Utah Small Business Taxes: The Employer’s 2024 Guide

Utah offers a vibrant environment for business with over 333,000 small businesses, employing 45% of the state’s workforce. Whether you’re an established business owner or planning to start a new venture, understanding the tax landscape in Utah is crucial. This guide provides an overview of the various taxes small businesses in Utah must navigate, including tax rates, filing requirements, and deadlines.

Types of Business Taxes in Utah

Business owners in Utah may be subject to various taxes depending on their business structure, activities, and revenue. Here’s a breakdown of the main types of taxes:

1. Corporation Franchise and Income Tax
   • Applicable Entities: C corporations and LLCs with C corp elections
   • Tax Rate: 4.55% (minimum $100 franchise tax)
   • Filing Requirements: File Form TC-20 by the 15th day of the fourth month after the tax year ends.
   • Estimated Payments: Required if liability in the current or previous tax year is $3,000 or more. Payments are due by the 15^th day of the fourth, sixth, ninth, and 12^th months of the tax year.
2. Pass-Through Entity (PTE) Tax
   • Applicable Entities: S corporations, partnerships, LLCs taxed as partnerships
   • Tax Rate: 4.55%
   • Filing Requirements: File Form TC-75 by December 31.
3. Sales and Use Tax
   • Applicable Activities: Retail sales, certain services
   • Tax Rate: 4.85% (local rates may apply)
   • Filing Requirements: File electronically monthly, quarterly, or annually based on sales volume.
4. Withholding Tax
   • Applicable Entities: Employers with employees
   • Tax Rate: Varies
   • Filing Requirements: File quarterly returns (Form TC-941E) by April 30, July 31, October 31, and January 31.
   • Estimated Payments: Payments due quarterly, monthly, or annually based on withholding amounts.
5. Unemployment Insurance Tax
   • Applicable Entities: Employers with employees
   • Tax Rate: Varies based on business’s experience rating
   • Wage Base: $47,000 per employee per year
   • Filing Requirements: File quarterly reports electronically by April 30, July 31, October 31, and January 31.
6. Personal Property Tax
   • Applicable Entities: Businesses using personal property
   • Tax Rate: Based on property type and value
   • Filing Requirements: Report annually to the county assessor by May 15.
7. Nonresident Withholding Tax
   • Applicable Entities: Pass-through entities with nonresident members
   • Tax Rate: 4.55% on distributive share income
   • Filing Requirements: File Form TC-20S (for S corporations) or Form TC-65 (for partnerships) by the 15th day of the fourth month following the close of the tax year.

How to File and Pay Utah Business Taxes

Business taxes in Utah can be filed and paid through various methods:

• Online Filing and Payment: Use Utah TAP for electronic submissions and payments.
• Mail: Send forms and payments to the address indicated on the form (where applicable).

Important Deadlines

Keep track of these key dates to avoid penalties:

• Corporate Income Tax Returns: Due by the 15th day of the fourth month after the tax year ends.
• Estimated Tax Payments: Due by the 15^th day of the fourth, sixth, ninth, and 12^th months of the tax year.
• Sales and Use Tax Returns: Monthly, quarterly, or annual filing based on sales volume.
• Withholding Tax Returns: Due quarterly by April 30, July 31, October 31, and January 31.
• Unemployment Insurance Reports: Due quarterly by April 30, July 31, October 31, and January 31.

Tax Credits and Incentives

Utah offers several tax credits and incentives for small businesses, including:

• Renewable Energy Systems Tax Credit: Available to businesses that install renewable energy systems in commercial buildings. The refundable credit equals 10% of the system costs, up to $50,000.
• Tax Credit For Employment of Persons Who Are Homeless: Available to employers that hire persons who are homeless. The credit equals $2,000 for each qualified new hire.
• Research and Development Tax Credit: Available to eligible businesses that engage in qualified research in Utah. The credit equals 5% of qualified research expenses for increasing research activities above a base amount, 5% of certain payments made to a qualified organization increasing basic research above a base amount, and 7.5% of qualified research expenses for the current tax year.

Utah’s business tax breakdown by business type

Business taxes can be complicated, so we’ve included a chart below that breaks down the taxes that different business structures usually pay. 

Keep in mind that pass-through entities don’t pay federal income taxes themselves—the obligation is passed on to their business owners or shareholders, who pay them through their personal income tax returns. 

Business type	Personal income tax	PTE election tax	Corporate income and franchise tax	Sales and use tax	Withholding tax	Unemployment tax	Federal income taxes
C corporation	No	No	Yes	Yes, if applicable	Yes, if you hire employees	Yes, if you hire employees	Yes
S corporation	Yes (pass-through), if not making the PTE tax election	Yes, if it makes the election	No	Yes, if applicable	Yes, if you hire employees	Yes, if you hire employees	Yes (pass-through)
LLC	Yes (pass-through), if not making the PTE tax election	Depends on how it’s structured	Depends on how it’s structured	Yes, if applicable	Yes, if you hire employees	Yes, if you hire employees	Yes (pass-through)
Partnership	Yes (pass-through), if not making the PTE tax election	Yes, if it makes the election	No	Yes, if applicable	Yes, if you hire employees	Yes, if you hire employees	Yes (pass-through)
Sole proprietorship	Yes (pass-through)	No	No	Yes, if applicable	Yes, if you hire employees	Yes, if you hire employees	Yes, by way of individual income tax

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As a business owner, your time and energy are valuable, finite resources. So, instead of managing your taxes manually, let Gusto give you a hand. Our easy-to-use software automatically files your payroll taxes each time you run payroll—freeing up your bandwidth for the work that matters most. 

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