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How To Get A Utah Sales Tax Exemption Certificate

How To Get A Utah Sales Tax Exemption Certificate

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How To Get A Utah Sales Tax Exemption Certificate

Sales tax exemption certificates allow businesses to make tax-free purchases on items that will be resold. To do so, the retailer must provide a Utah Exemption Certificate (commonly known as a Resale Certificate, Wholesale License, and similar names) to their vendor. 

Learn more about what the Utah Sales Tax Exemption Certificate is, how to get one, and more.

Related: Guide to starting a business in Utah

What is a Sales Tax Exemption Certificate?

When retailers purchase products to resell, they often don’t pay state sales tax to the supplier on the purchase. The sales tax will still be paid, but instead of the retailer paying sales tax, the retailer charges sales tax to their customer on the final value of the merchandise. The collected sales tax is then sent by the retailer to the Utah State Tax Commission.

For example, when a gourmet kitchenware shop in Utah orders a selection of high-end pots and pans to sell in their store, by having a sales tax exemption certificate, the shop owner will not pay sales tax on the purchase of inventory. The sales tax comes into play when a retail customer buys the cookware from the shop to use at home. The retailer adds the sales tax to the total price of the cookware to the end user.

The gourmet kitchenware shop accumulates the state sales tax from all their transactions throughout a specified period, usually at the end of the month, and then sends the sales tax to the state.

It’s worth noting that the sales tax exemption is only intended to be used for inventory that will be resold and not intended for the tax-free purchase of items used in normal business operations, such as paper, pens, etc.

Steps to fill out the Utah Sales Tax Exemption Certificate (Form TC-721)

Before a business starts selling products or providing taxable services, it must first get a Utah Sales Tax License from the Utah State Tax Commission. The Sales Tax License is sometimes referred to as a seller’s permit, sales tax number, or sales tax permit. After registering for the license, the Utah State Tax Commission will provide a sales tax number, which will be listed on the Resale Exemption Certificate.

Step 1: Begin by downloading the Utah Exemption Certificate Form TC-721 
Step 2: Identify the name, address, phone number, name, title and signature of the purchaser
Step 3: Enter the name of the supplier
Step 4: For businesses requesting a sales tax exemption because of reselling goods, enter the buyer’s sales tax license number
Step 5: If reselling goods, check the first box, Resale or Release

Utah Sales Tax Exemption FAQs

How much does a Utah Sales Tax Exemption Certificate cost?

There is no cost for a Sales Tax Exemption Certificate in Utah.

Does a Utah Resale Exemption Certificate Expire?

A Utah Resale Exemption Certificate does not expire, provided the buyer purchases from the seller at least once every 12 months.

How often is Utah sales tax due?

Most new businesses in Utah are set up to file and pay sales and use tax monthly, but depending on the amount of tax collected, your business may have a semi-monthly, quarterly, semi-annual, or annual basis filing frequency instead.

Where do I file the Utah Exemption Certificate?

In Utah, the Exemption Certificate is not filed with any government agency. Instead, it is kept by the seller (the business selling the merchandise for resale).

Are sellers required to accept resale certificates?

Sellers are not required to accept resale certificates for tax free purchases, however, most do.  If the vendor doesn’t accept the certificate, the buyer will have to pay sales tax on the merchandise being purchased.  In most cases, the state will provide a credit on the state sales tax filing. 

Is a Sales Tax Exemption Certificate the same as a Sales Tax License?

No – The Sales Tax License and Sales Tax Exemption Certificate are commonly thought of as the same thing, but they are actually two separate documents. The Sales Tax License allows a business to sell and collect sales tax from taxable products and services in the state, while the Sales Tax Exemption Certificate allows the retailer to make tax-exempt purchases for products they intend to resell.

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.

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How To Get A Utah Sales Tax Exemption Certificate

How To Get A Utah Sales Tax Exemption Certificate

2 Responses

  1. I am starting a business and need to get a resale exemption certificate. Once I get that filled out where do I send it to? Do I just fill it out and send it to the company that I will be buying resale products from? Not sure what to do.

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