Utah’s Tax Code is Upside Down

UTAH GRIT | TAXES

Utah's Tax Code Is Upside Down

A family making $18,600 pays a bigger share of its income in taxes than a family making $2.8 million. Here is how that happened, and 12 ways to fix it.

Rod Moser, candidate for Utah House District 45
September 2026

I am running for the Utah House in District 45. For the past few months I have been digging into four big problems. The first was housing. The second was wages. This one is taxes.

I am not going to tell you Utah taxes are too low. That is not the problem. The problem is who Utah taxes, and who it lets off the hook.

Let me show you.

The number that started this

A Utah family making $18,600 a year pays 9.8% of what it earns in state and local taxes.

A Utah family making $2,788,100 a year pays 6.4%.

Institute on Taxation and Economic Policy, Who Pays? 7th edition

That comes from a group that adds up every tax you pay in a state. Sales tax. Gas tax. Property tax. Income tax. Then they check what share of income each group pays.

The poorest fifth of Utah pays the biggest share. The richest 1% pays the smallest. The person ringing up your groceries pays a higher rate than the person who owns the store.

Almost all of that gap comes from one place. Sales tax.

The poorest fifth of Utah pays 6.3% of everything they earn in sales and gas taxes. The top 1% pays 0.9%. The reason is simple. A family living paycheck to paycheck spends every dollar it gets. A family making $2.8 million does not.

That includes the tax on your groceries. More on that in a minute.

Problem 1: The code is kinder to landlords than to first-time buyers

Utah gives homeowners a break. If you live in your house, the state only taxes 55% of what it is worth. The other 45% is skipped. That is real money, and it is good policy.

Here is the catch. A rental house gets that same break, as long as a renter lives there 183 days. The renter has to live there. The owner does not.

So an investor who owns 40 rental houses claims that break 40 times.

And almost nobody checks. Vacation homes and short-term rentals are not supposed to get the break. But most counties hand it out automatically without asking. The state's own auditors said so in October 2025.

When someone gets a break they should not get, the rest of us cover it. Look at what has happened to homeowners since 2015:

• Davis County: homeowners paid 65% of the property tax bill in 2015. By 2024 they paid 74%.
• Weber County: 62% to 70%.
• Utah County: 60% to 64%.
• Salt Lake County: 56% to 58%.

Meanwhile investors keep buying. In 2024, Utah ranked 4th in the country for investor home buying. Almost one in five homes sold went to an investor. In Salt Lake County, a company owned 26.9% of all housing in 2023. That is more than 108,000 homes.

Last year a bill would have given regular buyers a 30-day head start before corporate buyers could bid. It died in committee on a 5 to 2 vote.

The tax code did not cause the housing crisis. It quietly paid for the side that was already winning.

Problem 2: The state cannot tell you what it gives away

In 2009 the Legislature dropped a rule. Companies used to have to report the purchases they did not pay tax on. Now they do not.

So today Utah cannot tell you what its data center tax break costs. Not that it is hard to add up. That it cannot say.

Other states can. Virginia lost $1.9 billion in one year. Georgia expects $2.5 billion this year. Ohio's bill came in 12 times higher than it guessed. Texas lost $1.3 billion.

Utah's state auditor, Tina Cannon, was asked whether the public can see these numbers. She said, "Not easily, yet." She also said this, and I think she is exactly right:

"Anytime you're doing a contract with a private company, but you're using tax dollars as the incentive, the public has a right to know what you've done."

Tina Cannon, Utah State Auditor

The state knows what you owe down to the penny. Ask them what they gave away.

Problem 3: Six tax cuts in six years, paid for out of your kid's classroom

Utah has cut the income tax rate six years in a row. It went from 4.95% down to 4.45%.

That sounds good. Here is who got the money.

In 2025, the average Utah household got $31 for the whole year. That is $2.58 a month. The top 1% got $1,929.

Add up five years of cuts:

• The bottom 20% saved $106.
• The top 1% saved $17,361.

That is 164 to 1.

This year's cut was studied by PolicyEngine, an independent group that runs the math. They found it cost the state $83.6 million. The poorest tenth of households got $5. The richest tenth got $583. And it had, in their words, "no effect on poverty."

Now here is the part that matters most. Utah's constitution says income tax money goes to public schools and to services for kids and people with disabilities. So the income tax rate is basically the school funding rate.

Utah is last or nearly last in the country in spending per student. In the 1990s we were a top 10 state for school funding effort. Now we are in the bottom 10.

