Utah State Tax Rulings
Free plain-English summaries of state tax letter rulings and advisory opinions issued in Utah, with full citations and the original source on every page.
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Does having one remote, non-sales employee working from a home office in Utah force an out-of-state online retailer to collect Utah sales tax?
Yes. A single non-sales employee — here an R&D 'Director of Innovation' telecommuting from her own home in Utah — gives an out-of-state online retailer Utah sales-tax nexus, so it must collect and rem…
Does an out-of-state gift-code issuer (or its affiliated online retailers) have to register to collect Utah sales tax just because unrelated third-party retail stores in Utah sell its gift codes to consumers?
No. The Utah State Tax Commission reaffirmed (updating its own 2010 PLR 09-024 after a 2012 change to the affiliate-nexus statute) that selling gift codes isn't a taxable sale at all — a gift code is …
Does annual attendance at a Utah film festival or trade show, without sales activity, create Utah sales tax or corporate income tax nexus for an out-of-state company or its affiliated retailers?
No, on all counts. Annual attendance at a single Utah trade show or film festival for less than two weeks, limited to networking and relationship-building with no sales negotiated or contracts execute…
Is a company's fee for analyzing job applicants' questionnaire answers and delivering an online probability-of-success ranking report to HR departments subject to Utah sales tax?
No. A company that runs job applicants through its own proprietary psychometric questionnaire and analysis, then gives client HR departments online access to a probability-of-success ranking report, i…
Does an out-of-state bank create Utah nexus by using independent mortgage brokers and relationship managers to originate Utah home loans, and does that nexus reach its subsidiary and LLC too?
Yes to nexus, and yes it extends further. An out-of-state bank that uses independent relationship managers and mortgage brokers to originate loans secured by Utah real estate has Utah corporate franch…
Does Utah sales or use tax apply to printed customer statements a Utah printer produces and mails to both Utah and out-of-state policyholders, depending on who supplies the paper and where the printer ships the materials?
It depends entirely on where the printed materials are shipped. When a Utah printer produces and mails customer statements, Utah sales tax applies to everything shipped to Utah policyholders (whether …
Does Utah's throwback rule pull a Utah-based credit card issuer's out-of-state customer receipts back into Utah's tax numerator if a sister company has nexus in those states?
No throwback needed, based on the facts represented. A Utah-commercially-domiciled credit card issuer generally sources its credit card interest/fees, interchange fees, and loan interest to each cardh…
Does an out-of-state online retailer create Utah nexus by paying commissions to Utah-based affiliate websites that link customers to its checkout page?
Split answer. For SALES TAX, yes — Utah-based 'Affiliate Partners' who maintain their own Utah servers and link visitors to the retailer's checkout page are acting as the retailer's agents regularly s…
If a Utah-registered wholesaler drop-ships products directly to a reseller's Utah customers, does the wholesaler have to collect Utah sales tax when the reseller itself has no Utah nexus?
No, as long as the resale is properly documented. In a drop-shipment where a reseller (not the wholesaler) is the one actually selling to the Utah end customer, the reseller — not the wholesaler doing…
Does an out-of-state retailer get Utah sales tax nexus if a Utah-based company markets its products, processes the sales, and handles returns on its behalf?
Yes. When a Utah-based company (Company B) markets an out-of-state retailer's (Company A's) products on its own website, processes and approves the sales under its own name, collects payment, and hand…
In a drop-ship arrangement where an out-of-state distributor ships directly to customers, which company owes Utah sales tax: the Utah-based website operator or the out-of-state distributor?
It depends on which company is legally the seller, not on where the goods physically ship from. If the Utah-headquartered internet retailer (Company A) is the seller, it must collect Utah sales tax on…
Does a manufacturer have to collect Utah sales tax when its customer resells the goods online, or when a no-nexus out-of-state reseller has the manufacturer drop-ship straight to the reseller's Utah customer?
It depends on who has nexus and what documentation is on file. A manufacturer selling to a Utah reseller does NOT have to collect sales tax on that sale if it obtains a valid resale exemption certific…
If I ship merchandise directly to a Utah customer on behalf of a foreign reseller I sold it to, do I have to collect Utah sales or use tax?
