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This online workshop follows Publication 25, Sales and Use Tax General Information. Additional publications relating to sales and use tax are available on the Tax Commission website in Forms & Publications.
Tax Commission publications are general reference guides. They provide basic information, are not all-inclusive, and should not be considered a legal reference.
Top of PageUtah Code, Title 59, Revenue and Taxation is accessible from the Utah Legislature’s website.
A good source of information when starting a new business in Utah is Publication 38, Doing Business in Utah.
Verify the status of all taxes before purchasing a business. Utah Code §59-12-112 requires buyer to withhold enough purchase money to cover any unpaid taxes until the former owner produces a receipt from the Tax Commission showing that all taxes have been paid.
If the purchaser fails to withhold the required purchase money and unpaid taxes remain due 30 days after the business is sold, the purchaser is personally liable for payment of all unpaid taxes.
The seller is charged with collecting sales tax from the purchaser and remitting the tax to the state. If the seller does not collect sales tax on a taxable transaction, the tax becomes use tax and the purchaser is responsible to report and remit the use tax. Admin. Rule R865-19S-1.
Sales and use taxes are transaction taxes. The tax is not on the item, but on the transaction and the purchaser (final consumer) is the actual taxpayer. See Admin. Rule R865-19S-2.
Sales and use taxes are trust fund taxes. This means the funds collected by the seller may not be used for any other purpose. The seller holds the collected tax in trust for the state until remitted to the Tax Commission.
The same exemptions and tax rates apply to both sales and use tax. The two taxes complement each other and both taxes cannot be applied to the same transaction.
Top of PageSales Tax
Sales tax is applied to amounts paid for the retail sale or lease of certain services and all tangible personal property. Sales tax is collected by a licensed seller and remitted to the Tax Commission on monthly, quarterly or annual tax returns.
Use Tax
Use tax is applied to amounts paid for purchases of certain services and all tangible personal property when sales tax was due but not collected by the seller. The purchaser remits use tax to the Tax Commission. Examples of activities that trigger use tax liabilities include withdrawal of items from resale inventories and other consumption of goods or services purchased tax-free.
Use tax must be accrued and paid on certain purchases from unregistered out-of-Utah sellers. Some common items for use tax reporting include advertising supplies, office or shop equipment, computer hardware and software, and office supplies.
All sellers with Utah nexus must have a Utah Sales Tax License. Application for a license is made to the Tax Commission on a Utah State Business and Tax Registration form TC-69 or online using OneStop Business Registration.
There is no fee for a sales tax license; however, granting a sales tax license is conditional. Applicants or fiduciaries of applicants with a history of filing and paying late are required to resolve past delinquencies and/or post a bond of $25,000 to $500,000.
Sellers use the sales tax license number to file monthly, quarterly or annual sales tax returns to the Tax Commission.
Sales tax licenses are not transferable. If a business is closed, sold or ceases to operate, the sales tax license must be closed. Admin. Rule R865-19S-7.
In March 2008, the Tax Commission will issue new sales tax account numbers and licenses to all active sales tax accounts. You must use your new number on all returns and correspondence from that point forward. The new sales tax account numbers will be 14 characters: eight digits (hyphen), three digits (hyphen), and three alpha characters (e.g., 12345678-123-ABC).
Your new sales tax account number will be issued automatically. You do not need to apply for a new number. See Tax Bulletin 20-07 for more information.
Individuals and businesses are required to obtain a sales tax license in Utah if they have:
Individuals or businesses not required to obtain a sales tax license must report and remit the use tax on their annual Utah individual income or business income tax return.
Nexus means a business entity has established a direct or representational presence within a particular state. This presence gives the state the right to require a seller to pay or collect and remit taxes. Businesses with Utah nexus must file sales tax returns. See Publication 37, Business Activity and Nexus in Utah.
Following are some activities that, if engaged in, will exceed the minimum threshold of nexus and subject the business to Utah’s sales and use tax requirements. Sellers must pay or collect and remit sales and use tax if they:
This list contains examples and is not exhaustive or all-inclusive.
Businesses with Utah nexus must have a Utah sales tax license and file sales tax returns, even if there is no tax liability for a particular period. Admin. Rule R865-19S-12.
A non-nexus seller does not have nexus in Utah and is not required to register or collect and remit Utah sales and use tax. However, non-nexus sellers may choose to collect Utah sales tax on a voluntary basis.
When a seller does not collect sales and use tax on a taxable transaction, the buyer becomes responsible to pay use tax on an out-of-state purchase brought into Utah for storage, use, or consumption.
The non-nexus sales tax rate (except on food and food ingredients) is 5.9 percent for all locations within Utah.
The non-nexus sales tax rate for food and food ingredients is 3 percent. Food and food ingredients mean substances sold for ingestion or chewing by humans that are consumed for the substance’s taste or nutritional value. Food and food ingredients do not include alcoholic beverages, tobacco, or prepared food.
If a Utah outlet (location) is closed but the sales tax account remains open, the sales tax license holder is required to immediately notify the Tax Commission in writing. Identify the license number, location to be closed and closure date. The closed outlet will no longer appear on the pre-printed sales tax return.
For assistance with closing a sales tax outlet, contact Taxpayer Services at (801) 297-2200 or 1-800-662-4335 ext. 2200.
Every sales tax license holder that ceases business in Utah – whether the business is closed, sold or discontinued – is required to immediately notify the Tax Commission in writing. Admin. Rule R865-19S-25. Identify the license number and closure date. For assistance with closing a sales tax license, contact Taxpayer Services at (801) 297-2200 or 1-800-662-4335 ext. 2200.
If the Tax Commission is not informed that the business has ceased, the license holder may be assessed an estimated tax, including penalties and interest.