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PUBLICATION 25 Sales and Use Tax
Rev. 5/22

General Information

Utah State Tax Commission
210 North 1950 West
Salt Lake City, Utah 84134
801-297-2200
This publication is provided for general 1-800-662-4335
guidance only. It does not contain all tax.utah.gov
sales or use tax laws or rules.

If you need an accommodation under the Americans with Disabilities Act, email taxada@utah.gov,
or call 801-297-3811 or TDD 801-297-2020. Please allow three working days for a response.

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 ..................................................................................... 14
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 .................................................................... 15
Definitions (Utah Code §59-12-102) .......................................... 3 Bundled Transactions ............................................................... 15
Sales-based Tax Rates and Types ................................................... 4 Carwashes .............................................................................. 16
Determining Tax Rate (Point-of-Sale Sourcing) ......................... 4 Cigarette, Tobacco, Nicotine Products and
Chart 1: General Sourcing Rules ......................................... 5 E-Cigarette Products ............................................................... 16
Tax Rate Changes ..................................................................... 5 Coupons ................................................................................. 16
Rate Changes During Billing Cycles .................................... 5 Coupon Books, Gift Cards and Gift Certificates ...................... 16
Combined Sales Tax Rate ......................................................... 6 Direct Mail ................................................................................ 16
Chart 2: Taxes in the Combined Rate .................................. 6 Food Stamps and WIC ............................................................. 16
Related Taxes and Fees ............................................................ 7 Money Order, Fax and Photocopy Charges ............................. 16
Chart 3: Related Taxes and Fees ......................................... 7 Newspapers and Postage ........................................................ 16
Other Information ....................................................................... 8 Premiums and Gifts ................................................................. 16
Sales and Use Tax Exemptions ....................................................... 8 Rental With and Without an Operator ...................................... 16
Exemption Certificates ............................................................... 8 Returnable Containers ............................................................. 16
Types of Exemptions .................................................................. 9 Returned Merchandise ............................................................ 17
Entity-Based Exemptions ..................................................... 9 Special Events ......................................................................... 17
Use-Based Exemptions ...................................................... 10 Third-party Drop Shipping ....................................................... 17
Product-Based Exemptions ............................................... 11 Trade-in on Manufactured Homes ........................................... 17
Calculating Sales Tax .................................................................... 12 Vending Machine Sales ........................................................... 17
Taxable Transactions ............................................................... 12 Videos and DVDs ..................................................................... 17
Taxes and Fees Imposed on the Seller .................................... 13 Sales Tax Publications ................................................................... 18
Payments by Gold or Silver Coin ................................................... 13 Information Online ......................................................................... 18
Filing and Reporting Requirements ............................................... 13
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
• wholesalers purchasing resale inventory
Starting a New Business
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)
   from 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

   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

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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 (less than 30 days)      None     Sales 
                                                     of motor vehicles, unless the vehicle:                          Tourism 
                                                     •  temporarily replaces a motor vehicle being re-               Leasing 
                                                     paired under a repair or insurance agreement,                   Return
                                                     •  is registered for a gross laden weight of 
                                                     12,001 or more pounds, or
                                                     •  is a moving van for personal household goods

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

25                                                                                                                         page 7

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   Tax                   Imposed Rate        Applies To                                                Discount Reported 
                         By                                                                                     On
   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.

   Other Information                                              Sales and Use Tax Exemptions
   The following miscellaneous taxes and fees may also apply      Utah law provides some exemptions from sales and use tax. 
   to certain sellers. Contact the Tax Commission for more        See Utah Code §59-12-104 for more information.
   information.
   •  Motor fuel, aviation fuel, and special fuel taxes           Exemption Certificates
   •  Locomotive fuel                                             When an exemption certificate is required, the buyer must 
                                                                  provide the seller with the exemption information in one of 
   •  Lubricating oil fee
                                                                  two ways:
   •  Beer, cigarette, e-cigarette, tobacco and nicotine products 
                                                                  1. 
       taxes                                                         On a paper exemption certificate: form TC-721, 
                                                                     Exemption Certificate; or form TC-721G, Exemption 
   •  Royalty payment on unprocessed brine shrimp eggs               Certificate for Governments & Schools.
   •  Multi-channel audio and video tax                              A buyer needs to provide a signature when using a paper 
   •  Sexually explicit business and escort service tax              certificate.
                                                                  2. Electronically
                                                                     If the exemption information is provided electronically, all the 
                                                                     information required on the paper form must be included.

