In Utah, LLCs can choose how they are taxed. An LLC owned by one person is taxed like a sole proprietorship, while an LLC with two or more owners is taxed like a partnership. LLCs can also elect to be taxed like corporations, which pay 5% tax on taxable income, with a $100 minimum tax.
Pass-Through Taxation
LLCs do not have to pay business or income taxes directly. Taxes pass through to the LLC’s owners. The owners report profits and losses on their personal tax returns.
Operating Agreement and Business Registration
Utah does not require LLCs to have an operating agreement. However, agreements protect members’ assets if disputes arise.
To transfer an out-of-state LLC to Utah, file Form TC-69 with the Utah State Tax Commission. This registers your LLC to do business in Utah.
Employer Responsibilities
If an LLC has employees, it must:
- Withhold employee income taxes and submit them to the Utah Tax Commission.
- Pay unemployment insurance taxes to Utah’s Department of Workforce Services.
Other State Taxes
In addition to income taxes, LLCs pay other state taxes. All businesses pay sales tax on goods and services. Utah does not charge LLC franchise tax or annual fees. Every two years, LLCs must file an annual report and update registered agent information.