Utah Issues Guidance on Business Activities and Sales Tax Nexus

The Utah Tax Commission has issued guidance on how business activities can create sales tax nexus in Utah. Per the publication, Utah law defines a retailer as any person regularly engaged in regular solicitation of a consumer market in Utah. A retailer includes commission merchants, auctioneers, salespersons, representatives, distributors, supervisors and employers. Retailers and marketplace facilitators are required to collect and pay sales and use tax on their sales and on sales facilitated through their marketplace if they:

  • Sell tangible personal property, products transferred electronically, or services for storage, use, or consumption in Utah in the previous calendar year or the current calendar year that result in either gross revenue of more than $100,000 or 200 or more separate transactions;
  • Have or use an office, distribution house, sales house, warehouse, service enterprise or other place of business;
  • Maintain a stock of goods in Utah;
  • Regularly solicit orders (whether or not the orders are accepted in Utah), unless the activity in Utah is only advertising or solicitation by direct mail, email, the internet, telephone or similar means;
  • Regularly deliver property in Utah other than by common carrier or U.S. mail; or
  • Regularly engage in any activity related to the leasing or servicing of property located in Utah

Additionally, a seller has sales tax nexus in Utah if:

  • The seller has more than 10% interest in a related seller (or vice versa) or a related seller wholly owns the seller, and
  • The seller sells the same or very similar line of products as the related seller under the same or a very similar business name, or the place of business of the related seller or one of its in-state employees is used to advertise, promote or assist sales by the seller to a buyer.

(Publication 37, Utah State Tax Commission, September 2019)

Posted on November 13, 2019