University of Utah
Sales Tax Update
October 17th, 2007
Presented by:
Laura Howat, CPA
Associate Director, Accounting Operations &
Controls
Phone: 581-6699
Email: laura.howat@admin.utah.edu
University of Utah
Sales Tax Update
October 17th, 2007
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New Rates
Reduced sales tax on food & food
ingredients
Streamlined Sales Tax
Changes effective January 1, 2008
Brief Review of Certain Sale Tax
Provisions
New Sales Tax Rates
Effective April 1, 2007
 New sales tax rates
 The new base sales tax rate is
6.85% for Salt Lake County
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New Sales Tax Rates
If you do business in another
county, please check the Utah State
Tax Commission table
 http://tax.utah.gov/sales/rates/07q
2combined.xls
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Reduction in Sales Tax for
Food & Food Ingredients
Effective January 1, 2007
 There was a new 2% reduction in
sales tax for certain food and food
ingredients
 Which foods qualify for the 2%
reduction in sales tax is VERY
complicated
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Reduction in Sales Tax for
Food & Food Ingredients
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If your department serves or sells
food, please look over the Utah
State Tax Commission link outlining
the new reduced rate for food and
food ingredients.
http://www.tax.utah.gov/sales/food
_rate.html#legislation
Reduction in Sales Tax for
Food & Food Ingredients
Food sales qualifying for the new
4.85% Salt Lake County rate are
reported on a separate monthly
sales tax report
 http://www.acs.utah.edu/afs/forms/
Sales_Tax_Report_food.pdf
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Streamlined Sales Tax
(SST)
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SST is a nationwide effort by
governments to
standardize sales tax collection and
administration
Utah, along with many other states,
adopted legislation to approve SST
SST effective July 1st, 2006
Utah already postponed SST twice
How is SST different?
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New tax forms
Sales tax will be determined by where
products are delivered
Taxable portion of transaction may
change
Multi-state standardized definitions have
been adopted
SST Sourcing
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Sourcing is defined as attributing a sale
to a specific taxing jurisdiction in order to
determine tax rate to charge
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Utah sales tax would change
sourcing from point of sale, to point
of delivery
SST
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During the 2006 General Session,
the Utah Legislature adopted S.B.
233, Sales and Use Tax Revisions. In
part, S.B. 233 eliminated point of
delivery sourcing for required sales
and use tax. This means that Utah
sellers will continue to collect and
remit sales and use tax in the
traditional point of sale manner.
SST
In other words, SST is dead
 At least for now
 The information presented regarding
point of sale versus point of delivery
sourcing is subject to change based
on further action by the Utah
Legislature
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Clarification on Photocopies
A 2007 bill clarifies that State
Institutions of Higher Ed must
collect and remit sales tax on
photocopies
 Governmental entity exemption on
photocopies does not apply
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Sales Tax Changes Effective
January 1, 2008
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Reduces the state sales tax rate
from 4.75% to 4.65%
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Increases the resort communities
tax from up to 1% to up to 1.1%
Sales Tax Changes Effective
January 1, 2008
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Provides that the sales tax imposed on
food and food ingredients is the sum of:
(1) 1.75% state sales tax; (2) 1% local
option sales tax; and (3) .25% county
option sales tax (or the .25% state tax
imposed if a county has not enacted a
county option sales tax)
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Total 3%
Sale
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“Sale” means any transfer of title, exchange,
or barter of tangible personal property or any
other taxable item or service for consideration,
within the state of Utah. (Utah Code Ann.
Sections 59-12-103(1), 59-12-102.)
Some sales cause confusion
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Consignment sales of property require
assessment and collection of sales tax
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Fundraising sales of property are subject to sales
tax (Utah sales tax exemption for fundraising
sales is for K-12 only)
Sales Tax-Meals
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Sales tax applies to certain services,
including
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sales of meals [Utah Code Ann. § 59-12103(1)(e)]
Sales of Food-Tourism Tax?
