Utah lesson 5 of 6
Utah LLC taxes, licenses and permits
Utah has no LLC franchise tax for a standard pass-through entity. Members instead pay Utah's flat individual income tax on their share of profit, and most cities layer on their own business license.
How members are taxed
A Utah LLC taxed as a partnership or sole proprietorship for federal purposes passes its income through to members, who report their share on their Utah individual return and pay the state's flat income tax rate. Confirm the current rate on the Tax Commission's site before filing, since Utah has adjusted this rate in recent years.
An LLC that elects C corporation tax treatment instead owes Utah's flat corporate income tax on its Utah-sourced business income rather than the individual rate.
Sales tax, withholding and local licenses
If you sell taxable goods or certain services, register with the Tax Commission for a sales and use tax license before you start selling. If you hire employees, register for withholding at the same time. Utah does not issue one statewide general business license; instead, nearly every Utah city and county requires its own local business license, and the requirements and fees vary by jurisdiction.
Check with the city or county where your LLC operates for its local business license process, since operating without one can bring fines even if your state filings are current.
Key takeaways
- There is no LLC franchise tax; a C-Corp election instead pays Utah's flat corporate income tax.
- Register with the Tax Commission separately for sales tax or withholding.
- Nearly every Utah city or county requires its own local business license.
Frequently asked questions
Does Utah have a franchise tax on LLCs?
No. A standard pass-through Utah LLC does not pay a separate franchise tax. Only a C-Corp election pays Utah's flat corporate income tax.
Is there a statewide business license in Utah?
No. Check with the city or county where you operate, since almost all of them require a local business license.
Official sources
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Last reviewed: September 2026 - reviewed by Gullia Filing Legal & Formation Team