by Howard Stephenson
Utah’s state and local tax burden fell from 9th highest to 13th highest in the U.S., according to the Utah Taxpayers Association’s annual analysis of state and local tax burdens. According to the Association’s study, Utah’s state and local tax and fee burden increased from 10th highest to 3rd highest.
Burdens are determined as a percent of total personal income and calculations are based on data from the Census Bureau and the Bureau of Economic Analysis.
Utah’s general sales tax burden is considerably higher than the national average due to a comparitively large sales tax base. Utah taxes repair and installation charges of tangible personal property (unless it is attached to real property). Utah also taxes purchases of all food, including unprepared food which is exempt in most states.
Utah’s motor fuel taxes at 0.06% of personal income are also significantly higher than the national average. Due to population growth, most western states also have motor fuel tax burdens that are considerably higher than the national average including Nevada (0.64%), Idaho (0.64%), and Arizona (0.44%). Eastern states with high population densities and low population growth rates tend to have lower motor fuel tax burdens such as New York (0.07%) and New Jersey (0.16%).
Utah’s tax burden has traditionally ranked higher than the national average, primarily due to education spending demands produced by Utah’s unique age demographics. The percent of population enrolled in public schools is 25% higher in Utah than in the nation. Nearly 21% of Utah’s total population is enrolled in public schools compared to 16.6% for the nation. Utah’s tax burden increased during the late 1990s as the economy boomed. Utah’s tax burden fell during the recession as corporate income tax revenues and purchases by household and businesses stagnated or declined.
Utah’s fees-only burden is 5th highest in the nation, due in large part to the high percentage of Utahns enrolled in public universities and colleges. Half of the difference in fee burden between Utah and the U.S. is attributable to higher education charges (tuition and fees).