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Utah Sales Tax Guide

By Cristina Garza

🐝🚵Utah, the Beehive State, is a vast land chock full of wonder and natural beauty. A year round destination for fitness tourism, its mountain ranges are enjoyed by mountain bikers and skiers alike. With one of the youngest, healthiest, and most literate populations of the fifty states, it’s no wonder Utah boasts the highest percentage of high school and college graduates than any other state. With such a capable available workforce, starting a business in Utah confers many advantages. If you’re one of the lucky small business owners who calls Utah home, you’re going to want to be sure your business stays in line with Utah's sales tax laws. Fret not! That’s why we have assembled this all-in-one guide; so that you can readily meet the sales tax compliance requirements for a small business in Utah. 

After reading this guide, you will have learned:

  • How to be prepared for your call with the Utah Tax Commision.
  • How to contact the Utah Tax Commision.
  • When to charge sales tax in Utah.
  • What goods, products, and services are taxable in Utah.
  • When you establish a sales tax nexus with the state of Utah, and the nuances of various thresholds.
  • How to register for a sales tax license in Utah.
  • How to collect sales tax in Utah.
  • How to file and pay sales tax in Utah.

If, after reading, you still have any questions to help you determine your tax sales obligations in Utah and how to fulfill them, we are here for your small business bookkeeping needs! 

 

 


Utah Sales Tax Contacts

Utah Sales Tax Contacts

 

✅  Do you need to get in touch with the Utah Tax Commission?

✅  Are you uncertain about whether to visit, call them, or contact them through their website?  

✅ Do you wonder what information you should have ready before you contact them?

 

If you answered “Yes” to any of these questions, please read onward, as we have just the information you need! :)

The Utah Tax Commission is reachable by phone at 801-297-2200. 

You can also visit one of their four office locations or send them an email. If you are hoping for the fastest response, we always suggest that you call rather than visit in person or emailing. 

When you do call the Utah Tax Commission, you will want to have some information on hand. It will save time to have the following information easily accessible before you call: 

  • Taxpayer Name
  • EIN
  • Sales & Use Tax ID Number

If you plan on having a third party contact them on your behalf, you’ll want to be sure to have completed a power of attorney form (TC-737, PDF). If you don’t have a completed form they won’t be able to assist someone else on your behalf.

If you have any more questions, please feel free to contact us so we can assist you with your sales tax needs.

 

 


Utah Sales Tax Registration 

Utah Sales Tax Registration

 

Are you a new business selling tangible property in Utah? If yes, you are going to want to register your business with the Utah Tax Commission so that you can pay your sales tax on time. 

You need not fret as this is a relatively simple process and one for which you’re about to be fully prepared. We are going to outline the steps below so you are totally ready to register for your sales tax license.

 

Here we go! Remember...

Preparation is key. 

Let’s get started!

 

 

How do I register to collect sales tax in Utah?

You can apply or register for a Utah sales tax permit by visiting the Utah Taxpayer Access Point (TAP) site and following the instructions provided.

Utah prefers online registration but offers an old school paper based form (tc-69, PDF) you can print and mail in. We suggest that new businesses who are able to do so register online.

 

 

What information do I need to register for a Utah sales tax permit?

Great question!

Before you sign up for Utah sales tax permit you’ll want the following information on hand:

  • Business name
  • Business entity type 
  • Description of business activities
  • Date business activities began or will begin
  • Business address and mailing address
  • Business contact information
  • Associated business entities 
  • NAICS code that best matches the business
  • Federal Employer Identification Number (FEIN)
  • List of business officers, partners, managing members, and/or trustees

Don’t forget! Preparation is key. When you have all this information ready, you can go online and register for your permit at the Utah TAP site

 

 

How much does it cost to register for a Utah sales tax permit?

Zip! Zilch! Nada! Utah charges precisely $0 to register a new business sales tax permit, or to renew an existing one.

 

 

Do I need a Federal Tax ID Number or EIN to register for a Utah sales tax permit?

Quite right! For anything but a sole proprietorship, you will most assuredly need one. If you don’t already have one and need to get a new EIN, it’s a painless process. You can register for a Federal EIN right here :). 

 

 

Which agencies in Utah do I need to additionally register with?

You may need to check with some of the following agencies or resources: 

You’ll want to give this some thought and do a little research or investigating; since every business is unique, and there are such different rules, regulations, and laws that may apply. 

We suggest contacting the Utah Tax Commission to verify which additional government agencies you may be required to register with. 

 

*****

 

Huzzah!!!

You are now prepared to register for your Utah sales tax permit in Utah. 

