Utah State Tax Rulings
Free plain-English summaries of state tax letter rulings and advisory opinions issued in Utah, with full citations and the original source on every page.
No Utah rulings match these filters
Try a different search term or clear the filters.
For Utah corporate franchise tax, does a freight-forwarder reseller of transportation services use the single sales-factor apportionment formula, and does it source its sales to the shipment's origin, its destination, or its own direct customer's location?
Two separate answers. First, NO — this freight forwarder is NOT a "sales factor weighted taxpayer" and can't use the single-sales-factor apportionment formula in § 59-7-311(3)(c), because its NAICS co…
Is a Medicare Part D insurance company exempt from Utah's corporate franchise tax even though its premiums themselves are federally exempt from Utah's premiums tax?
Yes, but for a narrower reason than the company argued. The company (a Medicare Part D insurer) claimed it should be treated as 'subject to' Utah's premiums tax (and thus exempt from corporate franchi…
Does an out-of-state bank create Utah nexus by using independent mortgage brokers and relationship managers to originate Utah home loans, and does that nexus reach its subsidiary and LLC too?
Yes to nexus, and yes it extends further. An out-of-state bank that uses independent relationship managers and mortgage brokers to originate loans secured by Utah real estate has Utah corporate franch…
Does Utah's throwback rule pull a Utah-based credit card issuer's out-of-state customer receipts back into Utah's tax numerator if a sister company has nexus in those states?
No throwback needed, based on the facts represented. A Utah-commercially-domiciled credit card issuer generally sources its credit card interest/fees, interchange fees, and loan interest to each cardh…
Does an out-of-state online retailer create Utah nexus by paying commissions to Utah-based affiliate websites that link customers to its checkout page?
Split answer. For SALES TAX, yes — Utah-based 'Affiliate Partners' who maintain their own Utah servers and link visitors to the retailer's checkout page are acting as the retailer's agents regularly s…
Does an out-of-state government agency, or the company it leases light rail cars from, owe Utah corporate franchise tax if the agency subleases those cars to Utah Transit Authority?
The out-of-state government agency subleasing the rail cars owes no Utah corporate franchise tax, because it isn't a federally-taxed 'corporation' at all. But the Commission could NOT yet rule on the …
After Utah's 1998 legislative amendment removed the SIC-code / manufacturing-only limits, which businesses now qualify for the Utah enterprise zone tax credits, and how do the payroll and investment credits work?
After Utah's 1998 amendment removed the old SIC-code (manufacturing-only) limit, any business firm can qualify for the enterprise zone tax credits except retail trade and public utility businesses, as…
Can a multi-state corporate group get Utah to use a different apportionment formula instead of the standard three-factor UDITPA formula when it distorts the group's Utah income?
Partially granted. The Commission refused to let the group use separate accounting, but agreed to modify the standard three-factor UDITPA apportionment formula so that securities held in inventory (in…
Does a Utah homeowners association that files federal Form 1120-H owe Utah corporate franchise tax, and does the Commission decide the IRC Section 528 exempt-function-income and expenditure tests?
The Utah Tax Commission declined to interpret the IRC Section 528 60% exempt-function-income and 90% expenditure tests for a homeowners association, saying that determination is the IRS's jurisdiction…
What Utah taxes — property, sales/use, and corporate — will apply to a new S-corporation manufacturing business locating equipment, raw materials, and operations in a Utah county?
The Commission gave only general guidance since it lacked specific facts about the business, but covered all three tax areas asked about. Property tax: real and personal property in Utah is assessed a…
Does a nonprofit business league that is tax-exempt under IRC section 501(c)(6) owe Utah corporate income or franchise tax?
Generally no. Organizations exempt under IRC section 501 -- including a 501(c)(6) business league -- are generally exempt from Utah corporate income and franchise tax under § 59-7-102. The one excepti…
What Utah corporate taxes does an out-of-state mortgage lender owe if it's qualified to do business in Utah but has no offices, property, or employees here?
