Utah — Corporate Income / Franchise Tax

Utah imposes an annual corporate franchise and income tax on each domestic and foreign corporation doing business in or exercising its corporate franchise in Utah. The tax is measured by the corporation's Utah taxable income and is imposed under a dual-track statutory framework.

Under Utah Code § 59-7-104, every domestic and foreign corporation except those exempt under § 59-7-102 must pay an annual tax based on the corporation's Utah taxable income “for the privilege of exercising the corporation's corporate franchise or for the privilege of doing business in the state.” This is the primary franchise tax provision. A parallel income tax is imposed under § 59-7-201 on Utah taxable income derived from sources within Utah. In practice, Utah treats these as alternative bases for a single corporate-level tax, not separate taxes; a corporation pays tax under one provision or the other depending on its business activities, but not both.

Corporate Tax Rate and Effective Dates:

• For tax years beginning on or after January 1, 2025, and before January 1, 2026, the tax rate is 4.50% of Utah taxable income (reduced from 4.55% by H.B. 106 (2025 General Session)).
• For tax years beginning on or after January 1, 2026, the tax rate is 4.45% (further reduced by S.B. 60, 2026 General Session, effective May 6, 2026).
• A minimum tax of $100 per year continues to apply.

Corporations that are 501(c) organizations, insurance companies subject to premium tax, and certain other entities listed in § 59-7-102 are exempt from this tax.

Source: Utah Code § 59-7-104 (2026 version)

A corporation has Utah corporate income tax nexus if it earns income from Utah sources, other than from merely soliciting sales of tangible personal property (protected by P.L. 86-272). Utah nexus arises when a corporation (1) sells or performs services where the customer receives the greater benefit in Utah, or (2) earns income from intangible property used in Utah. Financial institutions that make loans or issue credit cards to Utah customers are subject to tax regardless of physical presence.

Source: Utah Code § 59-7-104 (effective Jan. 1, 2025); Publication 37

Most Utah corporations apportion business income using a single-sales-factor formula. A "sales factor weighted taxpayer" under Utah Code § 59-7-311(2) calculates its Utah apportionment fraction with the numerator equal to total sales in Utah and the denominator equal to total sales everywhere—no property or payroll factors. A taxpayer qualifies as a sales factor weighted taxpayer if it apportioned using this method in the prior year, or if more than 50% of its total sales everywhere come from economic activities classified in NAICS codes other than NAICS Sector 51 (Information, except Subsector 519, Other Information Services) or NAICS Sector 52 (Finance and Insurance). Taxpayers that do not qualify may elect alternative apportionment formulas under § 59-7-311(3).

Source: Utah Code § 59-7-311

For tax years beginning on or after January 1, 2026, Utah imposes a flat 4.45% tax on a corporation's Utah taxable income under Utah Code § 59-7-104, reflecting the reduction enacted by S.B. 60 (2026 General Session, effective May 6, 2026). This replaces the previous 4.50% rate, which applied to tax years beginning on or after January 1, 2025, and before January 1, 2026 (H.B. 106, 2025 General Session). A statutory minimum tax of $100 remains in effect for all corporations subject to the tax, regardless of income or loss. Certain entities remain exempt as specified under Utah Code § 59-7-102, including qualifying nonprofits and insurance companies subject to premium tax.

Rate change timeline:

• Tax year 2023: 4.65%
• Tax year 2024: 4.55%
• Tax year 2025: 4.50% (H.B. 106, 2025 General Session)
• Tax years 2026 and after: 4.45% (S.B. 60, 2026 General Session, effective May 6, 2026)

Source: Utah Code § 59-7-104 (2026 version)

Utah sources sales of tangible personal property for corporate income tax apportionment using a delivery-based rule. Under Utah Code § 59-7-318, sales are sourced to Utah if the property is delivered or shipped to a purchaser within Utah, regardless of the FOB point or other conditions of the sale. This means that for both intrastate and interstate transactions, a sale is considered a "Utah sale" when possession or control is transferred to the purchaser in Utah—even if the purchaser subsequently transports the property out of state or uses it elsewhere.

