House Bill 338, passed by the 1992 Utah Legislature, imposes certain filing and payment requirements for vendors whose sales, use, and public transit taxes for the previous calendar year meet threshold levels.

Mandatory Monthly Payment of Sales Taxes
Beginning July 1, 1992, any vendor whose combined state and local sales and use tax and public transit tax liability totaled $50,000 or more for the previous calendar year shall file and remit state and local sales and use tax and public transit tax collections on a monthly basis. The return and remittance are due on or before the last day of the month following each calendar month. For example, sales, use, and public transit taxes collected during July will be due on or before August 31. In addition to the sales, use, and public transit taxes, vendors shall also file and remit their waste tire fees and transient room, resort communities and tourism, recreation, cultural, and convention facilities taxes to the Tax Commission on a monthly basis.

The determination that a vendor must file and remit taxes on a monthly basis shall be made by the Tax Commission at the end of each calendar year and shall be effective for the fiscal year beginning July 1 and ending the following June 30. Vendors who are required to file monthly will be notified of their status in advance so that they may prepare for the July 1, 1992 implementation. The Tax Commission will provide this advance notification on a yearly basis to vendors who meet the $50,000 threshold. A vendor who does not receive notification from the Tax Commission but meets the $50,000 threshold for monthly payment of sales taxes is not excused from timely monthly filing and remittance of sales taxes.

Voluntary Monthly Sales Tax Payment
Vendors who are not required to file and remit sales taxes to the Tax Commission on a monthly basis may voluntarily do so by contacting the Tax Commission not less than 30 days prior to the beginning of a new fiscal year. Vendors who make this election, however, are subject to the same requirements and penalties as those who are required to file and remit sales taxes on a monthly basis. In addition, vendors who elect to file and remit their sales taxes on a monthly basis are not entitled to a reimbursement for the cost of collecting and remitting sales taxes on a monthly basis. The election to file and remit sales taxes on a monthly basis is effective for the following fiscal year and every fiscal year thereafter unless the vendor provides the Tax Commission with written notification not less than 30 days prior to the commencement of a fiscal year that the vendor no longer elects to file and remit sales taxes on a monthly basis. The revocation will become effective in the fiscal year following notification.

Reimbursement for Mandatory Monthly Filers
A vendor who is required to file and remit sales, use and public transit taxes to the Tax Commission on a monthly basis may retain 1.5 percent of the total monthly state sales and use taxes collected and 1 percent of the total monthly local sales and use taxes and public transit taxes collected as reimbursement for its cost of collecting and remitting those taxes to the Tax Commission on a monthly basis.

No reimbursement is allowed for the cost of monthly filing or remittance of waste tire fees or transient room, resort communities or tourism, recreation, cultural and convention facilities taxes.

Tax Calculation
For example, a vendor with calendar year sales of $1,000,000 would receive the following reimbursement:

State sales and use taxes: $1,000,000 x .05 = $50,000
Local sales and use taxes: $1,000,000 x .01 = $10,000
Public transit taxes: $1,000,000 x .0025 = $ 2.500
Total taxes collected: $62,500

Reimbursement
State sales and use taxes: $50,000 x .015 = $ 750
Local sales and use taxes: $10,000 x .01 = $ 100
Public transit taxes: $ 2,500 x .01 = $ 25
Total reimbursement: $ 875
Total taxes remitted to the Tax Commission: $61,625

Only those vendors who are required to file returns and remit the full amount of their taxes on a monthly basis who file returns and remit timely are entitled to reimbursement for the cost of collecting and remitting sales taxes to the Tax Commission on a monthly basis.

Payment of Taxes By Electronic Funds Transfer 
Mandatory Filing Requirements
Beginning July 1, 1992, any vendor whose state and local sales and use tax and public transit tax liability totaled $96,000 or more for the previous calendar year shall transmit the monthly amount of those taxes a due by electronic funds transfer (EFT). The paper return and electronic remittance are due on or before the last day of the month following each calendar month. In addition to the sales, use and public transit taxes, vendors shall also remit their waste tire fees and transient room, resort communities, and tourism, recreation, cultural, and convention facilities taxes by EFT.