Money is leaving from the other side too. Salt Lake City School District lost $35 million in one year, because property tax that should have gone to schools was routed to development projects instead. A school board member did the math. That is 277 teachers.

Problem 4: We still pay tax on groceries, and here is why

Utah charges 3% tax on food. Of that, 1.75% goes to the state and 1.25% stays local. The state's share is about $200 million a year.

In 2023 the Legislature voted to end the state's share. It never happened. They wrote the bill so it only took effect if voters first agreed to remove the school funding guarantee from the constitution.

Your groceries were the trade. Your kid's school fund was the price.

Then a court threw out that ballot question in October 2024. The Legislature admitted it had not published the amendment the way the constitution requires. The question was printed on the ballot, but the votes were never counted.

So the food tax stayed. In the two years since, Utah has passed two more income tax cuts. It has not brought back a clean bill to end the tax on food.

Idaho handles this differently. Idaho still taxes groceries. But every Idaho resident gets $155 back per person, and up to $250 if they save receipts. A family of five gets $775. They get it even if they owe no income tax at all.

Utah told families they could stop paying tax on groceries, but only if they gave up the promise that income tax pays for schools. The courts threw out the deal. The tax stayed anyway.

12 things we can actually do

Three fixes for each problem. Every one of them has already passed somewhere else, or is a small change to a bill Utah has already written.

Make the code fair to homeowners

1. Two levels of the homeowner break. People who live in their home, and landlords with long-term renters, get the bigger break. Vacation homes and short-term rentals get less. Montana did exactly this in 2025, signed by a Republican governor. Owner-occupied homes went down about 18%. Second homes went up about 68%.
2. Check the break. Make owners apply for it instead of getting it automatically. Kane County already does this. The state auditor recommended it.
3. Stop copying two federal write-offs. Utah automatically lets investors deduct wear and tear on a building, and skip taxes when they trade one property for another. You cannot deduct wear and tear on your paycheck. Most states already stop copying at least one of these.

Show the books

4. Count what we give away, and put an expiration date on it. Undo the 2009 rule change. Publish the list every two years. Make each break get renewed on purpose instead of forever by default.
5. Get the money back when a company does not deliver. Tie tax breaks to real jobs at real wages. If the jobs never show up, the company pays it back.
6. Make the working family credits actually pay out. Utah's earned income credit and child credit stop once your bill hits zero. If you qualify for $500 and owe $200, you lose the other $300. Utah is one of only four states that does this.

Fund the schools first

7. No more rate cuts until Utah climbs out of the bottom five in school spending. Nobody's rate goes up. The next cut just waits its turn.
8. Same money, delivered better. If they want to hand out $83.6 million, hand it out as a flat credit instead of a rate cut. Split evenly, that is about $76 for every household. Under the rate cut, the poorest tenth got $5.
9. Stop the leak from school property taxes. Cap how much school money can be routed to development deals. Make the school board vote yes in public first.

End the food tax the right way

10. A clean repeal bill. No trade, no strings, no constitutional hostage.
11. A grocery credit in the meantime, one that pays out even to people who owe no income tax, like Idaho's.
12. Pay for it out of the tax breaks nobody is counting, not out of the school fund.

What we can do here at home, without waiting for the Legislature

This is the part I care about most. A lot of this does not need a vote at the Capitol.

• Our county can check the homeowner break. Kane County already makes people apply. Salt Lake County could pass the same rule. Every short-term rental getting a break it should not get is money the rest of us pay.
• Our county can help seniors claim relief they already qualify for. Utah has a program for low-income seniors. Last year it gave an average of $672 to 9,526 households. It costs each Utah homeowner about $3.33 a year. Sign-ups have gone down since 2020. That is not a money problem. That is a nobody-told-them problem. A mailer and a phone bank fix it.
• Show up to the tax hearing. Once a year, every city, county, and school district that wants to raise your property tax has to say so out loud at a public hearing. Most people never hear about it.
• Ask the school board for the letters. When school money gets routed to a development deal, state law gives the school district's representative 45 days to write their board a letter explaining why they voted yes. Those letters exist. Ask for them. Read them out loud.
• The county assessor can check short-term rental listings. Those listings are public. Cross-check them against who is claiming the homeowner break.

One thing on your ballot this November

There is a question on the November 2026 ballot called SJR 2. It sounds boring. It is not.

Right now, if the Legislature will not fix a tax problem, Utahns can put it on the ballot ourselves and pass it with a simple majority. SJR 2 would change that. Any citizen ballot measure that touches taxes would need 60% to pass.

