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S.B. 59

             1     

SALES AND USE TAX EXEMPTION FOR

             2     
FOOD

             3     
2000 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Sponsor: Michael G. Waddoups

             6      AN ACT RELATING TO THE SALES AND USE TAX ACT; EXEMPTING SALES OF FOOD
             7      FROM SALES AND USE TAXATION; PROVIDING DEFINITIONS; INCREASING THE
             8      STATE SALES AND USE TAX RATE; AUTHORIZING A COUNTY, CITY, OR TOWN TO
             9      INCREASE CERTAIN SALES AND USE TAX RATES THAT THE COUNTY, CITY, OR
             10      TOWN IMPOSES; MODIFYING THE PROCEDURES FOR A COUNTY, CITY, OR TOWN
             11      TO IMPOSE OR INCREASE CERTAIN SALES AND USE TAXES; AND MAKING
             12      TECHNICAL CHANGES.
             13      This act affects sections of Utah Code Annotated 1953 as follows:
             14      AMENDS:
             15          59-12-102, as last amended by Chapters 63 and 362, Laws of Utah 1999
             16          59-12-103, as last amended by Chapter 133, Laws of Utah 1999
             17          59-12-104, as last amended by Chapters 63, 155, 195, 306, 313 and 362, Laws of Utah
             18      1999
             19          59-12-204, as last amended by Chapter 133, Laws of Utah 1999
             20          59-12-205, as last amended by Chapter 133, Laws of Utah 1999
             21          59-12-401, as last amended by Chapter 291, Laws of Utah 1998
             22          59-12-402, as last amended by Chapter 291, Laws of Utah 1998
             23          59-12-501, as last amended by Chapter 291, Laws of Utah 1998
             24          59-12-801, as last amended by Chapter 261, Laws of Utah 1998
             25          59-12-802, as last amended by Chapters 261 and 291, Laws of Utah 1998
             26          59-12-803, as last amended by Chapter 261, Laws of Utah 1998
             27          59-12-804, as enacted by Chapter 111, Laws of Utah 1994


             28          59-12-1001, as last amended by Chapter 291, Laws of Utah 1998
             29          59-12-1102, as last amended by Chapter 13, Laws of Utah 1998
             30          59-12-1302, as enacted by Chapter 243, Laws of Utah 1998
             31      ENACTS:
             32          59-12-805, Utah Code Annotated 1953
             33      Be it enacted by the Legislature of the state of Utah:
             34          Section 1. Section 59-12-102 is amended to read:
             35           59-12-102. Definitions.
             36          As used in this chapter:
             37          (1) (a) "Admission or user fees" includes season passes.
             38          (b) "Admission or user fees" does not include annual membership dues to private
             39      organizations.
             40          (2) "Area agency on aging" is as defined in Section 62A-3-101 .
             41          (3) "Authorized carrier" means:
             42          (a) in the case of vehicles operated over public highways, the holder of credentials
             43      indicating that the vehicle is or will be operated pursuant to both the International Registration
             44      Plan (IRP) and the International Fuel Tax Agreement (IFTA);
             45          (b) in the case of aircraft, the holder of a Federal Aviation Administration (FAA) operating
             46      certificate or air carrier's operating certificate; or
             47          (c) in the case of locomotives, freight cars, railroad work equipment, or other rolling stock,
             48      the holder of a certificate issued by the United States Interstate Commerce Commission.
             49          (4) (a) For purposes of Subsection 59-12-104 (43), "coin-operated amusement device"
             50      means:
             51          (i) a coin-operated amusement, skill, or ride device;
             52          (ii) that is not controlled through vendor-assisted, over-the-counter, sales of tokens; and
             53          (iii) includes a music machine, pinball machine, billiard machine, video game machine,
             54      arcade machine, and a mechanical or electronic skill game or ride.
             55          (b) For purposes of Subsection 59-12-104 (43), "coin-operated amusement device" does
             56      not mean a coin-operated amusement device possessing a coinage mechanism that:
             57          (i) accepts and registers multiple denominations of coins; and
             58          (ii) allows the vendor to collect the sales and use tax at the time an amusement device is


             59      activated and operated by a person inserting coins into the device.
             60          (5) "Commercial use" means the use of gas, electricity, heat, coal, fuel oil, or other fuels
             61      that does not constitute industrial use under Subsection [(13)] (14) or residential use under
             62      Subsection [(21)] (22).
             63          (6) (a) "Common carrier" means a person engaged in or transacting the business of
             64      transporting passengers, freight, merchandise, or other property for hire within this state.
             65          (b) (i) "Common carrier" does not include a person who, at the time the person is traveling
             66      to or from that person's place of employment, transports a passenger to or from the passenger's
             67      place of employment.
             68          (ii) For purposes of Subsection (6)(b)(i), in accordance with Title 63, Chapter 46a, Utah
             69      Administrative Rulemaking Act, the commission may make rules defining what constitutes a
             70      person's place of employment.
             71          (7) "Component part" includes:
             72          (a) poultry, dairy, and other livestock feed, and their components;
             73          (b) baling ties and twine used in the baling of hay and straw;
             74          (c) fuel used for providing temperature control of orchards and commercial greenhouses
             75      doing a majority of their business in wholesale sales, and for providing power for off-highway type
             76      farm machinery; and
             77          (d) feed, seeds, and seedlings.
             78          (8) "Construction materials" means any tangible personal property that will be converted
             79      into real property.
             80          (9) (a) Subject to Subsections (9)(b) and (c), for purposes of Subsection 59-12-104 (4),
             81      "food" is as defined in 7 U.S.C. Sec 2012(g) under the Food Stamp Program, 7 U.S.C. Sec. 2011
             82      et seq., regardless of whether the retailer from whom the food is purchased or the purchaser
             83      participates in a federal or state food program.
             84          (b) "Food" includes:
             85          (i) hot or cold foods prepared for immediate consumption on or off the premises of a
             86      retailer that does not meet the definition of a restaurant under Section 59-12-602 ; or
             87          (ii) food sold through vending machines.
             88          (c) "Food" does not include prepared foods or beverages that are sold by a restaurant as
             89      defined in Section 59-12-602 .


             90          [(9)] (10) (a) "Fundraising sales" means sales:
             91          (i) (A) made by a public or private elementary or secondary school; or
             92          (B) made by a public or private elementary or secondary school student, grades
             93      kindergarten through 12;
             94          (ii) that are for the purpose of raising funds for the school to purchase equipment,
             95      materials, or provide transportation; and
             96          (iii) that are part of an officially sanctioned school activity.
             97          (b) For purposes of Subsection [(9)] (10)(a)(iii), "officially sanctioned school activity"
             98      means a school activity:
             99          (i) that is conducted in accordance with a formal policy adopted by the school or school
             100      district governing the authorization and supervision of fundraising activities;
             101          (ii) that does not directly or indirectly compensate an individual teacher or other
             102      educational personnel by direct payment, commissions, or payment in kind; and
             103          (iii) the net or gross revenues from which are deposited in a dedicated account controlled
             104      by the school or school district.
             105          [(10)] (11) (a) "Hearing aid" means:
             106          (i) an instrument or device having an electronic component that is designed to:
             107          (A) (I) improve impaired human hearing; or
             108          (II) correct impaired human hearing; and
             109          (B) (I) be worn in the human ear; or
             110          (II) affixed behind the human ear;
             111          (ii) an instrument or device that is surgically implanted into the cochlea; or
             112          (iii) a telephone amplifying device.
             113          (b) "Hearing aid" does not include:
             114          (i) except as provided in Subsection [(10)] (11)(a)(i)(B) or [(10)] (11)(a)(ii), an instrument
             115      or device having an electronic component that is designed to be worn on the body;
             116          (ii) except as provided in Subsection [(10)] (11)(a)(iii), an assistive listening device or
             117      system designed to be used by one individual, including:
             118          (A) a personal amplifying system;
             119          (B) a personal FM system;
             120          (C) a television listening system; or


