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Contents
Sales and Use Tax General Information .......................................... 2 Online Payments ...................................................................... 14
Introduction ................................................................................ 2 Electronic Funds Transfer (EFT) .............................................. 14
Starting a New Business ........................................................... 2 Penalties .................................................................................. 14
Buying a Business — Liability .................................................... 2 Interest ..................................................................................... 15
What is Sales and Use Tax? ...................................................... 2 Overpayments and Refunds .................................................... 15
Sales Tax License ...................................................................... 2 Purchaser Refunds ............................................................ 15
Nexus Filers ............................................................................... 2 Use Tax and Bad Debts ..................................................... 15
Voluntary Sellers ........................................................................ 3 Seller Amendments and Adjustments ................................ 15
How to Add an Outlet ................................................................. 3 Record Keeping Requirements ................................................ 15
How to Close an Outlet .............................................................. 3 Reminders ............................................................................... 15
How to Close a Sales Tax Account ............................................ 3 Additional Information .................................................................... 16
Definitions (Utah Code §59-12-102) .......................................... 3 Bundled Transactions ............................................................... 16
Sales-based Tax Rates and Types ................................................... 4 Car-sharing .............................................................................. 16
Determining Tax Rate (Point-of-Sale Sourcing) ......................... 4 Carwashes .............................................................................. 16
Chart 1: General Sourcing Rules ......................................... 5 Cigarette, Tobacco, Nicotine Products and
Tax Rate Changes ..................................................................... 5 E-Cigarette Products ............................................................... 16
Rate Changes During Billing Cycles .................................... 5 Coupons ................................................................................. 16
Combined Sales Tax Rate ......................................................... 6 Coupon Books, Gift Cards and Gift Certificates ...................... 16
Chart 2: Taxes in the Combined Rate .................................. 6 Direct Mail ................................................................................ 16
Related Taxes and Fees ............................................................ 7 Food Stamps and WIC ............................................................. 16
Chart 3: Related Taxes and Fees ......................................... 7 Money Order, Fax and Photocopy Charges ............................. 16
Other Information ....................................................................... 8 Newspapers and Postage ........................................................ 16
Sales and Use Tax Exemptions ....................................................... 9 Premiums and Gifts ................................................................. 17
Exemption Certificates ............................................................... 9 Rental With and Without an Operator ...................................... 17
Types of Exemptions .................................................................. 9 Returnable Containers ............................................................. 17
Entity-Based Exemptions ..................................................... 9 Returned Merchandise ............................................................ 17
Use-Based Exemptions ...................................................... 10 Special Events ......................................................................... 17
Product-Based Exemptions ............................................... 11 Third-party Drop Shipping ....................................................... 17
Calculating Sales Tax .................................................................... 12 Trade-in on Manufactured Homes ........................................... 17
Taxable Transactions ............................................................... 12 Vending Machine Sales ........................................................... 17
Taxes and Fees Imposed on the Seller .................................... 13 Videos and DVDs ..................................................................... 17
Payments by Gold or Silver Coin ................................................... 13 Sales Tax Publications ................................................................... 18
Filing and Reporting Requirements ............................................... 13 Information Online ......................................................................... 18
Accounting Methods ................................................................ 13
Returns .................................................................................... 13
Filing Frequency ................................................................. 13
Forms and Schedules .............................................................. 13
What to File ........................................................................ 13
Seller Discount ......................................................................... 14
Goods Consumed by the Seller ............................................... 14
Employee Incentives and Discounts ........................................ 14
Bad Debts ................................................................................ 14

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Sales and Use Tax Sales Tax License
Every seller with an established presence in Utah (see
General Information Nexus Filers, below) must have a Utah Sales Tax License.
You can apply for a license online at tap.utah.gov (Tax
Introduction Commission only) or osbr.utah.gov (multiple Utah agen-
This publication provides basic sales and use tax informa- cies), or by submitting form TC-69, Utah State Business and
tion. It includes Utah tax law and Tax Commission rules, but Tax Registration (Tax Commission only). Sales tax licenses
is not all-inclusive. Future law or rule changes may change are not transferable.
this publication.
Businesses that typically must register for a sales tax license
For complete Utah sales tax law, see Utah include:
Code, Title 59, Revenue and Taxation, online at
le.utah.gov/xcode/code.html. • retailers selling tangible goods, products transferred elec-
tronically or services
Starting a New Business • wholesalers purchasing resale inventory
If you are starting a new business, see utah.gov/business • manufacturers
or tax.utah.gov/business. • leasing companies
• consumers such as professional firms and construction
Buying a Business · Liability contractors
Check the status of all taxes before you buy a business.
Keep enough of the purchase money to cover any unpaid
taxes until the former owner gives you a Tax Commission Nexus Filers
receipt showing that all taxes have been paid, or a certificate Nexus means a business has established a physical or
showing no taxes are due. economic presence in Utah, or is related to a business with a
physical presence in Utah.
If taxes are still due 30 days after you purchase the busi-
ness, you will be personally liable for the former owner’s You have a physical presence in Utah if you:
unpaid sales taxes. See Utah Code §59-12-112. 1. have or use an office, distribution house, sales house,
warehouse, service enterprise or other place of business
in Utah;
What is Sales and Use Tax?
Sales and use taxes are transaction taxes. This means the 2. maintain a stock of goods or inventory in Utah;
transaction is taxed, not the actual goods or services. The 3. regularly solicit orders in Utah, even if the orders are
buyer is the actual taxpayer. not accepted in Utah (unless your Utah activity is only
Sales and use taxes are trust fund taxes because the advertising or solicitation by mail, e-mail, the Internet,
seller holds the tax in trust for Utah until paid to the Tax telephone etc.);
Commission. The funds may not be used for any other 4. regularly deliver property in Utah other than by common
purpose. carrier or U.S. mail; or
Sales tax and use tax have the same exemptions and tax 5. regularly lease or service property located in Utah.
rates. Either sales tax or use tax applies to any transaction
— not both. You have an economic presence in Utah if, during the year
or the prior year, you:
Sales Tax 1. have more than $100,000 of sales in Utah; or
Sales tax is applied to retail sales and leases of tangible 2. have more than 200 sales in Utah.
personal property, products transferred electronically, and
certain services. The seller collects sales tax from the buyer A seller also has nexus in Utah if:
and pays it to the Tax Commission monthly, quarterly or 1. a. the seller has more than 10 percent interest in a
annually.See Utah Code §59-12-103 and Rules R865-12L, related seller, or
R865-19S and R865-21U. b. a related seller has more than 10 percent interest in
the seller, or
Use Tax
Use tax is applied to purchases of tangible personal prop- c. a related seller wholly owns the seller; and
erty, products transferred electronically, and certain services 2. a. the seller sells the same or very similar line of prod-
when sales tax is due but not collected by the seller. A ucts as the related seller under the same or a very
buyer without a sales tax account pays use tax to the Tax similar business name, or
Commission on form TC-40, Individual Income Tax Return.
b. the related seller’s place of business or one of its
Examples of use tax due include:
in-state employees is used to advertise, promote or
• using items from resale inventories; assist sales by the seller.
• buying goods or services tax-free for personal or business See Publication 37, Business Activity and Nexus in Utah.
use (advertising supplies, office or shop equipment, com-
Sellers with a physical presence, economic presence, or a
puter hardware and software, office supplies, etc.); and
related business in Utah must collect and pay sales tax and
• buying products from unlicensed, out-of-state sellers. file returns. You must file sales tax returns every period, even
when you have no tax liability.

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Voluntary Sellers Note: The term “grocery food” used in Tax Commission forms
Non-nexus sellers do not have to register or collect Utah and publications means “food and food ingredients” as de-
sales tax. However, they may voluntarily register to collect fined by Utah Code §59-12-102.
Utah sales tax at the combined sales tax rate for the delivery See also the Prepared Food definition below.
location.
When a seller does not collect sales tax on taxable sales, the Installation Charges
buyer must pay use tax on purchases brought into Utah for Charges for permanently installing tangible personal prop-
storage, use or consumption. erty to real property.
Purchase price and sales price of tangible personal property
do not include an installation charge if stated separately.
How to Add an Outlet
Notify the Tax Commission immediately if you add an outlet Installation charges do not include labor charges for repair,
to an existing account. You can add an outlet by logging in renovation, manufacturing or fabrication. Real property sales
at tap.utah.gov, or use form TC-69B, Additional Business are nontaxable. When tangible personal property or prod-
Location for a Sales Tax Account. ucts transferred electronically become part of the underlying
realty upon installation, the purchase and install transaction
is considered a real property transaction. The contractor is
How to Close an Outlet the final consumer and must pay sales and use tax on the
Notify the Tax Commission immediately if you close a Utah
purchase of materials converted to real property.
outlet. You can close an outlet by logging in at tap.utah.gov,
or use form TC-69C, Notice of Change for a Tax Account. Prepared Food
1. Food sold in a heated state or heated by a seller.
How to Close a Sales Tax Account 2. Two or more food ingredients mixed or combined by a
Notify the Tax Commission immediately if you stop doing seller for a single sale.
business in Utah (see Rule R865-19S-25). You can close
3. Food sold with an eating utensil provided by the seller
your sales tax account by logging in at tap.utah.gov, or use
(plate, knife, fork, spoon, glass, cup, napkin, straw, etc.).
form TC-69C, Notice of Change for a Tax Account.
Prepared food does not include:
If you need help closing your account, call Taxpayer Services
at 801-297-2200 or 1-800-662-4335 ext. 2200. • food that a seller only cuts, repackages or pasteurizes; or
If you do not inform the Tax Commission that you closed your • raw eggs, raw fish, raw meat or raw poultry, or a food contain-
business, we may assess an estimated tax, including late ing these items if the Food and Drug Administration advises
penalties and interest. buyers to cook the items to prevent food borne illness.

