Senate Bill 287, effective May 6, 2026, with the tax beginning on January 1, 2027, creates a new tax on targeted advertising in Utah. This bill aligns with the broader trend of jurisdictions creating new tax frameworks to expand the tax base and capture revenue from the digital economy, as seen in Maryland’s digital advertising tax and the recent introduction of the social media amusement tax in Chicago.
Utah’s new tax applies to large advertising businesses meeting specific revenue thresholds. Businesses qualify as a “targeted advertising entity” if they deliver targeted advertising to users in Utah and meet the following three thresholds:
Ads that qualify as targeted advertising are those delivered in exchange for payment that use individualized data profiles, are sold through a bidding or similar process, and allow user interaction, such as clicks or purchases.
Imposed annually, the tax is based on the state sales tax rate and applied to Utah-attributable advertising revenue, which is determined using an impressions-based apportionment formula. To determine Utah-attributable revenue, the business multiplies its global targeted advertising revenue by a fraction: Utah impressions divided by total impressions worldwide. This impressions-based apportionment formula allocates revenue to Utah based on the proportion of advertising viewed in the state.
Revenue from the tax will be deposited into the Targeted Advertising Tax Restricted Account, which is used to support child literacy programs, youth sports and recreation, children’s mental health services, youth volunteerism, as well as adoption and foster care services. (S.B. 287, Utah Legislature, Laws 2026)