Many people believe they don't have to pay sales tax on purchases made on the Internet or through a catalog. This is incorrect. If you purchase online or through a mail order from an out-of-state business, you must still pay Utah sales tax. If the tax was not paid to the business at the time of purchase, you must pay it with your Utah individual income tax return.
This sales tax that you pay directly to the Tax Commission is called "use tax" and is the same rate as the sales tax you pay in your city or county.
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:
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.
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 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.
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.