All Roll Calls
Yes: 141 • No: 1
UtahH.B. 772026 General SessionHouseWALLET
Tax Modifications
Sponsored By: Steve Eliason (Republican)
Signed by Governor
Corporate TaxIncome TaxProperty TaxPrivilege TaxProperty Tax ReliefSales and Use TaxState Tax CommissionRevenue and TaxationIndividual Income TaxLocal Option Sales TaxesLocal Taxation and FeesSales Tax ExemptionsTax Credits
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Bill Overview
Analyzed Economic Effects
17 provisions identified: 2 benefits, 1 costs, 14 mixed.
Estate tax repealed; cleaner-fuel credit ended
Utah’s state estate (transfer) tax is repealed for taxable years beginning on or after January 1, 2026. The cleaner‑burning fuels tax credit is also repealed. This change is effective May 6, 2026, with the listed retrospective operation for the 2026 tax year.
New rule for state and local tax
For Utah’s nonrefundable taxpayer credit, use the lesser of two numbers: (1) the state or local income tax you paid and reported on your federal return, or (2) the amount of that tax actually allowed as a federal itemized deduction. This replaces the old fixed $10,000 figure in Utah’s definition. The change takes effect May 6, 2026.
State housing credits: cap and carryovers
From 2023 through 2028, Utah can allocate up to $10 million each year in state low‑income housing tax credits. Credits can be allocated among pass‑through owners as agreed if the owner is in by Dec 31 and listed in the annual report. If your federal housing credit is recaptured, you must repay the same share of your state credit. Unused credits can be carried back three years or forward five years, first‑earned first‑used. The corporation and a designated reporter must file annual reports by Jan 31 so the commission can track totals.
Stiffer tax penalties and fraud crimes
The law raises consequences for late or unpaid taxes and tax fraud. If you file late, the penalty is the larger of $20 or 2% within 5 days, 5% at 6–15 days, and 10% after 15 days. If you file on time but do not pay, penalties can start 90 days after the due date, or 30 days after a final agency or court order. Operating without a required tax registration or with an expired license is a class B misdemeanor with fines from $500 to $1,000. Knowingly filing false returns is a third‑degree felony ($1,000–$5,000 fines), and tax evasion is a second‑degree felony ($1,500–$25,000 fines). These rules apply beginning May 6, 2026.
Property tax relief rules and appeals updated
The adjusted taxable value limit used for relief is $479,504 for 2023 and rises each year by the prior year’s CPI change. To claim homeowner or renter credits, you must be domiciled in Utah for the year and meet the age rule: 66+ if born on or before Dec 31, 1959; 67+ if born on or after Jan 1, 1960. If your claim is denied, you can appeal the denial to the commission, including denials for late filing. These changes apply under current law beginning May 6, 2026.
Property value checks and special valuation rules
County assessors must review large value jumps and follow new valuation rules. A review and reporting are required when a property's increase is $250,000 or more. For commercial and other nonresidential property, automatic review now triggers only if the value rises 350% or more from last year, and not from a change like new improvements or zoning. Assessors must consider listed factors for conservation easements, golf courses, and hunting clubs, and may use cost, income, or sales comparison methods. In plats with a common area, each lot is treated as an equal owner unless the plat says otherwise. These changes take effect May 6, 2026.
Short-term car rentals: taxes and breaks
Beginning July 1, 2026, Utah charges 2.5% on short‑term motor‑vehicle rentals. An extra 1.5% may start later if the Fairpark trigger is met; it begins the first day of a quarter at least 90 days after notice. You do not pay the rental tax if the vehicle is 14,001 pounds or more, it is a personal moving van, or the rental replaces your car during repairs under a repair or insurance agreement. Car‑sharing under 30 days is taxed the same, except for repair‑replacement trips. Most revenue is credited monthly to the Marda Dillree Corridor Preservation Fund, and some is paid to the Fairpark district until its stadium contribution is done, then it stops after notice.
Tax liens and three-year assessment limit
If you do not pay after the commission mails notice, a state lien attaches at assessment to all your property until paid. The law clarifies which unpaid state taxes can create a lien. Filing a frivolous return brings a $500 penalty. The commission must assess within three years after you file a return, or it generally cannot collect. You can name people to also receive tax notices by filing the commission’s form. These rules take effect May 6, 2026.
Pass-through tax election and withholding
Starting May 6, 2026, a pass‑through entity (not disregarded) can elect to pay an entity‑level tax equal to the listed percentage times its voluntary taxable income. The entity must notify each final owner and give a statement of tax paid. A payment by the last day of the entity’s tax year makes the election final for that year and not refundable. The commission must consider a specified refundable credit when estimating required pass‑through withholding. For trusts that missed required withholding for a dependent beneficiary, the commission waives collection, penalties, and interest if the trust applies and the filing or low‑income conditions are met.