             121          (D) a device or system similar to a device or system described in Subsections [(10)]
             122      (11)(b)(ii)(A) through (C); or
             123          (iii) an assistive listening device or system designed to be used by more than one
             124      individual, including:
             125          (A) a device or system installed in:
             126          (I) an auditorium;
             127          (II) a church;
             128          (III) a conference room;
             129          (IV) a synagogue; or
             130          (V) a theater; or
             131          (B) a device or system similar to a device or system described in Subsections [(10)]
             132      (11)(b)(iii)(A)(I) through (V).
             133          [(11)] (12) (a) "Hearing aid accessory" means a hearing aid:
             134          (i) component;
             135          (ii) attachment; or
             136          (iii) accessory.
             137          (b) "Hearing aid accessory" includes:
             138          (i) a hearing aid neck loop;
             139          (ii) a hearing aid cord;
             140          (iii) a hearing aid ear mold;
             141          (iv) hearing aid tubing;
             142          (v) a hearing aid ear hook; or
             143          (vi) a hearing aid remote control.
             144          (c) "Hearing aid accessory" does not include:
             145          (i) a component, attachment, or accessory designed to be used only with an:
             146          (A) instrument or device described in Subsection [(10)] (11)(b)(i); or
             147          (B) assistive listening device or system described in Subsection [(10)] (11)(b)(ii) or (iii);
             148      or
             149          (ii) a hearing aid battery.
             150          [(12)] (13) (a) "Home medical equipment and supplies" means equipment and supplies
             151      that:


             152          (i) a licensed physician prescribes or authorizes in writing as necessary for the treatment
             153      of a medical illness or injury or as necessary to mitigate an impairment resulting from illness or
             154      injury;
             155          (ii) are used exclusively by the person for whom they are prescribed to serve a medical
             156      purpose; and
             157          (iii) are listed as eligible for payment under Title 18 of the federal Social Security Act or
             158      under the state plan for medical assistance under Title 19 of the federal Social Security Act.
             159          (b) "Home medical equipment and supplies" does not include:
             160          (i) equipment and supplies purchased by, for, or on behalf of any health care facility, as
             161      defined in Subsection [(12)] (13)(c), doctor, nurse, or other health care provider for use in their
             162      professional practice;
             163          (ii) eyeglasses, contact lenses, or equipment to correct impaired vision; or
             164          (iii) hearing aids or hearing aid accessories.
             165          (c) For purposes of Subsection [(12)] (13)(b)(i), "health care facility" includes:
             166          (i) a clinic;
             167          (ii) a doctor's office; and
             168          (iii) a health care facility as defined in Section 26-21-2 .
             169          [(13)] (14) "Industrial use" means the use of natural gas, electricity, heat, coal, fuel oil, or
             170      other fuels in:
             171          (a) mining or extraction of minerals;
             172          (b) agricultural operations to produce an agricultural product up to the time of harvest or
             173      placing the agricultural product into a storage facility, including:
             174          (i) commercial greenhouses;
             175          (ii) irrigation pumps;
             176          (iii) farm machinery;
             177          (iv) implements of husbandry as defined in Subsection 41-1a-102 (23) that are not
             178      registered under Title 41, Chapter 1a, Part 2, Registration; and
             179          (v) other farming activities; and
             180          (c) manufacturing tangible personal property at an establishment described in SIC Codes
             181      2000 to 3999 of the 1987 Standard Industrial Classification Manual of the federal Executive Office
             182      of the President, Office of Management and Budget.


             183          [(14)] (15) "Manufactured home" means any manufactured home or mobile home as
             184      defined in Title 58, Chapter 56, Utah Uniform Building Standards Act.
             185          [(15)] (16) For purposes of Subsection 59-12-104 (14), "manufacturing facility" means:
             186          (a) an establishment described in SIC Codes 2000 to 3999 of the 1987 Standard Industrial
             187      Classification Manual of the federal Executive Office of the President, Office of Management and
             188      Budget; or
             189          (b) a scrap recycler if:
             190          (i) from a fixed location, the scrap recycler utilizes machinery or equipment to process one
             191      or more of the following items into prepared grades of processed materials for use in new products:
             192          (A) iron;
             193          (B) steel;
             194          (C) nonferrous metal;
             195          (D) paper;
             196          (E) glass;
             197          (F) plastic;
             198          (G) textile; or
             199          (H) rubber; and
             200          (ii) the new products under Subsection [(15)] (16)(b)(i) would otherwise be made with
             201      nonrecycled materials.
             202          [(16)] (17) (a) "Medicine" means:
             203          (i) insulin, syringes, and any medicine prescribed for the treatment of human ailments by
             204      a person authorized to prescribe treatments and dispensed on prescription filled by a registered
             205      pharmacist, or supplied to patients by a physician, surgeon, or podiatric physician;
             206          (ii) any medicine dispensed to patients in a county or other licensed hospital if prescribed
             207      for that patient and dispensed by a registered pharmacist or administered under the direction of a
             208      physician; and
             209          (iii) any oxygen or stoma supplies prescribed by a physician or administered under the
             210      direction of a physician or paramedic.
             211          (b) "Medicine" does not include:
             212          (i) any auditory, prosthetic, ophthalmic, or ocular device or appliance; or
             213          (ii) any alcoholic beverage.


             214          [(17)] (18) "Olympic merchandise" means tangible personal property bearing an Olympic
             215      designation, emblem, insignia, mark, logo, service mark, symbol, terminology, trademark, or other
             216      copyrighted or protected material, including:
             217          (a) one or more of the following terms:
             218          (i) "Olympic;"
             219          (ii) "Olympiad;" or
             220          (iii) "Citius Altius Fortius;"
             221          (b) the symbol of the International Olympic Committee, consisting of five interlocking
             222      rings;
             223          (c) the emblem of the International Olympic Committee Corporation;
             224          (d) a United States Olympic Committee designation, emblem, insignia, mark, logo, service
             225      mark, symbol, terminology, trademark, or other copyrighted or protected material;
             226          (e) any emblem of the Winter Olympic Games of 2002 that is officially designated by the
             227      Salt Lake Organizing Committee of the Winter Olympic Games of 2002; or
             228          (f) the mascot of the Winter Olympic Games of 2002.
             229          [(18)] (19) (a) "Other fuels" means products that burn independently to produce heat or
             230      energy.
             231          (b) "Other fuels" includes oxygen when it is used in the manufacturing of tangible personal
             232      property.
             233          [(19)] (20) "Person" includes any individual, firm, partnership, joint venture, association,
             234      corporation, estate, trust, business trust, receiver, syndicate, this state, any county, city,
             235      municipality, district, or other local governmental entity of the state, or any group or combination
             236      acting as a unit.
             237          [(20)] (21) "Purchase price" means the amount paid or charged for tangible personal
             238      property or any other taxable [item or service] transaction under Subsection 59-12-103 (1),
             239      excluding only cash discounts taken or any excise tax imposed on the purchase price by the federal
             240      government.
             241          [(21)] (22) "Residential use" means the use in or around a home, apartment building,
             242      sleeping quarters, and similar facilities or accommodations.
             243          [(22)] (23) (a) "Retail sale" means any sale within the state of tangible personal property
             244      or any other taxable [item or service] transaction under Subsection 59-12-103 (1), other than resale


