Free Utah Sales and Use Tax General Information - Utah


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Publication 25
Revised 6/09

This publication is provided for general guidance only. It does not contain all sales or use tax laws or rules.

Sales and Use Tax
General Information

Utah State Tax Commission 210 North 1950 West Salt Lake City, Utah 84134 801-297-2200 1-800-662-4335 www.tax.utah.gov

If you need an accommodation under the Americans with Disabilities Act, contact the Tax Commission at 801-297-3811, or TDD 801-297-2020. Please allow three working days for a response.

Contents
Sales and Use Tax General Information .......................................... 2 Introduction ................................................................................ 2 Utah Tax Code ........................................................................... 2 Starting a New Business ........................................................... 2 Buying a Business -- Liability.................................................... 2 What is Sales and Use Tax? ...................................................... 2 Sales Tax License ...................................................................... 2 Nexus Filers ............................................................................... 2 Non-Nexus Filers ....................................................................... 2 How to Close an Outlet .............................................................. 3 How to Close a Sales Tax Account ............................................ 3 Definitions .................................................................................. 3 Sales-based Tax Rates and Types................................................... 4 Determining Tax Rate (Point-of-Sale Sourcing) ......................... 4 Chart 1: General Sourcing Rules ......................................... 5 Tax Rate Changes ..................................................................... 5 Rate Changes During Billing Cycles .................................... 5 Combined Sales Tax Rate ......................................................... 6 Chart 2: Taxes in the Combined Rate .................................. 6 Related Taxes and Fees ............................................................ 7 Chart 3: Related Taxes and Fees ......................................... 7 Other Information ....................................................................... 8 Sales and Use Tax Exemptions ....................................................... 8 Exemption Certificates ............................................................... 8 Types of Exemptions .................................................................. 8 Entity-Based Exemptions ..................................................... 8 Use-Based Exemptions........................................................ 9 Product-Based Exemptions ............................................... 10 Calculating Sales Tax .................................................................... 10 Taxable Transactions ............................................................... 10 Taxes and Fees Imposed on the Seller .................................... 11 Filing and Reporting Requirements ............................................... 11 Returns .................................................................................... 11 Paper Returns .................................................................... 11 Online Sales Tax Return .................................................... 11 Filing Frequency................................................................. 11 Forms and Schedules .............................................................. 12 What to File ........................................................................ 12 Seller Discount......................................................................... 12 Goods Consumed by the Seller ............................................... 12 Returned Checks and Bad Debts ............................................ 12 PaymentExpress ...................................................................... 12 Electronic Funds Transfer (EFT) .............................................. 12 Penalties .................................................................................. 13 Interest ..................................................................................... 13 Overpayments and Refunds .................................................... 13 Record Keeping Requirements ................................................ 13 Reminders ............................................................................... 13 Additional Information .................................................................... 13 Bundled Transactions............................................................... 13 Car Washes ............................................................................ 14 Cigarettes and Tobacco Products ............................................ 14 Coupons ................................................................................. 14 Direct Mail ................................................................................ 14 Food Stamps and WIC ............................................................. 14 Money Orders, Faxes and Photocopies ................................... 14 Newspapers and Postage ........................................................ 14 Premiums and Gifts ................................................................. 14 Returnable Containers ............................................................. 14 Returned Merchandise ............................................................ 14 Special Events ......................................................................... 15 Third-party Drop Shipping ....................................................... 15 Trade-in on Manufactured Homes ........................................... 15 Vending Machine Sales ........................................................... 15 Videos and DVDs..................................................................... 15 Forms ............................................................................................ 16 Sales Tax Publications ................................................................... 16 Internet Information ....................................................................... 16

Sales and Use Tax General Information
Introduction
This publication provides basic sales and use tax information. It includes Utah tax law and Tax Commission rules, but is not all-inclusive. Future law or rule changes may change this publication.

Use Tax
Use tax is applied to purchases of tangible personal property, products transferred electronically, and certain services when sales tax is due but not collected by the seller. A buyer without a sales tax account pays use tax to the Tax Commission on form TC-40, Individual Income Tax Return. Examples of use tax due include: using items from resale inventories; buying goods or services tax-free for personal or business use (advertising supplies, office or shop equipment, computer hardware and software, office supplies, etc.); and buying products from unlicensed, out-of-state sellers.

Utah Tax Code
Utah Tax Code is published by Matthew Bender & Co., Inc. under the trademark LexisNexis. You must pay a subscription fee to access the online site. To order a hardcopy, contact the publisher at: Matthew Bender & Co., Inc. Attn: Customer Support 1275 Broadway Albany, NY 12204-2694 1-800-562-1197 You can get Utah Code, Title 59, Revenue and Taxation, at no charge at http://le.utah.gov/~code/title59/title59.htm. Utah tries to keep current information online; however, code published at LexisNexis may be more current.

Sales Tax License
Every seller with an established presence in Utah (see Nexus Filers, below) must have a Utah Sales Tax License. Submit form TC-69, Utah State Business and Tax Registration, or register online at business.utah.gov/registration to apply for a license. Sales tax licenses are not transferable. Businesses that typically must register for a sales tax license include: retailers selling tangible goods, products transferred electronically or services wholesalers purchasing resale inventory manufacturers leasing companies consumers such as professional firms and construction contractors

Starting a New Business
If you are starting a new business, see Publication 38, Doing Business in Utah, at tax.utah.gov/forms.

Buying a Business Liability
Check the status of all taxes before you buy a business. Keep enough of the purchase money to cover any unpaid taxes until the former owner gives you a Tax Commission receipt showing that all taxes have been paid, or a certificate showing no taxes are due. If taxes are still due 30 days after you purchase the business, you will be personally liable for the former owner's unpaid sales taxes. See Utah Code 59-12-112.

Nexus Filers
Nexus means a business has established a direct or representational presence in a certain state. You have Utah nexus if you: 1. have or use an office, distribution house, sales house, warehouse, service enterprise or other place of business in Utah. 2. maintain a stock of goods or inventory in Utah. 3. regularly solicit orders in Utah, even if the orders are not accepted in Utah. Exception: Your Utah activity is only advertising or solicitation by mail, e-mail, the Internet, telephone or similar means. 4. regularly deliver property in Utah other than by common carrier or U.S. mail. 5. regularly lease or service property located in Utah. See Publication 37, Business Activity and Nexus in Utah. Having Utah nexus requires a seller to collect and pay sales taxes and file returns. If you have Utah nexus, you must file sales tax returns every period, even when you have no tax liability.

What is Sales and Use Tax?
Sales and use taxes are transaction taxes. This means the transaction is taxed, not the actual goods or services. The buyer is the actual taxpayer. Sales and use taxes are trust fund taxes because the seller holds the tax in trust for Utah until paid to the Tax Commission. The funds may not be used for any other purpose. Sales tax and use tax have the same exemptions and tax rates. Either sales tax or use tax applies to any transaction -- not both.

Sales Tax
Sales tax is applied to retail sales and leases of tangible personal property, products transferred electronically, and certain services. The seller collects sales tax from the buyer and pays it to the Tax Commission monthly, quarterly or annually using form TC-62PC, Sales Tax Payment Coupon. See Utah Code 59-12-103 and Rules R865-12L, R865-19S and R865-21U.

