Utah Tax Rates

This post provides an overview of the primary taxes levied at the state level in Utah. The state is characterized by its flat individual and corporate income tax rates, low property taxes, and a dual system of sales tax for general goods and a lower rate for groceries. For individuals or businesses seeking comprehensive support with tax filings, compliance, or strategic planning, indinero offers expert services. We encourage all who utilize this summary to explore the tailored tax support available through indinero.

Individual Income Tax

Utah utilizes a flat rate individual income tax system, with the rate consistently being reduced by the legislature.

  • State Rate (2025): The state income tax rate for 2025 is a flat 4.50% of Utah taxable net income (reduced retroactively from 4.55% for the 2025 tax year).
  • Local Income Tax: Utah does not impose a local or county income tax.
  • Taxation of Retirement Income: Utah is one of the few states that taxes Social Security benefits and other retirement income (pensions, 401(k), IRA withdrawals). However, seniors with modest income levels may qualify for a Social Security tax credit or a Retirement Income Tax Credit to offset or eliminate the state tax liability on that income.

Sales and Use Tax

Sales tax is a significant revenue source, combining a state base rate with substantial local additions.

  • State Base Rate: The general state sales tax rate is 4.85% on the retail sale of most tangible personal property and certain services.
  • Local Taxes: Local jurisdictions (cities and counties) may levy additional local sales taxes, which can be up to 4.0%.
  • Combined Rate: The total combined state and local sales tax rate can range from 4.7% up to 8.7%, depending on the city and county. The combined rate in Salt Lake City, for example, is 7.25%.
  • Tax on Groceries: Unprepared food (groceries) is taxed at a reduced combined state and local rate of 3.0% (1.75% state rate + 1.25% local rate).
  • Exemptions: Key exemptions include prescription drugs and medical equipment.
  • Use Tax: A use tax of the same state and local rate applies to taxable items purchased outside of Utah but used, stored, or consumed in the state if Utah sales tax was not collected.

Property Tax (Ad Valorem Tax)

Property taxes in Utah are collected exclusively at the local level by various taxing entities (school districts, counties, etc.), and the effective rate is among the lowest in the U.S.

  • Assessment Ratio: Real property is assessed at 100% of its fair market value.
  • Residential Exemption: Utah provides a substantial 45% exemption for primary residential properties. This means only 55% of the home’s fair market value is subject to property taxation.
    $$\text{Taxable Value} = \text{Market Value} \times 0.55$$
  • Tax Calculation: The tax is determined by applying the local mill rate (set by local budgets) to the low taxable value.
  • Tax Relief: Various relief programs exist for seniors, disabled persons, and low-income residents, such as the Circuit Breaker Credit and tax deferral programs.

Corporate Income Tax

Utah imposes a flat-rate corporate franchise and income tax.

  • Tax Rate (2025): The corporate franchise and income tax rate is a flat 4.50% of the corporation’s taxable net income (reduced retroactively from 4.55% for the 2025 tax year).
  • Minimum Tax: All corporations doing business in the state are subject to a minimum tax of $100.
  • Apportionment: For multi-state corporations, Utah uses a single sales factor apportionment formula to determine the amount of income taxable in the state, based solely on the proportion of sales made in Utah.

Unique and Miscellaneous Taxes

  • No Estate or Inheritance Tax: Utah does not impose a state-level estate tax or inheritance tax.
  • Motor Fuel Tax: A per-gallon tax is levied on motor fuels, set at 31.9 cents per gallon for gasoline.
  • No Intangible Property Tax: Intangible property (stocks, bonds, etc.) is not subject to property taxation.

R&D Offer Quiz

Step 1 of 3

Answer to find out if you're eligible for R&D tax credits.

Do the activities performed relate to a new or improved business component’s function, performance, reliability, quality, or composition?(Required)
For Example: A mid-sized packaging company develops a slightly modified cardboard box design to improve its stacking strength (reliability) for warehouse storage, involving minor adjustments to the corrugation pattern to reduce collapse under standard weight loads.
Is your company trying to discover information to eliminate uncertainty concerning the capability or method for developing or improving a business component?(Required)
For Example: A furniture manufacturer investigates whether a cheaper wood adhesive can hold joints as effectively as the current one during assembly, testing bond strength to resolve doubts about its capability in standard production lines.
Do the activities performed constitute a process of experimentation?(Required)
For Example: An auto parts supplier runs a series of bench tests on different lubricant formulations to find one that reduces friction in engine bearings more effectively, systematically comparing wear rates over simulated operating cycles.