Most businesses starting in Utah that are 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 find out who needs a sales tax license, what products and services are taxable, how to register for a permit and reporting requirements.
Who needs a sales tax license in Utah?
A business must register for a sales tax license in Utah when:
- A business has “nexus” (significant presence in the state) such as a retail store, office or warehouse where products are produced, stored and/or delivered
- 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
- An out-of-state business selling to Utah residents and one of the
- Total annual sales of tangible personal property or taxable services to Utah residents is $100,000 or more; or
- Having 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 are taxable when sold at retail in 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 such as theaters, concerts, sporting events, bowling lanes, golf
- 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 service in Utah.
How to register for a sales tax license in Utah
Information needed to register includes:
- Type of business entity (Sole Proprietorship, Partnership, Corporation, LLC)
- Date the company started
- Federal Employer Identification Number (FEIN), 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 in Utah?
There is no cost for a sales tax license in Utah.
How long does it take to get a Utah sales tax license?
Most online applications are processed immediately. Expect 2-4 weeks 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 reporting
How is sales tax collected?
When a business makes a sale of 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?
The Utah State Tax Commission will determine a filing frequency based on the expected volume of sales, 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, in which case would move to the next business day.
Even if the business had no sales during the reporting period, a filing is still required indicating no sales occurred.
Sales tax on purchases for resale
A business is able to purchase items to resell without paying state sales tax. The tax liability is passed from the wholesaler or distributor 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 Tax Exemption Certificate to document the items being purchased are for resale.
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.