Utah Use Tax for Internet and Catalog Purchases
- Do You Shop Online? You Might Owe Use Tax!
- What is Use Tax
- What is Taxable
- Use Tax Rate Chart
- Grocery Food Purchases
- Use Tax Worksheet
Do You Shop Online? You Might Owe Use Tax!
Shopping online is easy, but it’s not tax-free.
When online sellers do not collect sales tax, it becomes your responibility to pay use tax. You must pay any use tax you owe when you file your Utah income tax return.
You should know:
- Purchases are not exempt from tax just because you make them online.
- Use tax applies to any purchase that sales tax would.
- Your use tax rate depends on where you live. See page 10.
- Grocery food is taxed at a flat 3 percent across Utah.
- Some online sellers have tools to help you calculate the use tax you owe.
What is Use Tax?
Use tax is a tax on goods and taxable services purchased for use, storage, or other consumption in Utah during the taxable year, and applies only if sales tax was not paid at the time of purchase. If you purchased an item from an out-of-state seller, including internet, catalog, radio, and TV purchases, and the seller did not collect sales tax on that purchase, you must pay the use tax directly to the Tax Commission. If you have a Utah sales tax license/account, include the use tax on your sales tax return. If you do not have a Utah sales tax license/account, report the use tax on your income tax return.
The tax rate for use tax depends on the city where you received the goods or taxable service. Multiply the purchase price of the goods or taxable service by the tax rate for the appropriate city as provided in the table below. If a city is not listed, use the tax rate for the county where the city is located.
What is Taxable?
You must pay use tax on all taxable items bought for storage, use or consumption in Utah during the tax year if sales tax was not paid to the seller at the time of purchase. You do not have to pay use tax if you paid Utah sales tax at the time of purchase. This includes Internet and catalog purchases.
Use tax must be paid on the purchase or rental of products (tangible personal property) as well as labor and parts used to repair or renovate products. Some examples are:
- Magazine subscriptions and newsletters
- Internet and mail-order products
- Clothing, toys, books, etc.
- Grocery food (see below)
If you paid sales tax to another state (but not a foreign country) on a purchase, you may claim a credit for the tax paid the other state in the calculation of the Utah tax you owe.
- If the other states’ tax rate is lower than Utah‘s, you must pay the difference.
- If the other states’ tax rate is more than Utah’s, no credit or refund is given.
- If you paid sales tax to more than one state, complete the worksheet below for each state.
Use Tax Rate Chart
Sales and use tax rates vary throughout Utah. Use the following chart to determine the local tax rate for the location where the merchandise was delivered, stored, used or consumed. Counties are listed in bold. Cities or towns with a rate different from the county are listed below the county name. If a city or town doesn’t appear on the list, the rate is the same as the county.
Grocery Food Purchases
Grocery food bought through the Internet or catalog is taxed at 3% statewide. The grocery food must be sold for ingestion or chewing by humans and consumed for the substance’s taste or nutritional value. Alcoholic beverages and tobacco are not considered grocery food.
Use Tax Worksheet
You may use the following worksheet to calculate your Utah use tax.
|Worksheet for Calculating Utah Use Tax|
|1.||Amount of purchases (except grocery food) subject to use tax||$|
|2.||Use tax rate (decimal from chart)||X|
|3.||Multiply line 1 by decimcal on line 2||$|
|4.||Amount of grocery food purchases subject to use tax||$|
|5.||Multiply line 4 by 3% (.03)||$|
|6.||Add line 3 and line 5||$|
|7.||Credit for sales tax paid to another state on use tax purchases||$|
|8.||Utah use tax (subtract line 7 from line 6). If less than zero, enter “0”||$|
Use separate worksheets for each state, then add all lines 8.
Utah use tax is reported on line 31 of form TC-40, Utah Individual Income Tax Return.