Utah Sales Tax Rates

Total Range for 2024

4.7%–8.7%

utah state tax commission seal

Why do you need to collect sales tax in Utah?

If you’re selling goods and services in Utah then sales tax might apply! To determine your obligation, you need to understand “nexus,” which ties businesses to states for tax purposes.

Two types of nexus exist:

  1. Physical Nexus: Having a physical presence, like an office, warehouse, or employees in Utah, triggers this type. If you do, you likely need to collect sales tax.
  2. Economic Nexus: This kicks in when your sales within Utah exceed a certain economic threshold. Even without a physical presence, surpassing this threshold requires collecting sales tax.

In Utah, there is also a transaction threshold of 200, which means that even if your sales aren’t over $100,000 if you’ve sold more than 200 items then you still need to pay sales tax.

Is what you’re selling taxable in Utah?

Now that you understand the basics of Utah’s sales tax and nexus thresholds, let’s delve into whether your specific products or services are taxable.

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How to register for sales tax in Utah

There are two ways to register for a sales tax permit (also called a sales and use tax license) in Utah:

  1. Online: This is the faster and recommended method. You can register through the Utah State Tax Commission’s OneStop Business Registration System: https://tax.utah.gov/business

Here’s what you’ll need for online registration:

  • Personal identification information: Social Security number (SSN), address, etc.
  • Business identification information: Employer Identification Number (EIN), address, business entity type (sole proprietorship, LLC, etc.)
  • Business details: Date you’ll start selling in Utah
  • Estimated sales figures: Annual net sales and purchases subject to Utah sales and use tax

2. By Mail: You can use form TC-69, Utah State Business and Tax Registration. Find the downloadable form here: https://tax.utah.gov/forms-pubs

How to collect sales tax in Utah

  1. Collect the Tax at the Point of Sale:
  • Add the appropriate sales tax (state + local) to the sales price of your taxable goods or services.
  • Most point-of-sale systems can automatically calculate the tax for you.
  1. Keep Accurate Records:
  • Maintain detailed records of all your sales, including the taxable amount and the sales tax collected.
  • This will be crucial for filing your sales tax returns.
Example:

Let’s say you’re selling a t-shirt in Salt Lake City, Utah. The base state sales tax rate is 4.85%.

  1. Check for Local Sales Tax: Salt Lake City has an additional local sales tax rate of 1.75%.
  2. Calculate Total Sales Tax: Add the state and local rates: 4.85% + 1.75% = 6.6%
  3. Apply Tax to Sales Price: Assume the t-shirt costs $20. Multiply the sales price by the total sales tax rate: $20 x 6.6% = $1.32

FAQs

Do you have a physical nexus in Utah?

In Utah, having a physical nexus generally means you have a physical presence in the state that creates a business connection strong enough to require you to collect and remit sales tax. You have a physical nexus if your business has any of the following in Utah:

  • An office, warehouse, distribution center, or any other place of business: This includes renting a desk in a co-working space or storing inventory at a fulfillment center.
  • Inventory: Owning or storing products you sell within Utah, even if through a third-party fulfillment service.
  • Employees or representatives: Having salespeople, delivery drivers, or other representatives working in Utah regularly (usually more than a few days) can establish nexus.
Do you have an economic nexus in Utah?

Utah has an economic nexus threshold based on sales or transaction volume within the state during the previous or current calendar year. You’ll create economic nexus if your business exceeds either of these thresholds:

  • $100,000 in gross revenue from sales of taxable goods or services delivered into Utah.
  • More than 200 separate transactions delivered into Utah (regardless of total sales amount).
What is use tax in Utah?

Here’s a breakdown of how use tax works in Utah:

  • When it applies: You’re responsible for paying use tax if you:
    • Buy something from an out-of-state seller (without a physical presence in Utah) that doesn’t collect sales tax.
    • Purchase an item from a Utah retailer but don’t pay sales tax because of an exemption (like buying groceries) and later use the item for taxable purposes (like using a non-taxed tool for your business).
  • Tax rate: The use tax rate in Utah is the same as the combined sales tax rate for your location (state + local). This can range from 4.7% to 8.7% depending on the area.
  • Responsibility for paying: The purchaser (you) are responsible for filing a use tax return and remitting the tax to the Utah State Tax Commission.
Do you need a seller/reseller permit?

In Utah, the term “seller’s permit” and “resale certificate” are often used interchangeably.  However, they serve slightly different purposes:

  • Sales Tax Permit: This is what you actually need to collect sales tax on taxable goods and services you sell in Utah. It’s also called a sales and use tax license.
  • Resale Certificate: This certificate allows you to purchase goods tax-free from wholesalers or retailers when you intend to resell them (not for personal use). It doesn’t authorize you to collect sales tax.
How to get a sales tax permit/license in Utah?

To get a sales tax permit (license) in Utah:

  • Apply online for faster processing
  • You’ll need your SSN, business info, and estimated sales figures.

Alternatively, mail form TC-69 (found on the same website).

There’s no fee, but you’ll need to complete a separate nexus questionnaire first.

When are Utah's Returns Due?

Utah sales tax returns are due on the last day of the month following the reporting period.

For instance, if your reporting period is January, the sales tax return would be due on the last day of February.

Important to Note:

  • If the due date falls on a weekend or holiday, the return and payment are generally due on the next business day.
  • Utah requires filing a return even if you have no tax liability for a particular period.
How to file sales tax in Utah

Filing sales tax in Utah involves two main steps: submitting your sales data and remitting any collected tax.

  1. Filing Your Sales Tax Return:

There are two ways to file your Utah sales tax return:

  • Online: This is the preferred method as it’s faster and more secure. You can file through the Utah Taxpayer Access Point (TAP) on the Utah State Tax Commission website.
  • By Mail: You can mail completed paper forms to the Utah State Tax Commission. Obtain forms from the Tax Commission website.
  1. Remitting Sales Tax:

Once you file your return, you need to remit any sales tax collected to the Utah State Tax Commission. Here are the options:

  • Electronic Funds Transfer (EFT): This is the preferred method for large payments. You can set up EFT payments through TAP.
  • Credit Card: You can pay by credit card through TAP, but there will be a fee.
  • Check or Money Order: Make payments payable to “Utah State Tax Commission” and mail them to the address listed on the return form.
Is anyone exempt from sales tax in Utah?

In Utah, there are no exemptions for people themselves, but there are exemptions for certain types of purchases.  Here’s a breakdown:

  • Exempt Goods: Certain goods are not subject to sales tax, including:
    • Groceries (taxed at a lower rate)
    • Prescription drugs and medical devices
    • Seeds for planting
    • Textbooks (under specific conditions)
    • Certain agricultural products and machinery
  • Tax-Exempt Organizations:  Sales tax may not apply to purchases made by qualified non-profit organizations and government agencies for exempt activities. However, they typically need a valid sales tax exemption certificate issued by the Utah State Tax Commission.

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