Utah Basic Business Taxes | Area Development Online

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Utah Basic Business Taxes

Area Development Online Research Desk (Feb/Mar 09)

Corporate income and franchise tax:
The state imposes a corporate income and franchise tax of 5 percent. The minimum corporate income tax is $100.

Sales and use tax:
The maximum sales and use tax is 6.35 percent. The rates will differ by community depending on the amount of local option taxes in effect. Manufacturing equipment and pollution-control equipment are exempt.

Property tax:
All tangible property, both real and personal, is subject to taxation. Intangible property is not taxed. All tangible property not assessed by the State Tax Commission is assessed by county assessors in the city, county, town, or school district in which it is located. The assessment rate is 100 percent of fair market value. Residential property is assessed at 55 percent of fair market value. Tax rates vary in each city, county, town, or school district.

The State Tax Commission assesses public utilities, transportation companies, mines, and oil- and gas-producing companies at 100 percent of fair market value. Assessments are apportioned among counties in which the companies operate to be taxed at local rates.

Sales tax exemption for new and replacement manufacturing equipment purchases:
• Manufacturers (SIC 2000-3999) are exempt from sales tax on the purchase of new equipment for Utah plant start-up.
• Replacement manufacturing equipment purchases are exempt from sales tax.

Research tax credits:
• Income tax credits of up to 6 percent of a taxpayer's qualified research expenses for the tax year in excess of the taxpayer's base amount.
• Limited to qualified research conducted in Utah.
• Available for basic research payments to qualified organizations.
• Quality research expenses include: (1) the purchase price of machinery and equipment primarily used for conducting qualified research in Utah; and (2) wages paid to an employee engaging in qualified research.
• Covers computers, computer equipment, and software.
• Available only if the equipment or machinery is not exempt from sales or use taxes.
• Available for basic research payments to qualified organizations.

Property tax inducements (tax increment financing):
• Available increment: 80 percent over 15 years.
• New property tax monies are returned to the developer/owner in the form of infrastructure development, land cost write down, or other appropriate means.
• Redevelopment Agency/Economic Development Agency (RDA/EDA) district is determined by each municipality.
• Eight-member voting approval board for each RDA district — two from the city; two from the county; two representatives from the local school board; one representative from the state school board; and one ex-officio, non-voting member representing the remaining local taxing agencies.

Utah State Contact:
Division of Business and Economic Development
324 S. State Street, Fifth Fl.
Salt Lake City, UT 84114
(801) 538-8640

Incentive and tax information is provided to Area Development by each state’s economic development or commerce agency for information purposes only and is subject to revision at any time by the state government. Please contact the state agency directly for full requirements and offerings.