             245      of such property, item, or service by a retailer or wholesaler to a user or consumer.
             246          (b) "Retail sale" includes sales by any farmer or other agricultural producer of poultry,
             247      eggs, or dairy products to consumers if the sales have an average monthly sales value of $125 or
             248      more.
             249          (c) "Retail sale" does not include, and no additional sales or use tax shall be assessed
             250      against, those transactions where a purchaser of tangible personal property pays applicable sales
             251      or use taxes on its initial nonexempt purchases of property and then enters into a sale-leaseback
             252      transaction by which title to such property is transferred by the purchaser-lessee to a lessor for
             253      consideration, provided:
             254          (i) the transaction is intended as a form of financing for the property to the
             255      purchaser-lessee; and
             256          (ii) pursuant to generally accepted accounting principles, the purchaser-lessee is required
             257      to capitalize the subject property for financial reporting purposes, and account for the lease
             258      payments as payments made under a financing arrangement.
             259          [(23)] (24) (a) "Retailer" means any person engaged in a regularly organized retail business
             260      in tangible personal property or any other taxable [item or service] transaction under Subsection
             261      59-12-103 (1), and who is selling to the user or consumer and not for resale.
             262          (b) "Retailer" includes commission merchants, auctioneers, and any person regularly
             263      engaged in the business of selling to users or consumers within the state.
             264          (c) "Retailer" includes any person who engages in regular or systematic solicitation of a
             265      consumer market in this state by the distribution of catalogs, periodicals, advertising flyers, or
             266      other advertising, or by means of print, radio or television media, by mail, telegraphy, telephone,
             267      computer data base, cable, optic, microwave, or other communication system.
             268          (d) "Retailer" does not include farmers, gardeners, stockmen, poultrymen, or other growers
             269      or agricultural producers producing and doing business on their own premises, except those who
             270      are regularly engaged in the business of buying or selling for a profit.
             271          (e) For purposes of this chapter the commission may regard as retailers the following if
             272      they determine it is necessary for the efficient administration of this chapter: salesmen,
             273      representatives, peddlers, or canvassers as the agents of the dealers, distributors, supervisors, or
             274      employers under whom they operate or from whom they obtain the tangible personal property sold
             275      by them, irrespective of whether they are making sales on their own behalf or on behalf of these


             276      dealers, distributors, supervisors, or employers, except that:
             277          (i) a printer's facility with which a retailer has contracted for printing shall not be
             278      considered to be a salesman, representative, peddler, canvasser, or agent of the retailer; and
             279          (ii) the ownership of property that is located at the premises of a printer's facility with
             280      which the retailer has contracted for printing and that consists of the final printed product, property
             281      that becomes a part of the final printed product, or copy from which the printed product is
             282      produced, shall not result in the retailer being deemed to have or maintain an office, distribution
             283      house, sales house, warehouse, service enterprise, or other place of business, or to maintain a stock
             284      of goods, within this state.
             285          [(24)] (25) "Sale" means any transfer of title, exchange, or barter, conditional or otherwise,
             286      in any manner, of tangible personal property or any other taxable [item or service] transaction
             287      under Subsection 59-12-103 (1), for a consideration. It includes:
             288          (a) installment and credit sales;
             289          (b) any closed transaction constituting a sale;
             290          (c) any sale of electrical energy, gas, services, or entertainment taxable under this chapter;
             291          (d) any transaction if the possession of property is transferred but the seller retains the title
             292      as security for the payment of the price; and
             293          (e) any transaction under which right to possession, operation, or use of any article of
             294      tangible personal property is granted under a lease or contract and the transfer of possession would
             295      be taxable if an outright sale were made.
             296          [(25)] (26) (a) "Sales relating to schools" means sales by a public school district or public
             297      or private elementary or secondary school, grades kindergarten through 12, that are directly related
             298      to the school's or school district's educational functions or activities and include:
             299          (i) the sale of textbooks, textbook fees, laboratory fees, laboratory supplies, and safety
             300      equipment;
             301          (ii) the sale of clothing that:
             302          (A) a student is specifically required to wear as a condition of participation in a
             303      school-related event or activity; and
             304          (B) is not readily adaptable to general or continued usage to the extent that it takes the
             305      place of ordinary clothing;
             306          (iii) sales of food if the net or gross revenues generated by the food sales are deposited into


             307      a school district fund or school fund dedicated to school meals; and
             308          (iv) transportation charges for official school activities.
             309          (b) "Sales relating to schools" does not include:
             310          (i) gate receipts;
             311          (ii) special event admission fees;
             312          (iii) bookstore sales of items that are not educational materials or supplies; and
             313          (iv) except as provided in Subsection [(25)] (26)(a)(ii), clothing.
             314          [(26)] (27) "Senior citizen center" means a facility having the primary purpose of
             315      providing services to the aged as defined in Section 62A-3-101 .
             316          [(27)] (28) "State" means the state of Utah, its departments, and agencies.
             317          [(28)] (29) "Storage" means any keeping or retention of tangible personal property or any
             318      other taxable [item or service] transaction under Subsection 59-12-103 (1), in this state for any
             319      purpose except sale in the regular course of business.
             320          [(29)] (30) (a) "Tangible personal property" means:
             321          (i) all goods, wares, merchandise, produce, and commodities;
             322          (ii) all tangible or corporeal things and substances which are dealt in or capable of being
             323      possessed or exchanged;
             324          (iii) water in bottles, tanks, or other containers; and
             325          (iv) all other physically existing articles or things, including property severed from real
             326      estate.
             327          (b) "Tangible personal property" does not include:
             328          (i) real estate or any interest or improvements in real estate;
             329          (ii) bank accounts, stocks, bonds, mortgages, notes, and other evidence of debt;
             330          (iii) insurance certificates or policies;
             331          (iv) personal or governmental licenses;
             332          (v) water in pipes, conduits, ditches, or reservoirs;
             333          (vi) currency and coinage constituting legal tender of the United States or of a foreign
             334      nation; and
             335          (vii) all gold, silver, or platinum ingots, bars, medallions, or decorative coins, not
             336      constituting legal tender of any nation, with a gold, silver, or platinum content of not less than
             337      80%.


             338          [(30)] (31) (a) "Use" means the exercise of any right or power over tangible personal
             339      property under Subsection 59-12-103 (1), incident to the ownership or the leasing of that property,
             340      item, or service.
             341          (b) "Use" does not include the sale, display, demonstration, or trial of that property in the
             342      regular course of business and held for resale.
             343          [(31)] (32) "Vehicle" means any aircraft, as defined in Section 72-10-102 ; any vehicle, as
             344      defined in Section 41-1a-102 ; any off-highway vehicle, as defined in Section 41-22-2 ; and any
             345      vessel, as defined in Section 41-1a-102 ; that is required to be titled, registered, or both. "Vehicle"
             346      for purposes of Subsection 59-12-104 (36) only, also includes any locomotive, freight car, railroad
             347      work equipment, or other railroad rolling stock.
             348          [(32)] (33) "Vehicle dealer" means a person engaged in the business of buying, selling, or
             349      exchanging vehicles as defined in Subsection [(31)] (32).
             350          [(33)] (34) (a) "Vendor" means:
             351          (i) any person receiving any payment or consideration upon a sale of tangible personal
             352      property or any other taxable [item or service] transaction under Subsection 59-12-103 (1), or to
             353      whom such payment or consideration is payable; and
             354          (ii) any person who engages in regular or systematic solicitation of a consumer market in
             355      this state by the distribution of catalogs, periodicals, advertising flyers, or other advertising, or by
             356      means of print, radio or television media, by mail, telegraphy, telephone, computer data base,
             357      cable, optic, microwave, or other communication system.
             358          (b) "Vendor" does not mean a printer's facility described in Subsection [(23)] (24)(e).
             359          Section 2. Section 59-12-103 is amended to read:
             360           59-12-103. Sales and use tax base -- Rate -- Use of sales and use tax revenues.
             361          (1) [There is levied a] A tax is imposed on the purchaser as provided in this part for [the
             362      amount] amounts paid or charged for the following transactions:
             363          (a) retail sales of tangible personal property made within the state;
             364          (b) [amount] amounts paid to common carriers or to telephone or telegraph corporations,
             365      whether the corporations are municipally or privately owned, for:
             366          (i) all transportation;
             367          (ii) intrastate telephone service; or
             368          (iii) telegraph service;