Non-Nexus Filers
Non-nexus sellers do not have to register or collect Utah sales and use tax. However, they may collect Utah sales tax voluntarily at the combined rate for the delivery location. When a non-nexus seller does not collect sales and use tax on taxable sales, the buyer must pay use tax on purchases brought into Utah for storage, use or consumption.

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How to Close an Outlet
Notify the Tax Commission immediately if you close a Utah outlet. Use form TC-69C, Notice of Change for a Tax Account. The closed outlet will no longer appear on your preprinted sales tax return. If you need help closing an outlet, call Taxpayer Services at 801-297-2200 or 1-800-662-4335 ext. 2200.

Prepared food does not include: food that a seller only cuts, repackages or pasteurizes; or raw eggs, raw fish, raw meat or raw poultry, or a food containing these items if the Food and Drug Administration advises buyers to cook the items to prevent food borne illness.

Products Transferred Electronically
Audio, video and data that are not delivered on physical storage media (CD, DVD, diskette, tape, etc.). Examples include: Music Reading material Ring tones Software Movies

How to Close a Sales Tax Account
Notify the Tax Commission immediately if you stop doing business in Utah (see Rule R865-19S-25). Use form TC-69C, Notice of Change for a Tax Account. If you need help closing your account, call Taxpayer Services at 801-297-2200 or 1-800-662-4335 ext. 2200. If you do not inform the Tax Commission that you closed your business, we may assess an estimated tax, including late penalties and interest.

Definitions
Delivery Charges
Charges for preparation and delivery to a location chosen by a buyer of tangible personal property, products transferred electronically or services. Delivery charges include (but are not limited to): transportation, shipping, postage, handling, crating and packing. Purchase price and sales price of tangible personal property do not include delivery charges if stated separately. The delivery charge does not include the cost of transportation to the seller (typically called "freight-in").

Purchase Price and Sales Price (Utah Code 59-12-102)
The total value for which tangible personal property, products transferred electronically or services are sold, leased or rented. Purchase price and sales price include: the seller's cost of the tangible personal property, products transferred electronically or services; the seller's expenses, including: the cost of materials, labor cost, service cost, interest, a loss, the cost of transportation to the seller, and tax (including federal excise tax) imposed on the seller; and charges by the seller for any service necessary to complete the sale. Purchase price and sales price do not include: delivery charges; installation charges; cash discounts or discount terms offered to buyers; coupons that are not reimbursed by a third party; or the following, if separately stated on an invoice, bill of sale or similar document given to the buyer: a. the amount of a trade-in; b. interest, financing and carrying charges for credit extended on the sale of tangible personal property, products transferred electronically or services; and c. a tax or fee legally imposed directly on the buyer.

Grocery Food
Substances sold for ingestion or chewing by humans for taste or nutrition. Grocery food does not include alcoholic beverages, tobacco or prepared food. Grocery food includes items sold without eating utensils by a food maker (other than a bakery and tortilla maker), items sold singly and unheated by weight or volume, and bakery items (bagel, bar, biscuit, bread, bun, cake, cookie, croissant, danish, donut, muffin, pastry, pie, roll, tart, torte or tortilla). A container or packaging used to transport food is not considered an eating utensil provided by the seller. See also the Prepared Food definition below.

Installation Charges
Charges for permanently installing tangible personal property to real property. Installation charges do not include charges for repairs or renovations of tangible personal property. Purchase price and sales price of tangible personal property do not include an installation charge if stated separately. Sales of real property are nontaxable. When tangible personal property becomes part of the underlying realty upon installation, the purchase and install transaction is considered a sale of real property and is therefore nontaxable. The contractor must pay the sales and use tax on the purchase of the materials because the contractor is the user.

Real Property
Any right, title, estate or interest in land, including all structures on the land. Real property includes construction materials that lose their separate identity as personal property once incorporated into the real property. These include lumber, bricks, nails and cement used to build structures on the land, as well as fixtures such as furnaces, built-in air conditioning systems, built-in appliances, and other items added to or built into real property. page 3

Prepared Food
1. Food sold in a heated state or heated by a seller. 2. Two or more food ingredients mixed or combined by a seller for a single sale. 3. Food sold with an eating utensil provided by the seller (plate, knife, fork, spoon, glass, cup, napkin, straw, etc.).

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Repair Charges
1. Repair or renovation of products transferred electronically or tangible personal property that is not permanently attached to real property. 2. Attaching tangible personal property or products transferred electronically to other tangible personal property. Charges for labor to repair, renovate or clean tangible personal property or products transferred electronically are subject to sales tax. Parts used to repair or renovate tangible personal property are also subject to sales tax, even if the parts are not actually used. Charges for labor and parts used to service, repair or renovate real property are not subject to tax. For repairs to real property, the contractor is the user of the materials and must pay sales and use tax.

1. the attachment is essential to use the tangible personal property, and 2. the tangible personal property will remain attached over its useful life. This includes an accessory attached to tangible personal property, if it is needed to operate the tangible personal property and is attached solely for that purpose. The classification is further supported if removal would largely damage either the tangible personal property or the real property. The permanently attached tangible personal property keeps its classification even if it is temporarily detached for onsite repair or renovation. The permanently-attached classification does not include: 1. movable tangible personal property attached for convenience, stability, or for an obviously temporary purpose; 2. tangible personal property that is detached for offsite repair or renovation; or 3. a dishwasher, refrigerator, freezer, microwave, stove, washer, dryer or similar appliance.

Restaurant
A retail establishment whose business is the sale of food and beverages for immediate consumption. The definition of restaurant does not include theaters, but does include dinner theaters. See Utah Code 59-12-602. Exception: In counties that impose the tourism tax, it does not apply to food sales from deli areas, pizza take-out counters or salad bars within a grocery store or convenience store whose primary business is the sale of fuel or food not prepared for immediate consumption. These sales are exempt from the tourism tax even if the store has seats or stools for customers. However, if a grocery or convenience store has a full-service restaurant, the tourism tax is due on sales in that restaurant.

Transient Room
Accommodations in hotels, motels, inns, trailer courts, campgrounds, tourist homes and similar stays of less than 30 consecutive days. Transient room does not include meeting rooms.

Tangible Personal Property
Property that can be seen, weighed, measured, felt or touched, or is perceptible to the senses in any manner. Tangible personal property includes electricity, water, gas, steam and prewritten software.

Sales-based Tax Rates and Types
Tax rates vary from one community to another, depending on the taxes each community imposes. Find tax rates online at tax.utah.gov/sales/rates.html.

Tangible Personal Property Permanently Attached to Real Property
A special classification of tangible personal property. Tangible personal property is considered permanently attached to real property if:

Determining Tax Rate (Point-of-Sale Sourcing)
Sourcing means assigning a sale to a taxing jurisdiction to determine the sales tax rate. Sales are sourced by transaction type.

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Chart 1: General Sourcing Rules Transaction Type
Retail sale of tangible personal property in Utah (including products transferred electronically).

