Utah LLC Taxes
After you start a Utah LLC, it's important to understand your tax obligations. The taxes your LLC owes depend on how it's classified, state and local rules, whether you sell taxable goods or services, and whether you have employees.
LLC Pass-Through Taxation
By default, LLCs don't pay taxes directly. Instead, the LLC members report the income (or losses) on their personal Form 1040 tax return. This is called pass-through taxation — tax responsibility "passes through" the LLC to its owners.
How Are LLCs Taxed in Utah?
By default, a Utah LLC is taxed by the IRS based on the number of members:
- An LLC with 1 owner (Single-Member LLC) is taxed like a Sole Proprietorship
- An LLC with 2+ owners (Multi-Member LLC) is taxed like a Partnership
These are the "default" statuses — automatically applied based on member count. You can also elect to have your LLC taxed as a Corporation (S-Corp or C-Corp) by filing extra paperwork with the IRS.
Single-Member LLC (default)
The IRS treats Single-Member LLCs as Disregarded Entities — the LLC doesn't file its own federal return. Instead, the owner reports LLC income on their personal Form 1040 (Schedule C if owned by an individual).
Multi-Member LLC (default)
Multi-Member LLCs file a Form 1065 Partnership Return and issue a Schedule K-1 to each member. Each member then reports their share of profits on their personal Form 1040.
Electing Corporate Taxation
- S-Corporation: File Form 2553 with the IRS. Can reduce self-employment taxes once the LLC has consistent profits (generally $70,000+ net income per member). Speak with an accountant first.
- C-Corporation: File Form 8832 with the IRS. Uncommon for small LLCs. Primarily useful for large employers offering healthcare fringe benefits.
Utah State Income Tax
Utah has a state income tax at rates of 4.55% flat rate. LLC members report their share of LLC profits on their Utah state tax return.
Single-Member LLC owners file Utah Form TC-40 (Individual Income Tax Return) and include LLC income. Multi-Member LLCs file Utah Form TC-65 (Partnership Return) and issue Utah K-1s to members.
Contact the Utah State Tax Commission at 801-297-2200 for more information.
Local Income Tax
You and/or your LLC may also need to file and pay income taxes with your local municipality (city, county, etc.). Contact your local government or hire an accountant to confirm local requirements.
Utah Sales Tax
If your LLC sells taxable products (and sometimes services) in Utah, you may need to collect sales tax and register for a Seller's Permit (also called a resale license or sales tax permit).
Utah's state sales tax rate is 4.85%. Local rates (city, county, transit) typically add 1.5%–3%, bringing most totals to 6.35%–8.85%.
Register for Utah Seller's Permit →
Contact the Utah State Tax Commission at 801-297-2200 with questions.
Utah LLC Payroll Taxes
If your Utah LLC has employees, you must handle payroll taxes, which include:
- Federal income tax withholding
- Utah state income tax withholding
- Social Security and Medicare taxes (FICA)
- Federal unemployment tax (FUTA)
- Utah state unemployment tax (SUTA)
Payroll calculations are complex — most LLC owners hire a payroll service or accountant.
Utah Tax Agency Contact
Utah LLC Taxes — FAQs
Read the step-by-step formation guide with filing fees, processing times, and annual report deadlines.