             369          (c) sales of the following for commercial use:
             370          (i) gas[,];
             371          (ii) electricity[,];
             372          (iii) heat[,];
             373          (iv) coal[,];
             374          (v) fuel oil[,]; or
             375          (vi) other fuels [sold for commercial use];
             376          (d) sales of the following for residential use:
             377          (i) gas[,];
             378          (ii) electricity[,];
             379          (iii) heat[,];
             380          (iv) coal[,];
             381          (v) fuel oil[,]; or
             382          (vi) other fuels [sold for residential use];
             383          (e) [meals sold] sales of prepared food or beverages by a restaurant as defined in Section
             384      59-12-602 ;
             385          (f) amounts paid or charged as admission or user fees for theaters, movies, operas,
             386      museums, planetariums, shows of any type or nature, exhibitions, concerts, carnivals, amusement
             387      parks, amusement rides, circuses, menageries, fairs, races, contests, sporting events, dances,
             388      boxing [and] matches, wrestling matches, closed circuit television broadcasts, billiard [or] parlors,
             389      pool parlors, bowling lanes, golf [and], miniature golf, golf driving ranges, batting cages, skating
             390      rinks, ski lifts, ski runs, ski trails, snowmobile trails, tennis courts, swimming pools, water slides,
             391      river runs, jeep tours, boat tours, scenic cruises, horseback rides, sports activities, or any other
             392      amusement, entertainment, recreation, exhibition, cultural, or athletic activity;
             393          (g) amounts paid or charged for services:
             394          (i) for repairs or renovations of tangible personal property; or [services]
             395          (ii) to install tangible personal property in connection with other tangible personal
             396      property;
             397          (h) except as provided in Subsection 59-12-104 (7), amounts paid or charged for cleaning
             398      or washing of tangible personal property;
             399          (i) amounts paid or charged for tourist home, hotel, motel, or trailer court accommodations


             400      and services for less than 30 consecutive days;
             401          (j) amounts paid or charged for laundry [and] or dry cleaning services;
             402          (k) amounts paid or charged for leases [and] or rentals of tangible personal property if [the
             403      property]:
             404          (i) the tangible personal property's situs is in this state[, if];
             405          (ii) the lessee took possession of the tangible personal property in this state[,]; or [if]
             406          (iii) within this state the tangible personal property is:
             407          (A) stored[,];
             408          (B) used[,]; or
             409          (C) otherwise consumed [in this state];
             410          (l) amounts paid or charged for tangible personal property if within this state the tangible
             411      personal property is:
             412          (i) stored[,];
             413          (ii) used[,]; or
             414          (iii) consumed [in this state]; and
             415          (m) amounts paid or charged for prepaid telephone calling cards.
             416          (2) Except [for] as provided in Subsection [(1)(d)] (3), the [rates of the] tax [levied under]
             417      rates imposed on a transaction described in Subsection (1) [shall be] are as follows:
             418          [(a) 5% through June 30, 1994;]
             419          [(b) 4.875%] (a) beginning on July 1, 1994 through June 30, 1997, the tax rate is 4.875%;
             420      [and]
             421          [(c) 4.75%] (b) beginning on July 1, 1997, through December 31, 2000, the tax rate is
             422      4.75%; and
             423          (c) beginning on January 1, 2001, the tax rate is 5.25%.
             424          (3) [The rates of the] Notwithstanding Subsection (2), beginning on January 1, 1990, the
             425      tax [levied under] rate imposed on a transaction described in Subsection (1)(d) [shall be] is 2%
             426      [from and after January 1, 1990].
             427          (4) (a) There shall be deposited in an Olympics special revenue fund or funds as determined
             428      by the Division of Finance under Section 51-5-4 , for the use of the Utah Sports Authority created
             429      under Title 63A, Chapter 7, Utah Sports Authority Act:
             430          (i) from January 1, 1990, through December 31, 1999, the amount of sales and use tax


             431      generated by a 1/64% tax rate on the taxable [items and services] transactions under Subsection
             432      (1);
             433          (ii) from January 1, 1990, through June 30, 1999, the amount of revenue generated by a
             434      1/64% tax rate under Section 59-12-204 or Section 59-12-205 on the taxable [items and services]
             435      transactions under Subsection (1); and
             436          (iii) interest earned on the amounts under Subsections (4)(a)(i) and (ii).
             437          (b) These funds shall be used:
             438          (i) by the Utah Sports Authority as follows:
             439          (A) to the extent funds are available, to transfer directly to a debt service fund or to
             440      otherwise reimburse to the state any amount expended on debt service or any other cost of any
             441      bonds issued by the state to construct any public sports facility as defined in Section 63A-7-103 ;
             442          (B) to pay for the actual and necessary operating, administrative, legal, and other expenses
             443      of the Utah Sports Authority, but not including protocol expenses for seeking and obtaining the
             444      right to host the Winter Olympic Games; and
             445          (C) unless the Legislature appropriates additional funds from the Olympics Special
             446      Revenue Fund to the Utah Sports Authority, the Utah Sports Authority may not expend, loan, or
             447      pledge in the aggregate more than:
             448          (I) $59,000,000 of sales and use tax deposited into the Olympics special revenue fund
             449      under Subsection (4)(a);
             450          (II) the interest earned on the amount described in Subsection (4)(b)(i)(C)(I); and
             451          (III) the revenues deposited into the Olympics Special Revenue Fund that are not sales and
             452      use taxes deposited under Subsection (4)(a) or interest on the sales and use taxes;
             453          (ii) to pay salary, benefits, or administrative costs associated with the State Olympic
             454      Officer under Subsection 63A-10-103 (3), except that the salary, benefits, or administrative costs
             455      may not be paid from the sales and tax revenues generated by municipalities or counties and
             456      deposited under Subsection (4)(a)(ii).
             457          (c) A payment of salary, benefits, or administrative costs under Subsection 63A-10-103 (3)
             458      is not considered an expenditure of the Utah Sports Authority.
             459          (d) If the Legislature appropriates additional funds under Subsection (4)(b)(i)(C), the
             460      authority may not expend, loan, pledge, or enter into any agreement to expend, loan, or pledge the
             461      appropriated funds unless the authority:


