Explore the state and local tax burden of residents across the United States. Hover over markers for more information about levels, rankings and year-over-year changes of the tax burden. Click and drag to move around or zoom in on states on the eastern coast for a better view.
Early 2015 you might have seen news coverage from several outlets on a Utah Foundation report which showed that in 2012, Utah had its lowest tax burden in the previous 20 years (the U.S. Census Bureau takes about two years to release the data). We now bring you a 2013 update. As a note, both the Census and the Bureau of Economic Analysis (BEA) have recently revised their numbers, so the numbers we post here are the most up-to-date and might not agree exactly with previous reports.
Just as a reminder, Utah Foundation calculates tax burden as all taxes and mandatory fees (those fees that are hard to get around, like registering your car or paying for sewerage disposal) in terms of $1,000 of personal income. So when we write the tax burden for 2013 is $111.36 we are saying that for every $1,000 you earn, you pay on average $111.36 in state and local taxes and mandatory fees (federal taxes are not included).
Overall Tax Burden
Utah reached its lowest tax burden in the previous twenty years in 2012: $110.91 per $1,000 of personal income. In 2013 it ticked up slightly to $111.36, but Utah remained ranked 25th among states.
Sales Tax
In 2013, sales tax continued its slow decline to rest at $24.21 per $1,000 of personal income. Sales tax hit a high of $35.63 in 1997 and has slowly declined since then, because as the legislative fiscal analyst’s report a) more consumers have transitioned to purchase more services (which are tax free) rather than goods, b) the price of goods have decreased overall, and c) an aging population spends more on medical services rather than tangible goods. Utah state legislators have attempted to address the eroding of the sales tax base by collecting sales tax on online goods purchased in Utah, but current federal regulations limit this option. Because raising the sales tax even higher or putting a sales tax on services are currently both unpalatable to state legislators, they will have to learn to live with sluggish growth and find other sources of funds for government operations. We might expect to see a slight bump in the sales tax burden in about three years when 2016 data becomes available due to the higher sales tax in counties where Proposition 1 passed.
Property Tax
Property taxes has been one of the most steady tax burdens over the past two decades. It recently hit a high point of $28.74 per $1,000 of personal income in 2011, but has since fallen to $26.39, near its long term average of $25.82.
Income Tax
The changes in income tax in 2007 and subsequent decline of the income tax burden was responsible for a large part of the decrease of the overall tax burden resulting in the 2012 low point. However, income tax posted a sharp rebound in 2013 jumping $2.49 per $1,000 of personal income, from $24.75 in 2012 to $27.24 in 2013. The income tax burden hasn’t been that high since before 2009. The exact reasons behind such a jump when there has been no clear change in tax policy are a little hazy. It could be due to the expanding economy, with more individuals receiving a higher income, fewer will qualify for credits and rebates and will pay the full 5% of Utah’s income tax.
Corporate Income Tax
It is no surprise that the corporate income tax burden fluctuates a lot with the overall state of the economy. The corporate income tax burden reached a historic high of $4.75 in 2007 and bottomed out in 2012 at $2.59. As is likely evident, the corporate income tax is one of the smaller forms of generating revenue and has since rebounded slightly to $3.16, near its long term average of $3.30. Current committee bills in the state Legislature aim to effectively remove this tax, so we might expect a sharp decline within a few years.
Motor Fuel Tax
Similar to sales tax, the motor fuel tax burden had its high point in the past, reaching $6.57 per $1,000 of personal income in 1998 after the state legislature increased the tax in 1997. Since, the tax has been eroded by inflation and a higher level of fuel efficiency resulting in a tax burden of $3.56 in 2013, the lowest point seen in the previous 20 years. However, with the tax being increased again in 2015 and a portion of it tied to inflation we should expect an increase in the motor fuel tax burden in future analyses.
Mandatory Fees
Over the past two decades we have seen overall trends of increasing fees across the nation. Utah’s mandatory fees burden was originally $10.18 per $1,000 of personal income in 1993 and rose to $17.29 in 2005. They have since fallen to 14.06, virtually on parity with its long-term average.
Conclusion
So how are we doing overall? That depends a little bit on your priorities. Having a low tax burden ensures you can keep a larger portion of your earnings to spend on yourself, which in turn, benefits the economy. However, having a tax burden that is too low could potentially cause problems with government underinvestment in infrastructure, or other important programs like education or social services which could be detrimental not only to the economy, but to Utahns’ quality of life as well.
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