Tax Commission Private Letter Ruling - Utah State Tax Commission

Conclusion
For non-taxable work you complete, your invoices will need to separately state the
taxable and non-taxable items. In addition to the statutory requirements to do so, see Utah Code
Ann. § 59-12-111; see also Utah Administrative Rule R865-19S-22, there is a practical reason. If
an auditor reviewing your tax documents has no way to separate taxable and non-taxable items,
there will be no way for you to support your reasons for not collecting sales tax on some of the
services that you provided to your clients. You indicated that you currently bill repairs and
consultation under the same billing code but could separate these two categories. Given that
repairs, as described in Utah statute and this opinion, are taxable and consultation that does not
result in a repair is not taxable, you should consider separately stating or invoicing these services.
This may depend on whether you do enough consultation work to make this worthwhile.
Finally, you indicated that you do not write custom software or write code or otherwise
modify prewritten software. If this should change, you should review the tax policies for
services related to custom software. Writing custom software and many related activities are not
subject to Utah sales and use tax. See Utah Code Ann. § 59-12-102(65); see also Utah Code
Ann. § 59-12-103. You may also request another Private Letter Ruling from the Tax
Commission.
The Tax Commission provides this opinion on the basis of the information you
presented. This ruling only applies to the specific fact situation, and for the individuals,
addressed in this letter. If you wish to address these or other Utah tax concerns further, please
do not hesitate to contact us.
For the Commission,
Marc B. Johnson
Commissioner
MBJ/CDJ/05-018