Frequently Asked Questions about Utah Sales and Use Taxes

How do I get a sales tax number?

You can apply online through Utah’s OneStop Online Business Registration service. Or apply by mail using Form TC-69, Utah State Business and Tax Registration.

If you or other listed owners, partners, officers, members or trustees have a history of filing or paying late under another Utah sales tax license, you will be required to resolve all past delinquencies and/or post a surety bond prior to receiving a new sales tax license.

After successful application, your sales tax license will be mailed to you within 30 days.

What is nexus?

Nexus means a business entity has established a direct or representational presence within a particular state or jurisdiction. This presence gives the state the right to require a seller to pay or collect and remit certain taxes, including sales and use tax. For complete information on nexus, please refer to Tax Commission Publication 37, Business Activity and Nexus in Utah.

When are my returns due?

Due dates for sales tax returns are based on the previous year's tax liability.

• $ 999 or less = Annual Filing Status
• $ 1,000 to $49,999 = Quarterly Filing Status
• $ 50,000 to $95,999 = Monthly Filing Status
• $ 96,000 or more = Monthly and Electronic Filing Status

New businesses with no prior sales tax liability will estimate the amount of sales and use tax liability and are set up on accordingly. The Tax Commission will notify businesses in writing if the filing status is changed.

Sales tax returns are due the last day of the month following the period end (for example, returns for annual filers are due January 31). If a due date falls on a Saturday, Sunday, or legal holiday, the due date becomes the next business day.

Why did I receive a billing notice when I had no sales and didn't use my account?

• Every sales tax license holder responsible to collect sales and use tax must file returns with the Tax Commission on a timely basis, whether or not sales tax is due for that month, quarter, or year.
• If you cease doing business, notify the Tax Commission in writing. If you fail to notify the Tax Commission, your sales tax license remains active.
• If you change ownership, business name, business location, or add additional locations, you must notify the Tax Commission in writing as soon as possible to alleviate any problems affecting the billing cycle of your account and type of returns you receive.
• NOTE: Neglecting to file your returns by the due dates will lead to unnecessary "Failure to File" notices and estimated tax billings. Further delay may even produce liens against your personal property.

Are services taxable?

Assisted sales to wash or clean tangible personal property are taxable. Assisted sales occur when the labor to clean or wash the tangible personal property is performed at the direction of the seller by an individual who is not the purchaser. Other types of labor performed in connection with the sale of tangible personal property are taxable. See also Publication 25, General Sales Tax Information.

What is the difference between real property and tangible personal property?

Real property, realty or real estate is:

• Any right, title, estate, or interest in land including all nonextracted minerals located in, on, or under the land.
• All buildings, fixtures, and improvements on land.
• All water rights, rights-of-way, rents, issues, profits, income, tenements, inherited property, possessory rights, claims, including mining claims, and privileges belonging to, used, or enjoyed with the land or any part of the land.

Tangible personal property is:

• Property that may be seen, weighed, measured, felt, touched or is in any manner perceptible to the sense.
• Tangible personal property includes electricity, water, gas, steam, prewritten software, and digital and electronic goods.

Tangible personal property is NOT:

• Real estate or any interest or improvements in real estate.
• Bank accounts, stocks, bonds, mortgages, or notes.
• Insurance certificates or policies.

What is the difference between sales and use tax?

Use tax is a tax on goods or taxable services purchased for use, storage or other consumption in Utah. Use tax only applies if sales tax is not applicable. If you purchase an item from an out-of-state retailer for use in Utah and the retailer does not collect the tax, you must pay the use tax directly to the Tax Commission.

• If the tax amount exceeds $400 annually, you are required to register and report the use tax on a Sales and Use Tax Return (Form TC-61).
• If the use tax does not exceed $400 annually, you may report the use tax on your personal Utah Individual Income Tax Return (Form TC-40) or Utah business income tax return.

How do I get a sales tax exemption number for a religious or charitable institution?

• Complete an Application for Sales Tax Exemption Number for Religious or Charitable Institutions, Form TC-160.
• Attach a copy of the determination letter from the IRS qualifying your organization as exempt from tax under Section 501(c)(3) of the Internal Revenue Code.
• Mail all information to:
  
  Utah State Tax Commission
  Technical Research Unit
  210 North 1950 West
  Salt Lake City, Utah 84134-3212

What is an exemption certificate, TC-721?

Form TC-721 is an exemption certificate for sales, use, tourism and motor vehicle taxes. The purchaser must be qualified under Utah Tax Code to receive such an exemption. The purchaser completes the exemption certificate form to purchase items tax exempt. The seller retains completed exemption certificates. The supplier or retailer selling items or services to exempt customers is required to keep records verifying the nontaxable status of such sales. Records are to be kept for a period of three years.

What is my sales tax rate?

Your sales tax rate depends on where you are doing business in Utah and the type of business you are conducting. Tax rates are available online at Utah Sales & Use Tax Rates. Or you can phone the Tax Commission at (801) 297-2200 or toll-free 1-800-662-4335 and ask a Customer Service agent. In compliance with Utah law, rates may change quarterly. Sales tax license holders are encouraged to periodically check sales tax rates.

Are transportation or delivery charges in connection with the sale of goods taxable?

No, transportation charges or delivery charges are not taxable when separately stated on an invoice.

Why didn't I receive my sales tax return in the mail?

If you changed your business name or address without notifying the Tax Commission, your form may have been returned as undeliverable. If you did notify us, the update may not have occurred in time to reflect the correct information in your billing cycle.

Will I be able to use the old form TC-71 and schedules?

You must use the TC-61 forms and schedules. If you use the incorrect forms, it will delay the processing of your return.
The only time to use old form TC-71 is if you are filing a late return or an amended return for a period(s) beginning prior to July 1, 2004. All forms are available on our website at tax.utah.gov/forms/.

Can sellers who use substitute forms continue to use these forms?

The sales tax returns and schedules are updated as changes occur to Utah law. Users and developers of substitute forms must have approval from the Tax Commission prior to filing the forms or releasing the forms to their customers. Please refer to Tax Commission Publication 99 for substitute forms requirements.

Are the sales being reported twice on the new form?

No. Utah Code §§59-12-201 through 59-12-205 requires the Tax Commission to distribute the 1 percent local sales tax to cities and counties based on point of sale. A seller uses the TC-61 Schedule PS to report all taxable sales based on point of sale without calculating tax. The TC-61 Schedule PSD is used to report and calculate sales tax due, and total dollar amounts are transferred to form TC-61.

Where can I get more information?

You have three options for more information:

1. Review the Online Sales and Use Tax Workshop
2. Attend a Sales and Use Tax Workshop
3. Contact the Technical Research Unit at (801) 297-7705 or 1-800-662-4335 ext. 7705. Agents are available Monday through Friday (excluding holidays) from 8:00 a.m. to 5:00 p.m.