It owes Utah corporate franchise tax, because holding a Certificate of Authority to do business in Utah as a foreign corporation creates nexus by itself -- Public Law 86-272 doesn't help here since th…
Does a Professional Employer Organization (PEO) that becomes the employer of record for its clients' workers, handles payroll/withholding/workers' comp, and leases those employees back to the clients, owe Utah sales or use tax on the payroll-cost reimbursements or its service fee charged to clients?
No. Neither the payroll/employment-tax/benefit reimbursement amounts nor the separate service fee that a Professional Employer Organization (PEO) charges its clients are subject to Utah sales tax — th…
Which specific charges on a cellular/paging service bill (access fees, airtime, various categories of toll charges, roaming, optional features, equipment sales/leases, late fees) are subject to Utah sales tax, what determines the tax situs (location) for each type of charge, and is the reseller itself subject to any other Utah taxes?
It depends on the specific charge. Taxable: access/activation/termination fees, airtime charges, intrastate toll charges (both call ends in Utah, regardless of LATA arrangement), optional features (ro…
Does an out-of-state finance company with two Utah-based sales employees, but no Utah office or property, owe Utah corporate franchise/income tax?
Yes. The Utah State Tax Commission ruled that a California-based company purchasing motor vehicle installment contracts from Utah dealers has Utah corporate income tax nexus solely because it has two …
If a Utah parent company spins off a wholly-owned subsidiary to hold an office building (leasing space back to affiliates) or to centralize intercompany financing (borrowing, lending, and investing for the group), is the new subsidiary automatically part of the parent's unitary combined-report group from inception, are the intercompany rent/interest and dividends eliminated from combined income and the sales/property factors, and is income from unrelated third parties business income?
Yes, with one nuance on investment income. Both a new office-building-holding subsidiary and a new centralized-financing subsidiary are unitary from their inception because they're wholly owned, centr…
Does an out-of-state company distributing satellite television programming to Utah bars, hotels, and nightclubs have Utah corporate franchise tax nexus, and are its receipts included in Utah's sales apportionment factor?
Utah has jurisdiction to tax the company (it has nexus), but that doesn't mean any revenue actually gets counted toward Utah's tax. Because the company is providing a SERVICE (delivering a satellite T…
Is a Utah limited liability company (LLC) organized under the Utah Limited Liability Company Act taxed as a partnership or as a corporation for Utah state tax purposes?
Yes, as a partnership. The Utah State Tax Commission ruled that companies organized under the Utah Limited Liability Company Act (Utah Code Ann. § 48-2b-101 et seq.) get the same state income tax trea…
If a Utah refinery processes gold and silver bullion for an out-of-state mining company and the bullion is then sold to a third party who takes delivery outside Utah, does that sale count as a 'Utah sale' in the corporation's apportionment sales factor?
It depends on the throwback rule. If the seller is not taxable in the state or country where the buyer takes delivery, the sale is 'thrown back' and counted as a Utah sale in the sales factor under U.…
If a Utah parent company contributes its trade name, logo, and proprietary technology to a newly formed IP-holding subsidiary in exchange for stock, is the contribution tax-free, is the new subsidiary automatically part of the parent's unitary group from day one, and is the royalty income the subsidiary earns from licensing that IP back to affiliates (and to outsiders) treated as apportionable business income?
Yes to all three questions, on the facts presented. Contributing the trade name, logo, and proprietary technology solely in exchange for the new subsidiary's stock is a nonrecognition transaction unde…
Browse Utah rulings by topic
These are official tax letter rulings and advisory opinions issued by Utah's revenue authority in response to questions from specific taxpayers about how the tax law applies to their facts. A ruling is binding on the department only for the taxpayer who requested it and cannot be relied on by anyone else, but it is strong evidence of how the state reads the law. Every ruling above has a plain-English question and short answer, plus a link to the full original source.