Products Transferred Electronically
Definitions (Utah Code §59-12-102) Audio, video and data that are not delivered on physical stor-
Delivery Charges age media (CD, DVD, diskette, tape, etc.).
Charges for preparation and delivery to a location chosen by Examples include:
a buyer of tangible personal property, products transferred • Music
electronically or services. Delivery charges include (but are not
limited to): transportation, shipping, postage, handling, crating • Reading material
and packing. • Ring tones
Purchase price and sales price of tangible personal property • Movies
do not include delivery charges if stated separately. The deliv-
ery charge does not include the cost of transportation to the Purchase Price and Sales Price
seller (typically called “freight-in”). The total value for which tangible personal property, products
transferred electronically or services are sold, leased or rented.
Fabrication Charges Purchase price and sales price include:
Charges to fabricate tangible personal property. Fabrication • the seller’s cost of the tangible personal property, products
charges are taxable and must be included in the sale price transferred electronically or services;
before tax is calculated.
• the seller’s expenses, including:
See Tax Commission Rule R865-19S-51
• the cost of materials,
Grocery Food • labor cost,
Substances sold for ingestion or chewing by humans for • service cost,
taste or nutrition. Grocery food does not include alcoholic
beverages, tobacco or prepared food. • interest,
Grocery food includes items sold without eating utensils by • a loss,
a food maker (other than a bakery and tortilla maker), items • the cost of transportation to the seller, and
sold singly and unheated by weight or volume, and bakery • tax (including federal excise tax) imposed on the seller;
items (bagel, bar, biscuit, bread, bun, cake, cookie, crois- and
sant, danish, donut, muffin, pastry, pie, roll, tart, torte or
tortilla). A container or packaging used to transport food is • charges by the seller for any service necessary to com-
not considered an eating utensil provided by the seller. plete the sale.

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Purchase price and sales price do not include: Tangible Personal Property
• delivery charges; Property that can be seen, weighed, measured, felt or
touched, or is perceptible to the senses in any manner.
• installation charges; Tangible personal property includes electricity, water, gas,
• cash discounts or discount terms offered to buyers; steam and prewritten software.
• coupons that are not reimbursed by a third party; or
Tangible Personal Property Permanently
• the following, if separately stated on an invoice, bill of sale Attached to Real Property
or similar document given to the buyer: A special classification of tangible personal property.
a. the amount of a trade-in; Tangible personal property is considered permanently at-
b. interest, financing and carrying charges for credit tached to real property if:
extended on the sale of tangible personal property, 1. the attachment is essential to use the tangible personal
products transferred electronically or services; and property, and
c. a tax or fee legally imposed directly on the buyer. 2. the tangible personal property will remain attached over
its useful life.
Real Property
Any right, title, estate or interest in land, including all struc- This includes an accessory attached to tangible personal
tures on the land. property, if it is needed to operate the tangible personal
property and is attached solely for that purpose.
Real property includes construction materials that lose their
separate identity as personal property once incorporated into The classification is further supported if removal would
the real property. These include lumber, bricks, nails and ce- largely damage either the tangible personal property or the
ment used to build structures on the land, as well as fixtures real property.
such as furnaces and built-in air conditioning systems. The permanently attached tangible personal property keeps
its classification even if it is temporarily detached for onsite
Repair Charges repair or renovation.
Charges for labor and parts to repair, renovate or clean
The permanently-attached classification does not include:
tangible personal property or to repair products transferred
electronically. Repairs or renovations of tangible personal 1. movable tangible personal property attached for conve-
property do not include installing or removing prewritten nience, stability, or for an obviously temporary purpose;
computer software. 2. tangible personal property that is detached for offsite
Repair charges for parts are subject to sales tax unless repair or renovation; or
the part is exempt under Utah Code §59-12-104. Repair 3. a dishwasher, refrigerator, freezer, microwave, stove,
charges for labor are subject to sales tax unless the personal washer, dryer or similar item.
property being repaired is exempt under §59-12-104. The
determination of whether repair labor is exempt from sales Transient Room
tax is based on the personal property being repaired, not on Accommodations in hotels, motels, inns, trailer courts, camp-
whether the parts used in the repair are exempt. grounds, tourist homes and similar stays of less than 30 con-
For charges to repair, renovate or clean real property or secutive days. Transient room does not include meeting rooms.
tangible personal property permanently attached to real
property, see Publication 42.
Sales-based Tax Rates
Restaurant and Types
A retail establishment whose business is the sale of food Tax rates vary from one community to another, depending on
and beverages for immediate consumption. The definition of the taxes each community imposes. Find tax rates online at
restaurant does not include theaters, but does include dinner tax.utah.gov/sales/rates.
theaters. See Utah Code §59-12-602.
Exception: In counties that impose the tourism tax, it does not Determining Tax Rate (Point-of-Sale
apply to food sales from deli areas, pizza take-out counters or Sourcing)
salad bars within a grocery store or convenience store whose Sourcing means assigning a sale to a taxing jurisdiction to deter-
primary business is the sale of fuel or food not prepared for im- mine the sales tax rate. Sales are sourced by transaction type.
mediate consumption. These sales are exempt from the tourism
tax even if the store has seats or stools for customers. However,
if a grocery or convenience store has a full-service restaurant,
the tourism tax is due on sales in that restaurant.

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Chart 1: General Sourcing Rules

   Transaction Type                                       Source to:                Exceptions

   Retail sale of tangible personal property in Utah      Seller’s fixed place of   Sales at special events (fairs, swap meets, 
   (including vending machine operators and sellers       business (whether or not  races, etc.) are sourced to the event location.
   who sell from mobile inventory)*                       the goods or services are 
                                                          delivered)
                                                          Location where inven-
                                                          tory is warehoused for 
                                                          vending machine opera-
                                                          tors and sellers who sell 
                                                          from mobile inventory

   Retail sale of taxable services in Utah when seller    Seller’s fixed place of   If the seller sells tangible personal property on 
   also sells tangible personal property*                 business OR custom-       the same invoice as the service, the transaction 
                                                          er’s location             must be sourced to  the seller’s fixed place of 
                                                          (seller’s preference)     business.
                                                                                    Sales at special events (fairs, swap meets, etc.) 
                                                                                    are sourced to the event location.

   Retail sale of taxable services in Utah when seller    Customer’s location
   does not sell any tangible personal property*

   Retail sale of tangible personal property (including   Buyer’s location (the 
   manufactured/mobile/modular homes, motor ve-           place the buyer receives 
   hicles, aircrafts and watercrafts) or taxable services the service or property)
   when the order is received outside Utah*

   Retail sale of admissions                              Location of activity 
                                                          or event (regardless of 
                                                          ticket purchase location)

   Retail sale of prewritten computer software where      See Publication 64
   there is no transfer of a copy of the software to the 
   buyer

   Retail sale by a ready-mix concrete manufacturer,      Fulfilment location from 
   nonmetallic mineral mining and quarrying operation,    where the product is 
   and asphalt paving mixture and block manufacturer      dispatched

   Lease or rental of tangible personal property*         Location the customer     If there are no recurring payments:
   (other than motor vehicles, semi-trailers, trailers    receives the goods or     •   source to the location the customer 
   10,000 pounds or less, and aircraft)                   services for down pay-        receives the goods or services.
                                                          ment and first payment
                                                                                    •   source to the customer’s location if 
                                                          Location of the item for      shipped from outside the state to a Utah 
                                                          subsequent payments           customer.

   Lease or rental of motor vehicles, semitrailers,       Customer’s location       If there are no recurring payments, source to the 
   trailers 10,000 pounds or less, and aircraft           (address) for all pay-    seller’s fixed place of business.
                                                          ments, including down 
                                                          and first payments

*Including products transferred electronically.
See Utah Code §§59-12-211, 59-12-212, 59-12-213 and 59-12-214.

