Most businesses starting in Utah selling a product or offering certain services will need to register for a sales tax license. This is commonly referred to as a seller’s permit, sales tax permit, sales tax number, or sales tax registration.
Check out the rest of this guide to determine who needs a sales tax license, what products and services are taxable, how to register for a permit, and reporting requirements.
Also See: Guide to Starting a Business in Utah
Who needs a sales tax license in Utah?
A business must register for a sales tax license in Utah when:
- A business has an “economic nexus” (physical presence in the state) when they have a physical location like a retail store or office or uses a warehouse or fulfillment center to store inventory.
- Selling products and taxable services in Utah (includes occasionally selling items at craft shows, fairs, seminars, shows, etc.)
- Employees (including sales representatives or agents) are working in Utah
- An online business located in Utah is selling taxable products to Utah residents
- A remote seller meets one of the following scenarios:
- Making total annual sales of tangible personal property or taxable services to Utah residents of $100,000 or more; or
- Shipping 200 or more transactions with Utah residents annually.
Tangible personal property is defined as property that may be seen, weighed, measured, felt, touched, or is in any manner perceptible to the senses. It also includes prewritten software and digital and electronic goods.
What products and services are taxable in Utah?
There are a few exceptions, but almost all physical products or real property are taxable when sold at retail in the state of Utah. Common examples include:
- General merchandise like furniture, appliances, and clothing
- Titled or registered items like vehicles
Most manufacturing equipment, certain products used in farming operations, prescriptions, and medical equipment is tax-exempt. See the full list of sales tax exemptions in Utah.
Digital products are taxable in Utah.
Most services aren’t taxable in Utah, however, there are a few exceptions, some of which include:
- Labor to repair, renovate and clean tangible personal property
- Laundry and dry-cleaning services when the labor is not performed by the buyer (i.e., coin-operated laundry)
- Admission or user fees for events or places of amusement such as theaters, concerts, sporting events, bowling lanes, golf, ski slopes, zoos, etc.
- Assisted cleaning or washing of tangible personal property if the cleaning or washing labor is not performed by the buyer (i.e., car detailing or cleaning service)
- Short-term lodging
The Utah State Tax Commission has more information on taxable services in Utah.
How to register for a sales tax license in Utah
A sales tax license can be obtained by registering through the Utah Taxpayer Access Point (TAP) or the Utah OneStop Business Registration (OSBR). Alternatively, you can mail in Form TC-69 to the Utah State Tax Commission 210 North 1950 West Salt Lake City, UT 84134-3310.
In addition to the sales tax license, you can also register for an unemployment insurance account with the Utah Department of Workforce Services, get certain city business licenses, and more.
Information needed to register includes:
- Type of business entity (Sole Proprietorship, Partnership, Corporation, LLC)
- Date the company started
- Federal Employer Identification Number (FEIN) from the IRS, or SSN if a sole proprietorship with no employees
- Tax year-end date
- Business name, physical address, mailing address, website, email, and phone number
- Doing Business As (if applicable)
- Name, SSN address, and phone number of owners/officers/members
How much does a sales tax license cost?
There is no cost for a sales tax license in Utah.
How long does it take to get a sales tax license?
Most online applications are processed immediately. Expect 2-4 weeks to get your sales tax license number when applying by mail.
Do you have to renew your Utah sales tax license?
The sales tax license is a one-time registration, and no renewals are needed. Be mindful that if any information about the business changes, such as the mailing address, additional locations, or change in ownership, those changes need to be updated with the Utah State Tax Commission.
Sales Tax Exemption Certificate
A business can purchase items to resell without paying state sales tax. The tax liability is passed from the wholesaler or supplier to the retailer, who will then charge sales tax to the end-user of the item.
Wholesalers and distributors will require a sales tax number and a completed Utah Sales & Use Tax Exemption Certificate (also referred to as a resale certificate) to document the items being purchased are for resale.
Sales tax reporting
How is sales tax collected?
When a business sells a taxable product or service, the business charges the appropriate sales tax rate to the customer. This tax is collected by the business who then sends it to the Utah State Tax Commission.
How much sales tax is charged?
The sales tax rate that is charged varies depending on the address of the business if the purchase is made in the store. When shipping in-state, the sales tax is based on the address of the purchaser.
In addition to the statewide tax, there are additional sales taxes that may be added by cities and municipalities. To find sales tax rates, see the sales tax rate charts from the Tax Commission.
When are Utah sales tax returns due?
New businesses will estimate the amount of sales and use tax liability when applying for a license and are assigned a filing status by the Utah State Tax Commission. The filing frequency is based on the expected sales volume, which will be monthly, quarterly, or annually. Generally, a business collecting over $50,000 in sales taxes annually will file monthly.
Filings are due the last day of the month following the reporting period, unless the last day falls on a weekend or federal holiday, which would move to the next business day. Late filings can result in penalties and interest.
Even if the business had no sales during the reporting period, a filing is still required indicating no sales.
In addition to registering for a sales tax permit, there may be other business licenses needed before starting a business in Utah. Learn what business licenses are needed in Utah.
If you have questions about the sales tax license, the Utah State Tax Commission has a guide to Sales and Use Tax (Publication 25), or they can be contacted by calling 801-297-2200 or 800-662-4335.