The Utah Supreme Court in Hercules Inc. v. Utah State Tax Comm'n, 877 P.2d 133 (Utah 1994), clarified this statutory scheme. The Court explicitly rejected the "destination rule" (which would source sales based on where goods are ultimately used or consumed) as not applicable to Utah’s sourcing statute for sales of tangible personal property. Instead, the Court held that the controlling factor is whether the property is delivered to the purchaser in Utah, not the purchaser’s subsequent use or the ultimate destination: "The destination rule ... applies only to interstate sales. For purposes of Hercules’ Utah franchise tax liability, the status of the sales is simply determined by whether such property ... is delivered or shipped to a purchaser within Utah."

For tax years 2026 and after, Utah has also repealed the throwback rule: sales shipped from Utah to a purchaser in another state where the taxpayer is not taxable are not thrown back to Utah. Only sales delivered or shipped to purchasers in Utah are included in the Utah sales factor numerator.

Source: Utah Code § 59-7-318 (2026 version); Hercules Inc. v. Utah State Tax Comm'n, 877 P.2d 133 (Utah 1994)

Not yet human confirmed. Needs monitoring for post-repeal administrative or regulatory guidance.

Utah corporate franchise and income tax returns (Form TC-20) are due on or before the later of two dates: (1) the 15th day of the fourth month following the close of the taxable year, or (2) the day on which the corporation is required to file a federal income tax return. For a calendar-year corporation, this means the return is due on the same date as the federal return—currently April 15 for C corporations under federal law.

Automatic extension

Utah grants an automatic extension of up to six months to file the return without requiring a separate extension form or application. Under Utah Code § 59-7-505(3), the Utah Tax Commission "shall allow a taxpayer an extension of time for filing a return" of up to six months from the original due date. For a calendar-year corporation with an April 15 original due date, the extended deadline is October 15.

The extension is automatic in the sense that no written request or form is required. However, to avoid penalty, a corporation must satisfy the prepayment requirements described in Utah Code § 59-7-507(1)(b). Specifically, to qualify for the extension without penalty, the corporation must pay at least 90% of the current year's tax liability or 100% of the prior year's tax liability by the original due date of the return (without regard to the extension). If less than 90% of the current year's tax is paid by the original due date, an extension penalty applies under Utah Code § 59-1-401(5).

Extension is for filing, not payment

The six-month extension applies only to filing the return, not to paying the tax. The full tax liability remains due on the original return due date. Interest accrues on any unpaid balance from the original due date under Utah Code § 59-7-505(2)(b), which provides that "interest accrues from the day on which a return is due under this Subsection."

Short-period returns and fiscal-year filers

For fiscal-year filers, the return is due on or before the 15th day of the fourth month following the close of the fiscal year. If a corporation changes its taxable year, a short-period return covering less than 12 months is required under § 59-7-505(7). The same extension rules apply to short-period returns.

Combined reports

A group of corporations filing a combined report under Utah Code Part 4 files one combined report by the same deadline. The combined report is due on or before the later of the 15th day of the fourth month following the close of the combined group's taxable year or the federal due date.

Source: Utah Code § 59-7-505; Utah Code § 59-7-507; Utah Code § 59-1-401

Utah requires most corporations that are members of a unitary group to file a combined report for franchise and corporate income tax purposes if any group member is doing business in Utah. The mandatory method is the water’s edge combined report, but a worldwide combined report may be elected by the group under statutory conditions.

Ownership threshold & included entities

• An "affiliated group" is defined as one where each U.S.-organized member (other than the common parent) is at least 80% owned (vote and value) by other group members, and the common parent directly owns at least 80% of one or more members. (Utah Code § 59-7-101(2)(a).)
• The "unitary group" is more functionally defined and includes members with centralized management, integrated operations, or economies of scale, established by a preponderance of evidence. (Utah Code § 59-7-101(34).)