No. When an out-of-state vendor sells merchandise to a foreign reseller with no Utah nexus and ships it directly to the reseller's Utah customer, the sale to the reseller is a sale for resale — the ve…
Does an out-of-state mortgage banking LLC create Utah income tax nexus by using a Utah-based loan originator and servicing loans secured by Utah property?
Yes. Using a Utah-based loan originator, servicing loans secured by Utah real property, and using Utah courts to foreclose are all activities "significantly associated" with maintaining a market in Ut…
Does a mail-order retailer owe Utah sales or use tax on catalogs mailed to Utah customers, and does using a Utah printer create nexus even if the retailer itself has none?
It depends on who has nexus. A mail-order retailer that already has Utah nexus owes use tax on catalogs mailed to Utah customers even if the catalogs are entirely printed and mailed from outside Utah.…
Does an out-of-state company create Utah income tax nexus just by sending traveling sales reps to solicit advertising, sign contracts, and collect deposits in Utah?
Yes. Sending sales representatives into Utah to solicit advertising, sign binding contracts, and secure deposits creates enough contact with Utah to trigger corporate franchise (income) tax nexus unde…
Does an out-of-state software company that licenses stock-trading software to Utah broker dealers and their customers have Utah sales tax nexus, and which of its license, tech-support, and installation fees are taxable?
Yes, nexus exists, and most fees are taxable. A Texas software company licensing canned trading software to Utah broker dealers or their customers has Utah sales and use tax nexus because it owns and …
Does Utah's sales tax exemption for 'locally grown' seasonal crops apply to an out-of-state farm's sales into Utah?
No. The Utah State Tax Commission interprets 'locally grown' in the seasonal-crop exemption to mean grown within Utah's state boundaries, not merely nearby or within some reasonable radius. An out-of-…
Does an interstate trucking company with no Utah office or employees, and its S-corporation parent, have Utah income or franchise tax nexus just from occasional pickups, deliveries, and pass-through mileage?
Yes to both. An interstate contract motor carrier has Utah nexus if it meets even ONE of four tests -- owning/leasing Utah property, making Utah pickups or deliveries, exceeding a mileage threshold, o…
Does an out-of-state debt collection company that only contacts Utah consumers by phone and mail -- with no employees or property in Utah -- owe Utah corporate franchise tax?
Yes -- but the Commission's reasoning turned on the company's own statement that it was "authorized to do business" in Utah (i.e., formally qualified there), not on an independent nexus analysis of it…
Is a wireless broadband data connectivity service taxed as telephone service in Utah, and if so, how are its subscriber fees, connection fees, and per-megabyte charges sourced?
Yes, taxable as telephone service, with nuance. A company providing wireless broadband connectivity that lets clients reach their own office networks acts as a telephone provider, not an internet/LAN …
Does an out-of-state manufacturer that sells into Utah through independent sales reps have sales tax nexus and need to register, even if it believes its sales are tax-exempt?
Yes. The Commission ruled that an Indiana manufacturer selling into Utah through independent manufacturers' representatives (not merely advertising or direct-mail solicitation) had sales tax nexus wit…
If an out-of-state S corporation leases its employees to companies that use them to promote products in Utah, does the leasing company itself have Utah income tax nexus?
Yes. The Utah State Tax Commission ruled that the out-of-state S corporation has Utah income tax nexus -- not because of what its leased employees (detailmen) do in Utah, but because the S corporation…
Does setting up a temporary trade show booth in Utah for under two weeks create sales tax or income tax nexus for an out-of-state mail-order company?
Mostly no, with one catch. A temporary trade show booth in Utah for under two weeks doesn't create sales/use tax or income tax nexus by itself, but giving away catalogs at the booth is still a taxable…
Does an out-of-state publisher have Utah sales tax nexus just because it owns a subsidiary that is already registered and collecting tax in Utah?
No, not on these facts. An out-of-state publisher whose only Utah contact is direct-mail sales does not have Utah sales tax nexus merely because it owns a subsidiary that is registered and collects ta…
Does an out-of-state direct-sales company owe Utah corporate franchise tax just because independent-contractor 'Members' solicit and make sales in Utah?
No, not under these facts. An out-of-state direct-sales/network-marketing company whose independent-contractor 'Members' only solicit and make sales of tangible personal property in Utah, with no Utah…
Is selling software via a free preview CD plus a paid 'electronic key' a taxable Utah sale, and are web design, web hosting, and internet-access charges taxable too?
