How to Pay Utah State Taxes

Options for Full Payments and Monthly Installments

If you owe individual income tax or business taxes in Utah, you should remit payment to the State Tax Commission (STC). The STC can accept payments online or through the mail, and you can pay with check, automatic bank draft, or even credit/debit cards for a fee. 

Can't pay in full? The state has several options to help taxpayers, but if you don't make payment arrangements, the STC can go after you and use tax liens, wage garnishments, and other involuntary collection actions to collect the tax debt. To point you in the right direction, here's an overview of how to pay taxes in Utah.

Key takeaways

• Full payment – pay online or through the mail. 
• Consequences of not paying on time and in full – late payment penalties, tax liens, and collection actions.
• Payment options - request monthly payments for up to 24 months. 
• If you can't make payments – consider an offer in compromise to settle for less than owed.
• Alternatives – talk with a tax pro about additional options for your unique situation. 

If you can pay in full

If you can pay in full or want to make a partial payment, you can do so online at tap.utah.gov. There, you can pay with an ACH transfer, credit/debit card, or other electronic options. You may need to verify your identity with information from your last state tax return, your state ID, or a letter from the Tax Commission. 

Alternatively, you can mail in a payment with your tax return or in response to a notice demanding payment. Write the check to "Utah State Tax Commission" and note the tax return number and your daytime phone number in the memo of the check. You can also use cashier's checks or money orders, but don't send cash. The state takes no responsibility if cash is lost in the mail. 

Benefits of paying in full

If you pay in full, the state will stop assessing penalties against you – however, if your payment is late, you will see late payment (and late filing penalties if applicable) applied to your account, backdated to the original due date of your return. 

Once you pay, the state will release any liens that have been filed against you within 30 days, and the state will immediately stop any involuntary collection against you such as wage garnishment.

If You Can’t Pay in Full – Monthly Payment Plans

If you can't pay in full, you may want to apply for an installment agreement. To apply for a payment plan online, go to tap.utah.gov and select "apply for a waiver or payment plan" or call the STC at (801) 297-7703 or 1-800-662-4335 ext 7703. To apply by mail, file Form TC-804 for individual payment plans or Form TC-804B for payment plans on business taxes.

• Individual income tax – Individuals can get up to 24 months to pay off state income tax. 
• Business taxes – Businesses that owe $5,000 or less can take up to 24 months to pay. Businesses that owe over $5,000 can make three equal payments over a 90-day period. If you owe more than $5000 and need more time to pay, contact the STC directly to ask about alternatives. 

What to expect when you're on an installment agreement

While you're on a payment plan, interest will continue to accrue on your account – Utah uses the federal short-term rate from the last quarter of the previous year plus two points. If a lien has already been filed, it will generally stay in place until you have paid off the full tax liability. However, if the state has not issued a lien yet, setting up a payment plan generally lets you avoid that. 

Both individuals and businesses are expected to file all returns and pay all taxes due while on the payment plan. If you don't, the plan will go into default, and the state can go after your assets to collect the remaining tax liability. The STC will also seize any state tax refunds that you earn while on the payment plan and IRS refunds as well.

If You Can't Afford Monthly Payments – hardship options

If you can't afford to pay monthly, you may want to look into a Utah offer in Compromise. That's where the state agrees to settle your tax bill for less than owed – you can get offers on individual income tax, corporate income tax, state payroll tax (employee withholding), and sales tax. To qualify, you must prove that you truly can't afford to pay the tax – even if you liquidate your assets and devote all of you disposable income to the liability.

The STC does not advertise a hardship program, like the IRS's currently non collectible option, on its website. However, if you establish that you cannot pay anything, the state may not be able to pursue certain collection actions. For example, if your wages are barely enough to cover living expenses, the state may not be able to garnish them for unpaid taxes. Similarly, if you don't have any assets, the state cannot take them. 

However, interest and penalties will continue to grow on your account, and the state will file a tax lien. The lien attaches to all of your current and future assets – for example, if you inherit property, the state will be able to seize that for your unpaid taxes. Also, as long as you owe money to the state, they have the right to seize your state and federal tax refunds. Similarly, if you owe money to the IRS, they can seize your state and/or IRS tax retunds. 

What about property taxes?

The Utah STC does not collect property taxes. Local governments assess and collect those taxes. Many local governments have hardship programs for homeowners who cannot afford to pay their local property taxes. Contact your local county board for more details about options in your area. 

What if you don't do anything

Can't afford to pay your taxes and tempted to just ignore the situation? Well, that's a risky idea. 

The STC will apply interest and penalties to your balance, and unfortunately, you can only get penalty waivers if you have reasonable cause (in other words, something significant and out of your control prevented you from paying the tax). Unlike the IRS, the STC does not offer first-time penalty abatement. 

Eventually, the state will file a tax lien against you. Then, the STC may move forward with garnishing your wages or seizing your assets. If you owe business taxes, you may lose your business and/or professional licenses. You can also face personal liability for certain business taxes. 

Personal liability for business taxes

Regardless of the structure of your business, the STC may be able to hold you personally liable for business trust fund taxes. To give you an example, imagine that your business is a corporation. The corporate structure protects you from personal liability for debts or lawsuits in the business's name. However, the state has the right to "pierce the corporate veil" for certain trust fund taxes. 

Here's how it works. Say that your business withholds state income tax from an employee's paycheck or collects sales tax from a customer. The business is supposed to hold those taxes in trust until it sends them to the state. If the business never pays those taxes, the STC may assess a penalty worth 100% of the unpaid tax against any responsible individual. 

That may include business owners, but also employees or even third-party professionals. Basically, anyone who was responsible for paying the tax and made the decision not to pay it may be liable. Although this is a state trust fund tax, Utah uses similar methods to assess personal responsibility and liability as the IRS does for its Trust Fund Recovery Penalty.

How TaxCure can help

You don't have to deal with the Utah State Tax Commission on your own. Using TaxCure, you can find licensed professionals based in Utah who understand exactly how the STC works and how to get relief for their clients. 

Whether you need help addressing a pending or in-progress collection action, are facing an audit, dealing with unpaid taxes, or navigating another state tax concern, TaxCure can help you find the assistance you need. Don’t wait — explore your options and act now.