   Tax Rate Changes                                                     Rate Changes During Billing Cycles
   Tax rates and jurisdictional boundaries can change quar-                When the sales tax rate changes during a billing cycle, it is 
   terly. The Tax Commission posts these changes 60 days                   applied differently depending on whether the rate increases 
   before the effective date. Check tax rates regularly at                 or decreases:
   tax.utah.gov/sales/rates.                                               •  If the tax rate increases, the new rate applies to the first 
                                                                              billing period starting on or after the effective date.

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   •  If the tax rate decreases, the new rate applies to the first    Example 2: Rate DECREASE
       billing statement payment rendered (sent) on or after the      Using Example 1 above, instead of an increase there 
       effective date.                                                was a tax rate decrease    effective October 1. The bill-
                                                                      ing statement for the October 15 payment is sent on 
       Example 1: Rate INCREASE                                       September 16. Although the payment is due October 
       Payments for a 36-month vehicle lease are due on the 15th      15, it is taxed at the old (higher) rate because the billing 
       day of each month. After the lease went into effect, the sales statement was sent before the new (lower) rate went 
       tax rate increased, effective October 1. The October 15        into effect. All future bills will be taxed at the new rate.
       payment is for the billing period beginning September 16, 
       which was before the new rate went into effect. The October 
       15 payment is taxed at the old (lower) rate, even though       Combined Sales Tax Rate
       the payment is made after the new rate went into effect.       The taxes listed in Chart 2 are included in the com-
       The November 15 payment will be for the period beginning       bined sales tax rate and are filed on the sales tax return 
       October 16 and will be taxed at the new (higher) rate.         (TC-62S or TC-62M). The combined sales tax rate is applied 
                                                                      to all taxable transactions, except as noted in the chart.

Chart 2: Taxes in the Combined Rate

   Tax                              Imposed By           Rate         Exemptions

   State Sales and Use              State                4.85%        The state sales tax rate for grocery food is 1.75 percent. 
                                                                      These transactions are also subject to local option and county 
                                                                      option and results in a total combined rate on grocery food of 
                                                                      3 percent throughout Utah. 
                                                                      The state sales tax rate for residential fuel is 2 percent which 
                                                                      results in a combined rate 2.85 percent less throughout Utah.

   Local Option                     County, city or town 1.00%        None

   County Option                    County               0.25%        None

   Resort Communities               City or town         Up to 1.60%  Grocery food sales. Sales of motor vehicles, aircraft, wa-
                                                                      tercraft, modular homes, manufactured homes or mobile 
                                                                      homes are exempt from resort communities tax, but are 
                                                                      subject to the remaining portion of sales and use tax. This 
                                                                      exemption does not apply to trailers, off-highway vehicles, 
                                                                      snowmobiles, truck-mounted campers, etc.

   Rural Health Care                County, city or town Up to 1.00%  Grocery food sales

   Public Transit                   County, city or town Up to 0.30%  Grocery food sales

   Public Transit, Airport Facility County, city or town 0.25%        Grocery food sales
   or State Highway Projects

   Highways                         City or town         Up to 0.30%  Grocery food sales

   Recreational Facilities and      County, city or town 0.10%        Grocery food sales
   Botanical, Cultural and 
   Zoological Organizations

   Town Option                      Town                 Up to 1.00%  Grocery food sales

   City or Town Option              City or town         Up to .20%   Grocery food sales

   Mass Transit Fixed Guideway      County               Up to 0.30%  Grocery food sales

   County Option Transportation     County               Up to 0.25%  Grocery food sales

                                                                                                                               page 6

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   Tax                          Imposed By           Rate        Exemptions

   State Correctional Facility  City or town         Up to 0.50% Grocery food sales. Sales of motor vehicles, aircraft, wa-
   Sales and Use Tax                                             tercraft, modular homes, manufactured homes or mobile 
                                                                 homes are exempt from the state correctional facility tax. 
                                                                 This exemption does not apply to trailers, off-highway ve-
                                                                 hicles, snowmobiles, truck-mounted campers, etc.

   Supplemental State Sales     State                Up to 0.05% Grocery food sales
   and Use

   County of the Second Class   County, city or town Up to 0.25% Grocery food sales
   Airport, Highway and Public 
   Transit

   County Option Highways       County, city or town 0.25%       Grocery food sales
   and Public Transit

   Related Taxes and Fees
   The following sales-related taxes and fees are filed on separate returns:
Chart 3: Related Taxes and Fees
   Tax                  Imposed       Rate           Applies To                                             Discount Reported 
                        By                                                                                           On
   State Transient Room State         0.32%          Tourist home, hotel, motel or trailer court rental for 6%       Sales 
                                                     less than 30 consecutive days                                   Transient 
                                                                                                                     Room 
                                                                                                                     Return

   County Transient     County        Up to          Tourist home, hotel, motel or trailer court rental for None     Sales 
   Room                               4.25%          less than 30 consecutive days                                   Transient 
                                                                                                                     Room 
                                                                                                                     Return

   Municipal Transient  City or       Up to          Tourist home, hotel, motel or trailer court rental for None     Sales 
   Room                 town          1.5%           less than 30 consecutive days                                   Transient 
                                                     Cities and towns that meet certain requirements                 Room 
                                                     may impose an additional transient room tax.                    Return

   Tourism Transient    Salt Lake     Up to          Tourist home, hotel, motel or trailer court rental for None     Sales 
   Room                 County        0.5%           less than 30 consecutive days                                   Transient 
                                                                                                                     Room 
                                                                                                                     Return

   Motor Vehicle Rental State         2.50%          Short-term leases and rentals or car-sharing           None     Sales 
                                                     (less than 30 days) of motor vehicles, unless the               Tourism 
                                                     vehicle:                                                        Leasing 
                                                     •  temporarily replaces a motor vehicle being re-               Return
                                                     paired under a repair or insurance agreement,
                                                     •  is registered for a gross laden weight of 
                                                     12,001 or more pounds, or
                                                     •  is a moving van for personal household goods

                                                                                                                         page 7

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   Tax                   Imposed Rate        Applies To                                                Discount Reported 
                         By                                                                                     On
   Short-term Leasing    County  Up to       Short-term leases and rentals or car-sharing              1%       Sales 
                                 7.0%        (less than 30 days) of motor vehicles, unless the                  Tourism 
                                             vehicle:                                                           Leasing 
                                             •  temporarily replaces a motor vehicle being re-                  Return
                                             paired under a repair or insurance agreement,
                                             •  is registered for a gross laden weight of 
                                             12,001 or more pounds, or
                                             •  is a moving van for personal household goods

   Short-term rentals    County  Up to       Short-term rentals of off-highway and recreational        1%       Sales 
   of Off-highway and            7.0%        vehicles, including: snowmobiles; motorcycles;                     Tourism 
   Recreational Vehicles                     all-terrain type I, II and III vehicles; travel trailers;          Leasing 
                                             camping trailers and fifth wheel trailers. Does not                Return
                                             apply to motor vehicles.
   Restaurant            County  Up to       Food, food ingredients and prepared food sold by          None     Sales 
                                 1.0%        a restaurant                                                       Prepared 
                                                                                                                Food Return

   911 Emergency         State   $0.71 per   Local exchange service switched access line, radio        1.5%     Emergency 
   Services Charge               access      communication access line, voice-over-Internet-                    Services 
                                 line        protocol (VoIP)                                                    Telecom

   Radio Network Charge  State   $0.52 per   Local exchange service switched access line, radio        None     Emergency 
   to fund the public            access      communication access line, voice-over-Internet-                    Services 
   safety communica-             line        protocol (VoIP)                                                    Telecom
   tions network

   Unified Statewide     State   $0.25 per   Local exchange service switched access line, radio        1.5%     Emergency 
   911 Emergency                 access      communication access line, voice-over-Internet-                    Services 
   Service Charge                line        protocol (VoIP)                                                    Telecom

   Municipal Telecom     City or Up to       Charges for telecommunications services                   None     Municipal 
   License Tax           town    3.5%                                                                           Telecom 
                                                                                                                License Tax

   Municipal Energy      City or Up to       Sales of natural gas and electricity                      1%       Sales 
   Sales and Use Tax     town    6.0%                                                                           Municipal 
                                                                                                                Energy

   Prepaid Disposable    State   4.9% of     A prepaid wireless 911 service charge of 3.7 per-         3%       Misc Sales 
   Phones and Prepaid            transaction cent and a prepaid wireless telecommunications                     Fees – 
   Disp. Phone Minutes           amount      service charge of 1.2 percent (4.9 percent com-                    Charges Ret
                                             bined) are imposed on the sales price of prepaid 
                                             disposable cell phone minutes.
   Waste Tire Fee        State   $1.00 per   Sales of new tires with a rim size up to 24½ inches.      2.50%    Misc Sales 
                                 tire        Sales tax exemptions do not apply to the fee.                      Fees – 
                                             The fee does not apply to used tires, bicycle tires,               Charges Ret
                                             tires attached to human-propelled devices, or tires 
                                             sold and delivered out of Utah.