Source to:
Seller's fixed place of business (whether or not the goods or services are delivered)

Exceptions
If the seller does not have a fixed place of business (vending machine operators, mobile tool companies, etc.), source to the location where the sale takes place. Sales at special events (fairs, swap meets, etc.) are sourced to the event location.

Retail sale of taxable services in Utah when seller sells, leases or rents any tangible personal property (including products transferred electronically).

Seller's fixed place of business OR customer's location (seller's preference)

If the seller does not have a fixed place of business (vending machine operators, mobile tool companies, etc.), source to the location where the sale took place. Sales at special events (fairs, swap meets, etc.) are sourced to the event location.

Retail sale of taxable services in Utah when seller does not sell, lease or rent any tangible personal property (including products transferred electronically). Retail sale of tangible personal property or taxable services from outside Utah (including products transferred electronically).

Customer's location

Buyer's location (the place the buyer receives the service or property)

Retail sale of admissions

Location of activity or event (regardless of ticket purchase location) Seller's fixed place of business for down payment and first payment Customer's address for subsequent payments Customer's address for all payments, including down and first payments If there are no recurring payments: source to the seller's fixed place of business if shipped from or picked up in Utah. source to the buyer's location if shipped from outside the state to a Utah customer.

Lease or rental of tangible personal property (other than motor vehicles, semi-trailers, trailers 10,000 pounds or less, and aircraft) and products transferred electronically.

Lease or rental of motor vehicles, semitrailers, trailers 10,000 pounds or less, and aircraft

See Utah Code 59-12-211, 59-12-212, 59-12-213 and 59-12-214.

Tax Rate Changes
Tax rates and jurisdictional boundaries can change quarterly. The Tax Commission posts these changes 60 days before the effective date. Check tax rates regularly at tax.utah.gov/sales/rates.html.

If the tax rate decreases, the new rate applies to the first payment due on or after the effective date. Example 1: Rate INCREASE Payments for a 36-month vehicle lease are due on the 15th day of each month. After the lease went into effect, the sales tax rate increased, effective October 1. The October 15 payment is for the billing period beginning September 16, which was before the new rate went into effect. The October 15 payment is taxed at the old (lower) rate, even though the payment is made after the new rate went into effect. The November 15 payment will be for the period beginning October 16 and will be taxed at the new (higher) rate. page 5

Rate Changes During Billing Cycles
When the sales tax rate changes during a billing cycle, it is applied differently depending on whether the rate increases or decreases: If the tax rate increases, the new rate applies to the first billing period starting on or after the effective date.

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Example 2: Rate DECREASE Using Example 1 above, instead of an increase there was a tax rate decrease effective October 1. The October 15 payment is taxed at the new (lower) rate because the payment is due after the rate went into effect, even though the period started before the effective date. All future bills will be taxed at the new rate.

Combined Sales Tax Rate
The taxes listed in Chart 2 are included in the combined sales tax rate and are filed on the sales tax return (TC-62S or TC-62M). The combined sales tax rate is applied to all taxable transactions, except as noted in the chart.

Chart 2: Taxes in the Combined Rate Tax
State Sales and Use

Imposed By
State

Rate
4.70%

Exemptions
The state sales tax rate for grocery food is 1.75 percent. These transactions are also subject to local option and county option and results in a total combined rate on grocery food of 3 percent throughout Utah. None None Sales of motor vehicles, aircraft, watercraft, modular homes, manufactured homes or mobile homes are exempt from resort communities tax, but are subject to the remaining portion of sales and use tax. This exemption, however, does not apply to trailers, off-highway vehicles, snowmobiles, truckmounted campers, etc. Grocery food sales Grocery food sales Grocery food sales Grocery food sales

Local Option County Option Resort Communities

County, city or town County City or town

1.00% 0.25% Up to 1.60%

Rural Health Care Public Transit Highways Recreational Facilities and Botanical, Cultural and Zoological Organizations Town Option City or Town Option Mass Transit Fixed Guideway County Option Transportation Supplemental State Sales and Use County of the second class airport, highway and public transit

County, city or town County, city or town City or town County, city or town

Up to 1.00% Up to 0.55% Up to 0.30% 0.10%

Town City or town County County State

Up to 1.00% Up to .20% Up to 0.30% Up to 0.25% Up to 0.05%

Grocery food sales Grocery food sales Grocery food sales Grocery food sales Grocery food sales

County, city or town

Up to 0.25%

Grocery food sales

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Related Taxes and Fees
The following sales-related taxes and fees are filed on separate returns or electronically:

Chart 3: Related Taxes and Fees Tax
Transient Room

Imposed By
County

Rate
Up to 4.25%

Applies To
Tourist home, hotel, motel or trailer court rental for less than 30 consecutive days

Seller Discount
None

Reported On
TC-62T, unless reported to the county TC-62T, unless reported to city TC-62T

Municipal Transient Room Tourism Transient Room Motor Vehicle Rental

City or town Salt Lake County State

Up to 1.5% Up to 0.5% 2.50%

Tourist home, hotel, motel or trailer court rental for less than 30 consecutive days Tourist home, hotel, motel or trailer court rental for less than 30 consecutive days Short-term leases and rentals (less than 30 days) of motor vehicles, unless the vehicle: temporarily replaces a motor vehicle being repaired under a repair or insurance agreement, is registered for a gross laden weight of 12,001 or more pounds, or is a moving van for personal household goods

None

None

None

TC-62L

Short-term Leasing

County

Up to 7.0%

Short-term leases and rentals (less than 30 days) of motor vehicles, unless the vehicle: temporarily replaces a motor vehicle being repaired under a repair or insurance agreement, is registered for a gross laden weight of 12,001 or more pounds, or is a moving van for personal household goods

1%

TC-62L

Restaurant

County

Up to 1.0% $0.61 per access line $0.07 per access line $0.08 per access line

Food, food ingredients and prepared food sold by a restaurant Local exchange service switched access line, radio communication access line, voice-over-Internetprotocol Local exchange service switched access line, radio communication access line, voice-over-Internetprotocol Local exchange service switched access line, radio communication access line, voice-over-Internetprotocol

None

TC-62F

Emergency Telephone Service

County, city or town County, city or town County, city or town

1%

Electronically

Emergency Service Telephone charge to fund Poison Control Cntr. Emergency Service Telephone charge to fund statewide E911 emergency service Municipal Telecom License Tax Municipal Energy Sales and Use Tax Waste Tire Fee

None

Electronically

1%

Electronically

City or town City or town State

Up to 3.5% Up to 6.0% $1.00 per tire

Charges for telecommunications services

None

Electronically

Sales of natural gas and electricity

1%

TC-62E

Sales of new tires with a rim size up to 24 inches. Sales tax exemptions do not apply to the fee. The fee does not apply to used tires, bicycle tires, tires attached to human-propelled devices, or tires sold and delivered out of Utah.