Let’s summarize what we have covered:  

  • Have all the required information easily accessible before registering online.
  • Acquire a tax ID or EIN before registering for a Utah sales tax permit.
  • Register online at the Utah TAP site.
  • Look into what other agencies you may have to additionally register with.

Registering for your Utah sales tax permit will be stress free as long as you are prepared. We recommend organizing all the essential information in a folder, preferably using a system like Box.com or Dropbox (something we’re happy to handle for our customers). 

 

 


Utah Sales Tax FAQ

Utah Sales Tax FAQ 

 

By now, you may have already contacted the Utah Tax Commission and applied for a Utah sales tax permit. 

Once you have a license to collect and remit sales taxes in Utah, you will probably be asking yourself two questions: 

  • When do I charge a sales tax in Utah?
  • What goods and services are subject to sales taxes in Utah? 

We are going to go over some common questions that our clients have asked. We believe these questions will help you appreciate the nuances of taxable goods so you can be confident in fulfilling your tax obligations. 

Let’s start with the first question…

 

 

What goods and services are considered taxable in Utah?

The following items are all taxable in the state of Utah: 

  • Sales of tangible goods at retail.
  • Repairs or alterations of tangible personal property.
  • Property rentals, leases, or licenses [e.g. commercial, mini-warehouse]
  • Selling service warranty contracts.
  • Short-term rentals for living accommodations (e.g. motel/hotel, beach houses, condos, timeshares, vacation homes, or RV homes).
  • Rental/lease of personal goods (e.g.: machinery, vehicles, equipment, or other property).
  • Charges for admission to any place of amusement, sport, or recreation.
  • Manufacturing or producing goods for retail sales.
  • Operating vending machines or amusement rides.
  • Most services are exempted

 

 

The bottom line is …

Your business must pay taxes on sales of any non-exempt goods, and some taxable services.

 *****

 

 

Let’s now review some of our clients’ frequently asked questions:

  • Is Utah an Origin or Destination sales tax State?
  • What creates a sales tax nexus in Utah?
  • What is the economic threshold in Utah?
  • Does Amazon have fulfillment centers in Utah?
  • Does Utah have a Click-Through Nexus?

To best understand your tax obligations, new businesses need to consider how they are doing business and the type of relationships they have with buyers and any third parties to their transactions. 

 Let’s discuss some questions that will help you understand the nature of your small business and the subsequent tax implications.   

 

 

Is Utah an origin or destination-based sales tax state?

Utah is an Origin-based sales tax state. This simply means you’ll want to have your Point-of-Sales system configured to track sales tax based on your business location vs. that of your buyer.

 

 

Protip: Charge sales tax based on your buyer’s location rather than your location.

 

 

What creates a tax nexus with the state of Utah?  

Having nexus, also known as "sufficient business presence,” with Utah means your business has established a taxing connection with a state. When this happens, you are required to collect and remit sales tax in Utah because you created a sales tax Nexus.

Even if your business maintains its main headquarters in another state, you may still have to charge and pay sales tax to the Utah Tax Commission even if you never step foot in Utah.   

So, how do you create a sales tax Nexus in Utah?

  

A business establishes a nexus in Utah by:

  • having a business location in Utah;
  • having property stored in Utah;
  • employing any person in Utah;
  • contracting with a salesperson or other agent in Utah;
  • leasing equipment used in Utah;
  • performing services in Utah;
  • licensing the use of intangible property in Utah, or transporting property in Utah using the taxpayer’s vehicles.

Let’s talk a bit more specifically about where your goods are stored, such as in the instance of an Amazon warehouse. 

 

 

Does Amazon have fulfillment centers in Utah?

No, not at this time. 

This is relevant for our customers that sell on Amazon or through Amazon’s FBA program.

In such cases we can help guide a small business through this regulatory maze! We use tools like A2X and Wherestock to identify where our clients' inventory is currently being held and shipped from so that we can keep them in compliance. 

 

 

Does Utah have economic nexus?

Yes! As of January 1st, 2019, remote sellers are liable to pay sales tax beyond a certain threshold. This means that even businesses without a physical presence or other traditional nexus can be required to register for, collect, and pay sales taxes.

The threshold for registering is having a cumulative gross revenue of over $100,000 or more than 200 transactions in a year to Utah purchasers.

For  more information see the Utah Tax Commission’s remote sellers page here.

 

Click Through Nexus

Does Utah have click-through nexus?

No, not at this time. This means those making revenue by way of affiliate marketing or referring sales needn’t worry about specially registering as of now.

 

 

Is Utah a streamlined sales tax state?

Yep! Since October, 2012 Utah has been a full member of Streamlined Sales Tax.