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A seller can accept exemption certificates at face value. A • the member has a tribal card showing a Federal
seller is not liable for improper exemptions unless the seller Bureau Number;
takes part in claiming a fraudulent exemption. • the purchased item is delivered to the enrolled tribal
Sellers must keep exemption certificates in their records as member’s own reservation (in the case of the Ute
documentation. A seller may use a certificate on file for its Indian Tribe, the item must be purchased on or deliv-
customers’ future purchases. A buyer must notify the seller if ered to tribal trust lands within the Uintah and Ouray
a certificate on file is cancelled, modified or limited. reservations); and
• in the case of sales to the tribe itself, the buyer must
Types of Exemptions present a purchase order, exemption certificate, or
There are three types of sales tax exemptions, based on: similar evidence of tribal identity.
1. Entity (exemption certificate required for sales to an Sales made off the reservation to enrolled members of
exempt entity) the tribe are taxable. They are exempt from tax only if the
2. Use (exemption certificate required) seller (or a licensed common carrier) delivers the pur-
chased item(s) to the reservation.
3. Product (exemption certificate not required)
• Sales to foreign diplomats. The U.S. State Department and
the American Institute in Taiwan grant a tax exemption to
Entity-Based Exemptions
eligible foreign officials assigned to the United States. Tax
An entity-based exemption is determined by who buys or
exempt foreign officials and government offices are issued
sells the product.
a Tax Exemption Card, valid nationwide. The card lists the
Some common exemptions are: person’s name, photograph, mission employed by, expira-
• Sales to a public transit district or a subcontractor of a pub- tion date and identification number.
lic transit district, if the tangible personal property is clearly The exemption cards are used at point-of-sale for exemp-
identified and installed or converted to real property owned tion from state and local sales, restaurant and lodging/
by the public transit district. occupancy taxes. These cards DO NOT exempt taxes on
• Sales to United States government agencies. utilities, gasoline or vehicle purchases (see Publication
5 for more information about vehicle purchases and
• Sales to entities exempt from state taxes by federal law.
Publication 66 for more information about gasoline pur-
• Sales to Utah state and local government agencies (see chases). The type of exemption is shown by an eagle, owl,
Publication 56 for lodging-related sales). deer or buffalo on the bottom corner of the card. The items
• Sales of construction materials to most Utah government exempted are listed on the back of the card.
agencies — only if installed by the agencies’ employees. Sellers must keep a copy of the card or a valid exemption
Construction materials bought by or for public elementary certificate as proof of the exempt sale.
and secondary schools are exempt from sales tax. The For more information on the Tax Exemption Program,
construction materials must be clearly identified and seg- see the Office of Foreign Missions (OFM) web site,
regated, and they must be installed or converted to real state.gov/ofm/tax, or contact the OFM San Francisco
property owned by the school. See Rule R865-19S-23. regional office at 415-744-2910.
To qualify for this exemption, the purchase must be made • Sales of feed, seed, baling ties, etc. to commercial farms.
with the government agency’s funds. A purchase does not
• Sales of tangible personal property and products trans-
qualify for this exemption if a government employee makes
ferred electronically for primary use in farming operations.
the purchase with personal funds, even if the government
Also, charges for labor, parts and supplies to repair and
agency reimburses the employee.
maintain off-road agricultural machinery.
• Sales to U.S. government employees traveling on official
• Sales of electricity and fuel for industrial use as defined in
business, if they present one of the following:
Utah Code §59-12-102.
• a complete and signed form TC-721G, Exemption
• Sale or lease of semiconductor fabricating, processing,
Certificate for Governments, Foreign Diplomats &
research or development materials.
Schools;
• Sales relating to schools and fundraising (see Publication
• a check from the government agency;
35).
• a purchase order; or
• Sales to religious or charitable institutions.
• a voucher.
• If the purchase is $1,000 or more, the buyer takes the
Sellers must keep proof that the purchase qualifies for exemption at the point of sale.
the exemption, such as a copy of the government check,
• If the purchase is less than $1,000, the buyer claims
purchase order, voucher or signed form TC-721G.
the exemption by submitting form TC-62N, Utah Sales
• Sales made to or by: Tax Refund Request, to the Tax Commission.
• a local agency on aging; • If a public utility makes the sale to a religious or chari-
• a senior citizen center owned by a county, city or town; table institution, the exemption must be taken at the
and point of sale.
• a senior citizen center that contracts with a local • If a contract exists between the seller and the religious
agency on aging. or charitable institution, the buyer may take the exemp-
tion at the point of sale regardless of the dollar amount
• Purchases by certain enrolled members of Native
of the sale.
American tribes (including the tribe itself), if:

