Everything you need to know about collecting sales tax in Utah
When do I need to collect sales tax in Utah?
As an e-commerce seller, you will need to collect sales tax in Utah if you have:
- Gross revenue of more than $100,000 or more than 200 separate transactions in previous or current calendar year (economic nexus) OR
- Physical presence in Utah (physical nexus).
Below, we'll highlight some of the basic provisions of Utah sales tax law.
What is the sales tax rate for Utah?Utah's sales tax rate ranges from state to local level. See the Utah State Tax Commission's Sales & Use Tax Rate page for more information.
State Sales Tax Rate: Utah’s general sales tax rate is 4.85%.
Local Sales Tax Rate: Utah localities impose their own sales tax at rates ranging from 0% to 7.6%.
Food and Ingredients Sales Tax Rate: Utah has a uniform statewide rate of 3% on food and food ingredients. The rate includes a state rate of 1.75%, a local option rate of 1.0%, and a county option rate of 0.25%.
What is the physical nexus threshold in Utah?
Certain business activities create physical nexus in Utah. If you have physical nexus, you are required to collect and remit sales tax on all sales that are shipped to Utah.
Examples of business activities that can create physical nexus in Utah include:
- Having or utilizing an office, a distribution house, a sales house, a warehouse, a service enterprise; or a place of business in Utah.
- Maintaining a stock of goods in Utah.
- Regularly engaging in the delivery of property in Utah other than by common carrier or United States mail.
- Regularly leasing or servicing property located within Utah.
What is the economic nexus threshold in Utah?
Remote sellers and marketplace facilitators that have gross revenue of more than $100,000 or more than 200 separate transactions in the previous or current calendar year must collect and remit Utah sales and use tax on taxable sales.
Here are a few other things to be aware of when it comes to economic nexus in Utah:
- A marketplace facilitator can have nexus on its own direct sales, on sales it facilitates, or both. Therefore, facilitators must determine nexus separately for their direct sales and their facilitated sales.
- Marketplace sellers do not need to have a Utah sales tax license for facilitated sales unless they have Utah nexus. A marketplace seller with a Utah sales tax license must file sales tax returns but does not report sales made through a marketplace. Marketplace sellers are not liable for taxes a facilitator is required to collect.
- Sales you make through a marketplace are not included in calculating your own threshold.
- Once you exceed the threshold, you must register and begin collecting tax immediately. Marketplace facilitators have a grace period of at least 60 days, but it is not clear if the Tax Commission would apply the same rule to other remote sellers.
What are considered taxable item sales in Utah?Here are a few examples of taxable items in Utah:
- Tangible personal property, unless an exemption applies
- Certain services
- Digital goods
- Food (reduced rate)
- Leases and rentals of tangible personal property
- Software as a Service (SaaS)
What are considered non-taxable or exempt items in Utah?Not all items are taxable in Utah. Here are a few examples of non-taxable and exempt items:
- Prescription drugs
- Various other medical products
- Fuel cells
Sales Tax Holidays in Utah
Currently, Utah does not have any sales tax holidays.
Is Utah a member of the SST (Streamlined Sales Tax)?
Currently, Utah is a full member of the Streamlined Sales Tax Governing Board (SSTGB).
How do I register for a sales tax permit in Utah?Once you meet the nexus requirements in Utah you must register with the Utah Tax Commission. See this page for more information. There are a few different options for registering.
- Taxpayer Access Point (TAP): Choose Apply for tax account(s) – TC-69 and follow the instructions given. This option is only for taxes administered by the Tax Commission. For more information, visit the TAP general information page.
- OneStop Business Registration (OSBR): Register for a Tax Commission account, register your business with the Department of Commerce, get certain city business licenses, and more.
- TC-69, Utah State Business and Tax Registration Form: This form can be mailed or faxed, or you can take it to one of our offices. This option is only for taxes administered by the Tax Commission
Have questions? Get in touch with our team of TaxGeeks here.