Mixed answers on three questions. Selling a password/'electronic key' that unlocks full software already sitting on a free preview CD is a taxable Utah sale if the buyer is in Utah. Web page design, h…
Is bottled water subject to Utah sales tax at retail and at wholesale, and what does an out-of-state bottler need to do to register and collect Utah sales tax?
Retail sales of bottled water — still or carbonated — are subject to Utah sales and use tax, because water in bottles, tanks, or other containers is expressly included in the statutory definition of t…
If a mail-order company with no Utah presence opens retail stores in Utah, does that create nexus for its separate, out-of-state mail-order division too?
Yes. Once a company opens retail stores in Utah, it has nexus for ALL of its sales into Utah -- including mail order sales handled entirely by a separate division that keeps its own employees, invento…
Does an out-of-state manufacturer with no offices, warehouses, or sales staff in Utah have to collect Utah sales/use tax on sales shipped to Utah dealers, and are its shipping charges taxable?
Without an office, warehouse, sales agents, or service/repair presence in Utah (directly or through a third party acting on its behalf), the manufacturer generally lacks Utah nexus and doesn't have to…
Does an out-of-state manufacturer with no Utah offices or employees have Utah sales tax nexus just because it hires an independent contractor to install and service its products in Utah, and how are warranty repairs and installation taxed?
Yes, nexus exists here through the service contractor. Even though the manufacturer had no Utah offices, warehouse, inventory, or sales force, and shipped everything by common carrier, the Commission …
Is Utah sales tax owed on a computer software licensing agreement that also bundles in maintenance, training, and other services?
It depends on whether the software is "canned" (prewritten, sold to a general market) or "custom" (built to a particular customer's specifications). Canned/prewritten software is taxable in Utah wheth…
What Utah corporate taxes does an out-of-state mortgage lender owe if it's qualified to do business in Utah but has no offices, property, or employees here?
It owes Utah corporate franchise tax, because holding a Certificate of Authority to do business in Utah as a foreign corporation creates nexus by itself -- Public Law 86-272 doesn't help here since th…
If an out-of-state company builds and runs a client retailer's website and collects payment on the retailer's behalf, is the website operator responsible for collecting and remitting Utah sales tax, and does it create its own Utah nexus?
The website operator must collect sales tax on behalf of any client retailer that has Utah nexus, but whether the operator itself must also report and remit the tax (versus just collecting and handing…
As a Federal Firearms Licensed Dealer handling interstate gun transfers, when do I collect Utah sales tax on the gun price, on my transfer fee, and on the federal NFA tax stamp — and does an individual owe tax on an NFA firearm even if it's for law enforcement training use?
It depends on the roles and billing details. Whether Utah sales/use tax applies to the gun's purchase price turns on nexus: if the out-of-state seller has sufficient contact with Utah, the seller (or …
How does Utah tax sale-leaseback lease payments, conditional-sale 'leases,' and secured loans on equipment, and how can a leasing company avoid taxing the same equipment twice?
It depends on how the transaction is structured. A true sale-leaseback avoids double taxation on the lease payments only if three conditions are all met: the lessee already paid sales tax on its own o…
Does an out-of-state captive equipment-finance company that leases/finances equipment used in Utah, with no Utah office or employees, have Utah income/franchise, property, and sales/use tax nexus?
It depends on the facts of each lease/finance arrangement — this ruling explains the tests rather than giving one flat answer, because whether a transaction is a true lease or a secured loan changes t…
When a manufacturer drop ships goods to a distributor's customer in Utah and the distributor won't pay sales tax or provide exemption documentation, who is responsible for the tax -- the manufacturer, the distributor, or the end customer?
The manufacturer's sale to its distributor is exempt as a sale for resale, even when the manufacturer drop ships the goods directly to a third-party customer in Utah -- the manufacturer is not liable …
Can a manufactured-housing contractor pay Utah use tax on just the raw-material percentage of prefabricated home panels shipped in from out of state, the same way a site-built home is only taxed on materials?
No -- the contractor's requested materials-only formula was rejected. A real property contractor who buys prefabricated "panelized" home sections from an out-of-state factory owes Utah use tax on the …
Does an out-of-state finance company with two Utah-based sales employees, but no Utah office or property, owe Utah corporate franchise/income tax?
