Utah fully conforms to federal §168(k) via rolling IRC conformity. STR investors take the 100% Year-1 bonus depreciation deduction — restored by the One Big Beautiful Bill Act (OBBBA, P.L. 119-21) for property acquired and placed in service after January 19, 2025 — on both federal and Utah returns. Utah's 4.5% flat tax means every dollar of §168(k) yields a predictable additional state saving. Visit the full state conformity hub to compare Utah's treatment to every other US jurisdiction.
Modeled on a $150,000 federal §168(k) deduction. Compare in the state conformity tool →
How Utah Adopts §168(k) — Rolling vs Static Conformity
Utah's individual income tax base is defined under Utah Code §59-10-103, which begins with federal taxable income and applies enumerated state modifications. Because §168(k) is not among those modifications, the federal depreciation figure flows through to the Utah return unchanged.
This is functionally rolling conformity for depreciation purposes — federal IRC amendments apply for Utah on the same effective date. When OBBBA restored 100% §168(k) permanently, Utah adopted that treatment automatically. Neighboring Idaho, by contrast, uses rolling conformity generally but has statutorily excluded §168(k) since 2001; Idaho STR investors must file Form DBDA to reverse federal bonus. Utah has no such carveout.
Worked Example — $150K Federal Deduction + Extra State Savings
Take a $1.1M ski cabin in Park City, Deer Valley, or the St. George area with a cost segregation analysis identifying $150,000 of 5-year and 15-year property eligible for §168(k):
- Federal Year-1 deduction: $150,000 × 37% marginal bracket = $55,500 federal tax savings.
- Utah Year-1 deduction: Same $150,000 on the state return. At the 4.5% flat rate = $6,750 additional state tax savings.
- Total Year-1 tax benefit: $62,250.
Because Utah is a flat-tax state, the $6,750 state savings applies to every Utah taxpayer regardless of overall income. That predictability makes deal underwriting simpler — no need to marginal-bracket-shift as income moves.
The Statute Explained
The controlling authority is Utah Code §59-10-103, which defines "adjusted gross income" (and by reference, Utah taxable income) using federal taxable income with statutory modifications. Because Utah has not enacted a §168(k)-specific modification, federal bonus depreciation as restored by OBBBA is operative for Utah purposes on the same effective date.
OBBBA restored 100% §168(k) bonus depreciation permanently — full first-year expensing for qualified 5-year, 7-year, 15-year, and 20-year property acquired and placed in service after January 19, 2025.
How Utah Compares to Decoupled States
Utah's full-conformer position stands out especially in the Mountain West, where treatment varies sharply state-to-state:
- California — 100% add-back at 13.3%: ~$19,950 Year-1 miss on a $150K deduction.
- Idaho — 100% add-back at 5.3% via Form DBDA: ~$7,950 Year-1 miss.
- Arizona — 100% add-back at 2.5%: ~$3,750 Year-1 miss.
Utah's 4.5% + full conformity beats every decoupled option: it's ~$14,700 better than Idaho, ~$10,500 better than Arizona, and ~$26,700 better than California on the same $150K federal deduction.
What This Means for Your STR Purchase Decision
Because Utah conforms cleanly, the pre-purchase math is uncomplicated: whatever the federal §168(k) deduction is, the Utah state deduction matches it, and the state layer adds 4.5% to your Year-1 savings. Cash-on-cash projections don't need a separate state-return sensitivity.
The size of the deduction itself depends on the property. Utah's ski markets tend to have modern builds, high-end interior finishes, and outdoor features that classify as 5-year and 15-year property — which is exactly the mix that maximizes §168(k). To model both federal and Utah state Year-1 tax math for a specific address, run the address on your property before you make an offer.
Analyze a specific Utah property
Run any Utah STR listing through DepreciMax's $99 property report — line-item finish classification with both federal and Utah state Year-1 tax math.
For a side-by-side view of Utah against any other state at any federal deduction amount, use the state conformity tool.
Frequently Asked Questions
Does Utah conform to federal §168(k) bonus depreciation in 2026?
Yes. Utah begins with federal taxable income under Utah Code §59-10-103 and applies no §168(k) modification. §168(k) as restored by OBBBA (P.L. 119-21) for property acquired and placed in service after January 19, 2025 flows through to the Utah return in full. No state add-back and no separate depreciation schedule are required.
How much extra state tax savings does a Utah STR investor get from bonus depreciation?
On a $150,000 federal §168(k) deduction, a Utah investor at the 4.5% flat rate captures an additional $6,750 in Year-1 state tax savings on top of ~$55,500 in federal savings at the 37% bracket. Total Year-1 tax benefit: about $62,250.
What is the Utah statute that governs IRC conformity?
Utah Code §59-10-103 defines Utah taxable income by reference to federal taxable income with statutory modifications. Because no §168(k)-specific modification exists, the federal depreciation figure applies for Utah purposes on the same effective date.
Does Utah require a Form 4562 add-back like decoupled states?
No. Utah's TC-40 individual return begins with federal taxable income and applies no §168(k) modification. There is no Utah 4562 variant or addition modification for bonus depreciation.
How does Utah compare to decoupled states like Idaho?
Idaho is a common surprise — it otherwise adopts the federal IRC broadly but has excluded §168(k) since 2001 and requires Form DBDA. On a $150,000 deduction, an Idaho investor at 5.3% loses ~$7,950 in Year-1 state savings. Utah at 4.5% picks up ~$6,750 in state savings instead. That's a ~$14,700 swing in Year-1 cash between two neighboring states.
Does Utah's flat 4.5% rate mean the §168(k) benefit is the same for every income level?
For state-side savings, yes — every dollar of §168(k) deduction saves 4.5 cents in Utah tax regardless of overall income. The federal benefit still varies by federal marginal bracket (22%, 24%, 32%, 35%, or 37%), so total combined Year-1 savings depend on the investor's federal bracket.
- Utah State Tax Commission: tax.utah.gov
- Utah Code §59-10-103 (Individual Income Tax; definitions and conformity)
- IRS §168(k) — Modified Accelerated Cost Recovery System, additional first-year depreciation
- One Big Beautiful Bill Act of 2025 (P.L. 119-21) — restored 100% §168(k) for property acquired and placed in service after January 19, 2025
Every state's §168(k) position, in one place
Interactive map, sortable table, and deep-dive guide for each of the 51 jurisdictions — post-OBBBA verified.
See the 50-state map →