Foreign corporations and the water’s edge threshold

• The default group for combined reporting includes all U.S.-organized affiliated corporations and any foreign corporation with at least 20% of its property, payroll, and sales factors sourced to the United States, as set forth in Utah Code § 59-7-101(40)(a)(ii). Foreign entities below this threshold are generally excluded from the water’s edge report.

Water’s edge vs. worldwide

• The water’s edge method is the default, but a unitary group may elect a worldwide combined report, thereby including all group members regardless of location. Such an election is binding for at least 10 years unless permission to change is granted by the Utah State Tax Commission. (Utah Code § 59-7-403.)

Computation mechanics

• Each entity’s income is determined separately. Intercompany dividends and interest, capital gains, and other enumerated items are eliminated to the extent required under Utah Code § 59-7-404. The combined report reflects the group’s aggregate Utah taxable income after eliminations.

Source: Utah Code § 59-7-101, Utah Code § 59-7-402, Utah Code § 59-7-403, Utah Code § 59-7-404

Not yet human confirmed. Needs review for post-2025 activity threshold rules or regulatory changes affecting foreign corporation inclusion.

Utah does not require corporations to add back or subtract GILTI (global intangible low-taxed income) under IRC §951A, nor does it require addback or subtraction for net CFC-tested income or corresponding IRC §250 deductions in computing Utah taxable income.

Direct answer: Utah corporate income tax starts with an "unadjusted income" base that follows federal taxable income with specific Utah statutory modifications. Utah law includes only expressly enumerated additions and subtractions, and these do not reference GILTI, net CFC-tested income, or the IRC §250 deduction.

• The definition of "unadjusted income" (Utah Code §59-7-101(45)) incorporates IRC §965(a) repatriation income for inclusion, but is silent on IRC §951A GILTI and does not mention CFC-tested income.
• Additions to unadjusted income (Utah Code §59-7-105) list only specific items, such as state tax payments deducted for federal purposes, tax-exempt interest, and related-party intangible expense addback—none require adding GILTI or CFC-tested income back to taxable income.
• Subtractions from unadjusted income (Utah Code §59-7-106) also do not include a subtraction for GILTI or a corresponding IRC §250 deduction.

Other major Utah-specific modifications:

• Utah generally follows federal taxable income but requires addback of state income taxes deducted, tax-exempt interest on non-Utah state and local bonds, and certain intangible and interest expenses paid to related parties. Subtractions include interest from U.S. government bonds, income from Utah municipal bonds, and foreign dividend gross-up under IRC §78 (if included federally), among others.
• No Utah law or regulation as of June 2026 requires an adjustment for GILTI, CFC-tested income, or related IRC §250/FDII deductions. If a future legislative or regulatory change is enacted, this answer should be updated.

Source: Utah Code § 59-7-101; Utah Code § 59-7-105; Utah Code § 59-7-106

Not yet human confirmed. Statutes controlling—review required after future Utah legislative sessions or DOR guidance.

Utah corporate income tax computation starts with federal taxable income, but Utah law requires specific state-level modifications—statutory additions and subtractions—to arrive at “Utah taxable income.” This section details the major computation steps and pinpoints the statutory basis for each category.

Starting point: Federal taxable income (separate company) Utah defines "unadjusted income" as federal taxable income computed on a separate return basis, before net operating loss (NOL) and federal special deductions (IRC §§ 241–247 inclusive). See Utah Code § 59-7-101(45).

Utah statutory additions (Utah Code § 59-7-105):

• State and local income taxes deducted on the federal return (Subsection 59-7-105(1)(a)).
• Interest from obligations other than Utah bonds or U.S. bonds (non-Utah muni bond interest) (59-7-105(1)(b)).
• Charitable contributions deducted federally in excess of Utah’s limitation (59-7-105(1)(h)).
• Bonus depreciation in excess of Utah limitation (federal bonus depreciation add-back; see 59-7-105(1)(d)).
• Intangible expense and related interest expense paid to related parties (Utah has a related-party add-back regime: 59-7-105(13)-(15)).
• Gain or loss recognized under IRC § 338 or § 336(e) deemed asset sales (59-7-105(1)(l), (m)).

