For the latest news and updates on Utah state and local tax
October 24, 2023
Utah Tax Commission Announces 2024 Interest Rate for Taxes Deficiencies
On October 1, 2023, the Utah State Tax Commission announced it would impose a 7% interest rate on tax deficiencies effective January 1, 2024. This interest rate applies to individual income, corporate income, trust income, sales and use, excise, and property tax. This prior interest rate on tax deficiencies was 5%.
March 24, 2023
Utah Creates Opportunities for Charitable Giving on Its Tax Return Form
Utah legislators have sent a bill to Governor Cox creating a fund to assist the 11,000 not-for-profit entities operating in the state. The Governor has until March 24 to sign or veto the bill. Grants from the fund would provide technical, professional, and operational support to nonprofit organizations within the state. The grants would be funded by donations from taxpayers who will donate to the fund via checkboxes on the state’s personal income tax return forms.
February 3, 2023
Utah Revises Business Personal Property Tax Publication
Effective January 1, 2023, the Utah Tax Commission issued a revised version of the Business Personal Property Tax publication. Business personal property includes furniture, fixtures, machinery, equipment, and other tangible personal property (TPP) not taxed as real property. TPP with a combined fair market value of less than $27,000 per county, items acquired for less than $500 and not critical to the business, supplies, inventory held for resale, farm equipment and agricultural machinery, livestock, household furnishing, intangible personal property, and personal property used for irrigation are exempt from business personal property tax. If a taxpayer is claiming the less than $27,000 fair market value exemption, they are required to apply for the exemption with the appropriate county assessor. Business personal property tax is assessed based on the status of the property on January 1st, and the payment is due on May 15th of each year.
April 8, 2022
Utah Adopts MTC Model in Taxing Nonresident Employees
On March 23, 2022, Utah Governor signed a bill that exempts nonresident individuals who work in the state for less than 20 days from nonresident income tax. This bill is effective for tax years beginning on or after January 1, 2022. To qualify for the exemption, the nonresident individual cannot have other income within the State of Utah in the same tax year, and the resident state needs to provide a substantially similar exemption or not have income tax. Additionally, the 20-day rule does not apply to professional athletes, performers, construction workers, or key employees.
February 25, 2022
Utah Seeks to Lower Income Tax Rates and Improve the State EITC Program
On February 11, 2022, Utah’s Governor Spencer Cox signed S.B. 59. This bill lowers the corporate and individual income tax rate to 4.85% from 4.95%. Additionally, it provides a nonrefundable EITC credit of 15% of the Federal EITC claimed. The bill also seeks to help those on social security by raising the thresholds for its income-based phaseout. The provisions of this bill are in effect retroactively to the beginning of 2022.
Effectively retroactively, amounts included in a taxpayer’s federal income under Internal Revenue Code Sections 965(a) (the one-time “transition tax”) and 951A (global low-taxed intangible income, aka “GLTI”) are eligible for Utah’s 50% dividends received deduction. However, the federal deduction for foreign direct investment (“FDI”) income is not permitted on the Utah state return, and as such, Utah’s 50% dividends received deduction applies to a taxpayer’s gross amount of GILTI and section 965 income. If your business is operating in Utah and overseas, Withum’s SALT group and International Tax Team can assist with any questions you have.
UT Not Changing Its Filing Due Date for State Income Tax
Although the IRS has extended the deadline for payment of 2019 Individual Income Tax due (up to $1 million) and Corporate Income Tax due (up to $10 million) to July 15, 2020, The deadline for payment of Utah state taxes has not changed. Utah has an automatic 6-month extension to file these taxes but payment must be made by April 15, 2020. Prepayment requirements for filing extension can be found here.