   Electronic Vehicle    State   12.5%       Sales of electricity by a charging station to charge      6%       Misc Sales 
   Charging                                  an electric vehicle or for a vehicle charging                      Fees – 
                                             subscription                                                       Charges Ret

                                                                                                                       page 8

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Other Information • Sales to Utah state and local government agencies (see
The following miscellaneous taxes and fees may also apply. Publication 56 for lodging-related sales).
Contact the Tax Commission for more information. • Sales of construction materials to most Utah government
• Motor fuel, aviation fuel, and special fuel taxes agencies — only if installed by the agencies’ employees.
• Locomotive fuel Construction materials bought by or for public elementary
and secondary schools are exempt from sales tax. The
• Lubricating oil fee construction materials must be clearly identified and seg-
• Beer, cigarette, e-cigarette, tobacco and nicotine products regated, and they must be installed or converted to real
taxes property owned by the school. See Rule R865-19S-23.
• Royalty payment on unprocessed brine shrimp eggs To qualify for this exemption, the purchase must be made
• Multi-channel audio and video tax with the government agency’s funds. A purchase does not
qualify for this exemption if a government employee makes
• Sexually explicit business and escort service tax the purchase with personal funds, even if the government
agency reimburses the employee.
Sales and Use Tax Exemptions • Sales to U.S. government employees traveling on official
Utah law provides some exemptions from sales and use tax. business, if they present one of the following:
See Utah Code §59-12-104 for more information. • a complete and signed form TC-721G, Exemption
Certificate for Governments, Foreign Diplomats &
Exemption Certificates Schools;
When an exemption certificate is required, the buyer must • a check from the government agency;
provide the seller with the exemption information in one of
two ways: • a purchase order; or
1. On a paper exemption certificate: form TC-721, • a voucher.
Exemption Certificate; or form TC-721G, Exemption Sellers must keep proof that the purchase qualifies for
Certificate for Governments & Schools. the exemption, such as a copy of the government check,
A buyer needs to provide a signature when using a paper purchase order, voucher or signed form TC-721G.
certificate. • Sales made to or by:
2. Electronically • a local agency on aging;
If the exemption information is provided electronically, all the • a senior citizen center owned by a county, city or town;
information required on the paper form must be included. and
A seller can accept exemption certificates at face value. A • a senior citizen center that contracts with a local
seller is not liable for improper exemptions unless the seller agency on aging.
takes part in claiming a fraudulent exemption. • Purchases by certain enrolled members of Native
Sellers must keep exemption certificates in their records as American tribes (including the tribe itself), if:
documentation. A seller may use a certificate on file for its • the member has a tribal card showing a Federal
customers’ future purchases. A seller must require a new Bureau Number;
exemption certificate if more than 12 months have passed
since the buyer’s last purchase. A buyer must notify the seller • the purchased item is delivered to the enrolled tribal
if a certificate on file is cancelled, modified or limited. member’s own reservation (in the case of the Ute
Indian Tribe, the item must be purchased on or deliv-
ered to tribal trust lands within the Uintah and Ouray
Types of Exemptions reservations); and
There are three types of sales tax exemptions, based on:
• in the case of sales to the tribe itself, the buyer must
1. Entity (exemption certificate required for sales to an present a purchase order, exemption certificate, or
exempt entity) similar evidence of tribal identity.
2. Use (exemption certificate required) Sales made off the reservation to enrolled members of
3. Product (exemption certificate not required) the tribe are taxable. They are exempt from tax only if the
seller (or a licensed common carrier) delivers the pur-
Entity-Based Exemptions chased item(s) to the reservation.
An entity-based exemption is determined by who buys or • Sales to foreign diplomats. The U.S. State Department and
sells the product. the American Institute in Taiwan grant a tax exemption to
Some common exemptions are: eligible foreign officials assigned to the United States. Tax
exempt foreign officials and government offices are issued
• Sales to a public transit district or a subcontractor of a pub- a Tax Exemption Card, valid nationwide. The card lists the
lic transit district, if the tangible personal property is clearly person’s name, photograph, mission employed by, expira-
identified and installed or converted to real property owned tion date and identification number.
by the public transit district.
The exemption cards are used at point-of-sale for exemp-
• Sales to United States government agencies. tion from state and local sales, restaurant and lodging/
• Sales to entities exempt from state taxes by federal law. occupancy taxes. These cards DO NOT exempt taxes on
utilities, gasoline or vehicle purchases (see Publication
5 for more information about vehicle purchases and
Publication 66 for more information about gasoline pur-

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chases). The type of exemption is shown by an eagle, owl, • Sales to or by a Utah aircraft maintenance, repair and
deer or buffalo on the bottom corner of the card. The items overhaul provider to maintain, repair, overhaul or refurbish
exempted are listed on the back of the card. a fixed-wing turbine-powered aircraft that is not registered
Sellers must keep a copy of the card or a valid exemption in Utah.
certificate as proof of the exempt sale.
Use-Based Exemptions
For more information on the Tax Exemption Program, A use-based exemption is determined by the buyer’s use of
see the Office of Foreign Missions (OFM) web site, the product.
state.gov/ofm/tax, or contact the OFM San Francisco
regional office at 415-744-2910. The following are exempt:
• Sales of feed, seed, baling ties, etc. to commercial farms. • Sales of certain vehicles for exclusive use outside of Utah.
• Sales of tangible personal property and products trans- • Products purchased for resale in the regular course of
ferred electronically for primary use in farming operations. business, either in their original forms or as ingredients or
Also, charges for labor, parts and supplies to repair and components of a manufactured or compounded product.
maintain off-road agricultural machinery. • Sales for resale or lease. The lease of tangible personal prop-
• Sales of electricity and fuel for industrial use as defined in erty and products transferred electronically is also exempt if it
Utah Code §59-12-102. meets all of the following conditions:
• Sale or lease of semiconductor fabricating, processing, • the property is part of a sale-leaseback transaction,
research or development materials. • sales or use tax was paid on the initial purchase of the
• Sales relating to schools and fundraising (see Publication property, and
35). • the leased property will be capitalized and the lease
• Sales to religious or charitable institutions. payments will be accounted for as payments made
under a financing arrangement.
• If the purchase is $1,000 or more, the buyer takes the
exemption at the point of sale. • Purchases of tangible personal property and products
transferred electronically when sales and use tax is paid to
• If the purchase is less than $1,000, the buyer claims another state, unless the other state’s tax rate is lower than
the exemption by submitting form TC-62N, Utah Sales Utah’s rate. When the tax rate is lower than Utah’s rate, the
Tax Refund Request, to the Tax Commission. buyer must pay the difference. No adjustment or credit is al-
• If a public utility makes the sale to a religious or chari- lowed if the other state’s tax rate is greater than Utah’s rate.
table institution, the exemption must be taken at the • Purchases of fuel, gas and electricity predominantly used
point of sale. for industrial use.
• If a contract exists between the seller and the religious • Purchases or leases of machinery, equipment, repair or
or charitable institution, the buyer may take the exemp- replacement parts or materials (except office equipment
tion at the point of sale regardless of the dollar amount and supplies) used or consumed:
of the sale.
• by a qualified manufacturing facility or scrap recycler to
To be eligible for the exemption, the organization must be produce an item sold as tangible personal property.
exempt under IRC Section 501(c)(3) and have a sales tax
exemption number from the Tax Commission. Submit form • used in a Utah mining production process or research
TC-160 to get a tax exemption number. and development, by a business described in NAICS
212, Mining (except Oil and Gas) or NAICS 213113,
• Sales of construction materials to a religious or charitable Support Activities for Coal Mining.
institution, or to a contractor buying for a religious or chari-
table institution. • by a qualified web search portal facility or medical
laboratory for the operation of the establishment.
• Sales of aircraft, boat and river-running tours.
• Purchases or leases of machinery, equipment and normal
• Amounts paid for aircraft tours are exempt if the craft operating repair or replacement parts, with an economic
enters a federal airway (designated by the Federal life of three or more years, used in Utah to perform quali-
Aviation Administration) during the tour. fied research.
• Amounts paid for boat tours, scenic cruises, and • Purchases of construction materials used to construct
similar services are exempt from tax if the waters of a new or expanding life science research and develop-
the tour or cruise are used as highways for interstate ment facility in Utah. The facility must be owned, leased or
commerce. rented by a life science establishment, and research and
For more information, see Rule R865-19S-113. development must take place in at least 51 percent of the
• Sales of grocery food, prepared food or alcoholic bever- total area of the facility. The construction materials must be
ages by a church or a charitable institution, if the items are clearly identified, segregated and installed or converted to
not available to the general public. real property. Life science establishments are described in
NAICS 33911, 334510 and 334517.
• Sales of grocery food, prepared food or alcoholic bever-
ages by a higher education institution, if the items are not • Purchases of materials for the construction, operation,
available to the general public and are prepaid as part of a maintenance, repair or replacement of facilities owned by
student meal plan offered by the institution. or constructed for:
• Sales of grocery food, prepared food or alcoholic bever- 1. a distribution electrical cooperative, or
ages provided at a medical or nursing facility for inpatient 2. a wholesale electrical cooperative.
meals. See Rule R865-19S-61.

