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 a 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.
A seller must collect sales tax from the purchaser and pay the tax to the state. If sales tax is not collected on a taxable transaction, the purchaser must report and pay the use tax. When the purchaser reports the tax, it is use tax. Admin. Rule R865-19S-1.
Sales and use taxes are transaction taxes. The tax is on the transaction—not on the item. The buyer (final consumer) is the actual taxpayer. See Admin. Rule R865-19S-2.
Sales and use taxes are trust fund taxes. The funds collected by the seller may not be used for any other purpose. The seller holds the tax in trust for the state until paid to the Tax Commission.
The same exemptions and tax rates apply to both sales and use tax. The two 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 tangible personal property and certain services. Sales tax is collected and paid to the Tax Commission on monthly, quarterly or annual tax returns.
Use Tax
Use tax is applied to amounts paid for purchases of tangible personal property and certain services when sales tax is due but not collected. The buyer pays use tax to the Tax Commission. Examples where use tax may apply include:
- withdrawal of items from resale inventories,
- goods or services purchased tax-free and used by you or your business (such as advertising supplies, office or shop equipment, computer hardware and software and office supplies),
- purchases from unlicensed out-of-state sellers.
All sellers with Utah nexus must have a Utah Sales Tax License. Apply for a license with the Tax Commission online using OneStop Business Registration or on form TC-69, Utah State Business and Tax Registration. There is no fee for a sales tax license.
Sales tax licenses are conditional. Applicants or fiduciaries of applicants with a history of filing and paying late must resolve past delinquencies and/or post a bond of $25,000 to $500,000.
Sellers use the sales tax account 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 account must be closed. Admin. Rule R865-19S-7.
Your account number is printed on your sales tax license. You must use your account number on all returns and correspondence. The sales tax account numbers are 14 characters: eight digits (hyphen), three digits (hyphen), and three alpha characters (e.g., 12345678-123-ABC).
Individuals and businesses are required to obtain a sales tax license in Utah if they have:
If you are not required to obtain a sales tax license, you must report and pay the use tax on your Utah individual or business income tax return.
Nexus means a business has established a direct or representational presence within Utah. This requires a seller to collect and pay taxes along with filing a sales tax return. See Publication 37, Business Activity and Nexus in Utah.
Any one of the following activities result in a business having nexus.. Sellers must collect and pay sales and use tax if they:
This list contains examples and is not 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 is not required to register or collect Utah sales and use tax. However, non-nexus sellers may collect Utah sales tax on a voluntary basis.
When a seller does not collect sales and use tax on a taxable sale, the buyer must 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 grocery food) is 5.9 percent for all Utah locations.
The non-nexus sales tax rate for grocery food is 3 percent. Grocery food means substances sold for ingestion or chewing by humans for their taste or nutritional value. Grocery food does 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 must immediately notify the Tax Commission using form TC-69C. 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, contact Taxpayer Services at (801) 297-2200 or 1-800-662-4335 ext. 2200.
Every sales tax license holder that stops doing business in Utah – whether the business is closed or sold– must immediately notify the Tax Commission using TC-69C. Admin. Rule R865-19S-25. Identify the license number and closure date. For assistance, 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 stopped, the license holder may be assessed an estimated tax, including penalties and interest.