Think about what that does. Every fix on my list would have to go back through the same Legislature that has said no. And 40% plus one vote would be enough to keep the code exactly the way it is.

Read it before you vote on it.

Where I stand

I do not think Utah needs higher taxes. I think Utah needs honest ones.

If you own the home you live in, the code should treat you at least as well as it treats someone who owns 40 of them. If a company gets a tax break, all of us should be able to see what it cost. And if we are going to cut taxes, we should not pay for it out of the fund the constitution set aside for our kids.

That is the whole argument.

Every number above is sourced at the bottom of this page, and most of those sources are the state’s own. Questions or corrections: Rod@utahgrit.com.

Where these numbers come from

Every figure above is public. Click any one of them and check me.

1. 9.8% and 6.4%, and the 6.3% / 0.9% sales and gas tax split. Institute on Taxation and Economic Policy, Who Pays? 7th edition, Utah.
2. The 55% primary residential exemption. Utah State Tax Commission, Primary Residential Exemption, citing Utah Code 59-2-102 and 59-2-103.
3. The state cannot say what a tax break costs. Utah News Dispatch, Mystery price tag: Utah can't say how much it's losing from data center tax break, August 31, 2026, tracing the gap to a 2009 law that removed reporting requirements for exempt transactions.
4. 4.95% down to 4.45%. Utah House of Representatives, Utah's Tax Cut Streak: Six Years and $1.5 Billion.
5. $31 for the average household, $1,929 for the top 1%. Voices for Utah Children with ITEP, reported in Utah Political Watch, February 25, 2025.
6. Five-year totals: $106 for the bottom 20%, $17,361 for the top 1%. Utah News Dispatch, Utah Legislature OKs another round of tax cuts, totaling $1.4 billion in 5 years, March 6, 2025.
7. $83.6 million, $5 for the poorest tenth, $583 for the richest tenth, no effect on poverty. PolicyEngine, Utah SB60: Proposed income tax rate reduction for 2026.
8. Income tax is school money. Utah Constitution, Article XIII, Section 5.
9. Utah at or near the bottom in per-student spending. U.S. Census Bureau, Public School Spending Per Pupil Reaches Historic High in 2024, which places Utah second lowest. The Utah Foundation explains why federal Department of Education data ranks Utah last while Census data ranks it second to last.
10. $35 million and 277 teachers. Ashley Anderson, Salt Lake City School District board member, Public funds should prioritize education over development, Deseret News, April 18, 2025. This is her own published statement, not a district financial report.
11. The 3% food tax, and the 1.75% state share worth about $200 million. Utah State Tax Commission, Grocery Food Sales & Use Tax, and Deseret News, Does Utah still have a sales tax on food? It's complicated, April 7, 2023.
12. The trade, and the court throwing it out. Utah News Dispatch, Judge voids Amendment A: Question on education earmark will appear on ballots, but won't count, October 9, 2024. Legislative defendants acknowledged there was no basis to argue the constitution's newspaper publication requirement had been met.
13. Idaho's grocery credit. Idaho State Tax Commission, Idaho Grocery Credit: $155 per person, up to $250 with receipts.
14. Montana's two-tier homestead law. HB 231 and SB 542, signed by Gov. Greg Gianforte in May 2025. Montana Free Press, Gianforte signs second-home tax and How Montana's new second-home tax could shift your property tax bill.
15. Kane County making owners apply. Utah Office of the Legislative Auditor General, Report 2025-21, A Performance Audit of Local Authorities' Property Tax and the Shifting Tax Burden, October 14, 2025. The report describes Kane County's ordinance, notes it can limit abuse of the exemption, and asks the Legislature to consider a statewide requirement.
16. Nonrefundable credits, and the count of states. ITEP, State Earned Income Tax Credits in 2025 and State Child Tax Credits in 2025.
17. The senior circuit breaker: $672 to 9,526 households, about $3.33 per homeowner. Jerry Schmidt, SB78 attacks tax relief for low-income seniors, Deseret News, February 11, 2026. That source puts the decline in participation since 2020 at 1.45%.
18. The 45-day letter. Utah Code 17C-1-402(11): a school district representative who votes to let an agency receive tax increment must give their board a written explanation within 45 days. The full text is easier to read here.
19. SJR 2. S.J.R. 2, Proposal to Amend Utah Constitution, Statewide Initiatives, 2025 General Session. Requires 60% approval for initiated legislation imposing a new tax, expanding an existing tax, or increasing a rate, for votes occurring after November 1, 2026.

Paid for by Elect Rod Moser | utahgrit.com