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• Purchases of machinery, equipment or normal operating 4. short-term lodging.
repair or replacement parts that: • Purchases or leases of items used to create prepared
1. are used in a qualifying data center as defined in food, only if:
Utah Code §59-12-102, 1. the ownership of both the seller and the buyer are the
2. are used in the operations of the qualifying data same, and
center or in an occupant’s operations in the qualifying 2. either the seller or the buyer paid Utah sales tax prior
data center, and to making the sale.
3. have an economic life of one or more years. • Purchases of machinery and equipment by amusement,
• Charges for labor to repair or renovate tangible personal gambling and recreation industries (NAICS Subsector
property or products transferred electronically, if the per- 713), only if:
sonal property being repaired is exempt under Utah Code 1. the machinery or equipment has an economic life of
§59-12-104. three or more years,
• Sales of parts used in the repair or renovation of the fol- 2. the machinery or equipment will be used by payers of
lowing exempt tangible personal property: admissions or user fees, and
• tools or equipment used exclusively under an aero- 3. at least 51 percent of the buyer’s sales revenue for the pre-
space or electronics industry contract with the United vious calendar quarter came from admissions or user fees.
States government;
• Purchases of machinery and equipment, or normal operat-
• tangible personal property and products transferred ing repair or replacement parts, only if the machinery:
electronically used or consumed primarily and directly
in farming operations; 1. is used by an electronic financial payment service
(NAICS Code 522320), and
• snow-making equipment, ski slope grooming equip-
ment, and passenger ropeways; 2. has an economic life of three or more years.
• Sales of non-returnable containers, labels, bags, shipping
Product-Based Exemptions
cases and casing to a manufacturer, processor, wholesaler A product-based exemption is determined by the type of
or retailer for use in packaging tangible personal property product. An exemption certificate is not required.
for resale.
The following are exempt:
• Purchases of lists or databases used to address direct mail.
• Isolated or occasional sales, if the sale is made by a per-
• Purchases or leases by a telephone service provider of son who does not typically sell that type of product. This
equipment, machinery or software that have a useful exemption does not apply to sales of products for resale
economic life of one or more years and are used for the or to the sale of a vehicle or vessel that must be titled or
following telecommunication purposes: registered in Utah.
• enabling or facilitating, • Purchases of prescription drugs. A drug is defined as a
• 911 service, compound, substance or preparation that is used to diag-
• maintenance or repair, nose, cure, mitigate, treat or prevent disease, or to affect
the structure or function of the human body. Food, dietary
• switching or routing, or supplements, alcoholic beverages and prosthetic devices
• transmission. are not considered drugs. Sales of drugs are exempt from
• Purchases of property from another state that is brought sales and use tax only if the buyer presents a prescription.
into Utah, only if the property is: • Sales or rentals of durable medical equipment, including
1. used for business, replacement and repair parts. Sales or rentals of durable
medical equipment are exempt from sales and use tax
2. first used outside Utah, only if the buyer presents a prescription for the equipment.
3. not a vehicle, and • Sales or rentals of mobility-enhancing equipment to help
4. not rented or leased. a person with limited mobility move from one place to
• Purchases of certain consumable items by short-term another. Sales or rentals of mobility-enhancing equipment
lodging providers, only if the items are: are exempt from sales and use tax only if the buyer pres-
ents a prescription for the equipment.
1. used by guests,
• Sales of prosthetic devices, including repair and replace-
2. included in the full sales price of the lodging, and ment parts. Eyeglasses and contact lenses are not prosthet-
3. not listed separately on the invoice. ic devices. Sales or rentals of prosthetic devices are exempt
See Publication 56. from sales and use tax only if a prescription is required for
the device or it is purchased by a hospital or medical facility.
• Purchases of items (except machinery, equipment, parts,
office supplies, electricity, gas, heat, steam or fuel) that are • Sales of disposable home medical equipment or supplies
essential for and entirely consumed to provide the taxable that cannot withstand repeated use. Sales of disposable
service of: home medical equipment or supplies are exempt from
sales and use tax only if the buyer presents a prescription
1. telecommunications; for the equipment or supplies. The equipment and sup-
2. admissions; plies must be eligible for payment under Title XVIII, federal
3. cleaning, repair or renovation of tangible personal Social Security Act or the state plan for medical assistance
property (including laundry and dry cleaning ser- under Title XIX, federal Social Security Act.
vices); or
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• Forty-five percent of the sales price of a new manufactured exemption certificates (TC-721) showing the buyer is
home, and 100 percent of the sales price of a used manu- enrolled in courses offered by an institution of higher
factured home. education.
• Fees for indoor skydiving, rock climbing or surfing if a • Sales of fuel cells (see Utah Code §54-15-102).
trained instructor is included and actively instructing the • Charges for database access if the primary purpose is
participant. to access information from the database. The exemption
• Fees for unassisted amusement devices, such as arcade does not include purchases of digital audioworks, digital
games. audio-visual works or digital books.
• Sales of unassisted carwashes, and unassisted dry clean-
ing and laundry services.
Calculating Sales Tax
• Interstate sales delivered by common carrier or by the
seller to a place outside Utah. The licensed seller or Taxable Transactions
retailer must keep a copy of the bill of lading, freight bill, Sales and leases of tangible personal property, products
form TC-757 or other proof of out-of-Utah delivery. If the transferred electronically, and certain services are taxable
property is delivered within Utah to a buyer, the tax ap- to the final consumer. The following transactions are taxable
plies, even if the buyer takes the property out of Utah. See unless an exemption applies:
Rule R865-19S-44. • Retail sales or purchases of tangible personal property
• Sales of motor fuels and special fuels subject to Utah fuel and products transferred electronically within Utah.
excise tax. • The storage, use or consumption in Utah of tangible per-
• Sales of hay. sonal property and products transferred electronically.
• Exclusive sale of seedling plants, or garden, farm or other • Rentals and leases of tangible personal property and prod-
agricultural produce, if sold during the harvest season ucts transferred electronically, if:
by the producer, an employee of the producer, or by a • the location of the product is in Utah;
member of the producer’s immediate family. If the producer
sells any other product, tax is due on all sales. • the lessee took possession of the product in Utah; or
• Sales of telephone service charged to a prepaid telephone • the product is stored, used or otherwise consumed in
calling card. Utah.
• Sales of newspapers or newspaper subscriptions. • Labor to repair, renovate and clean tangible personal prop-
erty and products transferred electronically. This includes
• Sales of water in a pipe, conduit, ditch or reservoir. maintenance agreements.
• Room and trailer space rentals for 30 consecutive days or • Labor to repair, upgrade or maintain products transferred
more. electronically. This includes maintenance agreements.
• Sales of currency or coinage that is legal tender of the • Laundry and dry cleaning services when the labor is not
United States or of a foreign nation. performed by the buyer.
• Sales of an ingot, bar, medallion or decorative coin con- • Admission or user fees for theaters, movies, operas, muse-
taining at least 50 percent gold, silver or platinum that is ums, planetariums, shows, exhibitions, concerts, carnivals,
not legal tender of any nation. amusement parks, amusement rides, circuses, menager-
• Sales of a note, leaf, foil or film that are used as a currency ies, fairs, races, contests, sporting events, dances, boxing
but are not legal tender and contain at least 50 percent matches, wrestling matches, closed circuit television
gold, silver or platinum (not including any transparent poly- broadcasts, billiard parlors, pool parlors, bowling lanes,
mer holder, coating or encasement). golf, miniature golf, golf driving ranges, batting cages,
• Admissions to higher education athletic events. skating rinks, ski lifts, ski runs, ski trails, snowmobile trails,
tennis courts, swimming pools, water slides, jeep tours,
• Sales of textbooks, if: horseback rides, sports activities, or any other amuse-
1. the textbook is required for a higher education ment, entertainment, recreation, exhibition, cultural, or ath-
course, letic activity. User fees include access charges for videos,
2. the seller is not a bookstore owned by an institution of video games, television programs and cable or satellite
higher education, broadcasts, if that access occurs anywhere other than the
buyer’s home.
3. the buyer is enrolled in a course offered by an institu-
tion of higher education, and • Use of assisted amusement devices when the device or
ride is not operated by the buyer.
4. at least 51 percent of the seller’s sales for the previ-
ous calendar quarter are sales of textbooks for a • Assisted cleaning or washing of tangible personal property
higher education course. if the cleaning or washing labor is not performed by the
buyer.
A Utah institution of higher education means: Dixie State
University, Salt Lake Community College, Snow College, • Stays at tourist homes, hotels, motels, campgrounds,
Southern Utah University, University of Utah, Utah System trailer courts and similar accommodations usually rented
of Technical Colleges, Utah State University, Utah Valley for less than 30 consecutive days.
University, Utah State University Eastern, Weber State • In-state telecom services.
University. • Meals (prepared food) at restaurants or other eating
Sellers must keep records to verify these conditions for places.
each sale. Additionally, a seller’s records must include

