Responses
June 21, 1995, July 5, 1995 and July 6, 1995
Request
**hand-written**
**We are planning to retire in Logan and would like info on taxes in
Utah, including income, sales and property taxes. Our retirement income will be a combination of St. of CA.
pensions, deferred compensation plan savings and social security. The State of Calif. requires us to pay
Calif. Income taxes on this even if we live in another state. Will we also be required to pay income tax
in Utah on this retirement income? Any
information you could provide would be greatly appreciated.
Thank you,
XXXXX
June 21, 1995
Re: Request For Advisory
Opinion - No. 95-023DJ
Dear XXXXX:
You requested an advisory opinion as to the taxability of retirement
income to the State of Utah earned and received from California.
Our research indicates as follows:
A Utah resident must report on the Utah individual income tax return
all income received regardless of the state where the income was earned or may
be taxed. However, a Utah resident
would be entitled to a credit for individual income taxes paid to another state
on that income included on the Utah return.
Utah Code Ann. Sec 59-10-106(1) states “A resident individual shall be
allowed a credit against the tax otherwise due under this chapter equal to the
amount of the tax imposed on him for the taxable year by anther sate of the
United States, the District of Columbia, or a possession of the United States,
on income derived from sources therein which is also subject to tax under this
chapter.”
The affect of this credit is that a taxpayer will not pay Utah taxes on
income that has been taxed in another state at a rate equal to or greater than
the Utah rates.
This opinion is based upon the facts presented in your letter. Obviously, if there are deviations from
these facts, this opinion may be negated.
If you do not agree with this determination, you may appeal to the Tax
Commission for a formal hearing. The
results of that hearing would constitute a declaratory judgment and would be
appealable to the Utah State Supreme Court.
A Notice of Appeal Rights and a copy of the Utah Taxpayer Bill of Rights
are attached.
Respectfully,
Alice Shearer
Commissioner
Re: Request for Advisory
Opinion - No. 95-023DJ
Dear XXXXX:
You requested an advisory opinion as to the taxability of retirement
income to the State of Utah earned an received from California.
Our research indicates as follows:
A Utah resident must report on the Utah individual income tax return
all income received regardless of the state where the income was earned or may
be taxed. However, a Utah resident
would be entitled to a credit for individual income taxes paid to another state
on that income included on the Utah return.
Utah Code Ann. Sec. 59-10-106(1) states “A resident individual shall be
allowed a credit against the tax otherwise due under this chapter equal to the amount
of the tax imposed on him for the taxable year by another state of the United
States, the District of Columbia, or a possession of the United States, on
income derived from source therein which is also subject to tax under this
chapter.”
The affect of this credit is that a taxpayer will not pay Utah taxes on
income that has been in another state at a rate equal to or greater than the
Utah rates.
This opinion is based upon the facts presented in your letter. Obviously, if there are deviations from these
facts, this opinion may be negated.
If you do not agree with this determination, you may appeal to the Tax
Commission for a formal hearing. The
results of that hearing would constitute a declaratory judgement and would be
appealable to the Utah State Supreme Court.
A Notice of Appeal Rights and a copy of the Utah Taxpayer Bill of Rights
are attached.
Respectfully,
Alice Shearer
Commissioner
RE: Tax on Retirement Income Information on
Other Taxes
Dear
XXXXX,
You
requested an advisory opinion as to the impact of Utah taxes on retirement
income earned and received from California, and information about sales and
property tax. With regard to the
taxability of your retirement income, our research indicates as follows:
A
Utah resident must report all taxable income on the Utah individual tax return
regardless of where the income was earned.
However, a Utah resident is entitled to a credit for individual income
taxes paid to another state on that reported income. The credit allowed on the Utah return for taxes paid to another
state is the smaller of the following:
1. the amount of tax paid to the other state;
or
2. a percentage of the total Utah tax,
determined by dividing the total federal adjusted gross income into the amount
of the federal adjusted gross income taxes in the other state.
The
effect of this credit is that a taxpayer will not pay Utah taxes on income that
has been taxed in another state at a rate equal to or greater than the Utah
rates.
You
also requested information about sales tax.
All retail sales of tangible personal property and certain services
performed in Utah are subject to Utah sales tax. The statewide tax rate is 5.875%, but most communities have
imposed additional local taxes which increase the sales tax rate. Although the tax rate varies from community
to community, the tax rate in most Wasatch Front communities is 6.125%.
Finally,
unless specifically exempted, all personal and real property is subject to
property tax. Household furnishings are
exempt from property tax on only 55% of the assessed value of their primary
residence. All other property is
assessed at 100% of value.
Motor
vehicles are taxed at 1.7% of value.
All other property is taxed at a local rate. That rate varies from community to community. You mentioned that you may move to the Logan
area. Although the tax rate for Logan
City has not been set this year, we can estimate that rate to be approximately
1.185%. The tax rate may vary for
property outside Logan City proper.
I
hope this information is helpful to you.
If you have additional questions, please let us know.
For
the Commission,
Alice
Shearer
Commissioner