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To be eligible for the exemption, the organization must be • by a qualified manufacturing facility or scrap recycler to
exempt under IRC Section 501(c)(3) and have a sales tax produce an item sold as tangible personal property.
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
• Sales of construction materials to a religious or charitable 212, Mining (except Oil and Gas) or NAICS 213113,
institution, or to a contractor buying for a religious or chari- Support Activities for Coal Mining.
table institution. • by a qualified web search portal facility or medical
• Sales of aircraft, boat and river-running tours. laboratory for the operation of the establishment.
• Amounts paid for aircraft tours are exempt if the craft • Purchases or leases of machinery, equipment and normal
enters a federal airway (designated by the Federal operating repair or replacement parts, with an economic
Aviation Administration) during the tour. life of three or more years, used in Utah to perform quali-
• Amounts paid for boat tours, scenic cruises, and fied research.
similar services are exempt from tax if the waters of • Purchases of construction materials used to construct
the tour or cruise are used as highways for interstate a new or expanding life science research and develop-
commerce. ment facility in Utah. The facility must be owned, leased or
For more information, see Rule R865-19S-113. rented by a life science establishment, and research and
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
• Sales of grocery food, prepared food or alcoholic bever- NAICS 33911, 334510 and 334517.
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
meals. See Rule R865-19S-61. 2. a wholesale electrical cooperative.
• Sales to or by a Utah aircraft maintenance, repair and • Purchases of machinery, equipment or normal operating
overhaul provider to maintain, repair, overhaul or refurbish repair or replacement parts that:
a fixed-wing turbine-powered aircraft that is not registered 1. are used in a qualifying data center as defined in
in Utah. Utah Code §59-12-102,
2. are used in the operations of the qualifying data
Use-Based Exemptions center or in an occupant’s operations in the qualifying
A use-based exemption is determined by the buyer’s use of data center, and
the product.
3. have an economic life of one or more years.
The following are exempt:
• Charges for labor to repair or renovate tangible personal
• Sales of certain vehicles for exclusive use outside of Utah. property or products transferred electronically, if the per-
• Products purchased for resale in the regular course of sonal property being repaired is exempt under Utah Code
business, either in their original forms or as ingredients or §59-12-104.
components of a manufactured or compounded product. • Sales of parts used in the repair or renovation of the fol-
• Sales for resale or lease. The lease of tangible personal prop- lowing exempt tangible personal property:
erty and products transferred electronically is also exempt if it • tools or equipment used exclusively under an aero-
meets all of the following conditions: space or electronics industry contract with the United
• the property is part of a sale-leaseback transaction, States government;
• sales or use tax was paid on the initial purchase of the • tangible personal property and products transferred
property, and electronically used or consumed primarily and directly
• the leased property will be capitalized and the lease in farming operations;
payments will be accounted for as payments made • snow-making equipment, ski slope grooming equip-
under a financing arrangement. ment, and passenger ropeways;
• Purchases of tangible personal property and products • Sales of non-returnable containers, labels, bags, shipping
transferred electronically when sales and use tax is paid to cases and casing to a manufacturer, processor, wholesaler
another state, unless the other state’s tax rate is lower than or retailer for use in packaging tangible personal property
Utah’s rate. When the tax rate is lower than Utah’s rate, the for resale.
buyer must pay the difference. No adjustment or credit is al- • Purchases of lists or databases used to address direct mail.
lowed if the other state’s tax rate is greater than Utah’s rate.
• Purchases or leases by a telephone service provider of
• Purchases of fuel, gas and electricity predominantly used equipment, machinery or software that have a useful
for industrial use. economic life of one or more years and are used for the
• Purchases or leases of machinery, equipment, repair or following telecommunication purposes:
replacement parts or materials (except office equipment • enabling or facilitating,
and supplies) used or consumed:
• 911 service,

