Utah LLC Taxes
Utah’s growing economy and low cost of living make it a popular spot for new businesses. Yet, as more business owners choose to start their ventures within the state, many may find it challenging to understand the business taxes involved.
Regardless of the size of your business, if you operate a limited liability company (LLC) in Utah, you’ll need to stay up to date on your finances and pay federal, state, and local taxes. Our guide will help you understand which taxes you must pay for your Utah LLC.
Recommended: Schedule a free consultation with an accountant to stay on top of your taxes.
Utah LLC Taxes Owed
LLCs benefit from pass-through taxation, which means the business’s profits pass through to its members’ individual tax returns. As a result, your LLC itself doesn’t pay taxes to the federal government or the state of Utah. Instead, LLC owners must pay taxes on their portion of the income generated by the LLC.
In Utah, LLC owners can expect to pay the following taxes:
Federal Taxes
Regardless of where your business is located, if you have an LLC within the United States, you will have to pay federal income taxes and federal self-employment taxes. These taxes are reported on your Form 1040.
Federal Self-Employment Taxes
It doesn’t matter if your LLC is a single-member LLC or a multi-member LLC; all LLC members must pay self-employment taxes on their share of the LLC’s profits. The self-employment tax rate is 15.3%.
Federal Income Taxes
Your federal income taxes will depend on your tax bracket, and the cutoffs for individual tax brackets, as well as the percent owed, will change each year.
Utah State Taxes
Each state has its own laws that dictate how it taxes individuals and businesses. Below is an overview of important state-level taxes likely to affect your Utah LLC.
Utah Income Taxes
In Utah, the state income tax rate is 4.85%. This rate is quite competitive when compared to other states, leaning a bit below average.
Utah Sales and Use Tax
Utah’s state sales tax rate is 6.1%. In some areas, the rate may be higher due to local sales taxes. The average local sales tax rate in Utah is 1.09%, leading to a combined average of 7.19%.
Register for a Utah Sales Tax License
If your business sells taxable goods or services, you must register for a sales tax license with the Utah State Tax Commission. Visit the Utah State Tax Commission website for more information.
Additional State Taxes
The Utah State Tax Commission oversees the collection of various state-specific taxes businesses may have to pay, depending on their location, industry, and number of employees. Some examples of these additional taxes include:
- Brine Shrimp Royalties
- Escort Service Tax
- Motor Fuel Taxes
- Oil Recycling Fee
- Radioactive Waste Facility Tax
For more information on these and other Utah taxes, visit the Utah State Tax Commission website.
Utah Local Taxes
The local laws and ordinances in Salt Lake City may differ greatly from those in Park City. Regardless of where you live in Utah, check with your local jurisdiction to ensure your business obtains the proper local permits and follows any local regulations that may impact its operations.
Utah LLC Compliance
You must obey Utah’s state and local laws in order to maintain your business in good standing. While LLCs technically don’t file taxes with the state, your business must still file an annual report each year.
Utah LLC Annual Report
All Utah LLCs must file an annual report with the Utah Department of Commerce. You can do this online or by mail, and the filing fee is $18.
Annual reports are due on the last day of your business's anniversary month — the month in which the state approved your LLC’s formation. While there’s a 30-day grace period after that deadline during which you may file without consequence, delaying any further will make your LLC enter a delinquency period.
If you submit your annual report during the delinquency period, you can pay the filing fee and a $10 late fee to remove the delinquent status from your business and operate as usual. If you still haven’t settled your debts by the end of this period, the Utah Department of Commerce will become involved, shutting down your LLC by marking it as “expired.”
An expired LLC can’t legally operate until it’s reinstated. Reinstatement costs $54 and requires you to submit an application.
For more information, check out our Utah LLC Annual Report guide.
LLC taxes are complex. While our guide can provide you with important information, we recommend you schedule a free consultation with an accountant to ensure that you handle your business taxes correctly.