Every year the national Tax Foundation calculates “Tax Freedom Day,” the day when the nation as a whole has earned enough money to pay all of the taxes it will owe for the year. This is done by dividing the nation’s income by all of the federal, state, and local taxes. For 2015, national Tax Freedom Day is on April 24th, 114 days into the year.
In addition to calculating national Tax Freedom Day, the Tax Foundation calculates Tax Freedom Day for each of the 50 states. Utah’s 2015 Tax Freedom Day falls on Monday, April 20th. This means that Utahns must work for 110 days to be able to pay all of their local, state and federal tax obligations.
Last year, Utah reached Tax Freedom Day on April 17th, three days earlier than this year’s Tax Freedom Day. Tax Freedom Day is later this year likely because of Utah’s continued economic growth, which boosts tax revenue.
Compared to other states, Utah ranks 27th best in terms of the least amount of time required to pay off its tax bill. States with higher incomes and higher state and local taxes reach Tax Freedom Day later in the year. The states with the latest Tax Freedom Day are Connecticut and New Jersey, which fall on May 13th. The state with the earliest Tax Freedom Day is Louisiana, which celebrated its Tax Freedom Day on April 2nd. The map below shows Tax Freedom Day for all 50 states.
To view the Tax Foundation’s methodology and complete report, click here.