On March 25, 2026, Utah Gov. Spencer Cox signed Senate Bill 287, establishing an annual targeted advertising tax at a rate equal to Utah’s general state sales tax rate, currently 4.85%. The legislation imposes the tax on certain large advertising businesses based on gross receipts attributable to targeted advertising delivered to Utah users. The tax is effective for tax years beginning on or after Jan. 1, 2027.
Senate Bill 287 creates a new tax on ‘targeted advertising entities’ that deliver paid advertisements to individuals or audiences in Utah using data-driven targeting methods, effective Jan. 1, 2027.
‘Targeted advertising’ includes the following:
An entity is subject to the Utah targeted advertising tax if the entity:
These requirements generally align the tax with large digital advertising platforms, similar to the Maryland digital advertising tax, which also uses $1 million state-level and $100 million global gross receipts thresholds.
The tax base is the product of the entity’s worldwide gross receipts from targeted advertising and the ratio of impressions from targeted advertising delivered in Utah to the total number of advertising impressions delivered regardless of location. An ‘impression’ is a single instance in which targeted advertising is delivered to an audience or individual, regardless of interaction with the advertisement.
The Utah State Tax Commission is responsible for adopting rules and procedures to implement and administer the tax, including registration, reporting, collection and enforcement.
The Utah targeted advertising tax is intended to apply primarily to large advertising businesses, such as well-known digital advertising and social media platforms. However, other businesses that meet the statutory thresholds may also be subject to the tax and should consider the following:
Although the legislation does not use the term ‘digital advertising,’ the practical effect of the tax is application to digital advertising services. While narrowly targeted at large platforms, the tax introduces novel sourcing and compliance concepts that may influence future state efforts to tax the digital economy.
In addition to Maryland’s digital advertising tax, New Mexico has clarified its taxation of digital advertising in revised regulations, and last year, Washington enacted a broad tax on advertising services, including digital advertising.
Affected taxpayers should begin evaluating exposure to the tax, data availability and compliance processes well ahead of the 2027 effective date.
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