Does Utah sales tax apply to a multi-day river rafting trip that starts in Colorado, spends most of its time there, and ends in Utah?

Plain-English summary

A river rafting outfitter ran one-day trips entirely within Utah, on which it collected Utah sales tax, and multi-day trips that started in Colorado and ended in Utah, spending the majority of days and river miles in Colorado (for example, a typical 4-day trip spent the first two nights in Colorado and only the last night in Utah). Some competitors weren't charging any Utah sales tax on similar multi-day trips, and the outfitter wanted clarity on Tax Commission Bulletin 28-94's rule that a trip is exempt if a "preponderance" of the activity happens outside Utah.

The Commission confirmed and quantified the "preponderance" standard: it means 51% or more of the entire trip — counting camping, lodging, meals, and any transportation the outfitter or guide service provides to and from the trip's start or end point, not just river miles or river time. A trip conducted entirely in Utah is taxable outright under § 59-12-103(1)(f)(I). A multi-day trip crossing into Colorado is taxable in Utah only if more than half of the whole trip, viewed as a whole, takes place in Utah; if the majority happens in Colorado (as this outfitter's multi-day trips did), the trip is exempt from Utah sales tax.

On the outfitter's second question, about a refund for tax it had already paid on 1994 multi-day trips (even though it hadn't collected that tax from clients, since its brochure was already printed), the Commission confirmed § 59-12-110 allows a refund or credit for overpaid sales tax to the person who actually paid it — but the outfitter would need to file a written claim supported by contemporaneous records showing that it, not its clients, paid the tax on the exempt trips.

The Commission also flagged that it was evaluating a recent U.S. Supreme Court decision on how sales and use tax applies to trips crossing state lines, and anticipated amending its rules — so this specific "51%" reading of the preponderance test was understood at the time to potentially change.

What this means for you

River rafting and other multistate recreation outfitters

Track where your trip's time is actually spent — including camping, lodging, meals, and any transportation you provide — not just miles on the water. If more than half of a multi-day trip (by this broader measure) happens outside Utah, the trip is exempt from Utah sales tax; if Utah has the majority, the whole trip is taxable.

Outfitters who overpaid sales tax

If you paid Utah sales tax yourself (rather than collecting it from clients) on trips that turn out to be exempt, you can seek a refund under § 59-12-110 — but be ready to document with contemporaneous records that you, not your customers, bore the cost of the tax.

Accountants and tax professionals

Because the Commission noted it was reassessing this area following a U.S. Supreme Court decision, treat the specific 51% "preponderance" framework here as the interpretation current as of 1995 — verify current Utah Tax Commission guidance before relying on this exact threshold today.

Common questions

Q: How is "preponderance of the activity" measured for a multistate river trip?
A: By whether 51% or more of the entire trip — including camping, lodging, meals, and outfitter-provided transportation — takes place in Utah, not just river miles or river time.

Q: Is a one-day rafting trip entirely within Utah taxable?
A: Yes, always — a trip conducted entirely in Utah is subject to Utah sales tax regardless of the preponderance test, which only applies to trips that cross state lines.

Q: Can I get a refund if I paid Utah sales tax on a trip that turned out to be exempt?
A: Yes, if you (not your clients) paid the tax, and you can support the refund claim with contemporaneous records.

Q: Does this ruling apply to my outfitting business today?
A: Not automatically, and be aware the Commission itself flagged this area as under review following a Supreme Court decision at the time. This is a private letter ruling binding only on the Commission as to this taxpayer's specific facts; another taxpayer can't rely on it as binding.

