Utah is a state in the western United States. It became the 45th state admitted to the union on January 4, 1896. It is the 13th largest state by area, the 30th most populous and the 11th most densely populated state.
Utah is known for its natural diversity and is home to features ranging from arid deserts with sand dunes to thriving pine forests in the mountain valleys. It is a rugged and geographically diverse state that is at the convergence of three distinct geological regions: the Rocky Mountains, the Great Basin, and the Colorado Plateau.
Utah features a dry semi-arid to desert climate, although its many mountains feature a large variety of climates, with the highest points in the Unita Mountains being above the timberline. The dry weather is a result of the state’s location in the rain shadow of the Sierra Nevada in California. The eastern half of the states lies in the rain shadow of the Wasatch Mountains. The Primary Source of precipitation for the state is the Pacific Ocean, with the state usually lying in the path of the large Pacific Storms from October to May. In Summer, the state, especially southern and eastern Utah, lies in the path of the monsoon moisture from the Gulf of California.
Business Climate
Major industries of Utah include mining, cattle ranching, salt production, and government services. In eastern Utah, petroleum production is a major industry. Near Salt Lake City, petroleum refining is done by a number of oil companies. In central Utah, coal production accounts for much of the mining activity.
Tourism is a major industry in Utah. With 5 national parks (Arches, Bryce Canyon, Canyonlands, Capitol Reef, and Zion), Utah has the third most national parks of any state after Alaska and California. In addition, Utah features 8 national monuments (Cedar Breaks, Dinosaur, Grand Staircase-Escalante, Hovenweep, National Bridges, Bears Ears, Rainbow Bridge, and Timpanogos Cave), two national recreation areas (Flaming Gorge and Glen Canyon) seven national forests (Ashley, Caribou-Targhee, Dixie, Fishlake, Manti-La Sal, Sawtooth, and Uinta-Wasatch-Cache), and numerous state parks and monuments.
Beginning in the late 19th century with the state’s mining boom (including the Bingham Canyon Mine, among the world’s largest open pit mines), companies attracted large numbers of immigrants with job opportunities. Since the days of the Utah Territory, mining has played a major role in Utah’s economy. Rich silver mines in the mountains adjacent to the towns led to many people flocking to the towns in search of wealth. During the early part of the cold war era, uranium was mined in eastern Utah. Today, mining activity still plays a major role in the state’s economy. Minerals mined in Utah include copper, gold, silver, molybdenum, zinc, lead, and beryllium. Fossil fuels including coal, petroleum, and natural gas continue to play a large role in the state’s economy.
Tax Climate
The top individual income tax rate is 4.95%. The top corporate income tax rate is also 4.95%.
Utah uses the sales factor for the apportionment of corporate income. Utah uses the market-based method for the sourcing of services and intangible property. In Utah, receipts from intangibles are sourced based on where the intangibles are used.
Sales Tax Structure
The state sales tax has a base rate of 6.45%, with cities and counties levying additional local sales taxes that vary among the municipalities.
Utah has enacted economic nexus legislation. Remote sellers are required to register, collect and remit UT sales tax if the company’s gross receipts is more than $100,000 or has 200 transactions in the previous or current calendar year. This legislation went into effect on January 1, 2019.
Utah is fairly aggressive in its approach to the taxation of technology products for sales tax purposes. Digital books, audio works, audio visual works and magazines are all taxable. However, digital newspapers are exempt from taxation. Prewritten computer software that is electronically downloaded is taxable, while custom computer software that is electronically downloaded is exempt from taxation. Lastly, Software as a Service (SaaS) is taxable. How products are produced, sold and delivered is critical to determining their tax status.
Some states have annual sales tax holidays, during which certain items the state wants to promote the purchase of (like school supplies, emergency preparedness supplies, or energy efficient appliances) can be purchased sales tax free. However, Utah does not have any sales tax holidays.
Random Facts
- Utah’s Great Salt Lake is about four times saltier than any of the world’s oceans. If a person boiled 1 quart of water from the saltiest part of the lake, a half cup of salt would remain. It is so salty because as the ancient Lake Bonneville dried up, salt and other minerals were left behind. Because the shrinking lake had no stream out to sea, the salt deposits became concentrated in the lake.
- The name “Utah” is derived from the name of the Ute Native American tribe. The name means “people of the mountains.”
- Utah is the second-driest state in the United States after Nevada. On average, Utah has about 300 sunny days a year.
- Utah is home to the largest open-pit mine in the world, Brigham Canyon.
- Kanab, Utah, is known as “Little Hollywood” because over 100 movies (mostly westerns) and many TV series have been filmed in Utah since 1924. Famous movies include Stage Coach, The Lone Ranger, Gunsmoke, Planet of the Apes, The Outlaw Josey Wales, and Sergeants 3.
- Because of the state’s high elevation and desert-like climate, its snow is dry and powdery. Hence, Utah claims to have the “Greatest Snow on Earth.”
- Approximately 75 million years ago, Utah was part of a landmass called Laramidia. This land mass was hot, swampy, and full of dinosaurs, which makes Utah one of the best places in the U.S. to find dinosaur fossils.
- Utah has the highest consumption of Jell-O in the United States. In fact, Jell-O is Utah’s state snack.
Our team at Miles Consulting Group is available to discuss the specifics of your state tax situation, whether in Utah or other states, we can help you navigate the complex tax structures arising from your multistate operations. Call us to help you achieve the best tax efficiencies.