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• maintenance or repair, • Purchases of prescription drugs. A drug is defined as a
• switching or routing, or compound, substance or preparation that is used to diag-
nose, cure, mitigate, treat or prevent disease, or to affect
• transmission. the structure or function of the human body. Food, dietary
• Purchases of property from another state that is brought supplements, alcoholic beverages and prosthetic devices
into Utah, only if the property is: are not considered drugs. Sales of drugs are exempt from
1. used for business, sales and use tax only if the buyer presents a prescription.
2. first used outside Utah, • Sales or rentals of durable medical equipment, including
replacement and repair parts. Sales or rentals of durable
3. not a vehicle, and medical equipment are exempt from sales and use tax
4. not rented or leased. only if the buyer presents a prescription for the equipment.
• Purchases of certain consumable items by short-term • Sales or rentals of mobility-enhancing equipment to help
lodging providers, only if the items are: a person with limited mobility move from one place to
1. used by guests, another. Sales or rentals of mobility-enhancing equipment
are exempt from sales and use tax only if the buyer pres-
2. included in the full sales price of the lodging, and ents a prescription for the equipment.
3. not listed separately on the invoice. • Sales of prosthetic devices, including repair and replace-
See Publication 56. ment parts. Eyeglasses and contact lenses are not prosthet-
• Purchases of items (except machinery, equipment, parts, ic devices. Sales or rentals of prosthetic devices are exempt
office supplies, electricity, gas, heat, steam or fuel) that are from sales and use tax only if a prescription is required for
essential for and entirely consumed to provide the taxable the device or it is purchased by a hospital or medical facility.
service of: • Sales of disposable home medical equipment or supplies
1. telecommunications; that cannot withstand repeated use. Sales of disposable
home medical equipment or supplies are exempt from
2. admissions; sales and use tax only if the buyer presents a prescription
3. cleaning, repair or renovation of tangible personal for the equipment or supplies. The equipment and sup-
property (including laundry and dry cleaning ser- plies must be eligible for payment under Title XVIII, federal
vices); or Social Security Act or the state plan for medical assistance
4. short-term lodging. under Title XIX, federal Social Security Act.
• Purchases or leases of items used to create prepared • Forty-five percent of the sales price of a new manufactured
food, only if: home, and 100 percent of the sales price of a used manu-
factured home.
1. the ownership of both the seller and the buyer are the
same, and • Fees for indoor skydiving, rock climbing or surfing if a
trained instructor is included and actively instructing the
2. either the seller or the buyer paid Utah sales tax prior participant.
to making the sale.
• Fees for unassisted amusement devices, such as arcade
• Purchases of machinery and equipment by amusement, games.
gambling and recreation industries (NAICS Subsector
713), only if: • Sales of unassisted carwashes, and unassisted dry clean-
ing and laundry services.
1. the machinery or equipment has an economic life of
three or more years, • Interstate sales delivered by common carrier or by the
seller to a place outside Utah. The licensed seller or
2. the machinery or equipment will be used by payers of retailer must keep a copy of the bill of lading, freight bill,
admissions or user fees, and form TC-757 or other proof of out-of-Utah delivery. If the
3. at least 51 percent of the buyer’s sales revenue for property is delivered within Utah to a buyer, the tax ap-
the previous calendar quarter came from admissions plies, even if the buyer takes the property out of Utah. See
or user fees. Rule R865-19S-44.
• Purchases of machinery and equipment, or normal operat- • Sales of motor fuels and special fuels subject to Utah fuel
ing repair or replacement parts, only if the machinery: excise tax.
1. is used by an electronic financial payment service • Sales of hay.
(NAICS Code 522320), and • Exclusive sale of seedling plants, or garden, farm or other
2. has an economic life of three or more years. agricultural produce, if sold during the harvest season
by the producer, an employee of the producer, or by a
Product-Based Exemptions member of the producer’s immediate family. If the producer
A product-based exemption is determined by the type of sells any other product, tax is due on all sales.
product. An exemption certificate is not required. • Sales of telephone service charged to a prepaid telephone
The following are exempt: calling card.
• Isolated or occasional sales, if the sale is made by a per- • Sales of newspapers or newspaper subscriptions.
son who does not typically sell that type of product. This • Sales of water in a pipe, conduit, ditch or reservoir.
exemption does not apply to sales of products for resale
or to the sale of a vehicle or vessel that must be titled or • Room and trailer space rentals for 30 consecutive days or
registered in Utah. more.

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• Sales of currency or coinage that is legal tender of the • Labor to repair, upgrade or maintain products transferred
United States or of a foreign nation. electronically. This includes maintenance agreements.
• Sales of an ingot, bar, medallion or decorative coin con- • Laundry and dry cleaning services when the labor is not
taining at least 50 percent gold, silver or platinum that is performed by the buyer.
not legal tender of any nation. • Admission or user fees for theaters, movies, operas, muse-
• Sales of a note, leaf, foil or film that are used as a currency ums, planetariums, shows, exhibitions, concerts, carnivals,
but are not legal tender and contain at least 50 percent amusement parks, amusement rides, circuses, menager-
gold, silver or platinum (not including any transparent poly- ies, fairs, races, contests, sporting events, dances, boxing
mer holder, coating or encasement). matches, wrestling matches, closed circuit television
• Admissions to higher education athletic events. broadcasts, billiard parlors, pool parlors, bowling lanes,
golf, miniature golf, golf driving ranges, batting cages,
• Sales of textbooks, if: skating rinks, ski lifts, ski runs, ski trails, snowmobile trails,
1. the textbook is required for a higher education tennis courts, swimming pools, water slides, jeep tours,
course, horseback rides, sports activities, or any other amuse-
2. the seller is not a bookstore owned by an institution of ment, entertainment, recreation, exhibition, cultural, or ath-
higher education, letic activity. User fees include access charges for videos,
video games, television programs and cable or satellite
3. the buyer is enrolled in a course offered by an institu- broadcasts, if that access occurs anywhere other than the
tion of higher education, and buyer’s home.
4. at least 51 percent of the seller’s sales for the previ- • Use of assisted amusement devices when the device or
ous calendar quarter are sales of textbooks for a ride is not operated by the buyer.
higher education course.
• Assisted cleaning or washing of tangible personal property
A Utah institution of higher education means: Dixie State if the cleaning or washing labor is not performed by the
University, Salt Lake Community College, Snow College, buyer.
Southern Utah University, University of Utah, Utah System
of Technical Colleges, Utah State University, Utah Valley • Stays at tourist homes, hotels, motels, campgrounds,
University, Utah State University Eastern, Weber State trailer courts and similar accommodations usually rented
University. for less than 30 consecutive days.
Sellers must keep records to verify these conditions for • In-state telecom services.
each sale. Additionally, a seller’s records must include • Meals (prepared food) at restaurants or other eating
exemption certificates (TC-721) showing the buyer is places.
enrolled in courses offered by an institution of higher • Sales for commercial use of gas, electricity, heat, coal,
education. fuel-oil or other fuels. (Sales of these items for industrial
• Sales of fuel cells (see Utah Code §54-15-102). use may qualify for an entity-based exemption.)
• Charges for database access if the primary purpose is • Sales for residential use of gas, electricity, heat, coal, fuel-
to access information from the database. The exemption oil or other fuels. These products are taxed at the state
does not include purchases of digital audioworks, digital rate of 2 percent plus any applicable local and/or public
audio-visual works or digital books. transit tax.
• Sales of grocery food. Taxed statewide at the rate of 3
percent. (Sales of prepared food are taxed at the full com-
Calculating Sales Tax
bined rate.)
Taxable Transactions • Sales of prepaid telephone calling cards, including vending
Sales and leases of tangible personal property, products machine sales of prepaid telephone calling cards, if the
transferred electronically, and certain services are taxable card can be used for in-state calls.
to the final consumer. The following transactions are taxable • Sales of memberships that entitle the buyer to discounted
unless an exemption applies: or free merchandise or services that are subject to sales
• Retail sales or purchases of tangible personal property tax. For example:
and products transferred electronically within Utah. 1. Memberships that let card holders enter a warehouse
• The storage, use or consumption in Utah of tangible per- and buy merchandise free of additional markup.
sonal property and products transferred electronically. 2. Video memberships that let members rent videos at a
• Rentals and leases of tangible personal property and prod- reduced price.
ucts transferred electronically, if: All purchases made with these membership cards are sub-
• the location of the product is in Utah; ject to sales tax at the time of purchase unless an exemp-
• the lessee took possession of the product in Utah; or tion applies.
• the product is stored, used or otherwise consumed in • Sales of products transferred electronically, if a physical
Utah. copy of the product would be taxable. For example, the
purchase of a music CD is taxable, so downloaded music
• Labor to repair, renovate and clean tangible personal prop- is also taxable. For more information, see the Additional
erty and products transferred electronically. This includes Information section.
maintenance agreements.

