In this Article, we will give you a snapshot of the legal compliance requirement and associated fees required to register Limited Liability Company (LLC) in Utah and most importantly, maintain the status of an LLC, especially as a small business e-commerce start up.
In the United States, LLCs are registered on the state level, therefore you can register an LLC in any of the 50 States in the United States, including Washington DC.
You can check out our the best states in the US to register your LLC as a small business e-commerce start-up, if you want to pay less State fees, less State imposed taxes and do less periodic paperwork in order to maintain your LLC.
In this Article, our focus is on Utah LLC. What cost should you expect to pay when you register a Utah LLC? What periodic filings requirements are imposed on Utah LLCs? What State taxes are levied on e-commerce small business start ups in Utah and what are the tax rates? What business permits are required to be obtained by e-commerce businesses in Utah, what’s the cost of these permits and are there any renewal requirements?
This Article presents you a snapshot, so you know what fees and legal compliance requirements to expect if you want to register an LLC for your e-commerce small business start up in Utah, operate with the required licenses and maintain your LLC status.
Business registration and compliance on Utah
LLC Registration cost; the state fee for registering an LLC in Utah is $50. You can register your LLC with Bizee for a service charge of $0 + the State fee.
LLC registration Publishing requirement; No, LLCs in Utah are not required to publish their registration in a local newspaper.
Has the Option to register as an Anonymous LLC; No, LLCs in Utah do not have the option to register as an anonymous LLC. Meaning that the business details of the LLC Owners are published on the Utahpublic records. The LLC can still maintain some privacy by using a virtual office address and not the Owners real addresses.
DBA requirement; DBA is required if your LLC is operating under a different name than your LLC registered name. Cost of registration is $22, the length of approval is 3 years. You can register for a DBA in Utah online or outsource the registration of your Utah DBA (if needed) to Bizee.
Annual report filing requirement; yes, Utah LLCs have annual report filing requirements. The cost of filing annual report in Utah is $18
You can file the Utah annual returns yourself, you’ll need to visit the Utah state website or you can outsource the filling of your annual returns to Bizee for a $99 service charge + the state fee.
You can register your DBA or fill your annual returns directly on the State’s website and only pay the state’s filing fees. Alternatively you can use Bizee a US business filing service to register your DBA and file your annual returns. Bizee charge a service fee of $99 + the state fees. We recommend Bizee for registering your LLC because specifically for LLC registration, Bizee does not charge any service fee. so you pay $0 + the state fees.
Annual Franchise tax filing and compliance in Utah
State Franchise tax requirement; No, LLCs are not required to pay Franchise tax in Utah
Annual State income tax filing and compliance in Utah
State income tax requirement; Utah has a flat 4.85 percent individual income tax rate. Utah also has a flat 4.85 percent corporate income tax.
- Who files State income tax; LLCs by default are passed through entities meaning that tax obligation passes through to the individuals who own the LLC. Therefore an LLC with a default tax status pays the individual state income tax. Interestingly, if the individuals behind the LLC are not resident in the state and do not have state source income (a dependent agent in the state), then they are not required to pay “individual State income tax”.
If the LLC owners are resident in the State or have State source income (a dependent agent in the state), then the LLC Owners are required to pay “individual State income tax”.
If the LLC has elected to be taxed as a corporation (C-corp), then the LLC is required to pay “Corporate State income tax”.
- How to file state income tax; You can file your Utah State income tax by yourself. You will need to visit the State website. Alternatively, we recommend using the Service of a Certified Public Accountant (CPA), through H&R Block to file your state income tax.
Periodic Sales tax filing and compliance in Utah
Sales tax requirement; Utah has a 6.10 percent state sales tax rate, a max local sales tax rate of 2.95 percent, and an average combined state and local sales tax rate of 7.19 percent.
Sales tax permit; It costs $0 to register for Utah sales and use tax license.
There is no requirement to renew a Sales tax permit in Utah.
Reseller/Resale Certificate; Businesses who purchase products from their suppliers for the purpose of reselling those products to their customers can make sales tax free purchases from their suppliers if they have a resale certificate.
This means that Resale businesses can get cheaper product prices from their suppliers (that is product prices without sales tax included) which can help these Businesses have a higher profit margin and/or maintain competitive selling prices to their Customers.
Generally, suppliers will charge the sales tax rate applicable in the State where the product is to be delivered unless the business presents to the supplier a Resale Certificate (also called a Reseller Certificate).
The Resale certificate must be valid and acceptable in the state where the product is to be delivered.
Businesses can present any of the below listed Resale certificates to suppliers if they want to make sales tax free purchases for product delivery to an Utah address.
- Exemption certificate | Form TC-721
- MTC Uniform Sales & Use Tax Resale Certificate (The MTC form serves as a uniform resale certificate for various states, streamlining the process by replacing the need for multiple state-specific resale forms when dealing with your supplier.)
- SST Certificate of Exemption (The SST form serves as a uniform resale certificate for various states, streamlining the process by replacing the need for multiple state-specific resale forms when dealing with your supplier.)
Note; Utah accepts the use of out-of-State Seller ID.
This means that Resale Businesses seeking sales-tax-free purchases in Utah can use an out-of-state seller ID (i.e a seller ID issued by another US state or their home state) to fill-out the MTC uniform resale certificate or SST Certificate of Exemption. They can indicate an out-of-state seller ID as their Utah Seller ID on the MTC form or SST form.
In Utah, A blanket Resale certificate (This means that the resale certificate is kept on file by the Supplier to cover multiple purchase transactions between a specific Supplier and Reseller) do not expire as long as a “recurring business relationship” exists. A “recurring business relationship” exists when no more than twelve months pass between sales.
Conclusion
This Article shows you a snapshot of the legal fillings and compliance requirements for LLCs that are registered in Utah, specifically for LLCs that want to carry on the business of selling and especially for small e-commerce start up LLCs that are registered in Utah.
If you are wondering what might be the best State in the United States to register your small business (especially if you are a reseller or an e-commerce business), we have written this Article, where we go over our most recommended states for registering a business in the United States, if you want to pay less LLC filling and legal compliance fees, if you want less state imposed taxes and if you want to do less periodic legal paperwork required to maintain your LLC status.