             462          (i) contracts in writing for the full reimbursement of the monies to the Olympics special
             463      revenue fund by a public sports entity or other person benefitting from the expenditure; and
             464          (ii) obtains a security interest that secures payment or performance of the obligation to
             465      reimburse.
             466          (e) A contract or agreement entered into in violation of Subsection (4)(d) is void.
             467          (5) (a) From July 1, 1997, the annual amount of sales and use tax generated by a 1/8% tax
             468      rate on the taxable [items and services] transactions under Subsection (1) shall be used as follows:
             469          (i) 50% shall be used for water and wastewater projects as provided in Subsections (5)(b)
             470      through (f); and
             471          (ii) 50% shall be used for transportation projects as provided in Subsections (5)(g) through
             472      (h).
             473          (b) Five hundred thousand dollars each year shall be transferred to the Agriculture
             474      Resource Development Fund created in Section 4-18-6 .
             475          (c) Fifty percent of the remaining amount generated by 50% of the 1/8% tax rate shall be
             476      transferred to the Water Resources Conservation and Development Fund created in Section
             477      73-10-24 for use by the Division of Water Resources. In addition to the uses allowed of the fund
             478      under Section 73-10-24 , the fund may also be used to:
             479          (i) provide a portion of the local cost share, not to exceed in any fiscal year 50% of the
             480      funds made available to the Division of Water Resources under this section, of potential project
             481      features of the Central Utah Project;
             482          (ii) conduct hydrologic and geotechnical investigations by the Department of Natural
             483      Resources in a cooperative effort with other state, federal, or local entities, for the purpose of
             484      quantifying surface and ground water resources and describing the hydrologic systems of an area
             485      in sufficient detail so as to enable local and state resource managers to plan for and accommodate
             486      growth in water use without jeopardizing the resource;
             487          (iii) fund state required dam safety improvements; and
             488          (iv) protect the state's interest in interstate water compact allocations, including the hiring
             489      of technical and legal staff.
             490          (d) Twenty-five percent of the remaining amount generated by 50% of the 1/8% tax rate
             491      shall be transferred to the Utah Wastewater Loan Program subaccount created in Section 73-10c-5
             492      for use by the Water Quality Board to fund wastewater projects as defined in Section 73-10b-2 .


             493          (e) Twenty-five percent of the remaining amount generated by 50% of the 1/8% tax rate
             494      shall be transferred to the Drinking Water Loan Program subaccount created in Section 73-10c-5
             495      for use by the Division of Drinking Water to:
             496          (i) provide for the installation and repair of collection, treatment, storage, and distribution
             497      facilities for any public water system, as defined in Section 19-4-102 ;
             498          (ii) develop underground sources of water, including springs and wells; and
             499          (iii) develop surface water sources.
             500          (f) Notwithstanding Subsections (5)(b), (c), (d), and (e), $100,000 of the remaining amount
             501      generated by 50% of the 1/8% tax rate each year shall be transferred as dedicated credits to the
             502      Division of Water Rights to cover the costs incurred in hiring legal and other technical staff for the
             503      adjudication of water rights. Any remaining balance at the end of each fiscal year shall lapse back
             504      to the contributing funds on a prorated basis.
             505          (g) Fifty percent of the 1/8% tax rate shall be transferred to the class B and class C roads
             506      account to be expended as provided in Title 72, Chapter 2, Transportation Finances Act, for the
             507      use of class B and C road funds except as provided in Subsection (5)(h).
             508          (h) (i) If H.B. 53, "Transportation Corridor Preservation," passes in the 1996 General
             509      Session, $500,000 each year shall be transferred to the Transportation Corridor Preservation
             510      Revolving Loan Fund, and if H.B. 121, "State Park Access Roads," passes in the 1996 General
             511      Session, from July 1, 1997, through June 30, 2006, $500,000 shall be transferred to the Department
             512      of Transportation for the State Park Access Highways Improvement Program. The remaining
             513      amount generated by 50% of the 1/8% tax rate shall be transferred to the class B and class C roads
             514      account.
             515          (ii) At least 50% of the money transferred to the Transportation Corridor Preservation
             516      Revolving Loan Fund under Subsection (5)(h)(i) shall be used to fund loan applications made by
             517      the Department of Transportation at the request of local governments.
             518          (6) (a) Beginning on January 1, 2000, the Division of Finance shall deposit into the
             519      Centennial Highway Fund created in Section 72-2-118 a portion of the state sales and use tax
             520      under Subsections (2) and (3) equal to the revenues generated by a 1/64% tax rate on the taxable
             521      [items and services] transactions under Subsection (1).
             522          (b) Except for sales and use taxes deposited under Subsection (7), beginning on July 1,
             523      1999, the revenues generated by the 1/64% tax rate:


             524          (i) retained under Subsection 59-12-204 (7)(a) shall be retained by the counties, cities, or
             525      towns as provided in Section 59-12-204 ; and
             526          (ii) retained under Subsection 59-12-205 (4)(a) shall be distributed to each county, city, and
             527      town as provided in Section 59-12-205 .
             528          (7) Beginning on July 1, 1999, the commission shall deposit into the Airport to University
             529      of Utah Light Rail Restricted Account created in Section 17A-2-1064 the portion of the sales and
             530      use tax under Sections 59-12-204 and 59-12-205 that is:
             531          (a) generated by a city or town that will have constructed within its boundaries the Airport
             532      to University of Utah Light Rail described in the Transportation Equity Act for the 21st Century,
             533      Pub. L. No. 105-178, Sec. 3030(c)(2)(B)(i)(II), 112 Stat. 107; and
             534          (b) equal to the revenues generated by a 1/64% tax rate on the taxable items and services
             535      under Subsection (1).
             536          Section 3. Section 59-12-104 is amended to read:
             537           59-12-104. Exemptions.
             538          The following sales and uses are exempt from the taxes imposed by this chapter:
             539          (1) sales of aviation fuel, motor fuel, and special fuel subject to a Utah state excise tax
             540      under Title 59, Chapter 13, Motor and Special Fuel Tax Act;
             541          (2) sales to the state, its institutions, and its political subdivisions; however, this exemption
             542      does not apply to sales of construction materials except:
             543          (a) construction materials purchased by or on behalf of institutions of the public education
             544      system as defined in Utah Constitution Article X, Section 2, provided the construction materials
             545      are clearly identified and segregated and installed or converted to real property which is owned by
             546      institutions of the public education system; and
             547          (b) construction materials purchased by the state, its institutions, or its political
             548      subdivisions which are installed or converted to real property by employees of the state, its
             549      institutions, or its political subdivisions;
             550          (3) beginning on January 1, 2001, sales of food[, beverage, and dairy products from
             551      vending machines in which the proceeds of each sale do not exceed $1 if the vendor or operator
             552      of the vending machine reports an amount equal to 150% of the cost of items as goods consumed];
             553          (4) sales of food, beverage, dairy products, similar confections, and related services to
             554      commercial airline carriers for in-flight consumption;


             555          (5) sales of parts and equipment installed in aircraft operated by common carriers in
             556      interstate or foreign commerce;
             557          (6) sales of commercials, motion picture films, prerecorded audio program tapes or
             558      records, and prerecorded video tapes by a producer, distributor, or studio to a motion picture
             559      exhibitor, distributor, or commercial television or radio broadcaster;
             560          (7) sales of cleaning or washing of tangible personal property by a coin-operated laundry
             561      or dry cleaning machine;
             562          (8) (a) except as provided in Subsection (8)(b), sales made to or by religious or charitable
             563      institutions in the conduct of their regular religious or charitable functions and activities, if the
             564      requirements of Section 59-12-104.1 are fulfilled;
             565          (b) the exemption provided for in Subsection (8)(a) does not apply to the following sales,
             566      uses, leases, or rentals relating to the Olympic Winter Games of 2002 made to or by an
             567      organization exempt from federal income taxation under Section 501(c)(3), Internal Revenue
             568      Code:
             569          (i) retail sales of Olympic merchandise;
             570          (ii) admissions or user fees described in Subsection 59-12-103 (1)(f);
             571          (iii) sales of accommodations and services as provided in Subsection 59-12-103 (1)(i),
             572      except for accommodations and services:
             573          (A) paid for in full by the Salt Lake Organizing Committee for the Olympic Winter Games
             574      of 2002;
             575          (B) exclusively used by:
             576          (I) an officer, a trustee, or an employee of the Salt Lake Organizing Committee for the
             577      Olympic Winter Games of 2002; or
             578          (II) a volunteer supervised by the Salt Lake Organizing Committee for the Olympic Winter
             579      Games of 2002; and
             580          (C) for which the Salt Lake Organizing Committee for the Olympic Winter Games of 2002
             581      does not receive reimbursement; or
             582          (iv) a lease or rental of a vehicle as defined in Section 41-1a-102 , except for a lease or
             583      rental of a vehicle:
             584          (A) paid for in full by the Salt Lake Organizing Committee for the Olympic Winter Games
             585      of 2002;


