New Utah Tax Laws Impact Digital Advertising and Streaming Services

Utah recently passed two pieces of legislation that expand how the state taxes digital activity, signaling a continued shift toward modern, data-driven revenue models.

Senate Bill 287 creates a new Targeted Advertising Tax on certain advertising businesses starting January 1, 2027. It applies to companies that deliver data-driven, targeted ads and meet specific revenue thresholds. The tax is based on ad “impressions,” meaning businesses will calculate the portion of revenue subject to tax based on how many ads are shown to Utah users compared to total impressions. The 4.7% rate aligns with the state’s sales tax. While the law does not explicitly reference digital advertising, it is clearly aimed at online, data-driven ad models. For more information, see S.B. 287 here.

Senate Bill 162, effective July 1, 2026, expands sales and use tax to include streaming and subscription-based digital content. This includes video, music, books, and certain gaming services, even when no download occurs. The law also confirms that prewritten software remains taxable regardless of delivery method, including cloud-based solutions. For more information, see S.B. 162 here.

Together, these changes reflect a broader trend as states adapt tax systems to align with evolving digital business models. Companies operating in advertising, software, or digital content should review their offerings, evaluate exposure, and prepare their systems for new tracking and compliance requirements.