flat tax. Utah's 2006 individual income tax collections were $896 per person, which ranked 20th highest nationally.
50-State Table of Individual Income Tax Rates
50-State Table of State Individual Income Tax Collections
50-State Table of State and Local Individual Income Tax Collections Per Capita

Utah's Corporate Income Tax System
Utah's corporate tax structure consists of a flat rate of 5% on all corporate income. Among states levying corporate income taxes, Utah's rate ranks 40th highest nationally. In 2007, state-level corporate tax collections (excluding local taxes) were $153 per capita, which ranked 28th highest nationally.
50-State Table of Corporate Income Tax Rates, 2000-2009
50-State Table of State and Local Corporate Income Tax Collections Per Capita and Per Household, 2005
50-State Table of State Corporate Income Tax Collections Per Capita, 2006

Utah Levies Sales Tax below the National Median; Gasoline Tax among the Highest in the Nation
Utah levies a 5.95% general sales or use tax on consumers, slightly below the national median of 6%.State and local governments combined collected $952 per capita in general sales taxes in 2006, which ranks 19th highest nationally. Utah's gasoline tax stands at 24.5 cents per gallon, ranking 24th highest nationally. Utah's cigarette tax stands at 69.5 cents per pack of twenty and ranks 35th highest nationally. The sales tax was adopted in 1933, the gasoline tax in 1923 and the cigarette tax in 1923.
50-State Table of Sales and Excise Tax Rates
50-State Table of State and Local General Sales and Gross Receipts Tax Collections Per Household and Per Capita, Fiscal Year 2005

Utah Property Taxes among Nation's Lowest
Utah's local governments collected $738.21 per capita in property taxes during fiscal year 2006, which is the latest year the Census Bureau published state-by-state property tax collections. Utah is one of the 13 states that collect no state-level property taxes. Its per capita property tax collections in FY2006 ranked 40th nationally.
State property tax collections per capita by state

Federal Tax Burdens and Expenditures: Utah is a Beneficiary State
Utah taxpayers receive more federal funding per dollar of federal taxes paid than the average state. Per dollar of Federal tax collected in 2005, Utah citizens received approximately $1.07 in the way of federal spending. This ranks the state 29th highest nationally and represents a decline from 1995 when Utah received $1.08 per dollar of taxes in federal spending (ranked 22nd nationally). Neighboring states and the amount of federal spending received per dollar of federal taxes collected were: Idaho ($1.21), Nevada ($0.65), Arizona ($1.19), New Mexico ($2.03), Colorado ($0.81), and Wyoming ($1.11).
Comparing the amount of federal taxes sent to Washington with the amount of federal spending coming back to the state

Tax Data from The Tax Foundation