How Much Is Utah Sales Tax and What Is Taxable?

Sales tax is a common revenue source for state and local governments, enabling funding for public services and infrastructure. Like many states across the United States, Utah imposes a sales tax on the retail sale of tangible goods and specific services. This tax is collected by sellers at the point of purchase and then remitted to the state tax authority, contributing significantly to the state’s overall budget.

Utah’s Base Sales Tax Rate

Utah’s statewide sales tax rate is 4.85%, forming the foundation for all sales tax calculations within the state. This rate applies uniformly to most taxable transactions across all counties and cities. It represents the portion of sales tax that directly goes to the state government.

While this rate applies uniformly, it is important to understand that this 4.85% is just one component of the total sales tax a consumer might pay. Other taxes are frequently added to this base rate depending on the specific location of the transaction.

Local and District Sales Taxes

The total sales tax rate paid by a consumer in Utah is often a combination of the statewide rate and various local and district sales taxes. These additional taxes are levied by counties, cities, and special taxing districts, such as public transit authorities or resort communities. This layered approach means the actual combined sales tax rate can vary significantly from one location to another within Utah.

These local taxes are added on top of the state’s 4.85% base rate. For instance, a county might add a county option sales tax, a city might levy a municipal sales tax, and a transit district could impose a public transit tax. Combined sales tax rates across Utah can range from the base 4.85% up to 8.7%, depending entirely on the specific address where a sale occurs. To determine the precise combined sales tax rate for any particular location, the Utah State Tax Commission provides online lookup tools and resources.

Taxable Goods and Services

Utah sales tax generally applies to the retail sale of most tangible personal property. This includes a wide array of physical goods purchased by consumers. Common examples of taxable items include clothing, electronics, furniture, appliances, and general merchandise.

Beyond tangible goods, Utah also taxes specific services. These services include charges for certain repair work, cleaning services, and telecommunications services. Digital goods and Software as a Service (SaaS) are also subject to sales tax in Utah. Leases and rentals of tangible personal property also fall under the scope of taxable transactions.

Exemptions and Specific Tax Categories

While many goods and services are subject to Utah’s sales tax, certain items and transactions are either exempt or taxed at different rates. For instance, most unprepared food items purchased for home consumption are taxed at a reduced statewide rate of 3%. However, prepared food, such as restaurant meals or items sold heated or with utensils, is subject to the full combined sales tax rate applicable in that location, often with an additional 1% restaurant tax.

Prescription drugs and medical equipment are generally exempt from sales tax. Sales of raw materials or goods purchased by businesses for resale are also exempt, preventing double taxation. Sales to government entities, non-profit organizations, and specific agricultural sales are also exempt. Long-term lodging stays exceeding 30 consecutive days are exempt.

Specific categories like motor vehicles are subject to a state sales tax rate of 6.85%, with a state sales tax cap of $900 on the purchase of a vehicle. Sales of motor vehicles are notably exempt from resort communities tax. Short-term lodging, defined as rentals for less than 30 consecutive days, faces a combination of the state sales tax, a county option sales tax, and a State Transient Room Tax, with additional municipal transient room taxes also applying.