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Salt Lake County has adopted the
Tourism Tax
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This is an extra 1% tax imposed on all
prepared foods and beverages
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Tourism tax separately reported to
General Accounting
Tourism Tax
Applies to soda fountains
 Luncheonettes
 Restaurants
 Catering
 Coffee shops
 Concessions
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Tourism Tax
In general, sale of prepared food for
immediate consumption
 Does not apply to packaged food
 Applies to packaged food sold when
prepared food also sold
 Does not apply when activity/outlet
serves prepared food only
occasionally
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Sales Tax Exemptions
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Utah sales to the University for items used by
the University for our mission are exempt from
Utah sales tax
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To qualify for the exemption, the purchase must
be made with University funds
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The purchaser must present a completed
exemption certificate to the seller
Sales Tax Exemptions-Other
States
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The University’s Utah sales tax exemption
certificate does NOT apply to purchases outside
of Utah
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If your department is conducting business in
another state, contact Tax Services and we can
investigate a potential sales tax exemption in
such state
Sales Tax Exemptions-Other
States
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See Tax Services website for current
sales tax exemptions in other states
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http://www.tax.utah.edu/
University Sales to Purchaser
Exempt from Tax
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If a sale is made to a purchaser who is exempt
from tax, the purchaser must present a valid
Utah State Exemption Certificate. (Utah Code
Ann. 59-12-106(2).)
Exempt sales are not exempt from being
reported to the state so you must include
exempt sales on the General Accounting Monthly
Sales Tax Report.
Sales Tax Exemptions
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How does a religious or charitable institution get
a Utah sales tax exemption number?
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Complete an Application for Sales Tax Exemption
Number for Religious or Charitable Institutions,
Form TC-160
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See Tax Services website for details and links
Transient Room Tax
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Salt Lake County has adopted the transient room
tax
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This is a 4.75% tax on the rental of hotel or
motel rooms
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Transient room tax is separately reported to
General Accounting
Sales Tax Process
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Sales tax returns are due by the last day
of the month following the sales month
Penalties and interest are assessed on
late filing of returns or late payment of
sales tax
General Accounting consolidates
departmental sales tax information so
that the University can prepare its
monthly sales tax return
Sales Tax Process
The University’s form “Utah Sales
Tax Monthly Report” is due to
General Accounting by the 15th of
the month following the sales month
 Please submit departmental reports
timely
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Utah Sales Tax Monthly
Report
Start with total taxable sales
 Do not include inter-departmental
transactions
 Back out any out of state sales
 Total sales should be total Utah
taxable sales
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Utah Sales Tax Monthly
Report
Subtract tax exempt sales where the
purchaser was tax exempt
 Subtract refunds
 Calculate net taxable sales
 Calculate tax according to the form
 Designate chartfield for the payment
of sales tax
 Include a contact, contact phone
number & email
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Record Keeping Requirements
Tax Commission Rule R865-19S-22
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Sellers are required to keep complete records
used to determine the amount of sales tax
liability
Records must be retained for three years from
the filing date of the returns
All records are open to the Tax Commission for
examination
University departments must maintain back-up
documentation for sales and sales tax liability for
three years
Record Keeping Requirements
Tax Commission Rule R865-19S-22
Records Required
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Show gross receipts from sales or rental
payments from leases of tangible personal
property, or services performed in connection
with tangible personal property made in Utah
regardless of whether the retailer considers the
receipts to be taxable or non-taxable
Show deductions and exemptions allowed by law
and claimed in filing sales tax returns
Show bills, invoices, or similar evidence of all
tangible personal property purchased for sale,
consumption, or lease in Utah
Record Keeping Requirements
Tax Commission Rule R865-19S-22
Records Required con’t
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Include the normal account books maintained by
an ordinarily prudent business person, together
with supporting documents of original entry such
as: bills, receipts, invoices, and cash register
tapes
All schedules or working papers used in the
preparation of tax returns must also be
maintained
University of Utah
Sales Tax Update
October 17th, 2007
Presented by:
Laura Howat, CPA
Associate Director, Accounting Operations &
Controls
Phone: 581-6699
Email: laura.howat@admin.utah.edu
???Questions????