The state of Utah generally does not collect sales tax on the vast majority of services provided. However, there are some services that are taxable, for example, services that include repairs, renovations or installation, laundry services, or dry cleaning services. This means that a web designer would not be required to collect sales tax, while the owner of a dry cleaning company could be required to collect sales tax. Utah sales tax may apply to shipping, handling, delivery, freight, and postage charges.
If shipping is included in the price of a taxable sale, shipping is also taxable. If shipping is indicated separately from the sales price, shipping costs are exempt from tax. Shipping for exempt sales is not taxable, regardless of whether it is included in the price or indicated separately. Some professional services are taxable in Utah.
The state stipulates that “Sales tax applies to retail sales and leases of tangible personal property, electronically transferred products, and certain services. For example, labor charges for repairing, renovating, or cleaning tangible personal property are taxable. Check with the Utah Department of Revenue to see if your service is taxable. Taxation for various transactions (such as services and shipping) may vary from state to state, as can policies on issues such as whether excise taxes or installation fees included in the purchase price are also subject to sales tax.
As a business owner that sells taxable goods or services, you act as an agent for the State of Utah by collecting taxes from buyers and passing them to the appropriate taxing authority. Utah has enacted a transitional room tax on transactions involving accommodations and services of tourist homes, hotels, motels, or RV courts that are regularly rented for less than 30 consecutive days. Now we've covered who should collect sales tax from, how to determine if goods for sale are considered taxable, what goods and services are subject to tax exemptions, who is eligible for tax exemption certificates, and finally, the sales tax collection process in the state of Utah. Sales tax applies to retail sales and leases of tangible personal property, electronically transferred products, and certain services purchased for storage, use, or consumption in Utah.
Use tax applies to purchases of tangible personal property, electronically transferred products, and certain services when sales tax must be paid, but not collected by the seller. Shipping costs are charges by the seller of tangible personal goods, electronically transferred products, or services for preparation and delivery to a location chosen by the buyer.