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Utah Business License Basics

Utah Business License Basics

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Utah Business License Basics

Starting a small business in Utah often means registering with several federal, state, and local agencies. Let’s review common Utah business license registrations so your business starts off right.

Related: Guide to starting a business in Utah

Setting Up the Business

Before you can apply for business licenses, you should first establish the business structure. This decision impacts your legal responsibilities, taxes, and how much personal liability you might face. Here’s a brief explanation of each type of entity:

Sole proprietorship: This is the simplest form of business structure, where one person owns and runs everything. There’s no separation between the owner and the business, meaning the owner is personally responsible for all debts and legal actions against the business. Taxes are straightforward as the owner reports business income on their personal tax return.

General partnership: Similar to a sole proprietorship, but with two or more people running the business. Partners share profits and losses, and like sole proprietors, they are personally responsible for the business’s debts and legal issues. Partnerships also don’t pay taxes as a separate entity; instead, each partner includes their share of profits or losses in their personal tax filings.

Corporation: A corporation is a more complex entity that is separate from its owners, providing personal liability protection. Owners, known as shareholders, are not personally responsible for the corporation’s debts or legal problems. Corporations can raise money by selling stock and are taxed separately from their owners. This entity requires more requirements, like having board meetings and record-keeping.

Limited Liability Company (LLC): An LLC blends elements of sole proprietorships, partnerships, and corporations. Owners (members) have limited personal liability for business debts and actions. Like sole proprietorships and partnerships, an LLC can pass income directly to owners to avoid double taxation, a common issue with corporations. This structure offers flexibility in management and less strict requirements than a corporation.

What Licenses Do Utah Businesses Need?

With the business structure out of the way, we can begin looking at the different types of registrations businesses in Utah may need. There isn’t a standard business license, as requirements vary depending on where the business is located and what it does. Here is a general overview of the different registrations your business may need.

General Business License

There is no general state of Utah business license; however, generally, all businesses in the state are required to license with the local municipality in which they are doing business. General standards exist for licensure, but each city and county has different procedures. Below are a few cities that have licensing requirements, but it is best to contact your city or county office to know the exact requirements.

  • Salt Lake City: Before starting a business in Salt Lake City, the Business License Office requires a business license. The cost of a business license varies depending on the type of business being operated. Most licenses are approved within 30 days, and some require a background check.
  • West Valley: In addition to commercial business licenses, West Valley also requires licenses for home-based businesses, rental units, and solicitors. The base fee for business licenses in West Valley is $110.  Businesses selling alcohol, pawn shops, and salvage yards are higher.
  • Provo: All businesses operating in Provo are required to obtain a Provo City Business License. Business license costs vary; however, additional fees are charged to food trucks, towing businesses, and businesses selling alcohol.
  • West Jordan: All businesses will need to register with the City of West Jordan’s Business Licensing Department. The business license fee in West Jordan starts at $50. 
  • Orem: All businesses operating within Orem’s city limits must register for a business license. Two licenses are available: the Commercial Business License and the Home Occupation Business License. Businesses that serve or handle food, offer public pool or spa access, operate tattooing or piercing establishments, or operate tanning salons must first register with the Utah County Health Department before registering for a business license.

Business Name Registration

While not a business license, it’s common for Sole Proprietorships and Partnerships operating under a business name that is different from the full name of the owner(s) to file a Business Name Registration (also known as a Doing Business As or DBA) with the Utah Division of Corporations and Commercial Code.

Take the guesswork out of figuring out what licenses and permits are required to start your business with license research packages from Bizee and LegalZoom.

For as little as $99, you can save a lot of time and know your business is in compliance with local, state, and federal requirements. 

Building & Zoning Permits

In Utah, businesses are required to obtain various permits and follow specific regulations related to building, zoning, and signage. Here is a brief overview of what you need to know.

