Does Utah charge sales tax on services?
by March 28, 2024
The majority of U.S. states require merchants to charge sales tax on tangible personal property (TPP), otherwise known as physical goods. Many states also implement sales and use tax on digital goods and SaaS. Because the economy has shifted over time from a manufacturing economy to a service economy, states are now looking to generate revenue by taxing services.
Here’s what merchants need to know about taxing services in the state of Utah, which has a state sales tax rate of 6.1%.
Does Utah charge sales tax on services?
Many services are considered taxable in Utah, these include:
- Telecommunications service that originates and terminates within the boundaries of this state
- Mobile telecommunications service that originates and terminates within the boundaries of one state only to the extent permitted by the Mobile Telecommunications Sourcing Act
- Ancillary service associated with telecommunications service or mobile telecommunications service
- Sales of the following for residential or commercial use: gas, electricity, heat, coal, fuel oil, or other fuels
- Admission or user fees for theaters, movies, operas, museums, planetariums, shows of any type or nature, exhibitions, concerts, carnivals, amusement parks, amusement rides, circuses, menageries, fairs, races, contests, sporting events, dances, boxing matches, wrestling matches, closed circuit television broadcasts, billiard parlors, pool parlors, bowling lanes, golf, miniature golf, golf driving ranges, batting cages, skating rinks, ski lifts, ski runs, ski trails, snowmobile trails, tennis courts, swimming pools, water slides, river runs, jeep tours, boat tours, scenic cruises, horseback rides, sports activities, or any other amusement, entertainment, recreation, exhibition, cultural, or athletic activity
- Services for repairs or renovations of tangible personal property
- Assisted cleaning or washing of tangible personal property;
- Tourist home, hotel, motel, or trailer court accommodations and services that are regularly rented for less than 30 consecutive days;
- Laundry or dry cleaning services
- Repair or renovation services of a product transferred electronically
Please keep in mind that this is a guideline, and you should consult with a sales tax professional to determine if the services your business provides should be subject to state sales tax. For an in-depth look at Utah sales tax, TaxJar’s guide to sales tax in Utah and the Utah State Tax Commission has more details.
How to stay compliant with sales tax when you sell services
Managing all the moving parts of sales tax can be challenging. Are accounting services taxed? What about hair care or car maintenance? They may not be taxed in your state today, but sales tax laws change all the time. TaxJar makes it easier for you to stay current with it all, especially as you scale your business across states.
If you need to charge sales tax on services, TaxJar takes all of these state laws into account and makes your job simple. To learn more about TaxJar and get started automating your sales tax compliance, start a free, 30-day trial today.