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   Taxes and Fees                                                    Returns are due the last day of the month following each 
                                                                     filing period. When a due date falls on a weekend or legal 
   Imposed on the Seller                                             holiday, the return is due the next business day.
   Municipalities may impose and collect a license fee or tax, 
   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.               •  If your sales tax liability is $50,000 or more, you must file 
   City and state taxes are calculated as follows:                     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             You will file the following at the same time you file your sales 
   Combined sales tax rate @ 6.125%              x.06125             tax return:
   State and local sales taxes paid to the state    $6.25 
   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       •  Multi-channel video and audio service tax
   purchase, you must state in your books and records and on 
                                                                     •  911 emergency services charge
   any invoice all of the following:
                                                                     •  Radio network charge to fund the public safety communi-
   1.  The purchase price of the item in gold or silver coin and 
                                                                       cations network
   in dollars.
                                                                     •  Unified statewide 911 emergency service charge
   2.  The amount of sales tax due in gold or silver coin and in 
   dollars.                                                          •  Disposable cell phone fee
   3.  The tax rate that applies to the purchase.
   4.  The date of the purchase.                                     Forms and Schedules
   You must use the most current London fixing price for the         What to File
   type of coin used to determine the tax due in dollars.            TC-62S, Sales and Use Tax Return, Single Place of 
                                                                     Business — For sellers with one fixed Utah location. TC-62S 
                                                                     filers do not need to file schedules.
Filing and Reporting                                                 TC-62M, Sales and Use Tax Return, Multiple Places of Business 
Requirements                                                         — For all other sellers, including those with multiple Utah busi-
                                                                     ness locations, no Utah location, or no fixed place of business. 
   Accounting Methods                                                Sellers file TC-62M if they need to report:
   Sellers must use accrual basis accounting to report sales         •  vending machine sales with multiple inventory locations,
   and use tax (see exceptions below).  Report all sales and 
   use tax on goods sold and consumed during a filing period         •  sales in Utah from a non-fixed place of business,
   on the return for that filing period (see Filing Frequency).      •  sales exempt from the resort tax in a resort community,
   You may only use cash basis reporting if one of the following     •  sales exempt from the state correctional facility tax in Salt Lake 
   circumstances applies:                                              City,
   •  a sale includes delivery or installation of tangible personal  •  sales of tangible personal property or products transferred 
   property at a location OTHER than the seller’s place of             electronically that are sent into Utah by sellers outside of Utah.
   business (the seller must state the delivery or installation      TC-62M filers must also file one or more of the following 
   on the invoice), or                                               schedules:
   •  a buyer who converts tangible personal property into real      • Schedule A, for sales of non-food and prepared food from 
   property chooses to report use tax on a cash basis — only if        multiple fixed Utah business locations, based on the seller’s 
   the buyer is not required to pay use tax on a monthly basis.        location.
                                                                     • Schedule AG, for sales of grocery food from multiple fixed 
   Returns                                                             Utah business locations, based on the seller’s location.
   Every sales and use tax account must electronically file a 
   Sales and Use Tax Return for each filing period. Depending        • Schedule J, for sales of non-food and prepared food re-
   on the nature of your business, you may also need to file           ported based on the customer’s location, products shipped 
   schedules with your return (see Forms and Schedules, be-            to customers in Utah, or tangible personal property or 
   low). File returns and schedules at tap.utah.gov.                   products transferred electronically at a location other than 
                                                                       a fixed place of business.
   If you are liable for sales-related taxes (transient room, res-
   taurant, motor vehicle rental, waste tire, etc.), you must file a • Schedule JG for sales of grocery food reported based on 
   return for each type of tax or fee.                                 the customer’s location.

