Tax and Prepayment Requirements
The corporate franchise tax is a tax on the privilege or right to do business in Utah, and is based on net income. Every corporation must file a return and pay the tax each calendar or fiscal year, regardless of whether or not a profit was made or business was conducted. The tax rate is computed at 4.95% of net income with a $100 minimum tax, whichever is greater.
Any corporation that is incorporated or qualified under the laws of Utah, or conducts business in Utah is required to file and pay the minimum tax. There are two exceptions:
- S corporations, and
- corporations that have obtained an exemption from franchise tax (usually non-profit corporations), that have received an exempt ruling from the Tax Commission
Every corporation having a Utah tax liability of $3,000 or more in the current year, or which had a tax liability of $3,000 or more in the previous year, must make quarterly estimated tax prepayments. The prepayments are due in four equal payments on the 15th day of the 4th, 6th, 9th, and 12th month of the corporation’s taxable year. The quarterly prepayment amounts are based on 90% of the current year’s tax or 100% of the prior year’s tax.
A corporation is not subject to the prepayment requirements for the first year that the corporation is required to file a return in Utah, if the corporation makes a payment on or before the due date (without extension) equal to or greater than the minimum $100 tax.
All calendar year corporation prepayments are due April 15, June 15, September 15, and December 15. Fiscal year corporation due dates vary according to the beginning month of the tax year.
You have the right to request a waiver of the penalties and/or interest, but the request must be in written form. Include your account number, the tax period, supportive documentation (if any), and state your reason why you believe the penalty and/or interest is unjust. Address your letter to:
Utah State Tax Commission
Collections Division, Waiver Section
210 North 1950 West
Salt Lake City, UT 84134