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Sales, rentals, leases and charges for using prewritten software in Utah are taxable regardless of delivery method (boxed, hosted, downloaded, etc.). Charges to upgrade prewritten software are also taxable.
Canned software, also referred to as prewritten, "shrink-wrapped" or standards software, is computer software that is designed for and distributed "as is" for multiple persons who can use it without modifying its code and which is not otherwise considered custom software.
Maintenance agreements or prepaid warranties. Sales of warranty agreements covering items of tangible personal property are subject to sales tax, and the tax is due at the time of the sale of the agreement.
Utah law applies sales tax to any product delivered electronically that is taxable if delivered by any other means. States Not Affirmatively Applying Sales Taxes to Digital Goods.
Traditional Goods or ServicesPrescription medicine and gasoline are both tax-exempt. Utah charges a 3%, reduced rate on the purchase of groceries. Some services in Utah are subject to sales tax.
The service agreement is considered to be advance payment for future taxable repairs of tangible property. Since the tax was prepaid upon sale of the agreement, actual repairs (including parts and labor) which are later made pursuant to the service agreement are tax exempt.
Sales, rentals, leases and charges for using custom software are nontaxable. Charges to maintain, support or upgrade custom software are also nontaxable.
The state of Utah does not usually collect sales taxes on the vast majority of services performed. However, there are some services which are taxed, for example services which include repairs, renovations, or installation, laundry services or dry cleaning services.
Utah law applies sales tax to any product delivered electronically that is taxable if delivered by any other means. States Not Affirmatively Applying Sales Taxes to Digital Goods.