25                                                                                                                       page 13

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• Schedule X for sales exempt from the resort communities You may not take a credit for repossessed items other than
tax or the state correctional facility tax. motor vehicles. See Publication 5, Sales Tax Information for
Motor Vehicle/Marine Dealer/Body & Repair Shops.
Seller Discount
Monthly sales tax filers may take a seller discount equal to Online Payments
1.31 percent of the combined sales tax. Monthly tourism You can pay sales tax online at tap.utah.gov with a credit
tax filers may take a seller discount equal to 1 percent of card (American Express, Discover, MasterCard or Visa)
the tourism short-term leasing tax adopted by the county. or electronic check (direct debit to a checking or savings
Sellers of grocery food may take the seller discount of 1.31 account).
percent as if they had collected tax at the full combined rate. A convenience fee is applied to some payment methods to
Quarterly and annual filers may not take the seller discount. cover service costs. If a convenience fee is required, it is
clearly listed before you complete the transaction. If you pay
Goods Consumed by the Seller online, you must still file a separate return if one is due.
Items consumed by the seller are subject to use tax on the
amount of the seller’s cost, not the potential sales price. Electronic Funds Transfer (EFT)
Items consumed by the seller include: If your annual sales tax liability is $96,000 or more, you must
• items taken from inventory and used by the seller, pay by Electronic Funds Transfer (EFT). Pay online by ACH
• samples given away for advertising, and debit at tap.utah.gov.
• products consumed by employees without payment. You can schedule EFT payments up to 130 days before
the due date and the payment can be withdrawn from your
When you buy products from local businesses for storage or use, account on the day you select. (WARNING: If the day you se-
you must pay tax at the time of purchase. For example, office lect is later than the return due date, we will assess penalty
supplies and equipment (such as cash register tapes, returnable and interest.)
containers and furniture) are taxable at the point of sale.
You may also pay with ACH credit. See Electronic Funds
A seller may purchase tax-free grocery bags, sacks and Transfer - EFT at tax.utah.gov/billing/payments.
other non-returnable packaging material that go out the door
with the customer.
No tax is due on items discarded because of spoilage, bro- Do not use other payment methods, such as
Caution:
credit cards, to pay current returns if you must pay by
ken packaging and similar incidents, because they are not EFT. Other payment methods do not meet EFT filing
consumed by the seller. requirements and you will lose your seller discount.
The purchase of printed advertising inserts is taxable unless
the inserts contain the name and publication date of the EFT filers may pay past-due liabilities with other payment
newspaper distributing the inserts and are included in and methods.
distributed with the newspaper. See Rule R865-19S-65.
Report use tax on your Sales and Use Tax Return.
Penalties
The penalty for failure to file a tax-due return by the due
Employee Incentives and Discounts date is the greater of $20 or up to 10 percent of the unpaid
If a seller’s employees earn credit (dollars or points) toward tax, based on the date the return is filed. Failure to file a tax
purchases of its goods or services as part of an incentive return includes filing a tax return without enough information
program, the dollar value of the credit is included in the total for us to correctly distribute local tax revenues. We will add
sales price. Employee incentive program credit is not an another failure-to-pay penalty, the greater of $20 or up to 10
employee discount. percent of the tax balance, if the tax balance remains unpaid
Employee discounts that are not reimbursed by third parties 90 days after the due date.
are discounts that are not included in the sales price. The penalty for failure to pay the full amount of tax due on a
timely-filed return, or within 30 days of a notice of deficiency,
Bad Debts is the greater of $20 or up to 10 percent of the tax due,
Only a seller may claim bad debts. A seller may take a sales tax based on the payment date. Unpaid tax includes tax paid
adjustment for bad debts. You must deduct nontaxable amounts without a tax return.
(such as cash back to the customer and exempt charges) from You will also lose the seller discount if you file your monthly
the total amount of the bad debt amount to arrive at the net return late or underpay the tax due.
write-off amount. Penalties are imposed at a graduated rate, based on the
To find the amount of the adjustment you may claim on your time period of the delinquency.
Sales and Use Tax Return, divide the net write-off (W) by See Publication 58, Utah Interest and Penalties, online at
one (1) plus the local combined sales tax rate (R) at the time tax.utah.gov/forms.
of sale.
W ÷ (1 + R) = adjustment
Interest
Interest is assessed from the original due date until the tax
Example: A retailer has a net write-off of $100. The liability is paid in full. See Publication 58, Utah Interest and
retailer’s combined sales tax rate is 6.5 percent (.065). Penalties, online at tax.utah.gov/forms.
The retailer divides $100 by 1.065 to arrive at an adjust-
ment claim of $93.90.