Building Permits: Before constructing, altering, or renovating a commercial building in Utah, businesses must obtain a building permit from their local building department. The permit ensures that the proposed work complies with the state’s adopted building codes,

Zoning Permits: Local governments establish zoning regulations in Utah to ensure that land use aligns with the community’s goals and values. Before establishing a business or changing the use of a property, a zoning permit from the local planning and zoning department must be obtained. This permit confirms that the property’s intended use is allowed within the designated zoning district.

Signage: Signage regulations in Utah are primarily governed by local municipalities and counties. Each jurisdiction has its own sign ordinances that specify the size, height, location, and type of signs allowed for businesses. These regulations aim to maintain public safety, preserve community aesthetics, and prevent visual clutter. Some common requirements include obtaining a sign permit, adhering to size limitations, and following specific design guidelines.

Sales Tax License

Businesses engaged in selling or leasing tangible personal property or taxable services in Utah must register for a Utah Sales Tax License from the Utah State Tax Commission.

Sales Tax Exemption Certificate

Businesses purchasing merchandise to resell will usually want to obtain a Utah Sales Tax Exemption Certificate (often referred to as a Resale Certificate) in order to not pay sales tax for merchandise that is being resold to customers.

Professional License

A variety of professions in the state are regulated and need to be registered before offering certain services.  A few common professions that require licensing in Utah include; accountants, electricians, handymen, hunting guides, landscapers, and many more.   Additional information, fees, and licensing requirements for professions are available from the Utah Division of Occupation and Professional Licensing.

Businesses in various industries, such as food establishments, daycares, and salvage yards, need licensing in addition to professional licenses from the Utah Division of Occupation and Professional Licensing.

Employer Identification Number (EIN)

Many businesses register with the Internal Revenue Service (IRS) for an EIN (also referred to as a FEIN, Federal Employer Identification Number, or Federal Tax ID Number). The EIN is the business equivalent of an individual’s Social Security Number. Corporations, Limited Liability Companies, partnerships, and sole proprietorships with employees will all need to register for one. Sole proprietorships without employees can use the owner’s Social Security Number.

There is no cost for an EIN, and it only takes a few minutes to get.

Learn how to apply for an EIN

Next Steps

These are some of the most common business licenses a new business in Utah will need to register for. While it’s a good start, there are so many different licenses that may be needed, be sure to double-check with the City Clerk’s Office, Chamber of Commerce, and/or Economic Development office in your area before opening your doors.

Author

  • Greg Bouhl

    With over two decades as an entrepreneur, educator, and business advisor, Greg Bouhl has worked with over 2,000 entrepreneurs to help them start and grow their businesses. Fed up with clients finding and acting on inaccurate and outdated information online, Greg launched StartUp101.com to be a trusted resource for people starting a business.

Utah Business License Basics

Utah Business License Basics

2 Responses

  1. Moved to Utah as an executive in Project Managment and I work under a 1099 started my business in Virginia and set this up as an LLC with an EIN number. I am now in Utah. Besides filling out 8822-B change of address with the IRS are there any other entities I need to file with.

    Do I need to contact my local city and ask? I am not selling any goods or services in this state but support in other locations in the US.

    1. Hi Stephen

      Technically, since your Virginia LLC is now also has a base of operations in Utah, you are supposed to register as a foreign entity with the state of Utah. https://corporations.utah.gov/business-entities/foreign-limited-liability-company/ (More info about the foreign entity – https://startup101.com/what-is-a-foreign-llc/)

      A business license isn’t required by the state, but there may be city licensing required.

      Even though you have a service that I don’t think is taxable (https://tax.utah.gov/forms/pubs/pub-25.pdf), any business that has nexus in the state (a physical presence) needs to register for a Sales Tax License – https://startup101.com/how-to-register-for-a-sales-tax-license-in-utah/

      This is a complicated subject, but I think the biggest concern could be your taxes as you have an entity in one state, but you are doing the work in another. I would recommend working with a CPA to give you some advice on how to best do this. In a case like this, some people would dissolve the Virginia LLC and set up a new one in Utah (and you should be able to do this under the same EIN), but be sure to talk to someone who has experience in this area.

      Hope this helps!
      Greg

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