If you are planning on taking advantage of the Streamlined Sales Tax as a business, it is recommended that you use a Certified Service Provider though businesses may opt to register themselves without a CSP. Ultimately the aim of streamlined sales tax is to simplify payment to multiple different states of sales and use tax. It isn’t required that you utilize them, but it can significantly reduce complexity to do so, especially if your business sells in multiple states.

 

 

More effectively manage your tax needs by keeping this guide handy. 

You and your business can be better equipped to avoid situations like paying fines, paying back taxes that you did know you had to pay in the first place, or facing an audit by the tax authorities in Utah.

 

 


Collecting Sales Tax in Utah 

Collecting Sales Tax in Utah

By now you know if you are a business that has established a nexus with Utah. So you have an understanding about whether, or when, you are required to collect sales tax. Knowing this is just half the battle! Now, we are going to help you with the next half of the battle: how to navigate the process of collecting taxes.

Let’s review some common questions our clients have asked regarding their Utah Sales Tax obligations. 

  • How do I collect Utah Sales Tax?
  • Who is eligible for Utah Sales Tax exemptions?
  • What should I do if my customer is exempt from sales tax in Utah?
  • What happens if I lose a Utah nontaxable transaction certificate? 

After reading this, you will be better equipped to determine when --and when not-- to collect sales tax in Utah.

 

 

How do I collect Utah sales tax?

Because Utah is an Origin-based sales tax state, your business should charge sales tax at the time of the transaction based on the business location rather than that of the buyer. 

 

 

What are the current Utah sales tax rates?   

Utah’s state-wide sales tax rate is technically 4.85% at the time of this article’s writing, but local taxes bring the effective rate from 6.1% to 9.05% depending on location. We advise you to check out the Utah Tax Commission Tax Rate page which has the current rate and links to lookup specific municipal rates. Any changes will be reflected on that page.

It always helps to be accurate and up to date with this type of information! :) 

 

 

What is exempt from sales tax in Utah>

What is exempt from Utah sales tax?

Here is a sample list of exemptions: 

  • Non-prepared food
  • Purchases for resale
  • Industrial Machinery
  • Medical supplies

And that’s it! Most items of tangible property are taxable in Utah. They do have a handy page with a detailed list of what food is and is not exempt from sales tax in Utah.

 

 

Who are eligible for Utah sales tax exemptions?

At this point, you should know what products are exempt from sales tax in Utah. You also want to know who may be exempt. 

Under Utah law, the type of buyer or the way the goods will be used can qualify can buyer for a sales tax exemption. A good example of this is a merchant purchasing goods for resale, aka a wholesaler.

Other common examples of an exempt buyer may include:

  • Government agencies
  • Non-profit organizations
  • Religious groups
  • Out-of-state buyers (should their business not have nexus in their home state).

Note that a non-profit status doesn’t instantly confer tax exemption.

 

 

What should I do if my customer is exempt from sales tax in Utah?

Purchasers who are tax exempt must have completed exemption certificate (TC-160, PDF) and must present their completed exemption certificate at the time of purchase. It is then incumbent upon the seller to hold on to this exemption certificate. Failure to do so may leave you unable to justify tax exempt sales.

Remember, you always want to collect and file a copy of the exemption certificate. Such certificates must be produced upon request to justify tax-exempt sales in the event of an audit.

 

 

What happens if I lose a Utah sales tax exemption certificate?

Obviously this issue is best to be avoided! Imagine finding out you’ll be audited and discovering you cannot produce an exemption certificate for a buyer... That nightmare scenario would mean you could be held liable to pay all taxes on behalf of the buyer. This is a bad scene and can be avoided by taking proper care of your paperwork... Which happens to be one of our areas of expertise! :) 

 

 

Does Utah have a sales tax holiday?

Negative, no break from sales tax in Utah at this time. Boo!

 

***** 

 

We have now covered who you need to collect sales taxes from, how to determine whether goods for sale are deemed taxable, what goods and services fall under tax exemptions, who is eligible for tax exemption certificates, and, finally, the process of collecting sales tax in Utah state. 

Now that we’re this far down the rabbit hole there’s only one thing we need to learn about next… how to pay the piper! 

 

 


Filing and Paying Sales Tax in Vermont

Filing and Paying Sales Tax in Utah

 

It is time to talk about filing and paying your sales taxes in Utah. In this section, We are going to cover the following frequently asked questions from our clients:

  • When is Utah Sales Tax due?
  • What are the Utah Sales Tax thresholds?
  • What if a Utah Sales Tax filing date falls on a weekend or holiday?
  • How do I file a Utah Sales Tax Return?
  • How do I correct a Utah Sales Tax return?
  • What happens if I don’t collect sales tax?
  • What happens if I file or pay my sales tax return late?
  • Do I need to file a return if I don’t collect any sales tax in Utah?
  • If I close my business, do I need to file a final sales tax return?
  • Does the Utah Tax Commission offer a discount for filing on time?

