Utah is ranked #8 by TaxFoundation.org. They are one of the few states that has a flat income tax (4.95%). They also have one of the lowest property tax rates in the country. Additionally, they have no estate or inheritance tax.
State Taxes at a Glance – Utah
| Type of Tax | 2023 |
|---|
| Individual Rates | 4.85% flat tax |
| Corporate / Business Tax Rates | 4.85% flat tax |
| Gross Receipts Tax | None |
| Sales Tax | 7.19% (average) |
| Property Taxes | 0.59% as a percentage of primary home |
| Estate or Inheritance Tax | None |
Income Taxes in Utah
The state of Utah is one of a few states with a flat individual income tax. Similar to states such as Colorado and Illinois, Utah’s individual tax rate is a percentage of your Federal Adjusted Gross Income, which is only 4.85%.
Additionally, Utah does not differentiate their tax rates between capital gains or ordinary income, e.g. Utah capital gains is also 4.85%.
Business Taxes in Utah
The state of Utah has a flat Corporate Tax rate of 4.85%. The Corporate tax is often referred to as a Franchise Tax. The Franchise tax is assessed only on C Corporations.
For other business entities that are flow-thru entities, such as S Corporations, Partnerships, LLCs, etc., since it flows-thru to the individual level, there is no business tax on those entities. However, those entities are subject to the individual income tax rate, which is also 4.85%.
Sales Tax
Sales tax – Like many states, Utah has multiple tax rates. One at the state level and another at the local level. The state rate is 6.10% the average local rate is 1.09% (total average rate for Utah Sales Tax is 7.19%).
Property Taxes
Property Taxes in Utah – the average property tax rate for residential property in the state of Utah is 0.59% as a percentage of home value, making it one of the lowest property tax rates in the country.
DMV fees
Utah has flat fees for vehicle registration. Since they are not based on the vehicles value, they are not deductible. To learn more, here’s a link to the Utah’s DMV website.
Domicile in Utah
If you maintain a permanent place of abode for over 183 days, in aggregate, you are considered a Utah resident.
Social Security Benefits Tax in Utah
Utah is one of the only states in the union that taxes Social Security according to the same rules as your Federal Income tax return. However, the state of Utah does offer a state tax credit that reduces this tax if your income is not beyond a certain threshold.
Payroll Taxes in Utah
Unemployment taxes usually consist of three factors. They are the wage base, range of rates, number of schedules. Below is an outline of the three:
- Wage Base – Utah has a wage base of $44,800
- UI Rates – range from 0.20% to 7.20%.
- Schedules – Utah has a single schedules regarding UI.
Utah Business Entities – LLCs
Utah is an inexpensive state to to set up your LLC. Here are some important facts:
- Utah’s annual LLC fee is only $20
- When you register with the state, you pay a one time fee of $70
- Secretary of State of Utah website –click here
Utah Tax Contact Phone Numbers
Important phone numbers for the Utah Department of Taxation:
- Website: tax.utah.gov
- Phone# for Individuals – (801) 297-2200
- Phone# for Businesses – Same