             586          (B) exclusively used by:
             587          (I) an officer, a trustee, or an employee of the Salt Lake Organizing Committee for the
             588      Olympic Winter Games of 2002; or
             589          (II) a volunteer supervised by the Salt Lake Organizing Committee for the Olympic Winter
             590      Games of 2002; and
             591          (C) for which the Salt Lake Organizing Committee for the Olympic Winter Games of 2002
             592      does not receive reimbursement;
             593          (9) sales of vehicles of a type required to be registered under the motor vehicle laws of
             594      this state which are made to bona fide nonresidents of this state and are not afterwards registered
             595      or used in this state except as necessary to transport them to the borders of this state;
             596          (10) sales of medicine;
             597          (11) sales or use of property, materials, or services used in the construction of or
             598      incorporated in pollution control facilities allowed by Sections 19-2-123 through 19-2-127 ;
             599          (12) sales of meals served by:
             600          (a) churches, charitable institutions, and institutions of higher education, if the meals are
             601      not available to the general public; and
             602          (b) inpatient meals provided at medical or nursing facilities;
             603          (13) isolated or occasional sales by persons not regularly engaged in business, except the
             604      sale of vehicles or vessels required to be titled or registered under the laws of this state in which
             605      case the tax is based upon:
             606          (a) the bill of sale or other written evidence of value of the vehicle or vessel being sold;
             607      or
             608          (b) in the absence of a bill of sale or other written evidence of value, the then existing fair
             609      market value of the vehicle or vessel being sold as determined by the commission;
             610          (14) (a) the following purchases or leases by a manufacturer on or after July 1, 1995:
             611          (i) machinery and equipment:
             612          (A) used in the manufacturing process;
             613          (B) having an economic life of three or more years; and
             614          (C) used:
             615          (I) to manufacture an item sold as tangible personal property; and
             616          (II) in new or expanding operations in a manufacturing facility in the state; and


             617          (ii) subject to the provisions of Subsection (14)(b), normal operating replacements that:
             618          (A) have an economic life of three or more years;
             619          (B) are used in the manufacturing process in a manufacturing facility in the state;
             620          (C) are used to replace or adapt an existing machine to extend the normal estimated useful
             621      life of the machine; and
             622          (D) do not include repairs and maintenance;
             623          (b) the rates for the exemption under Subsection (14)(a)(ii) are as follows:
             624          (i) beginning July 1, 1996, through June 30, 1997, 30% of the sale or lease described in
             625      Subsection (14)(a)(ii) is exempt;
             626          (ii) beginning July 1, 1997, through June 30, 1998, 60% of the sale or lease described in
             627      Subsection (14)(a)(ii) is exempt; and
             628          (iii) beginning July 1, 1998, 100% of the sale or lease described in Subsection (14)(a)(ii)
             629      is exempt;
             630          (c) for purposes of this Subsection (14), the commission shall by rule define the terms
             631      "new or expanding operations" and "establishment"; and
             632          (d) on or before October 1, 1991, and every five years after October 1, 1991, the
             633      commission shall:
             634          (i) review the exemptions described in Subsection (14)(a) and make recommendations to
             635      the Revenue and Taxation Interim Committee concerning whether the exemptions should be
             636      continued, modified, or repealed; and
             637          (ii) include in its report:
             638          (A) the cost of the exemptions;
             639          (B) the purpose and effectiveness of the exemptions; and
             640          (C) the benefits of the exemptions to the state;
             641          (15) sales of tooling, special tooling, support equipment, and special test equipment used
             642      or consumed exclusively in the performance of any aerospace or electronics industry contract with
             643      the United States government or any subcontract under that contract, but only if, under the terms
             644      of that contract or subcontract, title to the tooling and equipment is vested in the United States
             645      government as evidenced by a government identification tag placed on the tooling and equipment
             646      or by listing on a government-approved property record if a tag is impractical;
             647          (16) intrastate movements of:


             648          (a) freight by common carriers; and
             649          (b) passengers:
             650          (i) by taxicabs as described in SIC Code 4121 of the 1987 Standard Industrial
             651      Classification Manual of the federal Executive Office of the President, Office of Management and
             652      Budget; or
             653          (ii) transported by an establishment described in SIC Code 4111 of the 1987 Standard
             654      Industrial Classification Manual of the federal Executive Office of the President, Office of
             655      Management and Budget, if the transportation originates and terminates within a county of the
             656      first, second, or third class;
             657          (17) sales of newspapers or newspaper subscriptions;
             658          (18) tangible personal property, other than money, traded in as full or part payment of the
             659      purchase price, except that for purposes of calculating sales or use tax upon vehicles not sold by
             660      a vehicle dealer, trade-ins are limited to other vehicles only, and the tax is based upon:
             661          (a) the bill of sale or other written evidence of value of the vehicle being sold and the
             662      vehicle being traded in; or
             663          (b) in the absence of a bill of sale or other written evidence of value, the then existing fair
             664      market value of the vehicle being sold and the vehicle being traded in, as determined by the
             665      commission;
             666          (19) sprays and insecticides used to control insects, diseases, and weeds for commercial
             667      production of fruits, vegetables, feeds, seeds, and animal products, but not those sprays and
             668      insecticides used in the processing of the products;
             669          (20) (a) sales of tangible personal property used or consumed primarily and directly in
             670      farming operations, including sales of irrigation equipment and supplies used for agricultural
             671      production purposes, whether or not they become part of real estate and whether or not installed
             672      by farmer, contractor, or subcontractor, but not sales of:
             673          (i) machinery, equipment, materials, and supplies used in a manner that is incidental to
             674      farming, such as hand tools with a unit purchase price not in excess of $250, and maintenance and
             675      janitorial equipment and supplies;
             676          (ii) tangible personal property used in any activities other than farming, such as office
             677      equipment and supplies, equipment and supplies used in sales or distribution of farm products, in
             678      research, or in transportation; or