This is a partial list; the statute governs when computing all required add-backs.

Utah statutory subtractions (Utah Code § 59-7-106):

• Interest on obligations of the United States government (59-7-106(1)(a)).
• Interest and income from Utah municipal bonds (59-7-106(1)(c)).
• Foreign dividend gross-up (IRC § 78) if included federally (59-7-106(1)(n)).
• Utah depreciation/amortization subtraction corresponding to any prior Utah bonus depreciation add-back (59-7-106(1)(d)).
• Allowable capital loss recovery (59-7-106(1)(j)).
• Refunds of state income tax included in federal taxable income, to the extent properly allocable (59-7-106(1)(e)).

Reference the full statute for a complete, up-to-date list of allowable subtractions.

Net operating loss deduction (Utah NOL): After statutory modifications, Utah allows corporations to deduct Utah net losses (NOLs) from prior years to the extent permitted under Utah law. Utah-specific limitations—including a limit on deduction to 80% of Utah taxable income before NOL for losses incurred after 2018—are set forth at Utah Code § 59-7-109.

Computational sequence:

1. Federal taxable income (separate, pre-NOL/special deduction)
2. + Utah statutory additions (§ 59-7-105, pinpointed above)
3. – Utah statutory subtractions (§ 59-7-106, pinpointed above)
4. = Adjusted, apportioned/allocated income
5. – Utah net loss deduction (per § 59-7-109 limits)
6. = Utah taxable income

Source: Utah Code § 59-7-101; Utah Code § 59-7-105; Utah Code § 59-7-106; Utah Code § 59-7-109

Not yet human confirmed.

Utah requires most corporations to make quarterly estimated tax payments if their corporate income/franchise tax liability is $3,000 or more for the current or preceding taxable year.

Who is required:

• Any corporation (including S corporations, unless otherwise excepted) with Utah corporate tax liability of $3,000 or more—either in the current or previous tax year—must make estimated payments. Corporations with no prior Utah filing history are not required to pay estimated payments in their first year unless they reasonably expect to owe $3,000 or more (Utah Code § 59‑7‑504(1), (4)).
• Corporations with less than $3,000 liability are not required to pay estimated tax for that year.

Installment schedule and deadlines:

• Estimated payments are due in four equal installments. For calendar-year taxpayers, the due dates are:
• 15th day of 4th month (April 15)
• 15th day of 6th month (June 15)
• 15th day of 9th month (September 15)
• 15th day of 12th month (December 15)
• Fiscal-year filers use the same schedule based on their fiscal year end.

Amount and safe harbor:

• The required annual payment is the lesser of:
• 90% of the current year’s Utah tax liability, or
• 100% of the prior-year liability (if the prior year was a full 12-month return, timely filed, and covered a full year).
• Each installment is 25% of the required annual payment.

Penalty for underpayment:

• If a corporation fails to remit required estimated payments, it will be subject to an estimated tax penalty. The penalty is computed similarly to IRC § 6655 but is set at Utah’s prescribed interest rate plus 4% and calculated on the underpayment for the period outstanding (Utah Code § 59‑7‑504(7)). No additional interest is imposed on the penalty amount (Utah Code § 59‑1‑401(13)).

First-year exception:

• Corporations in their first year of Utah corporate tax liability are not required to pay estimated taxes (Utah Code § 59‑7‑504(8)).

Source: Utah Code § 59-7-504; Utah State Tax Commission Pub 58

Not yet human confirmed.

Direct answer: Utah’s corporate income/franchise tax treatment of net operating losses (NOLs) depends on when the loss was incurred. For tax years beginning before May 3, 2023, Utah allowed NOLs to be carried back up to three years and then forward for up to five years. For tax years beginning on or after May 3, 2023, NOL carrybacks are prohibited, and NOLs may be carried forward indefinitely. For losses carried to tax years beginning on or after January 1, 2023, the use of NOLs is limited to offsetting no more than 80% of Utah taxable income (before the NOL deduction) in any year.

