Utah Sales Tax: Rates, Rules, and How to File

Sales tax is a transactional tax collected by sellers from their customers and then remitted to the governing tax authority. The state of Utah employs a sales and use tax system that applies to a wide range of transactions within its borders. This article provides an overview of the state’s sales tax framework, covering applicable rates, taxable items, and the procedural requirements for registration and filing.

Utah Sales Tax Rates

The state of Utah has a statewide sales tax rate of 4.85%. This base rate is only one part of the total sales tax, as the final rate is a combined figure that includes various local and special district taxes. This causes the actual rate to differ based on the specific location of the sale. Counties and cities in Utah have the authority to levy their own local option sales taxes to fund local services.

For example, a uniform local sales tax of 1.00% and a county option sales tax of 0.25% are imposed in many areas. Beyond these, special district taxes can fund transportation infrastructure, resort communities, or rural hospitals. To determine the precise rate for any specific location, businesses must use the official rate lookup tool provided by the Utah State Tax Commission.

What is Subject to Sales Tax in Utah

Utah imposes sales tax on the retail sale of tangible personal property, which includes physical goods that can be seen, weighed, measured, or touched. This broad category covers most products sold to consumers. The tax also extends to a variety of specified services.

Taxable services include accommodations for tourists in hotels and motels for periods less than 30 consecutive days, laundry and dry cleaning services, and admissions to entertainment and recreational events. Other taxable services include repairs or renovations of tangible personal property, meaning labor charges for fixing an item are subject to sales tax. Telecommunication services that originate and terminate within the state are also taxable.

Food

Utah applies a different tax treatment to food items depending on if they are “food and food ingredients” or prepared food. Unprepared food, such as items purchased at a grocery store for home consumption, are taxed at a reduced statewide rate of 1.25%. This rate consists of a 1.0% local option tax and a 0.25% county option tax.

In contrast, prepared foods are subject to the full combined sales tax rate of the location where they are sold. Many counties also impose an additional 1% restaurant tax on sales of prepared food and beverages from establishments like restaurants, bars, and taverns.

Vehicles

The collection of sales tax on motor vehicles is handled differently than for most other retail goods. Instead of the tax being collected by the dealership, it is paid by the buyer directly to the Utah Division of Motor Vehicles (DMV). This payment occurs when the new owner registers the vehicle. The amount of tax due is calculated based on the purchase price of the vehicle and the applicable sales tax rate for the buyer’s residential address. This process ensures that the correct local taxes are applied based on where the vehicle will be registered and used, rather than the location of the dealership.

Common Exemptions

Utah law provides several exemptions from sales tax for specific goods and transactions. One of the most common is for sales for resale, allowing a business to purchase inventory without paying sales tax. Other exemptions include sales of prescription drugs dispensed by a licensed pharmacist and certain types of medical equipment.

Sales made to government agencies and certain religious or charitable institutions are also exempt from sales tax. For these exemptions to apply, the purchasing entity must provide the seller with a properly completed Utah Exemption Certificate at the time of the transaction. It is the seller’s responsibility to obtain and keep these certificates on file to justify not collecting sales tax.

Registering for a Utah Sales Tax License

Before a business can legally collect sales tax from customers in Utah, it must first register with the Utah State Tax Commission and obtain a sales tax license. The primary document for this is Form TC-69, the Utah State Business and Tax Registration application. The state encourages businesses to use the online OneStop Business Registration system, which allows for simultaneous registration with multiple state agencies.

To complete the registration, a business owner must provide several key pieces of information, including:

• Federal Employer Identification Number (EIN)
• The legal business name and any “doing business as” (DBA) names
• The physical address of the business and information about the owners or officers
• The North American Industry Classification System (NAICS) code for the business
• The business start date in Utah
• An estimate of their expected annual sales

Filing and Remitting Utah Sales Tax

After registering and collecting sales tax, businesses are responsible for filing returns and remitting the tax to the Utah State Tax Commission. The state assigns a filing frequency based on annual sales tax liability. Businesses with $1,000 or less in annual liability file annually, those with liability between $1,001 and $50,000 file quarterly, and those with over $50,000 in liability must file monthly.

The due date for filing returns and paying the tax is the last day of the month that follows the end of the reporting period. For example, a quarterly filer’s return for the first quarter (ending March 31) is due by April 30. A return must be filed for every period, even if the business had no sales and collected no tax. All sales tax returns in Utah must be filed electronically through the state’s online portal, Taxpayer Access Point (TAP). To use TAP, a business must create an account using its tax account number and a Personal Identification Number (PIN) provided by the state after registration. Failure to file or pay on time can result in penalties and interest charges.