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Utah tax revenues grew 7.5% last year

Published April 12, 2012 3:54 pm

Economy • Income tax collections grew less than other states, but sales taxes jumped.
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As another sign that the recession's effects are fading, Utah — like all states — saw its tax revenues increase last year. That means, in part, that people generally were earning and spending more.

But Utah's increase was less than the average of other states, according to data released Thursday by the U.S. Census Bureau. The office of Gov. Gary Herbert says that is because many large states increased their tax rates, while Utah did not.

Census data said tax revenues of all types among states nationwide rose by 8.9 percent in 2011. In Utah, the increase was only 7.5 percent. The state government's total tax receipts grew to $5.48 billion, up from $5.09 billion.

The Census said revenue from states' individual income taxes nationwide rose by 9.8 percent, but by only 9.2 percent in Utah. It said states' corporate income tax revenue was up 9.4 percent nationally, but only by a tiny 0.7 percent in Utah.

But Utah did far better than average on sales taxes. Its sales tax revenue rose by 12.5 percent, well above the average for all states of 7.5 percent.

"Several states in 2011 raised their tax rates. A lot of large states — such as Illinois and California — raised their tax rates a lot," David Stringfellow, tax economist with the Utah Governor's Office of Planning and Budget, said. "We did not. That's probably why our revenues were a bit lower, relatively, even though our economy is probably growing faster than other states."

However, he noted that Utah did raise one tax in 2011 — on cigarettes, from 69.5 cents per pack to $1.70. The Census Bureau reported that tobacco tax receipts in Utah were up 112 percent, from $58.7 million to $125.4 million.

"That was about in line with what we expected," he said. Stringfellow said cigarette purchases fell by 10 percent — and the state expected that it might have fallen even a bit more with the big tax increase.