Utah: Sales Tax Handbook
What constitutes sales tax nexus in Utah?
One of the more complicated aspects of Utah sales tax law is sales tax nexus, the determination of whether a particular sale took place within the taxation jurisdiction of Utah, and is thus subject to state (and possibly local) sales taxes.
If a vendor's transactions are determined to have nexus in Utah, the vendor must register for a Utah sales tax license and collect appropriate sales taxes from the buyer for all transactions with nexus in the state. On this page, we have compiled some of the most commonly needed facts about what constitutes sales tax nexus in Utah.
Sales Tax Nexus in Utah
According to the law of Utah, all retailers who have tax nexus can be defined in several ways. A seller is considered to have tax nexus if they have any of the following within the state's boundaries:
An office, warehouse, storage room, place of distribution, or any other place of business(directly or through any subsidiary), any employee, independent contractor or other representative present in the state for the purpose of taking or transmitting orders, and any delivery vehicles which are owned by the taxpayer making deliveries into the state..
For additional details on sales tax nexus law in Utah, see the nexus information page from the State Tax Commission at http://tax.utah.gov/forms/pubs/pub-37.pdf
Taxation of Internet-Based Sales in Utah
NOTE: 2018 Supreme Court Ruling Regarding Online Sales Taxes
In the 2018 Supreme Court case South Dakota vs. Wayfair Inc, Et Al., the court overturned a previous ruling that required a merchant to have physical nexus in order for a state to collect sales tax. This means that any state is now free to enforce collection of sales taxes on out-of-state online merchants. The information provided here may be subject to change, and many states are expected to begin collecting online sales taxes following this ruling.
Generally, Utah does not charge sales tax on Internet-based transactions determined to have nexus within the state. This means that purchases from Amazon.com and other Internet-based retailers may be sales-tax-free.
The nexus status and taxability of Internet-based sales, by vendors and/or consumers within Utah, have been the subject of hot debate in recent years. You can learn more on our introduction to Internet-based sales taxes.
Does my business have tax nexus in Utah?
The folks at the sales tax compliance company Avalara are an approved Utah sales tax partner, and you can use their free Utah nexus wizard tool to determine whether or not your business has nexus, and is therefore required to pay Utah sales taxes. If you're interested in automating your sales tax collection and filing process, click here to get more information.
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