Utah Tax Provision Saves Businesses Big Bucks
Utah law allows businesses to deduct the cost of a facility before determining sales tax on revenue.
About Facility Fee
Facility Fee Explained
Most retail businesses that are subject to sales tax have an expense for the facility in which the business is conducted. While Utah tax law requires the imposition of sales tax on most products sold, it exempts sales tax on the facility expense if the business can separate the revenue received for the product from what it pays for the facility from which the product is sold.
We have devised a method for separating the revenue that pays for the facility expense from that which is received for the product so that the facility expense can be deducted from gross revenue before determining the sales tax, thus reducing the sales tax burden by many thousands of dollars. See the example on the right of an actual ETAP filing.
Page two of the ETAP illustrates how net taxable sales of $198,817.08 is reduced to taxable sales of $149.112.00 by
using the facility fee deduction. The result is sales tax due
of $10,214.00 rather than $13,618.97—a savings of
$3,403 for the month.