Utah— Taxability of Portable Restrooms

SALT Report 1696 – The Utah State Tax Commission determined that a Taxpayer’s company was liable for sales tax on the rental of portable restrooms because the Taxpayer could not provide evidence that it was paying for portable restroom services.

The Taxpayer contracted for portable restrooms from two separate vendors; the first vendor invoiced the restrooms as the rental of tangible personal property and charged the Taxpayer a lump sum for the rental as well as sales tax.  The Commission denied the Taxpayer’s sales tax refund request because the restrooms were listed as rentals on the invoice.

The second vendor listed separate charges for different items, such as standard restroom, regular service, and delivery/pickup. The vendor calculated these charges separately and added sales tax to the total bill. The Commission refunded sales tax for the separately-stated delivery charges but denied refunds of sales tax on other charges by the second vendor.

In their final judgment the Commission stated that it must look at several factors when determining whether a portable restroom service is being provided or if the tangible personal property is being rented. Those factors include:

  • Invoice descriptions,
  • The relative costs of services and equipment consumed in providing the services compared with the cost of the property,
  • The manner in which the restrooms are advertised, and
  • Whether the vendor pays taxes on purchases of the restrooms as a final user of property

The Commission ultimately denied the Taxpayer’s refund request, with the exception of the refund for the sales tax on the separately-stated delivery charges, because the Taxpayer could not provide evidence to prove that he was paying for portable restroom services.  The Taxpayer’s only evidence was a sample invoice and a product list from the vendors.

For Further Information:

Utah State Tax Commission – Commission Decision, Appeal No. 10-1219