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   •  Sales for commercial use of gas, electricity, heat, coal,       4.  The date of the purchase.
   fuel-oil or other fuels. (Sales of these items for industrial      You must use the most current London fixing price for the 
   use may qualify for an entity-based exemption.)                    type of coin used to determine the tax due in dollars. 
   •  Sales for residential use of gas, electricity, heat, coal, fuel-
   oil or other fuels. These products are taxed at the state 
   rate of 2 percent plus any applicable local and/or public          Filing and Reporting 
   transit tax.                                                       Requirements
   •  Sales of grocery food. Taxed statewide at the rate of 3 
   percent. (Sales of prepared food are taxed at the full com-        Accounting Methods
   bined rate.)                                                       Sellers must use accrual basis accounting to report sales 
   •  Sales of prepaid telephone calling cards, including vending     and use tax (see exceptions below).  Report all sales and 
   machine sales of prepaid telephone calling cards, if the           use tax on goods sold and consumed during a filing period 
   card can be used for in-state calls.                               on the return for that filing period (see Filing Frequency).
   •  Sales of memberships that entitle the buyer to discounted       You may only use cash basis reporting if one of the following 
   or free merchandise or services that are subject to sales          circumstances applies:
   tax. For example:                                                  •  a sale includes delivery or installation of tangible personal 
   1.  Memberships that let card holders enter a warehouse            property at a location OTHER than the seller’s place of 
       and buy merchandise free of additional markup.                 business (the seller must state the delivery or installation 
                                                                      on the invoice), or
   2.  Video memberships that let members rent videos at a 
       reduced price.                                                 •  a buyer who converts tangible personal property into real 
                                                                      property chooses to report use tax on a cash basis — only if 
     All purchases made with these membership cards are sub-          the buyer is not required to pay use tax on a monthly basis.
   ject to sales tax at the time of purchase unless an exemp-
   tion applies.
                                                                      Returns
   •  Sales of products transferred electronically, if a physical     Every sales and use tax account must electronically file a 
   copy of the product would be taxable. For example, the             Sales and Use Tax Return for each filing period. Depending 
   purchase of a music CD is taxable, so downloaded music             on the nature of your business, you may also need to file 
   is also taxable. For more information, see the Additional          schedules with your return (see Forms and Schedules, be-
   Information section.                                               low). File returns and schedules at tap.utah.gov.
   •  Sales of leased tangible personal property from the lessor      If you are liable for sales-related taxes (transient room, res-
   to the lessee (including vehicle lease buyouts).                   taurant, motor vehicle rental, waste tire, etc.), you must file a 
                                                                      return for each type of tax or fee.
   Taxes and Fees                                                     Returns are due the last day of the month following each 
   Imposed on the Seller                                              filing period. When a due date falls on a weekend or legal 
   Municipalities may impose and collect a license fee or tax,        holiday, the return is due the next business day.
   other than taxes imposed under the Utah Sales and Use Tax 
   Act, as allowed by law. You must include city-imposed taxes        Filing Frequency
   (other than taxes imposed under the Utah Sales and Use             Your filing frequency depends on your yearly sales tax liability:
   Tax Act) in the taxable sales you report on your Utah Sales        •  If your sales tax liability is less than $1,000 per year, you 
   and Use Tax Return.                                                may file annually.
                                                                      •  If your sales tax liability is between $1,000 and $50,000 
   Example: A seller makes a $100 sale in a city that has             per year, you may file quarterly.
   imposed a 2 percent gross receipts tax on revenues. 
   City and state taxes are calculated as follows:                    •  If your sales tax liability is $50,000 or more, you must file 
                                                                      monthly.
   Taxable sales                                  $100.00             The Tax Commission will set your filing frequency and notify 
   City-imposed tax @ 2%                              2.00            you if it changes.
   Amount subject to state and local taxes        $102.00
   Combined sales tax rate @ 6.125%               x.06125             You will file the following at the same time you file your sales 
   State and local sales taxes paid to the state    $6.25             tax return:
   Transaction total (cost of item plus taxes)    $108.25             •  Municipal energy sales and use tax
                                                                      •  Municipal telecom license tax
                                                                      •  Lubricating oil recycling fee
Payments by Gold or Silver Coin                                       •  Waste tire recycling fee
   If you agree to accept gold or silver coin in payment for a 
   purchase, you must state in your books and records and on          •  Multi-channel video and audio service tax
   any invoice all of the following:                                  •  911 emergency services charge
   1.  The purchase price of the item in gold or silver coin and      •  Radio network charge to fund the public safety communi-
   in dollars.                                                        cations network
   2.  The amount of sales tax due in gold or silver coin and in      •  Unified statewide 911 emergency service charge
   dollars.                                                           •  Disposable cell phone fee
   3.  The tax rate that applies to the purchase.                     •  Electric vehicle charging tax

                                                                                                                           page 13

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Forms and Schedules The purchase of printed advertising inserts is taxable unless
the inserts contain the name and publication date of the
What to File newspaper distributing the inserts and are included in and
TC-62S, Sales and Use Tax Return, Single Place of distributed with the newspaper. See Rule R865-19S-65.
Business — For sellers with one fixed Utah location. TC-62S Report use tax on your Sales and Use Tax Return.
filers do not need to file schedules.
TC-62M, Sales and Use Tax Return, Multiple Places of Business
Employee Incentives and Discounts
— For all other sellers, including those with multiple Utah busi- If a seller’s employees earn credit (dollars or points) toward
ness locations, no Utah location, or no fixed place of business. purchases of its goods or services as part of an incentive
Sellers file TC-62M if they need to report: program, the dollar value of the credit is included in the total
• vending machine sales with multiple inventory locations, sales price. Employee incentive program credit is not an
• sales in Utah from a non-fixed place of business, employee discount.
• sales exempt from the resort tax in a resort community, Employee discounts that are not reimbursed by third parties
are discounts that are not included in the sales price.
• sales exempt from the state correctional facility tax in Salt Lake
City,
Bad Debts
• sales of tangible personal property or products transferred
Only a seller may claim bad debts. A seller may take a sales tax
electronically that are sent into Utah by sellers outside of Utah.
adjustment for bad debts. You must deduct nontaxable amounts
TC-62M filers must also file one or more of the following (such as cash back to the customer and exempt charges) from
schedules: the total amount of the bad debt amount to arrive at the net
• Schedule A, for sales of non-food and prepared food from write-off amount.
multiple fixed Utah business locations, based on the seller’s To find the amount of the adjustment you may claim on your
location. Sales and Use Tax Return, divide the net write-off (W) by one
• Schedule AG, for sales of grocery food from multiple fixed (1) plus the local combined sales tax rate (R) at the time of sale.
Utah business locations, based on the seller’s location. W ÷ (1 + R) = adjustment
• Schedule J, for sales of non-food and prepared food re-
ported based on the customer’s location, products shipped Example: A retailer has a net write-off of $100. The
to customers in Utah, or tangible personal property or retailer’s combined sales tax rate is 6.5 percent (.065).
products transferred electronically at a location other than The retailer divides $100 by 1.065 to arrive at an adjust-
a fixed place of business. ment claim of $93.90.
• Schedule JG for sales of grocery food reported based on
the customer’s location. You may not take a credit for repossessed items other than
• Schedule X for sales exempt from the resort communities motor vehicles. See Publication 5, Sales Tax Information for
tax or the state correctional facility tax. Motor Vehicle/Marine Dealer/Body & Repair Shops.