Tougher penalties for nonpayment and prep fraud
If a seller fails to remit monthly or by required EFT, they owe late penalties and lose the allowed sales‑tax keep‑amount. Preparing a document to understate someone else’s tax carries a $500 penalty per document. Missing required information returns costs $50 each, up to $1,000 total. Sellers who voluntarily collect and meet the listed court, order, or good‑faith standards are protected from certain penalties. These changes take effect May 6, 2026.
How county sales tax is shared
The state splits certain county tax revenue each year: 70% by how much each county collected, and 30% by each county’s share of the population. Population shares use Utah Population Committee estimates or the latest federal census if needed.
Extra tax report when revenue jumps
When state budget offices agree that income tax revenue will rise by a material amount next year, the Tax Commission adds a federal‑tax‑change impact report to its annual report. This improves transparency starting May 6, 2026.
Reports when federal changes raise revenue
If state budget offices agree that income‑tax revenue will rise by at least 0.5% from federal tax changes, the Tax Commission must report by October 1. The report lists each federal change and estimates the revenue impact. The definition of a “material increase” is a net rise of 0.5% or more over the prior year’s income‑tax revenue.
Optional 0.1% arts and culture tax
Starting July 1, 2026, a county or a city can ask voters to approve a 0.1% sales tax for cultural, recreational, botanical, and zoological uses, or related bus and facility rental. If the county already imposes the Part 7 tax, a city in that county cannot add this 0.1% city tax. Money must be spent only on the listed purposes. The levy usually lasts eight years, or 10 years if first imposed or reauthorized on or after July 1, 2011.
Sales tax: short-term rental definition
Starting July 1, 2026, a short‑term rental for sales‑tax purposes means a transfer of possession or control for less than 30 consecutive days. This covers real property, tangible goods, and products delivered electronically. The clearer definition can change which short stays or short rentals are taxed.
First-class county ski marketing spend
Starting July 1, 2026, a first‑class county that charges the tourism tax must spend at least $450,000 a year on a marketing and ticketing system. It must promote out‑of‑state visitors to county ski areas and bundle lift tickets with places to stay and services.
When county sales tax changes start
County sales tax changes take effect on the first day of a calendar quarter and only after 90 days from when the Tax Commission gets notice. If annexation causes a tax change, the same 90‑day and quarter‑start rule applies. For bills, if your billing period starts before the effective date, a rate increase starts the next billing cycle. A rate decrease or repeal applies from the last billing period that began before the effective date.
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Sponsors & Cosponsors
Sponsor
Steve Eliason
Republican • House
Cosponsors
Daniel McCay
Republican • Senate
Roll Call Votes
Senate vote • 2/6/2026
Senate/ uncircled
Yes: 0 • No: 0
Senate vote • 2/6/2026
Senate/ passed 3rd reading
Yes: 27 • No: 1
Senate vote • 2/6/2026
Senate/ circled
Yes: 0 • No: 0
Senate vote • 2/5/2026
Senate/ passed 2nd reading
Yes: 25 • No: 0
House vote • 2/2/2026
Senate Comm - Favorable Recommendation
Yes: 6 • No: 0
House vote • 1/27/2026
House/ floor amendment
Yes: 0 • No: 0
House vote • 1/27/2026
House/ passed 3rd reading
Yes: 72 • No: 0
House vote • 1/21/2026
House Comm - Favorable Recommendation
Yes: 11 • No: 0
Actions Timeline
Governor Signed
3/23/2026House/ to Governor
3/12/2026HouseHouse/ received enrolled bill from Printing
3/12/2026HouseHouse/ enrolled bill to Printing
3/10/2026HouseEnrolled Bill Returned to House or Senate
3/10/2026Draft of Enrolled Bill Prepared
2/10/2026Bill Received from House for Enrolling
2/10/2026House/ signed by Speaker/ sent for enrolling
2/6/2026HouseHouse/ received from Senate
2/6/2026HouseSenate/ to House
2/6/2026SenateSenate/ signed by President/ returned to House
2/6/2026SenateSenate/ passed 3rd reading
2/6/2026SenateSenate/ uncircled
2/6/2026SenateSenate/ circled
2/6/2026SenateSenate/ 3rd reading
2/6/2026SenateSenate/ passed 2nd reading
2/5/2026SenateSenate/ 2nd reading
2/5/2026SenateSenate/ placed on 2nd Reading Calendar
2/3/2026SenateSenate/ committee report favorable
2/3/2026SenateSenate Comm - Favorable Recommendation
2/2/2026Senate/ to standing committee
1/30/2026SenateSenate/ 1st reading (Introduced)
1/28/2026SenateSenate/ received from House
1/27/2026SenateHouse/ to Senate
1/27/2026HouseHouse/ passed 3rd reading
1/27/2026House
Bill Text
Enrolled
3/10/2026
Amended 1/27/2026 11:01:361
1/27/2026
Introduced
12/23/2025
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