2.50%

TC-62W

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Other Information
The following miscellaneous taxes and fees may also apply to certain sellers. Contact the Tax Commission for more information. Motor fuel, aviation fuel, and special fuel taxes Lubricating oil fee Beer, cigarette and tobacco products taxes Royalty payment on unprocessed brine shrimp eggs Multi-channel audio and video tax Sexually explicit business and escort service tax

To qualify for this exemption, the purchase must be made with the government agency's funds. A purchase does not qualify for this exemption if a government employee makes the purchase with personal funds, even if the government agency reimburses the employee. U.S. and Utah government employees traveling on official business are exempt from sales tax if they present one of the following: a complete and signed form TC-721G, Exemption Certificate for Governments & Schools; a check from the government agency; or a U.S. government credit card (also called SmartPay cards). For more information about SmartPay cards, see U.S. General Services Administration SmartPay online at gsa.gov/gsasmartpay and select "Tax Information". U.S. Department of the Interior (DOI) bureaus that centrally bill travel expenses include: Bureau of Indian Affairs, Bureau of Reclamation, U.S. Geological Survey, Minerals Management Service, Office of Special Trust, Office of Surface Mining, Office of the Secretary, and National Business Center. If employees of these DOI bureaus incur travel expenses in Utah, the transactions may be exempt from sales tax. To qualify, the employee must use a DOI Bank of America MasterCard with beginning numbers of 5568 16. The DOI credit card is embossed with the employee's name, U.S. Department of the Interior, and the DOI tax-exempt ID number. The sales tax exemption for government purchases does NOT apply to purchases by any state or local government located outside of Utah. Utah government purchases are tax-exempt if made with a Utah state purchasing card or paid with a Utah state check. Purchasing cards are issued by US Bank. The cards display the Utah state seal, include the words "State of Utah Tax Exempt," and are imprinted with the state employee's name and state agency. A seller must keep proof that a purchase qualifies for the U.S. or Utah government exemption. This proof may be a record of the credit card number, a copy of the government check, a purchase order, a voucher or a signed form TC-721G. Sales made to or by: a local agency on aging; a senior citizen center owned by a county, city or town; and a senior citizen center that contracts with a local agency on aging. Purchases by certain enrolled members of Native American tribes (including the tribe itself), if: the member has a tribal card showing a Federal Bureau Number; the purchased item is delivered to the enrolled tribal member's own reservation (in the case of the Ute Indian Tribe, the item must be purchased on or delivered to tribal trust lands within the Uintah and Ouray reservations); and in the case of sales to the tribe itself, the buyer must present a purchase order, exemption certificate, or similar evidence of tribal identity. Sales made off the reservation to enrolled members of the tribe are taxable. They are exempt from tax only if the seller (or a licensed common carrier) delivers the purchased item(s) to the reservation. page 8

Sales and Use Tax Exemptions
Utah law provides some exemptions from sales and use tax. See Utah Code 59-12-104 for more information.

Exemption Certificates
When an exemption certificate is required, the buyer must provide the seller with the exemption information in one of two ways: 1. On a paper exemption certificate: form TC-721, Exemption Certificate; or form TC-721G, Exemption Certificate for Governments & Schools. A buyer only needs to provide a signature when using a paper certificate. 2. Electronically If the exemption information is provided electronically, all the information required on the paper form must be included. A seller can accept exemption certificates at face value. A seller is not liable for improper exemptions unless the seller takes part in claiming a fraudulent exemption. Sellers must keep exemption certificates in their records as documentation. A seller may use a certificate on file for its customers' future purchases. A buyer must notify the seller if a certificate on file is cancelled, modified or limited.

Types of Exemptions
There are three types of sales tax exemptions, based on: 1. Entity (exemption certificate required for sales to an exempt entity) 2. Use (exemption certificate required) 3. Product (exemption certificate not required)

Entity-Based Exemptions
An entity-based exemption is determined by who buys or sells the product. Some common exemptions are: Sales to a public transit district or a subcontractor of a public transit district, if the tangible personal property is clearly identified and installed or converted to real property owned by the public transit district. Sales to United States and Utah government agencies. Sales of construction materials to most Utah government agencies are exempt only if installed by the agencies' employees. Construction materials bought by or for public elementary and secondary schools are exempt from sales tax. The construction materials must be clearly identified and segregated, and they must be installed or converted to real property owned by the school. See Rule R865-19S-23.

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Sales to certain foreign diplomatic employees, to varying degrees. The U.S. State Department issues tax exemption cards to its personnel. The cards have a colored stripe that indicates the types and/or amount of the sales tax exemption. Cardholders with a green stripe are not exempt from taxes on hotel rooms. Sellers must keep a photocopy of the card for evidence of exemption. The cards are not valid for exempt purchases of telephone or other utility services -- the U.S. State Department issues special exemption certificates for such purposes. Sales of feed, seed, baling ties, etc. to commercial farms. Sales of tangible personal property and products transferred electronically for primary use in farming operations. Also, charges for labor, parts and supplies to repair and maintain off-road agricultural machinery. Sales of electricity and fuel for industrial use as defined in Utah Code 59-12-102. Sale or lease of semiconductor fabricating, processing, research or development materials. Sales relating to schools and fundraising. Sales to religious or charitable institutions. If the purchase is $1,000 or more, the buyer takes the exemption at the point of sale. If the purchase is less than $1,000, the buyer claims the exemption by submitting form TC-62N, Utah Sales Tax Refund Request, to the Tax Commission. If a public utility makes the sale to a religious or charitable institution, the exemption must be taken at the point of sale. If a contract exists between the seller and the religious or charitable institution, the buyer may take the exemption at the point of sale regardless of the dollar amount of the sale. To be eligible for the exemption, the organization must be exempt under IRC Section 501(c)(3) and have a sales tax exemption number from the Tax Commission. Submit form TC-160 to get a tax exemption number. Sales of construction materials to a religious or charitable institution, or to a contractor buying for a religious or charitable institution. Sales of aircraft, boat and river-running tours. Amounts paid for aircraft tours are exempt if the craft enters a federal airway (designated by the Federal Aviation Administration) during the tour. Amounts paid for boat tours, scenic cruises, and similar services are exempt from tax if the waters of the tour or cruise are used as highways for interstate commerce. For more information, see Rule R865-19S-113.

Sales for resale or lease. The lease of tangible personal property and products transferred electronically is also exempt if it meets all of the following conditions: the property is part of a sale-leaseback transaction, sales or use tax was paid on the initial purchase of the property, and the leased property will be capitalized and the lease payments will be accounted for as payments made under a financing arrangement. Purchases of tangible personal property and products transferred electronically when sales and use tax is paid to another state, unless the other state's tax rate is lower than Utah's rate. When the tax rate is lower than Utah's rate, the buyer must pay the difference. No adjustment or credit is allowed if the other state's tax rate is greater than Utah's rate. Purchases or leases of machinery and equipment and repair or replacement parts with an economic life of three or more years that are used in a cogeneration facility (see Utah Code 54-2-1), or a qualified manufacturer or scrap recycler (see Standard Industrial Classification Manual (SIC) classification 2000-3999). Purchases or leases of machinery, equipment or parts with an economic life of three or more years that are used in a mining production process or in research and development, by a business described in NAICS 212, Mining (except Oil and Gas) or NAICS 213113, Support Activities for Coal Mining. Charges for labor to repair or renovate tangible personal property or products transferred electronically, if the parts used are exempt from sales and use tax. Sales of parts used in the repair or renovation of the following exempt tangible personal property: tools or equipment used exclusively under an aerospace or electronics industry contract with the United States government; tangible personal property and products transferred electronically used or consumed primarily and directly in farming operations; snow-making equipment, ski slope grooming equipment, and passenger ropeways; Sales of non-returnable containers, labels, bags, shipping cases and casing to a manufacturer, processor, wholesaler or retailer for use in packaging tangible personal property for resale. Purchases of lists or databases used to address direct mail. Purchases or leases by a telephone service provider of equipment, machinery or software that have a useful economic life of one or more years and are used for the following telecommunication purposes: enabling or facilitating, 911 service, maintenance or repair, switching or routing, or transmission.

