Utah, like many states, treats certain platforms as “marketplace facilitators.” A marketplace facilitator is a company that hosts listings, processes payments, and helps complete sales for third-party sellers. Think of platforms such as Amazon, Etsy, Walmart Marketplace, eBay, and many social-commerce tools.

Under Utah’s marketplace rules, these platforms are generally responsible for collecting and remitting Utah sales tax on taxable sales they facilitate for you. That is good news for many small businesses because it shifts much of the calculation and collection work to the platform. But it does not mean you can ignore Utah’s tax rules altogether.

Even when a marketplace collects tax on your behalf, Utah may still require your business to register with the Utah State Tax Commission and hold a sales tax license. This is most likely if you:

• Sell directly to Utah customers through your own website or invoicing, not only through marketplaces.
• Maintain a physical presence in Utah, such as an office, warehouse, or employees.
• Exceed Utah’s economic nexus threshold based on sales volume into the state.
• Need to file returns that show both marketplace-collected sales and your own direct sales.

If you operate a Shopify, WooCommerce, Squarespace, or custom site and you control checkout yourself, you are usually responsible for collecting and remitting Utah tax on those direct sales. Marketplaces may handle their portion, but they cannot cover tax on sales they never process.

Utah uses an economic nexus standard for out-of-state sellers. You can be required to collect Utah sales tax even with no physical office in the state if your Utah sales volume crosses a certain threshold.

If you are close to the threshold or unsure how to calculate it, consider pulling a full year of sales reports from your marketplaces and payment processors and talking through the numbers with a tax professional.

Utah taxes many digital goods and electronically delivered products in a similar way to their physical counterparts. For small businesses, that often includes:

• Downloadable software and apps sold for a fee.
• Streaming services for video, music, or other media.
• E-books and digital publications when sold as finished products.
• Digital media files such as stock photos, templates, and design packs.
• Online courses or training where the main product is a pre-recorded digital file, rather than live instruction.

In contrast, many stand-alone services (for example, consulting, custom design work, or bookkeeping performed remotely) are typically not taxed as sales of tangible or digital goods in Utah. However, packaging those services with digital downloads can change the tax analysis, so it is important to know what exactly you are selling.

Once you understand who collects tax and which sales are taxable, the next step is filing accurate Utah sales tax returns. Even when marketplaces collect tax on your behalf, you may still need to file returns that show:

• Total Utah sales for the period.
• Sales where the marketplace collected and remitted tax.
• Direct sales where you collected tax yourself.
• Any exempt or non-taxable transactions.

Good recordkeeping is essential. Keep marketplace reports, payment processor summaries, invoices, and copies of your Utah returns for several years so you can respond quickly if the state asks questions.

Type of sale	Who usually collects Utah tax?	Does the seller often need a Utah license?
Amazon, Etsy, Walmart Marketplace orders	Marketplace facilitator	Sometimes especially if you also sell directly or cross nexus thresholds.
Facebook or Instagram Shops sales	Often the platform, if set up as a marketplace.	Sometimes, check your direct sales volume and Utah nexus.
Sales on your own website (Shopify, WooCommerce, custom checkout)	You, the business owner.	Yes, if sales are taxable and you meet nexus or have a Utah presence.
Invoice-based digital services to Utah clients	Usually you, if the transaction is taxable.	Often yes, when those sales are taxable and recurring.
Very low-volume sales into Utah with no presence or nexus	May be no one, if not required.	Often no, but monitor volume so you notice when rules change for you.

Do I still need a Utah sales tax license if Amazon or Etsy collects tax for me?
Sometimes, yes. If you also sell through your own site, have a Utah presence, or exceed Utah’s economic nexus threshold, you may still need to register and file returns, even when the marketplace sends in tax on its portion of your sales.

Are all digital goods taxable in Utah?
Many are. Downloaded software, streaming services, e-books, and other digital media are often treated as taxable. The details depend on how your product is structured, so it is important to categorize what you sell as clearly as possible.

If my marketplace collects tax, should I still show those sales on a Utah return?
Often you will report those sales in an informational way, even if you do not remit additional tax on them. That lets Utah see the full picture of your activity and match it with marketplace reports.

What happens if I ignore Utah’s digital tax rules?
Late registration and missed filings can lead to back taxes, penalties, and interest. For small businesses running on tight margins, that kind of surprise can be painful, especially after a period of strong online growth.

When should I talk to a tax professional or attorney?
Any time you cross state lines, approach a nexus threshold, bundle digital products with services, or receive a notice from the Utah State Tax Commission, it is wise to get individualized advice from a Utah-focused tax professional or attorney.