“The statewide sales tax for businesses in Utah is 4.7%.”
What Does The Sales Tax For Businesses In Utah Mean?
Sales tax for businesses in Utah refers to the sales tax that sellers have to pay to the governing body. These are the taxes that business owners have collected from the buyers on the purchase of certain goods and services. A seller here acts as an agent of the state who is responsible for collecting tax from purchasers and further submitting it to the appropriate tax authority.
How Much Is The Sales Tax For Businesses In Utah?
In 1933, Utah adopted its first general state sales tax, and since then, the rate has reached 4.7%. Above these state sales taxes, there are also one or more local sales taxes and special district taxes, each of them can range between 0 to 4%. Sales and use tax in Utah is administered by the State Tax Commission of Utah, where all the tax collected from customers belongs to the state, not the seller.
| Utah Sales Tax | Threshold Limit |
| 4.7% | $100,000 in annual sales or 200 separate sales transactions |
Read More: Iowa Sales Tax 2022 for Businesses: A Complete Guide
Do You Need To Collect Utah Sales Tax For Your Ecommerce Business?
Definitely, you need to collect the sales tax in Utah for your eCommerce business if you hold a nexus there. In Utah, the tax is imposed on the purchase of tangible products and services which need to be collected by the seller. The seller further needs to submit the collected tax to the state authority. To easily determine whether you need to collect Utah sales tax or not, the very first, you need to answer these questions:
Do you hold Nexus in Utah?
Are you selling Taxable goods to residents of Utah?
Are your buyers required to pay sales tax?
If you say “Yes” to all these questions, you are the one who needs to collect the sales tax and submit it to the tax authority. The seller needs to register with the state tax authority, collect the taxes, file returns, and remit it to the Utah state authority.
What Types Of Goods and Services Are Taxable Under Utah Sales Tax?
Tax on Transactions
In Utah, sales taxes and use taxes are applied to financial transactions. All sales transactions are taxed at the rate of 5.95%, depending upon the location and what one is purchasing. This means here that the transaction is taxed, not the specific goods or services. Businesses that make over $100,000 in sales annually in Utah or more than 200 transactions either in previous or current years need to collect sales tax from buyers.
Tax on Services
The goods for which the tax is collected in Utah include physical property, including – furniture, home appliances, and motor vehicles. Prescribed medicines and gasoline are exempt from tax. On the purchase of groceries, the state charges a 3% reduced rate.
Tax Collection
Utah is a sales tax state that requires the collection of taxes based on origin. This means the seller is charging a sales tax rate from customers in Utah based on the business location. A seller who is registered successfully for the collection of Utah sales tax has to apply for the correct rate for all taxable sales. They have to remit the sales tax, file returns, and also need to keep up with the excellent records.
Tax Filing
As sales taxes don’t belong to a specific seller, one needs to immediately transfer them to the tax authorities. Filing sales tax in Utah is a two-step process – filing the returns and further remitting the collected taxes to the state authority. In the filing process, the seller needs to detail each and everything, like the total sales in the state, the amount of sales tax collected, and the sale location.
How Often Do You Need To File Utah Sales Tax Return?
There is definitely a due date associated with filing the Utah Sales tax returns. For a seller, it is important to understand the due dates associated with the filing frequency. Any failure to follow these due dates can lead to penalties and interest rates.
The Tax commission of Utah requires all sales tax filing need to be completed by the last day of the month, considering the taxable period. Due dates that come on weekends or holidays will be adjusted to the following business day.
What If You Fail To File Your Tax Return Before The Due Date?
Failing to file the tax returns before the due date might lead to penalties and adding interest rates on the outstanding. So it’s good for the tax collector to submit the taxes on time without making any delay. Also, the longer you wait to file, the larger the penalty will be. If you are in the process of acquiring the business in Utah, it is highly recommended to contact the tax commission and inquire about the current status.
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