Seller Discount Online Payments
Monthly sales tax filers may take a seller discount equal to You can pay sales tax online at tap.utah.gov with a credit
1.31 percent of the combined sales tax. Monthly tourism card (American Express, Discover, MasterCard or Visa)
tax filers may take a seller discount equal to 1 percent of or electronic check (direct debit to a checking or savings
the tourism short-term leasing tax adopted by the county. account).
Sellers of grocery food may take the seller discount of 1.31 A convenience fee is applied to some payment methods to
percent as if they had collected tax at the full combined rate. cover service costs. If a convenience fee is required, it is
Quarterly and annual filers may not take the seller discount. clearly listed before you complete the transaction. If you pay
online, you must still file a separate return if one is due.
Goods Consumed by the Seller
Items consumed by the seller are subject to use tax on the Electronic Funds Transfer (EFT)
amount of the seller’s cost, not the potential sales price. If your annual sales tax liability is $96,000 or more, you must
Items consumed by the seller include: pay by Electronic Funds Transfer (EFT). Pay online by ACH
• items taken from inventory and used by the seller, debit at tap.utah.gov.
• samples given away for advertising, and You can schedule EFT payments up to 130 days before
the due date and the payment can be withdrawn from your
• products consumed by employees without payment.
account on the day you select. (WARNING: If the day you se-
When you buy products from local businesses for storage or use, lect is later than the return due date, we will assess penalty
you must pay tax at the time of purchase. For example, office and interest.)
supplies and equipment (such as cash register tapes, returnable
You may also pay with ACH credit. See Electronic Funds
containers and furniture) are taxable at the point of sale.
Transfer - EFT at tax.utah.gov/billing/payments.
A seller may purchase tax-free grocery bags, sacks and
other non-returnable packaging material that go out the door
with the customer. Caution: Do not use other payment methods, such as
credit cards, to pay current returns if you must pay by
No tax is due on items discarded because of spoilage, bro- EFT. Other payment methods do not meet EFT filing
ken packaging and similar incidents, because they are not requirements and you will lose your seller discount.
consumed by the seller.

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   EFT filers may pay past-due liabilities with other payment        1.  Explanation of the changes
   methods.                                                          2.  Documentation provided by the purchaser proving 
                                                                       they were exempt from the tax (such as an Exemption 
   Penalties                                                           Certificate) 
   The penalty for failure to file a tax-due return by the due       3.  Proof that you credited or refunded the tax to the 
   date is the greater of $20 or up to 10 percent of the unpaid        purchaser
   tax, based on the date the return is filed. Failure to file a tax 
   return includes filing a tax return without enough information    4.  Adjustments only: calculation of adjustment amount 
   for us to correctly distribute local tax revenues. We will add      (refunded tax divided by current period’s tax rate)
   another failure-to-pay penalty, the greater of $20 or up to 10    5.  Adjustments only: schedule showing which period(s) the 
   percent of the tax balance, if the tax balance remains unpaid       taxes were originally reported to the Tax Commission 
   90 days after the due date.                                         and, if multiple locations, the locations being adjusted
   The penalty for failure to pay the full amount of tax due on a    Explain your basis as prompted and provide the above docu-
   timely-filed return, or within 30 days of a notice of deficiency, ments upon request.
   is the greater of $20 or up to 10 percent of the tax due,         If you have multiple business locations and/or a non-fixed lo-
   based on the payment date. Unpaid tax includes tax paid           cation you must also amend or adjust the appropriate return 
   without a tax return.                                             schedules for the location(s) where you originally reported 
   You will also lose the seller discount if you file your monthly   the tax.
   return late or underpay the tax due.                              Do not adjust your sales and use tax return to claim a credit 
   Penalties are imposed at a graduated rate, based on the           for taxes paid to another seller. Instead, you must seek a 
   time period of the delinquency.                                   refund from the seller or apply for a refund from the Tax 
   See Publication 58, Utah Interest and Penalties, online at        Commission using form TC-62PR, Application for Purchaser 
   tax.utah.gov/forms.                                               Refund of Utah Sales Tax. (See Purchaser Refunds.)

   Interest                                                          Record Keeping Requirements
   Interest is assessed from the original due date until the tax     From Rule R865-19S-22
   liability is paid in full. See Publication 58, Utah Interest and  Every retailer, lessor or person doing business in Utah must 
   Penalties, online at tax.utah.gov/forms.                          keep complete records used to determine their sales and 
                                                                     use tax liabilities. You must keep records for three years from 
   Overpayments and Refunds                                          the date you file your tax return. Your records must be avail-
   You may file a claim for a credit or an overpayment refund        able to the Tax Commission in their original format (paper or 
   within either three years from the return due date or two         electronic).
   years of paying the tax to the Tax Commission, whichever          Your records should:
   is later. However, you may not file a claim for a credit or a     •  show all gross receipts from Utah sales or leases of tan-
   refund on a tax deficiency that has been legally settled. If we   gible personal property, products transferred electronically, 
   deny your claim, you may file a Petition for Redetermination.     or services.
   Purchaser Refunds                                                 •  show deductions and exemptions claimed on sales tax 
   If you pay Utah sales tax to a seller and later find the pur-     returns.
   chase was taxed incorrectly, ask the seller to credit or refund   •  show bills, invoices and similar proof of all tangible person-
   the overpaid tax. If the seller is no longer in business or does  al property and products transferred electronically bought 
   not provide a credit or refund, you may request a refund          for sale, consumption or lease in Utah.
   directly from the Tax Commission using form TC-62PR,              •  include original supporting documents (bills, receipts, 
   Application for Purchaser Refund of Utah Sales Tax. For           invoices, cash register tapes, etc.) and all schedules or 
   more information, see tax.utah.gov/sales/refund-request.          working papers used to prepare tax returns.
   Use Tax and Bad Debts                                              Note: It is a third degree felony to knowingly sell, 
   To claim a refund or credit for use tax and bad debts, amend        buy, install, transfer, use or possess any auto-
   the sales tax return the tax was reported on, or make an            mated sales suppression device or phantomware 
   adjustment on your next sales tax return.                           with the intent to defraud.
   You must explain the legal basis for your refund. If amending     See additional record keeping requirements in Rule 
   a return, explain your legal basis as prompted and provide        R861-1A-35. 
   supporting documents upon request.
   If you have multiple business locations and/or a non-fixed loca-  Reminders
   tion you must amend or adjust the appropriate return schedules    The information in this publication is only a summary and 
   for the location(s) where you originally reported the tax.        does not include all sales or use tax laws and rules.
                                                                     1.  You must collect sales tax on all taxable sales of tangible 
   Seller Amendments and Adjustments                                   personal property, products transferred electronically and 
   If you are a seller who has credited or refunded previously         services to the final consumer.
   reported sales taxes, you may either amend the return(s) the      2.  You must file a Sales and Use Tax Return for every pe-
   taxes were originally reported on or claim an adjustment on         riod, even when no tax is due.
   your next sales tax return. Your amendment or adjustment 
   must include the following:                                       3.  You must notify the Tax Commission in writing if you 
                                                                       change business locations or add or close sales outlets.
                                                                                                                          page 15

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4. If you stop doing business, you must notify the Tax
Commission in writing within 30 days of the final date you Example 3
were required to collect sales tax. As a fundraising activity, a scout troop offers to dry cars
coming out of a carwash. The scouts are not paid by
5. You must keep your records for three years from the filing the carwash, so their labor is not a factor in whether the
date of a return. carwashes are assisted or unassisted.
6. Records are subject to audit by the Tax Commission.
7. Sales tax licenses are not transferable.
8. Goods purchased tax-free but used or consumed by you Cigarette, Tobacco, Nicotine
or your company must be reported on the Sales and Use Products and E-Cigarette Products
Tax Return. You must pay use tax on goods you or your A business selling cigarettes and/or tobacco products or
company consume. e-cigarette products must be licensed for each selling loca-
9. You must keep exemption certificates from your exempt tion. See Pub 65, Tax Information for Cigarettes, Tobacco
customers to prove nontaxable sales. Products, Nicotine Products and Electronic Cigarette
Products.
10. You must document out-of-state sales with a bill of lading
or other proof of shipment. The terms of the sale must Sales of cigarettes and/or tobacco products are subject to
require shipment of the property across Utah’s borders sales tax.
by the seller.
11. Round tax up to the next whole cent whenever the third Coupons
decimal place is greater than four. Coupons for which a seller is reimbursed by a third party
(such as a manufacturer or distributor) do not reduce the
sales amount subject to tax. The taxable amount is the sales
Additional Information price of the item before the value of the coupon is deducted.
An in-store coupon issued by the seller is considered a reduc-
Bundled Transactions tion in the sales price. The taxable amount is the amount paid
A bundled transaction is the retail sale of two or more sepa- for an item after deducting the value of the in-store coupon.
rate products that are sold for one combined price. If any
part of the bundled transaction is subject to tax, the entire
transaction is taxed unless the seller keeps separate records Coupon Books, Gift Cards
of the tax-exempt portion of the transaction. and Gift Certificates
The sale of coupon books is taxable. Collect sales tax on the
sales price when the books are sold. Buying paper for the
Car-sharing
books and the printing of the books are resale purchases
Certified individual-owned car-share vehicles are subject to a
exempt from tax.
reduced sales tax rate by the car-share program. To become
certified, a car-share vehicle owner must complete form Sales of gift cards and gift certificates are not taxable. Treat
TC-159 and provide the required documentation to the Tax the cards and certificates like cash and collect sales tax on
Commission. Car-share vehicles rented for periods of less taxable transactions. Buying card stock or paper to make the
than 30 days are also subject to state and county short-term card or certificate is taxable.
motor vehicle rental taxes unless a vehicle is being rented to
temporarily replace a vehicle that is being repaired under a Direct Mail
repair or insurance agreement. A direct mailer may either pay sales tax directly to the printer
or give the printer a signed exemption certificate (form
Carwashes TC-721). Direct mail is not exempt from sales tax. An exemp-
Assisted carwashes are subject to sales and use tax. A tion certificate simply shifts who is responsible to report and
carwash is assisted if the labor to clean or wash is primarily pay the tax. By using an exemption certificate, the direct
performed by a carwash employee. Assisted carwashes that mailer reports the tax on its Sales and Use Tax Return rather
only include the cleaning or washing of a vehicle’s exterior than the printer collecting the tax.
are exempt from sales tax.
A business location that sells both assisted (including wash- Food Stamps and WIC
ing or cleaning of the vehicle interior) and unassisted car- Sales of food paid with federal food stamps or Women,
washes must collect tax on all its sales unless those assisted Infants and Children (WIC) coupons are exempt from sales
and unassisted sales are recorded separately. and use tax.

