Utah Updates Guidance on Business Activity and Nexus for Sales and Use Tax

The Utah State Tax Commission has updated guidance on business activity and nexus for sales and use tax purposes. The publication redefines “nexus” to mean that a business entity has established a direct or representational presence within a state or jurisdiction. This presence allows Utah to require the business to collect and remit certain taxes. “Retailer” is also redefined as any person regularly engaged in regular solicitation of a consumer market in Utah. A retailer includes commission merchants, auctioneers, salesmen, representatives, distributors, supervisors and employers. The publication also discusses the recently enacted Utah affiliate nexus rules. It states that a seller has nexus in Utah if the seller has a more than 10% interest in a related seller, a related seller has a more than 10% interest in the seller, or a related seller wholly owns a seller; and the seller sells the same or a 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, May 2012)

Posted on June 22, 2012