How Sales Tax Laws Helped Make Vacuums at the Car Wash Free (in Utah)

Ever wonder why car washes provide free vacuums? Well, in Utah, it is likely because car washes do not want to collect and pay sales tax. Basically, if you only pay for the cleaning of the outside of your car, then the car wash does not have to charge or collect sales tax.

Getting practice reading the law is always helpful. Utah Code 59-12-104 states (read this with a double negative in mind):

Exemption from the taxes imposed by this chapter [that require sales tax] are as follows: … (85) sales of cleaning or washing of a vehicle, except for cleaning or washing of a vehicle that includes cleaning or washing of the interior of the vehicle.

Yes, Utah code lists over 85 things (96 actually) that are exempt from sales tax, plenty of which must be super important (please read this and the following with some sarcasm), such as molten magnesium (no sales tax), sales of “rail rolling stock manufactured in Utah” (this gives Utah’s rail rolling stock a boost over other state’s rail rolling stock), and “construction materials used for the construction of a qualified stadium” (yep, you read that right, we like our ‘qualified’ sports stadiums).

Getting back to the all-important car wash though, if you purchase the cleaning of just the outside of your car, it is exempt from sales tax. So, all of the school groups that you see out with their car wash signs and buckets of water do not have to collect sales tax when they do their fundraisers. How nice. But, if you charge to clean the outside and the inside of the car, then you have to charge and collect sales tax as the code lists an exception to the exemption (a double negative, in other words).

So, if you purchase a car wash and you obtain the ability to use the vacuums as a result of your purchase (meaning that you could not use them unless you paid), you will need to pay sales tax, as that would include paying to clean the outside and inside of your car.

But, if the vacuums are always free (regardless of whether you purchase a car wash or not), then you are not paying to clean the inside of your car when you purchase a car wash, and so no sales tax is needed.

So, in Utah, you can be grateful for the legislative grace (or someone’s lobbying efforts) that helped make our car wash vacuums free. Apparently, it is less work and cost to offer free vacuums then it is to deal with collecting and paying sales tax.

If you don’t believe that taxes shape the way we do things, you should think again. Laws and taxes have impact, and each one will affect what takes place in some way or another. Check back often for additional updates on laws and the way that they impact our society.