Why:

• Historical regime: Utah Code § 59-7-108(14) (prior to repeal) required corporations to carry net losses first to the earliest of the three prior years and then forward five years. Refund claims for carrybacks had to be filed within the time specified in Utah Code § 59-7-141(2)(b). This regime applies to losses arising in tax years before the effective date of the new rule.
• Current rule (Utah Code § 59-7-110): For losses incurred in tax years beginning on or after May 3, 2023, NOLs may not be carried back; carryforward is permitted indefinitely. The statute further provides that for losses carried to tax years beginning on or after January 1, 2023, the NOL deduction can offset no more than 80% of Utah taxable income for that year. The 80% limitation applies regardless of when the underlying loss arose if it is carried into a post-2023 year. This mirrors the post-TCJA federal rule, but Utah calculates NOLs separately and may diverge from federal practice.
• Utah Admin. Code R865-6F-14: Clarifies that for purposes of computing Utah taxable income, federal and Utah NOLs are not interchangeable, and Utah’s rules control. Carrybacks, carryforwards, and limitations must be determined under Utah law, and Utah does not automatically conform to federal changes.
• Utah State Tax Commission guidance: The Utah DOR’s official guidance states that NOL carrybacks are not allowed under current law and that corporations must compute Utah NOL separately from federal. The 80% limitation on post-2023 NOL use is echoed in agency publications.

Source: Utah Code § 59-7-110 Source: Utah State Tax Commission Decision 91-0718 Source: Utah State Tax Commission Decision 91-0924 Source: Utah Admin. Code R865-6F-14 Source: Utah Filing Corporate Returns Guidance

Not yet human confirmed.

Utah begins its corporate income tax calculation with federal taxable income ("unadjusted income" under Utah law), but diverges through specific statutory additions, subtractions, and state-level credits. Utah conformity, addback, and credit rules have been amended, including the creation of a new clean energy systems credit effective January 1, 2026.

Direct answer: Utah uses federal taxable income (computed on a separate company basis) as its base, with required state-level statutory additions/subtractions (see Utah Code §§ 59-7-105, 59-7-106) and a suite of Utah-specific corporate tax credits. In 2025–2026, the legislature enacted a new clean energy systems corporate tax credit (Utah Code § 59-7-614, effective January 1, 2026), materially updating the state credit regime.

Why:

• The starting point is federal taxable income as defined in Utah Code § 59-7-101(45), prior to NOL/special deductions.
• Additions (Utah Code § 59-7-105) include: state/local income tax deduction addbacks, non-Utah municipal bond interest, related-party intangible expense addbacks, excess federal bonus depreciation, and, as updated, other legislated items. Section 59-7-105 was amended in October 2025 for technical clarifications.
• Subtractions (Utah Code § 59-7-106) include: U.S. government bond interest, Utah municipal bond interest, foreign dividend gross-up, Utah depreciation, and, as updated, new/modified items. Section 59-7-106 was amended October 2025.
• Federal conformity (Utah Admin. Code R865-6F-14) is followed for accounting, depreciation, depletion, and subpart F, but Utah diverges on combined reporting, dividend deductions, municipal bond interest, and NOLs.

Updated Utah Corporate Tax Credits:

• General corporate credits are codified in Utah Code §§ 59-7-601 to 59-7-613 (low-income housing, targeted jobs, research, historic preservation, etc.).
• Clean Energy Systems Credit: NEW for tax years beginning on or after January 1, 2026, Utah law (59-7-614) allows a credit for certain clean energy systems, with eligibility, credit computation, and carryforward governed by statute. This is a material addition to the Utah credits regime and should be evaluated in all planning for 2026 and later years.

Source:

• Utah Code § 59-7-101
• Utah Code § 59-7-105
• Utah Code § 59-7-106
• Utah Admin. Code R865-6F-14
• Utah Code § 59-7-601 et seq.
• Utah Code § 59-7-614

Not yet human confirmed. Section updated June 2024 to reflect statutory amendments effective in October 2025 and January 2026, including the new clean energy systems credit. Legislative and DOR guidance should be monitored for further updates.