Citations and references

Statutes and rules:

• Utah Code Ann. § 59-12-103(1)(f)(I) (sales tax on river runs sold in Utah)
• Utah Code Ann. § 59-12-110 (refund/credit for overpaid sales tax)
• Utah Tax Commission Bulletin 28-94 (preponderance-of-activity exemption test)

Source

• Landing page: https://tax.utah.gov/commission/rulings/
• Original PDF: https://files.tax.utah.gov/tax/commission/ruling/95-015.pdf

Original ruling text

Response June 20, 1995

Request

March 23, 1995

Utah Tax Commission

Salt Lake City, UT

Commission Members,

I recently spoke with XXXXX in your office and he recommended I write
you to request an advisory opinion. My
question relates to the newly implemented state sales tax on river rafting
outfitter sales. Some of my competitors
are not charging clients any sales tax, which makes them 6% less expensive than
I am. In Tax Bulletin 28-94 you state
that �If the preponderance of a recreational activity takes place outside of
Utah, admissions and user fees charged are not subject to Utah sales tax.� There is confusion among rafting outfitters
as to what you mean by �preponderance.�

Let me give you my specific situation.
We run rafting trips in XXXXX on the XXXXX and XXXXX Rivers. Our 1 day trips are entirely within Utah and
we collect sales tax for this trip. Our
MULTIDAY trips all start in Colorado and end in Utah. Each MULTIDAY trip spend the majority of days
and miles within the state of Colorado.
For example, a typical 4 day trip is in Colorado for the first 2 nights
and the last nights is spent in Utah.
On our 3 and 5 day trips, over 50% of the time is spent in Colorado.

My first question is: Do we need to collect Utah sales tax at all for
our MULTIDAY trips? If so, how
much? My second question relates to
payments made in 1994. I assumed I would
need to pay Utah sales tax on our MULTIDAY trips in 1994, and since our
brochure was already printed, I paid Utah sales tax on MULTIDAY trips booked
after July 1, even though I did not collect any sales tax from clients. Can I get a refund on sales tax I paid on
MULTIDAY trips last year?

I would appreciate an answer to my questions. If you need verification of the times and distances in XXXXX try
calling XXXXX concessions specialist, at XXXXX.

Sincerely,

XXXXX

RE:
Advisory Opinion - Application of Sales Tax to One-day and Multi-day River
Rafting Trips.

Dear
XXXXX,

You
requested an advisory opinion as to the application of sales tax to river
rafting trips which may be wholly within Utah or in Utah and at least one other
state. You also asked whether you are
entitled to a refund of excess sales tax charged since XXXXX

Our
research indicates:

1. Under section 59-12-103(l)(f)(I) of the Utah
   Code, river runs sold in Utah are subject to Utah sales tax.

2. In Tax Bulletin 28-94, the Commission
   clarified its interpretation of the application of sales tax applies to river
   trips which cross state lines. There
   the Commission stated that a river trip is exempt from Utah sales tax if a
   preponderance of the activity takes place outside Utah. �Preponderance of the activity� means 51% or
   more of the entire trip, including camping, lodging, meals, and transportation
   to and from the beginning or termination point of the river trip, if
   transportation is provided by the river run outfitter or guide service.

3. Under the Commission�s interpretation set
   out in Tax Bulletin 28-94, a raft trip which is conducted entirely within Utah
   is subject to Utah sales tax. A
   multiday raft trip through Utah and Colorado is subject to Utah sales tax if
   more than half of the activity, when viewed as a whole, takes place in Utah.

4. Section 59-12-110 of the Utah Code allows
   for a credit or refund of an overpayment of sales tax to the person who paid
   it. A written claim for refund may be filed
   with XXXXX of the Customer Service Division of the Tax Commission. Your claim must be supported by
   contemporaneous records which show you, and not your clients, paid sales tax on
   exempt activities.

This
opinion is based on current Utah law as interpreted by the Commission in its
administrative rules and associated publications. However, the Commission is evaluating a recent United States
Supreme Court decision on the applicability of sales and use tax to river trips
that cross state lines. The Commission
anticipates amending its rules in the near future.

This
opinion is based on the facts presented.
If there are deviations from these facts, the opinion may be negated.

If
you do not agree with this determination, you may appeal to the Tax Commission
for a formal hearing. The results of
that hearing would constitute a declaratory judgment and be appealable to the
Utah Supreme Court. A Notice of Appeal
Rights and a copy of the Utah Taxpayer Bill of Rights are attached.

For
the Commission

Alice
Shearer

Commissioner