             679          (iii) any vehicle required to be registered by the laws of this state, without regard to the use
             680      to which the vehicle is put;
             681          (b) sales of hay;
             682          (21) exclusive sale of locally grown seasonal crops, seedling plants, or garden, farm, or
             683      other agricultural produce if sold by a producer during the harvest season;
             684          (22) purchases of food as defined in 7 U.S.C. Sec. 2012(g) under the Food Stamp
             685      Program, 7 U.S.C. Sec. 2011 et seq.;
             686          (23) sales of nonreturnable containers, nonreturnable labels, nonreturnable bags,
             687      nonreturnable shipping cases, and nonreturnable casings to a manufacturer, processor, wholesaler,
             688      or retailer for use in packaging tangible personal property to be sold by that manufacturer,
             689      processor, wholesaler, or retailer;
             690          (24) property stored in the state for resale;
             691          (25) property brought into the state by a nonresident for his or her own personal use or
             692      enjoyment while within the state, except property purchased for use in Utah by a nonresident living
             693      and working in Utah at the time of purchase;
             694          (26) property purchased for resale in this state, in the regular course of business, either
             695      in its original form or as an ingredient or component part of a manufactured or compounded
             696      product;
             697          (27) property upon which a sales or use tax was paid to some other state, or one of its
             698      subdivisions, except that the state shall be paid any difference between the tax paid and the tax
             699      imposed by this part and Part 2, and no adjustment is allowed if the tax paid was greater than the
             700      tax imposed by this part and Part 2;
             701          (28) any sale of a service described in Subsections 59-12-103 (1)(b), (c), and (d) to a
             702      person for use in compounding a service taxable under the subsections;
             703          (29) purchases of supplemental foods as defined in 42 U.S.C. Sec. 1786(b)(14) under the
             704      special supplemental nutrition program for women, infants, and children established in 42 U.S.C.
             705      Sec. 1786;
             706          (30) beginning on July 1, 1999, through June 30, 2004, sales or leases of rolls, rollers,
             707      refractory brick, electric motors, or other replacement parts used in the furnaces, mills, or ovens
             708      of a steel mill described in SIC Code 3312 of the 1987 Standard Industrial Classification Manual
             709      of the federal Executive Office of the President, Office of Management and Budget;


             710          (31) sales of boats of a type required to be registered under Title 73, Chapter 18, State
             711      Boating Act, boat trailers, and outboard motors which are made to bona fide nonresidents of this
             712      state and are not thereafter registered or used in this state except as necessary to transport them to
             713      the borders of this state;
             714          (32) sales of tangible personal property to persons within this state that is subsequently
             715      shipped outside the state and incorporated pursuant to contract into and becomes a part of real
             716      property located outside of this state, except to the extent that the other state or political entity
             717      imposes a sales, use, gross receipts, or other similar transaction excise tax on it against which the
             718      other state or political entity allows a credit for taxes imposed by this chapter;
             719          (33) sales of aircraft manufactured in Utah if sold for delivery and use outside Utah where
             720      a sales or use tax is not imposed, even if the title is passed in Utah;
             721          (34) amounts paid for the purchase of telephone service for purposes of providing
             722      telephone service;
             723          (35) fares charged to persons transported directly by a public transit district created under
             724      the authority of Title 17A, Chapter 2, Part 10, Utah Public Transit District Act;
             725          (36) sales or leases of vehicles to, or use of vehicles by an authorized carrier;
             726          (37) (a) 45% of the sales price of any new manufactured home; and
             727          (b) 100% of the sales price of any used manufactured home;
             728          (38) sales relating to schools and fundraising sales;
             729          (39) sales or rentals of home medical equipment and supplies;
             730          (40) (a) sales to a ski resort of electricity to operate a passenger ropeway as defined in
             731      Section 72-11-102 ; and
             732          (b) the commission shall by rule determine the method for calculating sales exempt under
             733      Subsection (40)(a) that are not separately metered and accounted for in utility billings;
             734          (41) sales to a ski resort of:
             735          (a) snowmaking equipment;
             736          (b) ski slope grooming equipment; and
             737          (c) passenger ropeways as defined in Section 72-11-102 ;
             738          (42) sales of natural gas, electricity, heat, coal, fuel oil, or other fuels for industrial use;
             739          (43) sales or rentals of the right to use or operate for amusement, entertainment, or
             740      recreation a coin-operated amusement device as defined in Section 59-12-102 ;


             741          (44) sales of cleaning or washing of tangible personal property by a coin-operated car
             742      wash machine;
             743          (45) sales by the state or a political subdivision of the state, except state institutions of
             744      higher education as defined in Section 53B-3-102 , of:
             745          (a) photocopies; or
             746          (b) other copies of records held or maintained by the state or a political subdivision of the
             747      state; and
             748          (46) (a) amounts paid:
             749          (i) to a person providing intrastate transportation to an employer's employee to or from the
             750      employee's primary place of employment;
             751          (ii) by an:
             752          (A) employee; or
             753          (B) employer; and
             754          (iii) pursuant to a written contract between:
             755          (A) the employer; and
             756          (B) (I) the employee; or
             757          (II) a person providing transportation to the employer's employee; and
             758          (b) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             759      commission may for purposes of Subsection (46)(a) make rules defining what constitutes an
             760      employee's primary place of employment;
             761          (47) amounts paid for admission to an athletic event at an institution of higher education
             762      that is subject to the provisions of Title IX of the Education Amendments of 1972, 20 U.S.C. Sec.
             763      1681 et seq.;
             764          (48) sales of telephone service charged to a prepaid telephone calling card;
             765          (49) (a) sales of hearing aids; and
             766          (b) sales of hearing aid accessories; and
             767          (50) (a) sales made to or by:
             768          (i) an area agency on aging; or
             769          (ii) a senior citizen center owned by a county, city, or town; or
             770          (b) sales made by a senior citizen center that contracts with an area agency on aging.
             771          Section 4. Section 59-12-204 is amended to read:


             772           59-12-204. Sales and use tax ordinance provisions -- Tax rate -- Distribution of tax
             773      revenues.
             774          (1) The tax ordinance adopted pursuant to this part shall impose a tax upon [those items
             775      listed] the transactions in Section 59-12-103 , subject to the exemptions provided for in Section
             776      59-12-104 .
             777          (2) Except as provided in Subsection 59-12-205 (2), [such] the tax ordinance shall include
             778      a provision imposing [a] the tax [upon every retail sale of items listed in Section 59-12-103 ]
             779      described in Subsection (1) on transactions made within a county, including areas contained within
             780      the cities and towns [thereof at the rate of 3/4% or any fractional part of such 3/4% of the purchase
             781      price paid or charged.] located within the county, at the following rates:
             782          (a) through December 31, 2000, at a rate that is less than or equal to .75%; and
             783          (b) beginning on January 1, 2001, at a rate that is less than or equal to .84%.
             784          (3) Such tax ordinance shall include provisions substantially the same as those contained
             785      in Part 1, Tax Collection, insofar as they relate to sales or use tax, except that the name of the
             786      county as the taxing agency shall be substituted for that of the state where necessary for the
             787      purpose of this part and that an additional license is not required if one has been or is issued under
             788      Section 59-12-106 .
             789          (4) Such tax ordinance shall include a provision that the county shall contract, prior to the
             790      effective date of the ordinance, with the commission to perform all functions incident to the
             791      administration or operation of the ordinance.
             792          (5) Such tax ordinance shall include a provision that the sale, storage, use, or other
             793      consumption of tangible personal property, the purchase price or the cost of which has been subject
             794      to sales or use tax under a sales and use tax ordinance enacted in accordance with this part by any
             795      county, city, or town in any other county in this state, shall be exempt from the tax due under this
             796      ordinance.
             797          (6) Such tax ordinance shall include a provision that any person subject to the provisions
             798      of a city or town sales and use tax shall be exempt from the county sales and use tax if the city or
             799      town sales and use tax is levied under an ordinance including provisions in substance as follows:
             800          (a) a provision imposing a tax upon every retail sale of items listed in Section 59-12-103
             801      made within the city or town at the rate imposed by the county in which it is situated pursuant to
             802      Subsection (2);