Use-Based Exemptions
A use-based exemption is determined by the buyer's use of the product. The following are exempt: Sales of certain vehicles for exclusive use outside of Utah. Property purchased in the regular course of business for resale in Utah, either in its original form or as an ingredient or component of a finished product.

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Purchases of property from another state that is brought into Utah, only if: 1. the property is used for business, 2. the property is first used outside Utah, 3. the property is not a vehicle, and 4. the property is not rented or leased.

Sales of motor fuels and special fuels subject to Utah fuel excise tax. Sales of hay. Exclusive sale of seedling plants, or garden, farm or other agricultural produce, if sold during the harvest season by the producer, an employee of the producer, or by a member of the producer's immediate family. If the producer sells any other product, tax is due on all sales. Sales of telephone service charged to a prepaid telephone calling card. Sales of newspapers or newspaper subscriptions. Sales of water in a pipe, conduit, ditch or reservoir. Room and trailer space rentals for 30 consecutive days or more. Sales of currency or coinage that is legal tender of the United States or of a foreign nation. Sales of an ingot, bar, medallion or decorative coin containing at least 80 percent gold, silver or platinum that is not legal tender of any nation. Admissions to higher education athletic events. Sales of grocery food, prepared food or alcoholic beverages by a church or a charitable institution, if the items are not available to the general public. Sales of grocery food, prepared food or alcoholic beverages by a higher education institution, if the items are not available to the general public and are prepaid as part of a student meal plan offered by the institution. Sales of grocery food, prepared food or alcoholic beverages provided at a medical or nursing facility for inpatient meals. See Rule R865-19S-61.

Product-Based Exemptions
A product-based exemption is determined by the type of product. An exemption certificate is not required. The following are exempt: Isolated or occasional sales, if the sale is made by a person who does not typically sell that type of product. This exemption does not apply to sales of products for resale or to the sale of a vehicle or vessel that must be titled or registered in Utah. Purchases of prescription drugs. A drug is defined as a compound, substance or preparation that is used to diagnose, cure, mitigate, treat or prevent disease, or to affect the structure or function of the human body. Food, dietary supplements, alcoholic beverages and prosthetic devices are not considered drugs. Sales of drugs are exempt from sales and use tax only if the buyer presents a prescription. Sales or rentals of durable medical equipment, including replacement and repair parts. Sales or rentals of durable medical equipment are exempt from sales and use tax only if the buyer presents a prescription for the equipment. Sales or rentals of mobility-enhancing equipment to help a person with limited mobility move from one place to another. Sales or rentals of mobility-enhancing equipment are exempt from sales and use tax only if the buyer presents a prescription for the equipment. Sales of prosthetic devices, including repair and replacement parts. Eyeglasses and contact lenses are not prosthetic devices. Sales or rentals of prosthetic devices are exempt from sales and use tax only if a prescription is required for the device or it is purchased by a hospital or medical facility. Sales of disposable home medical equipment or supplies that cannot withstand repeated use. Sales of disposable home medical equipment or supplies are exempt from sales and use tax only if the buyer presents a prescription for the equipment or supplies. The equipment and supplies must be eligible for payment under Title XVIII, federal Social Security Act or the state plan for medical assistance under Title XIX, federal Social Security Act. Forty-five percent of the sales price of a new manufactured home, and 100 percent of the sales price of a used manufactured home. Fees for unassisted amusement devices, such as arcade games. Sales of unassisted car washes, and unassisted dry cleaning and laundry services. Interstate sales delivered by common carrier or by the seller to a place outside Utah. The licensed seller or retailer must keep a copy of the bill of lading, freight bill, form TC-757 or other proof of out-of-Utah delivery. If the property is delivered within Utah to a buyer, the tax applies, even if the buyer takes the property out of Utah. See Rule R865-19S-44.

Calculating Sales Tax
Taxable Transactions
Sales and leases of tangible personal property, products transferred electronically, and certain services are taxable to the final consumer. The following transactions are taxable unless an exemption applies: Retail sales or purchases of tangible personal property and products transferred electronically within Utah. The storage, use or consumption in Utah of tangible personal property and products transferred electronically. Rentals and leases of tangible personal property and products transferred electronically, if: the location of the product is in Utah; the lessee took possession of the product in Utah; or the product is stored, used or otherwise consumed in Utah. Labor to repair, renovate and clean tangible personal property and products transferred electronically. This includes maintenance agreements. Labor to repair, upgrade or maintain products transferred electronically. This includes maintenance agreements. Labor to attach tangible personal property or products transferred electronically to other tangible personal property. (Labor to attach tangible personal property or products transferred electronically to real property is not subject to tax if stated separately.) page 10

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Laundry and dry cleaning services when the labor is not performed by the buyer. Admission or user fees for theaters, movies, operas, museums, planetariums, shows, 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, jeep tours, horseback rides, sports activities, or any other amusement, entertainment, recreation, exhibition, cultural, or athletic activity. User fees include access charges for videos, video games, television programs and cable or satellite broadcasts, if that access occurs anywhere other than the buyer's home. Use of assisted amusement devices when the device or ride is not operated by the buyer. Assisted cleaning or washing of tangible personal property if the cleaning or washing labor is not performed by the buyer. Stays at tourist homes, hotels, motels, campgrounds, trailer courts and similar accommodations usually rented for less than 30 consecutive days. Telegraph services and in-state telephone service. Meals at restaurants or other eating places. Sales for commercial use of gas, electricity, heat, coal, fuel-oil or other fuels. (Sales of these items for industrial use may qualify for an entity-based exemption.) Sales for residential use of gas, electricity, heat, coal, fueloil or other fuels. These products are taxed at the state rate of 2 percent plus any applicable local and/or public transit tax. Sales of grocery food. Taxed statewide at the rate of 3 percent. (Sales of prepared food are taxed at the full combined rate.) Sales of prepaid telephone calling cards, including vending machine sales of prepaid telephone calling cards, if the card can be used for in-state calls. Sales of memberships that entitle the buyer to discounted or free merchandise or services that are subject to sales tax. For example: 1. Memberships that let card holders enter a warehouse and buy merchandise free of additional markup. 2. Video memberships that let members rent videos at a reduced price. All purchases made with these membership cards are subject to sales tax at the time of purchase unless an exemption applies. Sales of products transferred electronically, if a physical copy of the product would be taxable. For example, the purchase of a music CD is taxable, so downloaded music is also taxable. For more information, see the Additional Information section.

