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Tax Information

Property Tax: Property taxes are levied at the state and local level, based on assessed valuations established by elected county assessors and, in the case of certain properties, by the State Tax Commission's Property Tax Division. The amount of taxes paid is based on the tax rate applied against the taxable value of the property. Tax rates are set by local entities (counties and towns, school districts, and special taxing districts) and approved by the Property Tax Division. Effective tax rates range from 0.87 percent of market value on residential property to 1.2 percent on fee-in-lieu personal property in 2000.

State Income Tax: This tax is based on federal taxable income after deducting one-half of federal tax. Utah has a graduated tax rate up to a 7 percent rate on taxable incomes greater than $7,500. 

Sales and Use Tax: Utah has a sales and use tax for retail sales of tangible personal property and select services such as admissions to places of amusement, intrastate transportation service, hotel and motel accommodations, and certain other goods and services. Rates for sales and use tax within each municipality vary between 5.75 percent and 7.0 percent of purchase price. Additional local sales taxes for specific goods also exist. The restaurant tax is an additional 1 percent. The motor vehicle rental tax of 2.5 percent is applied statewide with an additional tax of 3 percent in Duchesne, Grand and Uintah counties and 7 percent in Davis, Morgan, Salt Lake, Sevier, Washington, and Weber counties.

Local taxes, in addition to sales taxes from room rates, vary from 3 to 4.5 percent. Municipal energy sales and use tax rates, when charged, varies from 1 percent to 6 percent. A general sales tax of up to 1.5 percent is applied in 12 resort communities.

Corporate Franchise Tax: The state of Utah taxes all corporations' net income, which has been determined by law to be allocable to the state. Utah has the three factors-sales, payroll and property-to equally apportion federal taxable income. The corporate franchise tax rate is 5 percent of net taxable income. Minimum tax for state banks and corporations is $100. 

Unemployment Compensation: Employers must pay on the first $21,400 of wages paid to each employee during the calendar year. Unemployment tax rates vary from 0.1 percent to 8.1 percent of taxable payroll, depending on unemployment experience and type of industry. 

Tax Considerations and Exemptions: Utah's free port law is among the most liberal inventory tax laws in the country. Goods used by retailers, wholesalers, or manufacturers for processing and sale in Utah are exempt from ad valorem taxes.

Salt Lake, a customs port city, offers a foreign trade zone. The service allows duties to be deferred or reduced.

Motor vehicles have a uniform fee in lieu of property tax based on the model year of the vehicle. The fee ranges from $10 to $150, depending on the age of the vehicle. 

 

For more information on Utah tax rates, visit the Utah State Tax Commission.

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