Yes. The Utah State Tax Commission ruled that a California-based company purchasing motor vehicle installment contracts from Utah dealers has Utah corporate income tax nexus solely because it has two …
Does a direct-sales company need to collect Utah sales tax on sales to Utah customers, and how does the tax work when independent contractors resell the company's products to their own customers?
Two different rules for two different sales channels. When the company sells directly to Utah customers for their own use, those are ordinary retail sales, and the company -- which has Utah nexus beca…
What are Utah's rules for vendor registration, exemption certificate formats (including electronic/paperless certificates), and stale-dating of resale and exemption certificates?
Utah gave a detailed, question-by-question rundown of its exemption certificate policies for a company building certificate-automation software. Vendors must register (form TC-69) if they have Utah ne…
As of the mid-1990s, did Utah use tax apply to mail-order and early online purchases, and how did Utah tax software, newspapers, and other products delivered electronically?
As of this January 1996 opinion: Utah use tax is owed by a Utah purchaser whenever tangible personal property is bought for use in Utah and sales tax wasn't charged, but the out-of-state vendor only h…
Does an out-of-state company owe Utah sales tax on discount memberships it sells, on catalog/drop-shipped products, and does using independent contractors in Utah create nexus?
It depends on the structure. Selling a bare discount membership — where the member later buys goods or services at a discount from a separate, unrelated retailer who collects its own sales tax — is no…
Does Utah sales tax apply to installed swimming pool cover systems, and does an out-of-state auto-parts locator service with no Utah office or employees owe Utah franchise or income tax?
Two separate advisory opinions are bundled in this record. Installed swimming pool covers become part of the real property, so the installer (not the pool owner) owes sales/use tax on the materials, a…
Does Utah property, sales/use, or corporate franchise tax apply to copper, gold, silver, platinum, or palladium held in a Utah commodity-exchange depository warehouse before it's resold?
Property tax doesn't apply to copper (or gold, silver, platinum, palladium) once it becomes resale inventory held in the Utah warehouse, because Utah exempts inventory held for sale in the ordinary co…
Does building a warehouse before it's operational create Utah corporate franchise and sales tax nexus, and can a company get relief from filing/collecting until the facility opens?
Nexus is created, but the Commission agreed to defer the resulting tax obligations. A national mail-order retailer planning a roughly one-million-square-foot Utah warehouse and distribution facility a…
Does an out-of-state company that only licenses 'canned' software to Utah customers to access its data services create Utah corporate franchise tax nexus?
Yes. The Utah State Tax Commission ruled that an out-of-state database-access ('gateway') service provider was subject to Utah corporate franchise tax even without any traveling salespeople in the sta…
Does an out-of-state company distributing satellite television programming to Utah bars, hotels, and nightclubs have Utah corporate franchise tax nexus, and are its receipts included in Utah's sales apportionment factor?
Utah has jurisdiction to tax the company (it has nexus), but that doesn't mean any revenue actually gets counted toward Utah's tax. Because the company is providing a SERVICE (delivering a satellite T…
Are sales to mixed-blood descendants of the Ute Tribe who are not themselves enrolled tribal members exempt from Utah sales tax the way sales to enrolled tribal members are?
No. Utah's sales tax exemption for reservation sales applies only to enrolled members of a tribe who live within the reservation's exterior boundaries, evidenced by a Federal Bureau of Indian Affairs …
When an out-of-state distributor drop-ships goods directly to a Utah customer on behalf of a reseller who has no Utah nexus, what paperwork satisfies Utah sales and use tax law?
The out-of-state seller needs only a sales tax exemption certificate signed by its reseller customer showing that customer's home-state resale number -- not a Utah certificate. Because the reseller ha…
Does an out-of-state internet retailer create Utah sales tax nexus by letting customers pick up online orders at an affiliated Utah store, and if so, how does it collect and report the tax?
Yes. Even though the internet seller is a separate out-of-state legal entity from the Utah store, letting Utah customers pick up their online orders at that store means the internet seller is using a …
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These are official tax letter rulings and advisory opinions issued by Utah's revenue authority in response to questions from specific taxpayers about how the tax law applies to their facts. A ruling is binding on the department only for the taxpayer who requested it and cannot be relied on by anyone else, but it is strong evidence of how the state reads the law. Every ruling above has a plain-English question and short answer, plus a link to the full original source.