25 page 14

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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 Î 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.
1. Explanation of the changes
4. If you stop doing business, you must notify the Tax
2. Documentation provided by the purchaser proving Commission in writing within 30 days of the final date you
they were exempt from the tax (such as an Exemption were required to collect sales tax.
Certificate)
5. You must keep your records for three years from the filing
3. Proof that you credited or refunded the tax to the date of a return.
purchaser
6. Records are subject to audit by the Tax Commission.
4. Adjustments only: calculation of adjustment amount
(refunded tax divided by current period’s tax rate) 7. Sales tax licenses are not transferable.
5. Adjustments only: schedule showing which period(s) the 8. Goods purchased tax-free but used or consumed by you
taxes were originally reported to the Tax Commission or your company must be reported on the Sales and Use
and, if multiple locations, the locations being adjusted Tax Return. You must pay use tax on goods you or your
company consume.
Explain your basis as prompted and provide the above docu-
ments upon request. 9. You must keep exemption certificates from your exempt
customers to prove nontaxable sales.
If you have multiple business locations and/or a non-fixed lo-
cation you must also amend or adjust the appropriate return 10. You must document out-of-state sales with a bill of lading
schedules for the location(s) where you originally reported or other proof of shipment. The terms of the sale must
the tax. require shipment of the property across Utah’s borders
by the seller.
Do not adjust your sales and use tax return to claim a credit
for taxes paid to another seller. Instead, you must seek a 11. Round tax up to the next whole cent whenever the third
refund from the seller or apply for a refund from the Tax decimal place is greater than four.
Commission using form TC-62PR, Application for Purchaser
Refund of Utah Sales Tax. (See Purchaser Refunds.)
Additional Information

Record Keeping Requirements Bundled Transactions
A bundled transaction is the retail sale of two or more sepa-
From Rule R865-19S-22
rate products that are sold for one combined price. If any
Every retailer, lessor or person doing business in Utah must
part of the bundled transaction is subject to tax, the entire
keep complete records used to determine their sales and
transaction is taxed unless the seller keeps separate records
use tax liabilities. You must keep records for three years from
of the tax-exempt portion of the transaction.
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Carwashes Direct Mail
Assisted carwashes are subject to sales and use tax. A A direct mailer may either pay sales tax directly to the printer
carwash is assisted if the labor to clean or wash is primarily or give the printer a signed exemption certificate (form
performed by a carwash employee. Assisted carwashes that TC-721). Direct mail is not exempt from sales tax. An exemp-
only include the cleaning or washing of a vehicle’s exterior tion certificate simply shifts who is responsible to report and
are exempt from sales tax. pay the tax. By using an exemption certificate, the direct
A business location that sells both assisted (including wash- mailer reports the tax on its Sales and Use Tax Return rather
ing or cleaning of the vehicle interior) and unassisted car- than the printer collecting the tax.
washes must collect tax on all its sales unless those assisted
and unassisted sales are recorded separately. Food Stamps and WIC
Sales of food paid with federal food stamps or Women,
Example 1 Infants and Children (WIC) coupons are exempt from sales
A customer buys a carwash and the car is washed by and use tax.
machines. This is an unassisted carwash and is not
subject to sales tax. Money Order, Fax and
Photocopy Charges
Money order fees and charges to send a fax are not subject
Example 2 to sales tax. Photocopy charges and charges to receive a fax
A customer buys a machine carwash, but a carwash are taxable.
employee vacuums the interior and cleans the inside
windows. This is a taxable assisted carwash and is
subject to sales tax. Newspapers and Postage
Sales of newspapers and postage stamps are exempt from
sales tax.
To qualify as a newspaper, a publication must:
Example 3
As a fundraising activity, a scout troop offers to dry cars • be published daily or weekly,
coming out of a carwash. The scouts are not paid by • be printed for circulation among the general public,
the carwash, so their labor is not a factor in whether the • contain matters of general interest,
carwashes are assisted or unassisted.
• report on current events, and
• not create a book when multiple issues are put together.
Cigarette, Tobacco, Nicotine Sales of tabloids (e.g., Enquirer, Star, Globe) and magazines
Products and E-Cigarette Products (e.g., Newsweek, Ladies Home Journal, Time) are taxable.
A business selling cigarettes and/or tobacco products or
e-cigarette products must be licensed for each selling loca- Premiums and Gifts
tion. See Pub 65, Tax Information for Cigarettes, Tobacco A premium or gift given away with the sale of a taxable prod-
Products, Nicotine Products and Electronic Cigarette uct is part of that sale, and the purchase of the premium or
Products. gift by the seller is not taxable.
The sale of cigarettes and/or tobacco products is subject to Items given away without requiring a special purchase and
sales tax. items given away as advertising are consumed by the seller.
The seller must pay tax on the seller’s cost of those items.
Coupons
Coupons for which a seller is reimbursed by a third party Rental With and Without an
(such as a manufacturer or distributor) do not reduce the
sales amount subject to tax. The taxable amount is the sales Operator
A business that rents out equipment without an operator
price of the item before the value of the coupon is deducted. must charge the customer sales tax. But a business that
An in-store coupon issued by the seller is considered a reduc- rents out equipment WITH an operator does NOT charge
tion in the sales price. The taxable amount is the amount paid the customer sales tax, since the sale is considered to be a
for an item after deducting the value of the in-store coupon. service. In that case, the business must pay sales tax when
they buy the equipment, since the business is considered to
Coupon Books, Gift Cards be the consumer.
and Gift Certificates
The sale of coupon books is taxable. Collect sales tax on the Returnable Containers
sales price when the books are sold. Buying paper for the Deposits on returnable containers, bottles, pallets and drums
books and the printing of the books are resale purchases are subject to tax. When containers are returned for refund
exempt from tax. of the deposit, sales tax should be refunded. Bottle deposits
are exempt from tax when purchased with food stamps or
The sale of gift cards and gift certificates is not taxable. Treat
Women, Infants and Children (WIC) coupons.
the cards and certificates like cash and collect sales tax on
taxable transactions. Buying card stock or paper to make the
card or certificate is taxable.