Taxes and Fees Imposed on the Seller
Municipalities may impose and collect a license fee or tax, other than taxes imposed under the Utah Sales and Use Tax Act, as allowed by law. You must include city-imposed taxes (other than taxes imposed under the Utah Sales and Use Tax Act) in the taxable sales you report on your Utah Sales and Use Tax Return. Example: A seller makes a $100 sale in a city that has imposed a 2 percent gross receipts tax on revenues. City and state taxes are calculated as follows: Taxable sales City-imposed tax @ 2% Amount subject to state and local taxes Combined sales tax rate @ 6.125% State and local sales taxes paid to the state Transaction total (cost of item plus taxes) $100.00 2.00 $102.00 x.06125 $6.25 $108.25

Filing and Reporting Requirements
Returns
Every sales and use tax account must file a Sales and Use Tax Return for each filing period. Depending on the nature of your business, your return is either form TC-62S or form TC-62M. If you file TC-62M, you must also file schedules with your return (see Forms and Schedules, below). If you are liable for sales-related taxes (transient room, tourism, waste tire, etc.), you must file a separate return for each separate type of tax or fee. Only file once for each filing period. Returns are due the last day of the month following each filing period. When a due date falls on a weekend or legal holiday, the return is due the next business day.

Paper Returns
The Tax Commission mails personalized returns to every seller (unless a seller asks not to receive paper returns). However, you must file returns and pay taxes by the due date, even if you don't receive a return. Get blank forms and schedules online at tax.utah.gov/forms.

Online Sales Tax Return
You may file your Sales and Use Tax Returns and schedules online. Find the TC-62 web application at utah.gov/salestax. Access the system using the PIN number printed on your paper TC-62M or TC-62S. You can file your Sales and Use Tax Return (TC-62M or TC62S) and Schedules A, AG, B, BG and X electronically. You must file other TC-62 forms (Restaurant Tax Return, Transient Room Tax Return, etc.) on paper.

Filing Frequency
Your filing frequency depends on your yearly sales tax liability: If your sales tax liability is less than $1,000 per year, you may file annually. If your sales tax liability is between $1,000 and $50,000 per year, you may file quarterly.

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If your sales tax liability is $50,000 or more, you must file monthly. The Tax Commission will set your filing frequency and notify you if it changes.

No tax is due on items discarded because of spoilage, broken packaging and similar incidents, because they are not consumed by the seller. The purchase of printed advertising inserts is taxable unless the inserts contain the name and publication date of the newspaper distributing the inserts and are included in and distributed with the newspaper. See Rule R865-19S-65. Report use tax on your Sales and Use Tax Return.

Forms and Schedules
What to File
TC-62S, Sales and Use Tax Return, Single Place of Business -- For sellers with one fixed Utah location. TC-62S filers do not need to file schedules. TC-62M, Sales and Use Tax Return, Multiple Places of Business -- For sellers with multiple Utah business locations or no fixed place of business. Sellers file TC-62M if they need to report: vending machine sales from multiple locations, sales in Utah from a non-fixed place of business, sales in a resort community, and sales of tangible personal property or products transferred electronically that are sent into Utah by sellers with Utah nexus. TC-62M filers must also file one or more of the following schedules: Schedule A, for sales of non-food and prepared food from multiple fixed business locations, based on the seller's location. Schedule AG, for sales of grocery food from multiple fixed business locations, based on the seller's location. Schedule B, for sales of non-food and prepared food from non-fixed places of business based on the customer's location, or consumption of tangible personal property or products transferred electronically at a location other than a fixed place of business. Schedule BG for sales of grocery food from non-fixed places of business based on the customer's location. Schedule X for sales exempt from resort communities tax.

Returned Checks and Bad Debts
Only a seller may claim bad debts. A seller may take a sales tax adjustment for returned checks and bad debts. You must deduct nontaxable amounts (such as cash back to the customer and exempt charges) from the total amount of the returned check or bad debt amount to arrive at the net writeoff amount. To find the amount of the adjustment you may claim on your Sales and Use Tax Return, divide the net write-off (W) by one (1) plus the local combined sales tax rate (R) at the time of sale. W (1 + R) = adjustment Example: A retailer has a net write-off of $100. The combined sales tax rate in the retailer's community is 6.5 percent. The retailer divides $100 by 1.065 to arrive at an adjustment claim of $93.90. You may not take a credit for repossessed items other than motor vehicles. See Publication 5, Sales Tax Information for Motor Vehicle/Marine Dealer/Body & Repair Shops.

PaymentExpress
You can pay sales tax online using PaymentExpress. You may use this service whether you file electronically or on paper returns. Go to paymentexpress.utah.gov. Using this service, you may pay by credit card (American Express, Discover, or MasterCard) or by electronic check (direct debit to a checking or savings account). A convenience fee is applied to PaymentExpress transactions to cover service costs. The convenience fee is $1 for electronic check payments. The convenience fee varies for credit card payments, depending on the amount paid. See a complete convenience fee table on the PaymentExpress website in the Frequently Asked Questions. You may only use PaymentExpress to pay taxes and other amounts due. You must file tax returns separately.

Seller Discount
Monthly sales tax filers may take a seller discount equal to 1.31 percent of the combined sales tax. Monthly tourism tax filers may take a seller discount equal to 1 percent of the tourism short-term leasing tax adopted by the county. Sellers of grocery food may take the seller discount of 1.31 percent as if they had collected tax at the full combined rate. Quarterly and annual filers may not take the seller discount.

Goods Consumed by the Seller
Items consumed by the seller are subject to use tax on the amount of the seller's cost, not the potential sales price. Items consumed by the seller include: items taken from inventory and used by the seller, samples given away for advertising, and products consumed by employees without payment. When you buy products for store use from local businesses, you must pay tax at the time of purchase. For example, office supplies and equipment (such as cash register tapes, returnable containers and furniture) are taxable at the point of sale. A seller may purchase tax-free grocery bags, sacks and other non-returnable packaging material that go out the door with the customer.

Electronic Funds Transfer (EFT)
If your annual sales tax liability is $96,000 or more, you must pay by Electronic Funds Transfer (EFT). EFT payments can be scheduled up to 30 days before the filing due date and the payment can be withdrawn from your account on the date you select. If you wait until the filing due date to make a payment, it must be completed by 7:00 p.m. Mountain Time, with a settlement date no later than the next business day. You must set up this account before making your payment. Contact the Tax Commission for more information.

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Caution: Do not use PaymentExpress for current returns if you are required to pay by EFT. Payments through PaymentExpress do not meet EFT filing requirements. You will lose your seller discount on current returns if you are required to pay by EFT but pay through PaymentExpress. However, EFT filers may pay past-due liabilities with PaymentExpress.

Your records should: show all gross receipts from Utah sales or leases of tangible personal property, products transferred electronically, or services. show deductions and exemptions claimed on sales tax returns. show bills, invoices and similar proof of all tangible personal property and products transferred electronically bought for sale, consumption or lease in Utah. include original supporting documents (bills, receipts, invoices, cash register tapes, etc.) and all schedules or working papers used to prepare tax returns. See additional record keeping requirements in Rule R861-1A-35.