Example 1 Money Order, Fax and
A customer buys a carwash and the car is washed by Photocopy Charges
machines. This is an unassisted carwash and is not Money order fees and charges to send a fax are not subject
subject to sales tax. to sales tax. Photocopy charges and charges to receive a fax
are taxable.

Example 2 Newspapers and Postage
A customer buys a machine carwash, but a carwash Sales of newspapers and postage stamps are exempt from
employee vacuums the interior and cleans the inside sales tax.
windows. This is a taxable assisted carwash and is
subject to sales tax.

page 16

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To qualify as a newspaper, a publication must: If the business has a Utah sales tax license, it must collect
• be published daily or weekly, and pay the sales tax. If the business is not required to have
a Utah sales tax license, it does not have to collect the tax.
• be printed for circulation among the general public, However, the customer must report and pay the tax directly
• contain matters of general interest, to the Tax Commission.
• report on current events, and
• not create a book when multiple issues are put together. Trade-in on Manufactured Homes
Utah Code §59-12-104 provides an exemption of 45 percent
Sales of tabloids (e.g., Enquirer, Star, Globe) and magazines of the sales price of a new manufactured home and 100
(e.g., Newsweek, Ladies Home Journal, Time) are taxable. percent of the sales price of a used manufactured home.
When there is a trade-in, calculate the sales price subject to
Premiums and Gifts the exemption as follows:
A premium or gift given away with the sale of a taxable prod-
uct is part of that sale, and the purchase of the premium or 1. Subtract the trade-in amount from the full sales price.
gift by the seller is not taxable. The difference is the net sales price.
Items given away without requiring a special purchase and 2. Multiply the net sales price by the allowed exemption (45
items given away as advertising are consumed by the seller. or 100 percent) to determine the exempt amount.
The seller must pay tax on the seller’s cost of those items. 3. Subtract the exempt amount from the net sales price.
This is the portion of the net sales price subject to sales
tax.
Rental With and Without an
Operator
A business that rents out equipment without an operator Example: A dealer accepts a trade-in at a value of
must charge the customer sales tax. But a business that $8,000 against the purchase of a new manufactured
rents out equipment WITH an operator does NOT charge home valued at $60,000. The calculation is:
the customer sales tax, since the sale is considered to be a Original sales price $60,000
service. In that case, the business must pay sales tax when Less trade-in amount - 8,000
they buy the equipment, since the business is considered to Net sales price $52,000
be the consumer. Portion of net sales price exempt
from sales tax ($52,000 x .45) $23,400
Returnable Containers Portion of net sales price subject
Deposits on returnable containers, bottles, pallets and drums to sales tax ($52,000 - $23,400) $28,600
are subject to tax. When containers are returned for refund
of the deposit, sales tax should be refunded. Bottle deposits
are exempt from tax when purchased with food stamps or Vending Machine Sales
Women, Infants and Children (WIC) coupons. Sales of tangible personal property from vending machines
are taxable. Vending machine sales of items that cannot be
Returned Merchandise ingested, such as cigarettes or novelty toys, are taxed at the
A customer who receives credit for returned merchandise is full combined rate.
entitled to a refund of the sales tax. If a customer is given a Vending machine sales of prepared food, such as sandwich-
partial refund or allowance, the customer is entitled to a refund es or slices of pizza, are also taxed at the full combined rate.
of sales tax on the portion of the original sales price refunded. For vending machine sales of grocery food, such as packs of
gum or bags of pretzels, the statewide combined rate is 3.0
Special Events percent.
A special event is a one-time event or an event that runs for six Tax is included in the vended price. To find the dollar amount
months or less where taxable sales occur. Sales tax is collected of sales without tax, divide the sales by one (1) plus the
on taxable transactions at special events. A seller who partici- combined tax rate in the community where the vending ma-
pates in a special event must register for a temporary sales tax chine inventory is warehoused. For example:
license, even if the seller has a current sales tax license.
• Where the combined rate is 6.0 percent, divide by 1.060.
For more information or to get a temporary sales tax license,
• Where the combined rate is 6.125 percent, divide by
call 801-297-6303 or toll free 1-800-662-4335, ext. 6303, or
1.06125.
email specialevent@utah.gov.
• Where the combined rate on grocery food is 3.0 percent,
divide by 1.030.
Third-party Drop Shipping
In third-party drop shipping, a customer buys tangible per- A seller of food, beverage and dairy products for $1 or less
sonal property or products transferred electronically from a may choose to pay tax on 150 percent of the seller’s cost (in-
business that does not have the item in stock. The business cluding incoming freight costs) rather than on the sales price.
buys the items from a wholesaler who sends it directly to the When this option is taken, the taxable amount (150 percent
customer. of cost) must be reported on the Sales and Use Tax Return
as goods consumed.
There are two separate transactions in third-party drop ship-
ping. The first transaction, between the customer and the If the vending machine is owned and serviced by a vending
business, is subject to tax. The second transaction, between machine company, the vending machine company is respon-
the business and the wholesaler, is exempt from tax as a sible for the tax.
purchase for resale.

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   Videos and DVDs                                           Pub 65   –  Tax Information for Cigarettes, Tobacco 
   Rentals of videotapes and DVDs are taxed as sales of tan-             Products and Electronic Cigarette Products
   gible personal property.                                  Pub 69   –  Sales Tax Information for Guides and 
                                                                         Outfitters
                                                             Pub 70   –  Sales Tax Information for Utah State and Local 
                                                                         Government Agencies
Sales Tax Publications                                       Pub 71   –  Sales and Use Tax Information for 
   Get the following publications at tax.utah.gov/forms.                 Marketplace Sellers and Marketplace 
                                                                         Facilitators
   Pub 5  –  Sales Tax Information for Motor Vehicle/Marine 
          Dealer/Body & Repair Shops
   Pub 25 –  Sales and Use Tax General Information           Information Online
   Pub 35 –  Sales Tax Guidelines for Public and Private     Utah State Tax Commission Website
          Elementary and Secondary Schools                   tax.utah.gov
   Pub 37 –  Business Activity and Nexus in Utah             This site has links to:
   Pub 40 –  Personal Liability for Unpaid Sales, Fuel and   •  Forms and publications
          Withholding Taxes                                  •  Current and past sales tax rates
   Pub 42 –  Sales Tax Information for Sales, Installation   •  Internal Revenue Service
          and Repair of Tangible Personal Property 
          Attached to Real Property                          •  Utah Counties (business license, property tax)
   Pub 45 –  Sales Tax Information for Nurseries, Florists,  • Multistate Tax Compact
          Landscapers and Related Industries                 •  Other States’ Revenue Departments
   Pub 53 –  Sales Tax Information for Health Care
                                                             State of Utah Website
   Pub 54 –  Sales Tax Information for Public Utilities      utah.gov
   Pub 55 –  Sales Tax Information for Restaurants           This site has links to:
   Pub 56 –  Sales Tax Information for Lodging Providers     •  Workforce Services (unemployment)
   Pub 58 –  Utah Interest and Penalties                     •  Labor (worker’s compensation)
   Pub 62 –  Sales Tax Information for Telecommunications    •  Commerce (corporations, DBA registration)
          Service Providers
   Pub 64 –  Sales Tax Information for Computer Services 
          Providers

                                                                      ___________________

                                                             Sales tax publications provide general guidance only. They 
                                                             do not contain all sales or use tax laws or rules. For more 
                                                             information, call 801-297-7705 or 1-800-662-4335, ext. 7705, 
                                                             or email taxmaster@utah.gov.

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