Utah Ruling, Software and Sales Tax
- Feb 28, 2012 | Will Frei

The Utah Department of Revenue has issued a private letter ruling highlighting the change to Utah sales tax law applicable to the sale of web-based services.
The letter answers whether a particular company's services, which include remote computer access, meeting attendance and technical support, are subject to Utah sales tax. The Department of Revenue applied the following logic to reach their conclusion:
- The service provided is prewritten software since the company does not modify it for individual consumers.
- Prewritten software is tangible personal property according to § 59-12-102(113)(b)(v).
- The service provided constitutes a sale, since customers pay to use the service.
- "Under § 59-12-211, the locations of the sales of the Web Services are based on the addresses of the purchasers."
- Therefore, the company's web services are subject to Utah sales tax.
The Department concludes that the Web services are taxable. The change to Utah sales tax law comes into play in the fourth point. Utah tax law has changed to consider the "addresses of the purchasers" the location of the sale. As a result, the Department states "Our previous private letter rulings locating the sales based on the locations of the sellers' servers are no longer applicable."
For more state rulings on the taxability of Web Services see:
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