1. Taxable Income and Exemptions
2. Credits Based on Federal Tax Deductions
3. Major Tax Credits in Utah
4. Capital Gains
5. Utah Sales Tax Rates
6. Retail Sales and Personal Property Leases
7. Products Taxed at Other Rates in Utah

The Utah LLC tax rate matches that of the rest of the state at 5 percent because there is a statewide flat income tax rate. Income tax payments come in around the national average for residents. Utah has the 11th lowest average property tax rate in the US at 0.67 percent. Sales tax rates in Utah, ranging from 5.95 percent up to 8.60 percent are also near the national average.

Taxable Income and Exemptions

The average person in Utah pays $981, and they have a fairly low state and local tax burden. To calculate taxable income in Utah, subtract personal exemptions from total income.

  • Utah's personal exemption equals 75 percent of the U.S. Federal personal exemption.
  • As of 2017, the amount of the exemption for an individual in Utah was $3,038.
  • Dependents, filers, and sources can all be claimed, and extra exemptions are available for those who have dependents with disabilities.

Credits Based on Federal Tax Deductions

Hiring an accountant or using tax preparation software to file your tax returns is worth considering. The Utah Taxpayer Tax Credit is based solely on the amount of Federal tax deductions, and there aren't any standard deductions or itemized deductions to claim in Utah. In Utah, Social Security is taxed, but there is a Retirement Tax Credit to help reduce the burden of taxes for retirees.

Major Tax Credits in Utah

Utah's major tax credits include:

  • Low-Income Housing Credit: Taxpayers who reside in low-income housing projects can claim this credit.
  • Qualifying Solar Project Credit: Homeowners who buy qualified solar panels can deduct 25 percent of the amount they pay, or up to $2,000.
  • Retirement Income Tax Credit: Retired taxpayers over age 65 can claim this credit at $450 for single filers or $900 for joint filers.
  • Taxpayer Tax Credit: Taxpayers can claim an equivalent of 6 percent of claimed Federal deductions, though it gets smaller and phases out at higher income levels. This is in addition to the Utah personal deduction.
  • Utah Educational Savings Plan Credit: Taxpayers can claim up to 5 percent of contributions to educational plans, or $96 per qualified beneficiary if filing singly, and $192 if filing jointly.

Capital Gains

In Utah, long-term capital gains and short-term capital gains are included in a taxpayer's personal income and taxed at the standard rate of five percent. When added to the capital gains rate for the U.S., which is 15 percent, the total capital gains tax rate adds up to 20 percent. Utah's Capital Gains Tax Credit kicks in at five percent if the taxpayer used at least 70 percent of the proceeds earned from the gain to buy stock in a small business corporation in Utah during the past 12 months.

Utah Sales Tax Rates

In Utah, sales taxes are applied at both the local and state level. State sales tax is 4.70 percent. Local sale tax is collected at county and city levels, and it ranges from a low of 1.25 percent up to a high of 3.9 percent. So, the full, combined sales tax rates in Utah come out between 5.95 percent and 8.60 percent. These include the rates for all 29 counties in Utah, and also the 100 biggest cities in the state.

Retail Sales and Personal Property Leases

Utah sales tax law includes retails sales and tangible personal property leases. Personal property that's considered tangible includes physical items like seating, tables, and garments. It also includes products that are transferred electronically, such as music or movies. Some services can also be taxed, like maintenance and repair labor costs. The costs of laundering garments, attending movies and other entertainment venues, hotel stays, and telecommunications are also taxable.

Products Taxed at Other Rates in Utah

Groceries and other types of non-prepared food are taxed at three percent. Utilities for residences, like electric and gas, are taxed at up to six percent. Other products are fully exempt, such as prescription medication, prosthetics, medical gear, newspapers, wheelchairs, textbooks, college sporting events, and fuel cells.

If you find you must charge sales tax on goods and services sold by your business, you must also register for permission, called a seller's permit so that you can collect sales tax for Utah's local and state government agencies.

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