By the time you finish reading this, you will feel confident enough to file and pay your Utah Sales Tax.

 

 

When is Utah sales tax due?

Utah sales tax payments are due based on the filing interval and type. Filing intervals are based on the company’s tax liability [detailed ahead, be patient! :p] and the type refers to paper vs. online.

The state of Utah requires payment by no later than the 20th day of the month following the reporting period for paper and electronic filing.

 

What are the Utah sales tax filing interval thresholds?

The thresholds for filing intervals are based on the expected or actual tax liability owed:

 

Average Tax Liability Owed Monthly*

Filing interval

From $0 - $83.33

Annual 

From $83.34 - $4,166.66

Quarterly

From $4,166.67 up

Monthly

 

 

*anticipated if new business, actual if existing company

 

Not sure how to determine your tax filing frequency?

You can review your eCommerce or Point-of-Sale Software to see the volume of sales you have generated. 

Don't worry though! The state will let you know when your due dates change. :) 

Keep an eye out for notices in your mail from the State of Utah so that you don't miss any shift in deadlines.

 

What if a Utah sales tax filing date falls on a weekend or holiday?

The deadline is moved to the next business day, typically the Monday following the weekend or the day after the holiday. Where possible, we always suggest filing well before the holiday, of course ;). 

 

How do I file a Utah sales tax return?

Paper: For a single location, fill form TC-62S (PDF), for multiple locations use TC-62M (PDF), then mail to the address on the form upon completion. 

Electronic: File online via Utah TAP site site and submit payment via EFT.

  

How do I correct a Utah sales tax return?

Paper: Fill same forms as above but check “Amended” option at the top, mail to address on the form.

Electronic: Amend the return within the Utah TAP site.

 

What happens if I don’t collect sales tax?

If you were required to collect sales taxes and failed to do so for whatever reason, that’s a big no-no! Ultimately the business will be held liable for the due tax. Always be sure to collect sales tax at the point of sale. Attempting to collect after the fact will be time consuming and most likely unsuccessful. 

 

 

Protip: You are still responsible for remitting sales taxes even if you failed to collect them. 

 

 

What happens if I file or pay my sales tax return late?

Utah's Department of Taxation charges penalties for late filing and late payment:

 

Late filing or payment results separately in a penalty of whichever is greater, $20 or anywhere from 2-10% per month of tax due, depending on how late it is (Up to 5 days late is 2%, 15 days is 5% and 16 days or later is 10%).

 

 

 

Do I need to file a return if I don’t collect any sales tax in Utah?

Yep! Utah requires businesses file a “Zero-Tax” return even when they have no sales during a taxing period.

 

 

If I close my business, do I need to file a final sales tax return?

Yes, Utah requires businesses to file form TC-69c as a “Final sales tax” return when closing their doors.

 

 

Does the Utah Tax Commission offer a discount for filing on time?

Yes! Utah offers a rather hefty 1.31% discount to early filers with no minimum or maximum. This is a great opportunity to be rewarded for punctuality and we highly suggest taking it!

 

*****

 

Now that we have covered all our bases for filing and paying sales taxes in the state of Utah, you should feel more at ease about the process.

 

Some things to remember:

  • Due dates are important. If anything, file and pay your taxes early.
  • There are three payment plans for filing and paying your sales taxes depending on how much you collect in sales tax on average in a month.
  • You can file and pay your taxes electronically or by mail
  • If you need to amend a return, you may do so electronically or by paper.
  • If you don’t collect sales tax and you were supposed to, you (not the buyer) is liable to pay the sales tax to the state of Utah.
  • You will have to pay late fees if you fail to file your tax return on time and/or if you fail to make your tax payment on time.
  • Even if you collect no sales tax, you still need to file a return.
  • You need to file a “Final sales tax report” when you close your business.

 

Now, you are ready to file and pay your sales tax in Utah. If you have any more questions, feel free to contact us.

  

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Please note: This blog is for informational purposes only and the information is accurate as of 10/29/2019. If you want legal advice on sales tax law for your business, please contact a Sales Tax professional. Keep in mind that sales tax regulations and laws are subject to change at any time. While we strive to keep our blog current, this blog possibly may be out of date by the time you review it. 

Tags: Sales Tax, Utah