Tax Insight

Utah enacts targeted advertising tax beginning January 1, 2027

Insight
5 minute read
April 13, 2026

What happened?

Utah enacted S.B. 287 on March 25, 2026, creating a new annual 4.7% tax that applies to a targeted advertising entity meeting specified revenue thresholds and delivering targeted advertising to Utah audiences. The enacted legislation uses an impressions-based apportionment methodology to determine the tax base.

The tax is imposed beginning January 1, 2027.

Why is it relevant?

Utah’s law is another example of state efforts to tax advertising that relies on automated placement, individualized data, and user interaction. Unlike Maryland’s digital advertising tax, Utah’s statute does not expressly refer to “digital advertising,” but its definition of “targeted advertising” appears aimed at interactive, data-driven advertising transactions.

This development continues the trend, as other states also are considering taxes on digital advertising or data derived from consumers. Utah's enactment could prompt additional legislative activity, and businesses should monitor whether this type of tax withstands legal scrutiny.

Actions to consider

Businesses with digital advertising revenue should evaluate whether their activities fall within Utah’s definition of “targeted advertising” and whether they meet the statute’s revenue thresholds. Affected taxpayers also may want to monitor whether Utah’s tax draws legal challenges similar to those raised against digital advertising tax imposed in Maryland.

With the tax taking effect January 1, 2027, affected taxpayers should assess whether their systems can track Utah impressions and compute the required apportioned receipts amount. They also should begin evaluating data sources and compliance processes ahead of that date. In addition, businesses should monitor Utah State Tax Commission guidance and rulemaking, particularly around sourcing, reporting, return filing, and documentation.