In Utah, property taxes are the chief source of funding for city and county government, school districts and numerous other entities that provide public services at the local level. Property tax is imposed on all residential and commercial real property in the state, on motor vehicles and on certain types of personal property used when conducting business.

In 2014, the most recent year for which data is publicly available, individual taxing districts in Utah combined to collect just over $2.95 billion in property taxes. School districts collected roughly 54% of the total, while counties took a 19% share and municipalities collected 14%. The remainder was collected by 392 independent special taxing districts providing local services such as fire protection, water and sewage systems, health care, street lighting and cemetery maintenance.

Real Property Taxes in Utah

Under the Utah Constitution, county assessors must reset real property values each year on the first day of January, according to fair market value, with an emphasis on uniform valuation across similar properties. Assessors are required to conduct detailed property appraisements once every five years, while market data is used to adjust valuations in off years. Both residential and commercial real property undergo the same annual valuation process.

While all real property is assessed at fair market value, a standard 45% exemption is available on all primary owner-occupied residential properties in the state. Thus, a primary residence with a fair market value of $200,000 has a taxable value of $110,000 after applying the exemption. Commercial real property, second homes and rental homes have taxable values equal to 100% of fair market value.

Once the taxable value of a property is established, the combined local tax rate covering the property is used to calculate the tax. Most properties lie within multiple taxing districts. Each district sets its own tax rate under the requirements of Utah's Truth in Taxation law. Under this law, taxing districts must conduct public hearings and complete other steps if an increase in tax revenue is required beyond natural growth in the district.

Vehicle Property Taxes in Utah

While motor vehicles are considered taxable property in Utah, tax assessments are constructed as fees payable during regular annual vehicle registrations and renewals. Two types of fees are in place: a value-based fee and an age-based fee. Value-based fees apply to large vehicles. Heavy-duty trucks, commercial trailers and water vessels longer than 31 feet are charged 1.5% fees on the value of the vehicles as assessed on Jan. 1 each year. Recreational vehicles are charged 1% value-based fees.

Age-based fees apply to passenger vehicles, personal watercraft and noncommercial travel trailers. Fee schedules are set annually and vary according to the class of vehicle and the model year. In 2016, for example, a 2014 to 2016 passenger vehicle is subject to an age-based uniform fee of $150. Fees drop with vehicle age. In the passenger vehicle category, 2004 model year and older vehicles are charged a $10 fee.

Personal Property Taxes in Utah

Apart from motor vehicles, personal property not used in the operation of a business is generally not subject to taxation in Utah. Business personal property, including office furniture, machinery and other business equipment, is subject to taxation. Business personal property is valued according to official property valuation schedules published each year. The schedules provide a percentage figure based on the class of property and the model year. The percentage is applied to the property's acquisition cost to generate a taxable value.

Average Property Tax in Utah

In 2014, Utah had an average tax rate of 1.32% when expressed as a percentage of taxable property value, which excludes motor vehicles under the age-based fee system. County-level averages vary widely. At the low end, Wayne County had an average rate of 0.54% of taxable property value, while Rich County had an average rate of 0.75%. At the high end of the scale, Salt Lake County and Weber County both had average rates slightly above 1.52% of taxable property value.

How Do Utah Property Taxes Compare?

Given the often significant differences within states, it is generally difficult to make broad comparisons across state lines. The Tax Foundation, a nonprofit research organization, has cut through some of the confusion by calculating the average effective tax rate for owner-occupied homes throughout the United States. According to the figures, Utah imposes an average property tax rate of 0.68% on the full market value of owner-occupied homes. Two of its neighbors, Wyoming and Colorado, come in slightly lower at 0.61%. Utah bests all of its other neighbors, including Idaho at 0.75%, Arizona at 0.8% and Nevada at 0.86%.

Conclusion

While statewide figures show property tax is relatively low in Utah, county-level averages reveal substantial differences within the state. There are a couple of important reasons for the differences in tax rates between Utah counties and cities. The primary reason has to do with differences in the level of demand for public services in urban and rural areas. Utah's two counties with the highest rates are centered in Salt Lake City and Ogden, large urban areas with comparatively high per capita spending on public services. Also, local governments can generate revenue through sales and use taxes, in addition to property taxes. While one county may choose to fund a certain activity through a sales tax, another may opt for property tax funding. A full accounting of the tax burden in Utah localities requires a close look at all three types of taxes.

Washington Property Tax Guide

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