Penalties
The penalty for failure to file a tax-due return by the due date is the greater of $20 or up to 10 percent of the unpaid tax, based on the date the return is filed. Failure to file a tax return includes filing a tax return without enough information for us to correctly distribute local tax revenues. We will add another failure-to-pay penalty, the greater of $20 or up to 10 percent of the tax balance, if the tax balance remains unpaid 90 days after the due date. The penalty for failure to pay the full amount of tax due on a timely-filed return, or within 30 days of a notice of deficiency, is the greater of $20 or up to 10 percent of the tax due, based on the payment date. Unpaid tax includes tax paid without a tax return. You will also lose the seller discount if you file your monthly return late or underpay the tax due. Penalties are imposed at a graduated rate, based on the time period of the delinquency. See Publication 58, Utah Interest and Penalties, online at tax.utah.gov/forms.

Reminders
The information in this publication is only a summary and does not include all sales or use tax laws and rules. 1. You must collect sales tax on all taxable sales of tangible personal property, products transferred electronically and services to the final consumer. 2. You must file a Sales and Use Tax Return for every period, even when no tax is due. 3. You must notify the Tax Commission in writing if you change business locations or add or close sales outlets. 4. If you stop doing business, you must notify the Tax Commission in writing within 30 days of the final date you were required to collect sales tax. 5. You must keep your records for three years from the filing date of a return. 6. Records are subject to audit by the Tax Commission. 7. Sales tax licenses are not transferable. 8. Goods purchased tax-free but used or consumed by you or your company must be reported on the Sales and Use Tax Return. You must pay use tax on goods you or your company consume. 9. You must keep exemption certificates from your exempt customers to prove nontaxable sales. 10. You must document out-of-state sales with a bill of lading or other proof of shipment. The terms of the sale must require shipment of the property across Utah's borders by the seller. 11. Round tax up to the next whole cent whenever the third decimal place is greater than four.

Interest
Interest is assessed from the original due date until the tax liability is paid in full. For more information see Publication 58, Utah Interest and Penalties, online at tax.utah.gov/forms.

Overpayments and Refunds
You can file a claim for a credit or an overpayment refund within three years of paying the tax. If we deny your claim, you may file a petition for agency action. You may not file a claim for a credit or a refund on a tax deficiency that has been legally settled. You may file a claim for refund or credit in one of three ways: 1. Take an adjustment on your current sales tax return. 2. File an amended sales tax return for the period in question. 3. Mail a refund request letter to the Tax Commission. A refund request must include the legal basis for a refund and supporting documents (such as copies of invoices that show tax collected and copies of checks that prove invoice payment). We may require additional proof to process your refund request.

Additional Information
Bundled Transactions
A bundled transaction is the retail sale of two or more separate products that are sold for one combined price. If any part of the bundled transaction is subject to tax, the entire transaction is taxed unless the seller keeps separate records of the tax-exempt portion of the transaction.

Record Keeping Requirements
From Rule R865-19S-22
Every retailer, lessor or person doing business in Utah must keep complete records used to determine their sales and use tax liabilities. You must keep records for three years from the date you file your tax return. Your records must be available to the Tax Commission in their original format (paper or electronic).

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Car Washes
Assisted car washes are subject to sales and use tax. A car wash is assisted if any of the cleaning or washing is performed by a car wash employee. A business location that sells both assisted and unassisted car washes must collect tax on all its sales unless its assisted and unassisted sales are recorded separately. Example 1 A customer buys a car wash and the car is washed by machines. This is an unassisted car wash and is not subject to sales tax.

Direct Mail
A direct mailer may either pay sales tax directly to the printer or give the printer a signed exemption certificate (form TC-721). Direct mail is not exempt from sales tax. An exemption certificate simply shifts who is responsible to report and pay the tax. By using an exemption certificate, the direct mailer reports the tax on its Sales and Use Tax Return rather than the printer collecting the tax.

Food Stamps and WIC
Sales of food paid with federal food stamps or Women, Infants and Children (WIC) coupons are exempt from sales and use tax.

Example 2 A customer buys a machine car wash, but a car wash employee runs a soapy brush over the car's wheels at the entrance. This is an assisted car wash and is subject to sales tax.

Money Orders, Faxes and Photocopies
Money order fees and fax charges are not subject to sales tax. Photocopy charges are taxable.

Newspapers and Postage
Example 3 As a fundraising activity, a scout troop offers to dry cars coming out of a car wash. The scouts are not paid by the car wash, so their labor is not a factor in whether car wash is assisted or unassisted. Sales of newspapers and postage stamps are exempt from sales tax. To qualify as a newspaper, a publication must: be published daily or weekly, be printed for circulation among the general public, contain matters of general interest, report on current events, and not create a book when multiple issues are put together. Sales of tabloids (e.g., Enquirer, Star, Globe) and magazines (e.g., Newsweek, Ladies Home Journal, Time) are taxable.

Cigarettes and Tobacco Products
A business selling cigarettes and/or tobacco products must be licensed for each selling location. Apply on form TC-69. Find forms online at tax.utah.gov/forms. Cigarette tax is paid by buying stamps from the Tax Commission. Only registered and bonded businesses may buy, receive and affix stamps. Cigarette stamps must be affixed to each package within 72 hours of receipt of the package. Any cigarette pack without a Utah stamp is subject to a $25 penalty and confiscation. Tobacco products tax is due from the first buyer within Utah. A retail store must be registered and bonded if it buys directly from an out-of-Utah source not collecting the tax. Pay the tobacco products tax with form TC-553, due the last day of the month following each calendar quarter. Consumers buying cigarettes or tobacco products online must pay the sales tax and cigarette or tobacco products tax on form TC-720C. The sale of cigarettes and/or tobacco products is subject to state and local sales tax. The amount subject to sales tax includes the cigarette tax or the tobacco products tax.

Premiums and Gifts
A premium or gift given away with the sale of a taxable product is part of that sale, and the purchase of the premium or gift by the seller is not taxable. Items given away without requiring a special purchase and items given away as advertising are consumed by the seller. The seller must pay tax on the seller's cost of those items.

Returnable Containers
Deposits on returnable containers, bottles, pallets and drums are subject to tax. When containers are returned for refund of the deposit, sales tax should be refunded. Bottle deposits are exempt from tax when purchased with food stamps or Women, Infants and Children (WIC) coupons.

Returned Merchandise
A customer who receives credit for returned merchandise is entitled to a refund of the sales tax. If a customer is given a partial refund or allowance, the customer is entitled to a refund of sales tax on the portion of the original sales price refunded.

Coupons
Coupons for which a seller is reimbursed by a third party (such as a manufacturer or distributor) do not reduce the sales amount subject to tax. The taxable amount is the sales price of the item before the value of the coupon is deducted. An in-store coupon issued by the seller is considered a reduction in the sales price. The taxable amount is the amount paid for an item after deducting the value of the in-store coupon.