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Returned Merchandise Example: A dealer accepts a trade-in at a value of
A customer who receives credit for returned merchandise is $8,000 against the purchase of a new manufactured
entitled to a refund of the sales tax. If a customer is given a home valued at $60,000. The calculation is:
partial refund or allowance, the customer is entitled to a refund Original sales price $60,000
of sales tax on the portion of the original sales price refunded. Less trade-in amount - 8,000
Net sales price $52,000
Special Events Portion of net sales price exempt
A special event is a one-time event or an event that runs for six from sales tax ($52,000 x .45) $23,400
months or less where taxable sales occur. Sales tax is collected Portion of net sales price subject
on taxable transactions at special events. A seller who partici- to sales tax ($52,000 - $23,400) $28,600
pates in a special event must register for a temporary sales tax
license, even if the seller has a current sales tax license.
For more information or to get a temporary sales tax license, Vending Machine Sales
call 801-297-6303 or toll free 1-800-662-4335, ext. 6303, or Sales of tangible personal property from vending machines
email specialevent@utah.gov. are taxable. Vending machine sales of items that cannot be
ingested, such as cigarettes or novelty toys, are taxed at the
Third-party Drop Shipping full combined rate.
In third-party drop shipping, a customer buys tangible per- Vending machine sales of prepared food, such as sandwich-
sonal property or products transferred electronically from a es or slices of pizza, are also taxed at the full combined rate.
business that does not have the item in stock. The business For vending machine sales of grocery food, such as packs of
buys the items from a wholesaler who sends it directly to the gum or bags of pretzels, the statewide combined rate is 3.0
customer. percent.
There are two separate transactions in third-party drop ship- Tax is included in the vended price. To find the dollar amount
ping. The first transaction, between the customer and the of sales without tax, divide the sales by one (1) plus the
business, is subject to tax. The second transaction, between combined tax rate in the community where the vending ma-
the business and the wholesaler, is exempt from tax as a chine inventory is warehoused. For example:
purchase for resale. • Where the combined rate is 6.0 percent, divide by 1.060.
If the business has a Utah sales tax license, it must collect • Where the combined rate is 6.125 percent, divide by
and pay the sales tax. If the business is not required to have 1.06125.
a Utah sales tax license, it does not have to collect the tax.
However, the customer must report and pay the tax directly • Where the combined rate on grocery food is 3.0 percent,
to the Tax Commission. divide by 1.030.
A seller of food, beverage and dairy products for $1 or less
may choose to pay tax on 150 percent of the seller’s cost (in-
Trade-in on Manufactured Homes
Utah Code §59-12-104 provides an exemption of 45 percent cluding incoming freight costs) rather than on the sales price.
of the sales price of a new manufactured home and 100 When this option is taken, the taxable amount (150 percent
percent of the sales price of a used manufactured home. of cost) must be reported on the Sales and Use Tax Return
as goods consumed.
When there is a trade-in, calculate the sales price subject to
the exemption as follows: If the vending machine is owned and serviced by a vending
machine company, the vending machine company is respon-
1. Subtract the trade-in amount from the full sales price. sible for the tax.
The difference is the net sales price.
2. Multiply the net sales price by the allowed exemption (45 Videos and DVDs
or 100 percent) to determine the exempt amount. Rentals of videotapes and DVDs are taxed as sales of tan-
3. Subtract the exempt amount from the net sales price. gible personal property.
This is the portion of the net sales price subject to sales
tax.

___________________

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.

25 page 17

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

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