The determination that a vendor must remit sales taxes by EFT shall be made by the Tax Commission at the end of each calendar year and shall be effective for the fiscal year beginning July 1 and ending the following June 30. Vendors who are required to remit their sales taxes by EFT will be notified of their status in advance so that they may prepare for the July 1, 1992 implementation. The Tax Commission will provide this advance notification on a yearly basis to vendors who meet the $96,000 threshold. A vendor who does not receive notification from the Tax Commission but meets the $96,000 threshold for payment of sales taxes by EFT is not excused from timely filing and remittance of sales taxes by EFT.

Voluntary Electronic Funds Transfer
Vendors who are not required to remit sales taxes to the Tax Commission by EFT may elect to do so by contacting the Tax Commission not less than 30 days before the beginning of a new fiscal year. Vendors who make this election, however, are subject to the same requirements and penalties as those who are required to remit sales taxes by EFT. The election to remit sales taxes by EFT is effective for the following fiscal year and every fiscal year thereafter unless the Tax Commission receives written notification not less than 30 days prior to the commencement of a fiscal year that the vendor no longer elects to remit sales taxes by EFT. The revocation will become effective in the fiscal year following notification.

Vendors who are required to remit sales taxes to the Tax Commission by EFT and those who request EFT status must file an EFT agreement with the Tax Commission. The agreement form will be sent to vendors required to remit sales taxes by EFT. Those who request EFT status must contact the Tax Commission to obtain the form.

Procedure for EFT Remittance
Generally, a vendor's EFT payment shall be remitted by an ACH-debit transaction through the National Automated Clearing House Association (NACHA) system CCD application. Under this procedure, the vendor will contact the third party with whom the state contracts and authorize that third party to initiate the debit to the vendor's account. Subsequent to initiating the debit, the third party will process the transaction through NACHA and submit the appropriate records to the Tax Commission for the identification of all EFT payments.

In those instances where a vendor's organization bylaws prohibit third-party access to its bank account, the vendor may remit its payment by ACH-credit with tax payment addendum transaction through NACHA's CCD+ application. Under this procedure, the vendor will: contact its bank, authorizing it to initiate the debit to the vendor's account and contact the third party to provide the necessary information for the Tax Commission.

Subsequent to initiating the debit, the bank will process the transaction through NACHA.
In certain unusual circumstances, an EFT may be accomplished by Fed-Wire, transfer of funds from an account at the Tax Commission's bank to the Tax Commission's account, or cash deposit into the Tax Commission's bank account. Use of these procedures, however, is limited and must be approved beforehand by the Tax Commission.

Only those vendors who are required to file returns and remit sales taxes by EFT and who file returns and remit sales taxes by EFT on a timely basis are entitled to reimbursement for the cost of collecting and remitting sales taxes to the Tax Commission by EFT on a monthly basis.

Vendors who meet the $50,000 monthly filing threshold or the $96,000 EFT threshold will be notified by the Tax Commission and advised of the particular procedures they must follow. However, failure to receive notice does not excuse the vendor from timely filing and remittance requirements.

Filing and Late-payment Penalties
The Tax Commission will assess the appropriate penalties when a vendor does not meet all statutory requirements. Vendors who remit sales taxes by EFT should pay special attention to ensure that the funds transfer is completed timely and the return is filed timely.

Utah law provides the following uniform statutory penalties: a 10 percent late-filing penalty; a 10 percent late-payment penalty; and an additional 10 percent penalty on amounts remaining unpaid after 90 days.

In addition to these penalties, House Bill 338 provides that those vendors who are required to file monthly and those required to remit by EFT will lose their reimbursement and be assessed a 10 percent penalty if the sales tax is not remitted timely or by EFT, if required.
Any questions regarding this Tax Bulletin should be directed in writing to Taxpayer Services, 160 East 300 South, Salt Lake City, UT 84134 or by calling (801) 530-4848 or toll-free within Utah 1-800-662-4335.

REMINDER: MONTHLY FILING REQUIREMENTS BEGIN JULY 1, 1992 AND THE FIRST PAYMENT IS DUE ON OR BEFORE AUGUST 31, 1992. THE FINAL SALES TAX PREPAYMENT UNDER THE CURRENT SYSTEM IS DUE JUNE 15, 1992.