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Special Events
A special event is a one-time event or an event that runs for six months or less where sales occur. Sales tax is collected on taxable transactions at special events. A seller who participates in a special event must register for a temporary sales tax license, even if the seller has a current sales tax license. For more information or to get a temporary sales tax license, call 801-297-6303 or toll free 1-800-662-4335, ext. 6303, or email [email protected]

Vending Machine Sales
Sales of tangible personal property from vending machines are taxable. Vending machine sales of items that cannot be ingested, such as cigarettes or novelty toys, are taxed at the full combined rate. Vending machine sales of prepared food, such as sandwiches or slices of pizza, are also taxed at the full combined rate. For vending machine sales of grocery food, such as packs of gum or bags of pretzels, the statewide combined rate is 3.0 percent. Tax is included in the vended price. To find the dollar amount of sales without tax, divide the sales by one (1) plus the combined tax rate in the community where the vending machine is located. For example: Where the combined rate is 6.0 percent, divide by 1.060. Where the combined rate is 6.125 percent, divide by 1.06125. Where the combined rate on grocery food is 3.0 percent, divide by 1.030. A seller of food, beverage and dairy products for $1 or less may choose to pay tax on 150 percent of the seller's cost (including incoming freight costs) rather than on the sales price. When this option is taken, the taxable amount (150 percent of cost) must be reported on the Sales and Use Tax Return as goods consumed. If the vending machine is owned and serviced by a vending machine company, the vending machine company is responsible for the tax.

Third-party Drop Shipping
In third-party drop shipping, a customer buys tangible personal property or products transferred electronically from a business that does not have the item in stock. The business buys the items from a wholesaler who sends it directly to the customer. There are two separate transactions in third-party drop shipping. The first transaction, between the customer and the business, is subject to tax. The second transaction, between the business and the wholesaler, is exempt from tax as a purchase for resale. If the business has a Utah sales tax license, it must collect and pay the sales tax. If the business is not required to have a Utah sales tax license, it does not have to collect the tax. However, the customer must report and pay the tax directly to the Tax Commission.

Trade-in on Manufactured Homes
Utah Code 59-12-104 provides an exemption of 45 percent of the sales price of a new manufactured home and 100 percent of the sales price of a used manufactured home. When there is a trade-in, calculate the sales price subject to the exemption as follows: 1. Subtract the trade-in amount from the full sales price. The difference is the net sales price. 2. Multiply the net sales price by the allowed exemption (45 or 100 percent) to determine the exempt amount. 3. Subtract the exempt amount from the net sales price. This is the portion of the net sales price subject to sales tax. Example: A dealer accepts a trade-in at a value of $8,000 against the purchase of a new manufactured home valued at $60,000. The calculation is: Original sales price Less trade-in amount Net sales price Portion of net sales price exempt from sales tax ($52,000 x .45) Portion of net sales price subject to sales tax ($52,000 - $23,400) $60,000 - 8,000 $52,000 $23,400 $28,600

Videos and DVDs
Rentals of videotapes and DVDs are taxed as sales of tangible personal property.

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Forms
The following forms are available at tax.utah.gov/forms/ or by calling the Tax Commission automated forms order hotline at 801-297-6700 or toll free 1-800-662-4335 ext. 6700. TC-51 TC-55A TC-62S TC-62M Nexus Questionnaire Claim for Refund of Motor Vehicle Fees or Sales Tax Utah Sales and Use Tax Return, Single Place of Business Sales and Use Tax Return, Multiple Places of Business Sales of Non-Food and Prepared Food from Fixed Utah Locations

Sales Tax Publications
The following publications are available at tax.utah.gov/ forms/ or by calling the Tax Commission forms order hot-line at (801) 297-6700 or 1-800-662-4335 ext. 6700. Pub 5 Pub 25 Pub 35 Pub 37 Pub 38 Pub 40 Pub 42 Sales Tax Information for Motor Vehicle/Marine Dealer/Body & Repair Shops Sales and Use Tax General Information Sales Tax Guidelines for Public and Private Elementary and Secondary Schools Business Activity and Nexus in Utah Doing Business in Utah Personal Liability for Unpaid Sales, Fuel and Withholding Taxes Sales Tax Information for Sales, Installation and Repair of Tangible Personal Property Attached to Real Property Sales Tax Information for Nurseries, Florists, Landscapers and Related Industries Sales Tax Information for Health Care Sales Tax Information for Public Utilities Sales Tax Information for Restaurants Sales Tax Information for Lodging Providers Utah Interest and Penalties Sales Tax Information for Telecommunications Service Providers

TC-62M Schedule A

TC-62M Schedule AG Sales of Grocery Food from Fixed Utah Locations TC-62M Schedule B Sales of Non-Food and Prepared Food from Places Other Than Fixed Utah Locations

Pub 45 Pub 53 Pub 54 Pub 55 Pub 56 Pub 58 Pub 62

TC-62M Schedule BG Sales of Grocery Food from Places Other Than Fixed Utah Locations TC-62E TC-62F TC-62L TC-62N TC-62P TC-62Q TC-62X TC-62T TC-62W TC-69 TC-69B TC-73 TC-85 TC-160 TC-553 TC-719 TC-720 Municipal Energy Sales and Use Tax Restaurant Tax Return Motor Vehicle Rental Tax Return Sales Tax Refund Request for Religious or Charitable Organizations Instructions for Filing Refund Claims for Sales Tax Paid on Pollution Control Facilities Utah Sales Tax Sourcing Schedule Sales Exempt from Resort Tax Transient Room Tax Return Waste Tire Recycling Fee Return Utah State Business and Tax Registration Application Additional Business Locations for a Sales Tax Account Sales Tax Exemption Contract Agreement for Remitting through Electronic Funds Transfer (EFT) Application for Sales Tax Exemption for Religious and Charitable Institutions Tobacco Products Tax Return Sales Tax Exemption Affidavit for Authorized Interstate Carriers Order for Cigarette Revenue Stamps, or TAX for Products Imported for Use, Storage or Consumption Exemption Certificate Sales and Use Tax Exemption Affidavit for Exclusive Use Outside Utah

Pub 99-ST Guidelines for Substitute and Copied Utah Sales Tax Forms

Internet Information
Utah State Tax Commission Website
www.tax.utah.gov This site has links to: Forms and publications Online sales tax return filing OneStop Business Registration PaymentExpress Current and past sales tax rates Internal Revenue Service Utah Counties (business license, property tax) Multistate Tax Compact Other States' Revenue Departments

State of Utah Website
www.utah.gov This site has links to: Workforce Services (unemployment) Labor (worker's compensation) Commerce (corporations, DBA registration) _________________ _ _ Sales tax publications provide general guidance only. They do not contain all sales or use tax laws or rules. If you need additional information, call 801-297-7705 or 1-800-662-4335, ext. 7705 (outside the Salt Lake area), or email [email protected] page 16

TC-721 TC-721A

TC-721NR Sales Tax Exemption Certificate for Non-Utah Retailers Accepting Delivery of Merchandise in Utah TC-738 TC-757 TC-762 Petition for Redetermination Affidavit of Out-of-State Delivery Lease/Rental Sales Tax Affidavit

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