Utah State Tax Guide 2025

Moving to Utah offers stunning landscapes and a growing economy. Understanding the state's tax structure is essential for financial planning. This guide provides an overview of Utah's tax landscape for 2025.

1. Income Tax

Utah utilizes a flat income tax rate. This simplifies the tax filing process as the rate does not change based on income levels.

Rate: 4.55%
Structure: Flat (The same rate applies to all taxable income brackets).
Filing: Utah requires taxpayers to file a state return, and the rate applies to both individuals and corporations.

2. Sales Tax

Utah’s sales tax is a combination of state and local taxes. While the state sets a base rate, local jurisdictions (cities and counties) add their own taxes.

State Rate: 6.1%
Local Rates: These can vary significantly depending on the specific location. In some areas, the total combined rate can reach 8.35% or higher when including county and city taxes.
Taxable Goods: Most tangible personal property and some services are taxable.
Groceries: As of 2025, grocery food is subject to a reduced state sales tax rate of 1.75%, though local taxes may still apply to the total purchase.

3. Property Tax

Utah’s property tax system is generally considered favorable compared to the national average. Property taxes are primarily used to fund local government services, such as schools, libraries, and emergency services.

Assessment: Property taxes are based on the assessed value of the property. Utah limits the annual increase in the taxable value of residential property to 3% for primary residences (excluding new construction).
Average Rate: While rates vary by county, Utah's effective property tax rate is typically below the national average, often hovering around 0.5% to 0.6% of the property's market value.
Exemptions: Utah offers exemptions for certain groups, including disabled veterans and qualifying seniors.

4. Other Taxes

Beyond income, sales, and property taxes, Utah has several other taxes to be aware of:

Gas Tax: Utah imposes a motor fuel tax. As of 2025, the tax rate is approximately 36.5 cents per gallon for gasoline and 38.5 cents per gallon for diesel. These rates may be adjusted annually for inflation.
"Sin" Taxes: Utah levies excise taxes on specific goods such as tobacco, alcohol, and vaping products. These taxes are often higher than standard sales tax rates.
Inheritance/Estate Tax: Utah does not have a state-level inheritance or estate tax. However, federal estate taxes may still apply to large estates.

5. Retiree Taxes

Utah is moderately tax-friendly for retirees, though it depends on the source of income.

Social Security: Social Security benefits are taxable in Utah. However, retirees can claim a non-refundable tax credit on their Utah return to offset taxes on Social Security income.
Retirement Accounts: Distributions from 401(k)s, IRAs, and pensions are fully taxable at the flat rate of 4.55%.
Other Income: Income from wages or investments is also taxed at the flat rate.

6. Comparison to Neighbors

Utah's tax structure is distinct from its neighboring states:

Idaho: Idaho has a progressive income tax system with rates ranging from 1% to 6.5% (as of 2025). Utah's flat 4.55% rate is often more favorable for middle-to-high-income earners compared to Idaho's top rate, though lower earners in Idaho may pay less.
Nevada: Nevada has no state income tax. While Utah has a 4.55% income tax, Nevada typically has higher sales tax rates to compensate.
Arizona: Arizona has a progressive income tax system with rates ranging from 2.5% to 4.5%. Utah's flat rate is comparable to Arizona's top marginal rate but applies to all income levels.
Colorado: Colorado has a flat income tax rate of 4.4%, which is slightly lower than Utah's 4.55%.

Disclaimer: Tax laws and rates are subject to change. This guide is for informational purposes only and does not constitute professional tax advice. Please consult with a Certified Public Accountant (CPA) or tax professional for advice specific to your financial situation.