Utah Sales Tax on Cottage Food: SB 217 Exemption Explained

If you're selling food from your home kitchen in Utah, you've probably wondered whether you need to collect sales tax — and if so, how much. Senate Bill 217, which took effect July 1, 2026, changed the answer significantly. But not completely. Here's what you actually need to know.

What SB 217 Changed

Before SB 217, home food producers owed sales tax on every sale. Grocery staples were taxed at a reduced state rate of 1.75%, and prepared foods (anything you cooked, heated, or mixed to order) were taxed at the full combined state and local rate.

SB 217 carved out a new exemption: food, food ingredients, and prepared foods made and sold by a "home cook" from a private, noncommercial home kitchen are now exempt from the state portion of Utah's sales and use tax.

The critical word there is "state portion." Local taxes still apply.

What Qualifies as a "Home Cook" Under SB 217

The exemption uses a specific statutory definition under Utah Code § 59-12-102. To qualify, you must be:

• An individual (not a corporation or multi-location business)
• Preparing food exclusively in a private, noncommercial home kitchen
• Selling directly to consumers

This covers all three home kitchen pathways — Traditional Cottage Food (UDAF), Homemade Food Act (HB 181), and MEHKO — as long as the food is made in your residential kitchen and sold direct.

If you lease a commercial kitchen, the exemption doesn't apply to food produced there. It's tied to the kitchen, not the person.

Local Taxes Still Apply

This is where people get tripped up. SB 217 only exempts the state portion of sales tax. County and municipal sales taxes are not exempted and must still be collected and remitted to the Utah State Tax Commission.

Local sales tax rates in Utah vary by location. Verify the current rate for the county and city where each transaction occurs. You need to:

1. Know the combined local rate for the location where the transaction happens
2. Collect that amount from the buyer
3. File and remit it on your regular sales tax return

So do you still need a Utah sales tax license? In most cases, yes. You're still collecting and remitting local tax, which means you still need to be registered with the Tax Commission. The exemption reduces your tax burden — it doesn't eliminate your filing obligation.

What About Farmers Market Sales?

SB 217 also removed the old requirement that forced direct-to-sale farmers markets to physically separate Homemade Food Act vendors into their own labeled section. Markets can now organize vendors however they choose.

For tax purposes, farmers market sales fall under the same rules: state sales tax is exempt if you meet the home cook definition, but local taxes based on the market's physical location still apply. If you sell at a market in a different county from where you live, you collect the local rate for the market's location — not your home address.

How to Handle This on Your Tax Return

When you file your Utah sales tax return (typically quarterly for small operators):

• Report your total gross sales as usual
• Claim the SB 217 exemption for the state portion on qualifying home-cook sales
• Remit the local portion based on where each sale occurred

Keep records of every sale including the date, location, amount, and what was sold. If you sell at multiple farmers markets across different counties, track each location separately because the local rates differ.

SB 217 Also Removed the Signage Requirement

One often-overlooked change: SB 217 eliminated the physical signage requirement for direct-to-sale farmers markets. Homemade Food Act vendors previously had to post conspicuous signs declaring their products were uninspected. That mandatory signage rule is gone.

You still need to verbally inform each buyer that the food isn't inspected by state or local authorities — the Homemade Food Act's verbal disclosure requirement wasn't changed by SB 217. But the physical sign mandate at markets is no longer in the statute.

Our Utah Cottage Food & Home Food Business Guide includes a complete tax compliance section covering SB 217 implementation, local rate lookups, and quarterly filing steps — so you can handle the tax side without guesswork.

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