Background
The Utah Governor signed a Senate Bill 73(Bill) on March 19, 2026, that introduces a 2% sales-based excise tax imposed on the sales price of specific digital transactions. This sales-based excise tax is charged on the final amount charged for access to digital images, digital audio work, digital audio-visual work, digital books, and gaming services.
The excise tax is also charged on streaming of or subscription for access to digital images, digital audio-visual work, digital audio products, digital books, or gaming services by providers required to perform age verification.
Effective Date
The Law takes effect on October 1, 2026.
Impact on Digital Service Providers
With the adoption of the Bill that becomes effective by October 1, 2026, the impacted digital service providers shall have additional tax and compliance obligations. From July 1, 2026, these providers shall become part of the sales and use tax network, and from October 1, 2026, they are going to enrich their tax obligations with the additional 2% sales-based excise tax.
This tax, as indicated above, covers a broad array of digital products. The delivery method doesn’t bear any relevance in deciding the taxability status of the digital product. If the digital good is made available through subscription, on-demand access, or streaming, it is taxable.
Businesses in Scope
The successful collection of the “new” tax on digital transactions shall become a daily task of a broad array of digital providers. The tax provision indicates that businesses in scope are those entities that are required to perform age verification.
Already registered entities that are going to be responsible for charging, collecting, and remitting excise tax, are “simply” going to “amend” their default template by adding a line that covers excise tax. The same Utah sales tax return shall be used for tax reporting and remitting.