             803          (b) provisions substantially the same as those contained in Part 1, Tax Collection, insofar
             804      as they relate to sales and use taxes, except that the name of the city or town as the taxing agency
             805      shall be substituted for that of the state where necessary for the purposes of this part;
             806          (c) a provision that the city or town shall contract prior to the effective date of the city or
             807      town sales and use tax ordinance with the commission to perform all functions incident to the
             808      administration or operation of the sales and use tax ordinance of the city or town;
             809          (d) a provision that the sale, storage, use, or other consumption of tangible personal
             810      property, the gross receipts from the sale of or the cost of which has been subject to sales or use
             811      tax under a sales and use tax ordinance enacted in accordance with this part by any county other
             812      than the county in which the city or town is located, or city or town in this state, shall be exempt
             813      from the tax; and
             814          (e) a provision that the amount of any tax paid under Part 1, Tax Collection, shall not be
             815      included as a part of the purchase price paid or charged for a taxable item.
             816          (7) (a) Notwithstanding any other provision of this section, from January 1, 1990, through
             817      June 30, 1999, the commission shall determine and retain the amount of revenue generated by a
             818      1/64% tax rate and deposit it in the Olympics Special Revenue Fund or funds provided for in
             819      Subsection 59-12-103 (4) for the purposes of the Utah Sports Authority described in Title 63A,
             820      Chapter 7, Utah Sports Authority Act.
             821          (b) Except for sales and use taxes deposited under Subsection (7)(c), beginning on July 1,
             822      1999, the amount of revenue generated by the 1/64% tax rate under Subsection (7)(a) shall be
             823      retained by the county, city, or town levying a tax under this section.
             824          (c) Notwithstanding any other provision of this section, beginning on July 1, 1999, the
             825      commission shall:
             826          (i) determine and retain the portion of the sales and use tax imposed under this section:
             827          (A) by a city or town that will have constructed within its boundaries the Airport to
             828      University of Utah Light Rail described in the Transportation Equity Act for the 21st Century, Pub.
             829      L. No. 105-178, Sec. 3030(c)(2)(B)(i)(II), 112 Stat. 107; and
             830          (B) that is equal to the revenues generated by a 1/64% tax rate; and
             831          (ii) deposit the revenues described in Subsection (7)(c)(i) in the Airport to University of
             832      Utah Light Rail Restricted Account created in Section 17A-2-1064 for the purposes described in
             833      Section 17A-2-1064 .


             834          Section 5. Section 59-12-205 is amended to read:
             835           59-12-205. Ordinances to conform with statutory amendments -- Distribution of tax
             836      revenues.
             837          (1) Each county, city, and town, in order to maintain in effect sales and use tax ordinances
             838      pursuant to this part, shall, within 30 days of any amendment of any applicable provisions of Part
             839      1, Tax Collection, adopt amendments of their respective sales and use tax ordinances to conform
             840      with the amendments to Part 1, Tax Collection, insofar as they relate to sales and use taxes.
             841          (2) [Any] (a) A county, city, or town may distribute its sales or use tax revenues by means
             842      other than point of sale or use by [notifying] sending notification of the decision in writing to the
             843      commission [in writing of such decision], no later than 30 days before commencement of the next
             844      tax accrual period.
             845          (b) After [such] notice is given under Subsection (2)(a), a legislative body of a county, city,
             846      or town may:
             847          (i) beginning on January 1, 1990, through December 31, 2000, increase the tax rate
             848      authorized by this part to a rate of 1%; and
             849          (ii) beginning on January 1, 2001, increase the tax rate authorized by this part to a [total
             850      of 1% from and after January 1, 1990, of the purchase price paid or charged, excluding a public
             851      transit sales and use tax as provided in Section 59-12-501 and a resort communities sales tax as
             852      provided in Section 59-12-401 . This tax shall be collected and distributed as follows:] rate that
             853      is less than or equal to 1.1%.
             854          [(a) from July 1, 1992, through June 30, 1993, 45% of each dollar collected from the sales
             855      and use tax authorized by this part shall be paid to each county, city, and town providing notice
             856      under this section, based upon the percentage that the population of the county, city, or town bears
             857      to the total population of all such entities providing notice under this section, and 55% based upon
             858      the point of sale or use of the transaction; and]
             859          [(b)] (c) [from and after July 1, 1993,] Except as provided in Subsections (3) and (4):
             860          (i) 50% of each dollar collected from the sales and use tax authorized by this part shall be
             861      paid to each county, city, and town providing notice under this section, based upon the percentage
             862      that the population of the county, city, or town bears to the total population of all such entities
             863      providing notice under this section[,]; and
             864          (ii) 50% of each dollar collected from the sales and use tax authorized by this part shall


             865      be paid to each county, city, and town providing notice under this section, based upon the point
             866      of sale or use of the transaction.
             867          (3) (a) Notwithstanding [any provision of] Subsection (2), a legislative body of a county,
             868      city, or town that has given notice under this section may not:
             869          (i) if the legislative body of the county, city, or town imposes a tax rate of 1% under this
             870      section, receive a tax revenue distribution of less than [3/4 of 1%] .75% of the taxable sales within
             871      its boundaries[. The]; or
             872          (ii) if the legislative body of the county, city, or town imposes a tax rate that is greater than
             873      1% but is less than or equal to 1.1%, receive a tax revenue distribution of less than .84% of the
             874      taxable sales within its boundaries.
             875          (b) The commission shall proportionally reduce quarterly distributions to any county, city,
             876      or town, which, but for the reduction, would receive a distribution:
             877          (i) if the legislative body of the county, city, or town imposes a tax rate of 1% under this
             878      section, in excess of 1% [beginning January 1, 1990,] of the sales and use tax revenue collected
             879      within its boundaries[.]; or
             880          (ii) if the legislative body of the county, city, or town imposes a tax rate that is greater than
             881      1% but is less than or equal to 1.1%, in excess of 1.1% of the sales and use tax revenue collected
             882      within its boundaries.
             883          (4) (a) Notwithstanding any other provision of this section, from January 1, 1990, through
             884      June 30, 1999, the commission shall determine and retain the amount of revenue generated by a
             885      1/64% tax rate and deposit it in the Olympics Special Revenue Fund or funds provided for in
             886      Subsection 59-12-103 (4) for the purposes of the Utah Sports Authority described in Title 63A,
             887      Chapter 7, Utah Sports Authority Act.
             888          (b) Except for sales and use taxes deposited under Subsection (4)(c), beginning on July 1,
             889      1999, the amount of revenue generated by the 1/64% tax rate under Subsection (4)(a) shall be
             890      distributed to each county, city, and town as provided in this section.
             891          (c) Notwithstanding any other provision of this section, beginning on July 1, 1999, the
             892      commission shall:
             893          (i) determine and retain the portion of the sales and use tax imposed under this section:
             894          (A) by a city or town that will have constructed within its boundaries the Airport to
             895      University of Utah Light Rail described in the Transportation Equity Act for the 21st Century, Pub.


             896      L. No. 105-178, Sec. 3030(c)(2)(B)(i)(II), 112 Stat. 107; and
             897          (B) that is equal to the revenues generated by a 1/64% tax rate; and
             898          (ii) deposit the revenues described in Subsection (4)(c)(i) in the Airport to University of
             899      Utah Light Rail Restricted Account created in Section 17A-2-1064 for the purposes described in
             900      Section 17A-2-1064 .
             901          (5) (a) Population figures for purposes of this section shall be based on the most recent
             902      official census or census estimate of the United States Bureau of the Census.
             903          (b) If population estimates are not made for any county, city, or town by the United States
             904      Bureau of Census, population figures shall be determined according to the biennial estimate from
             905      the Utah Population Estimates Committee.
             906          (6) The population of a county for purposes of this section shall be determined solely from
             907      the unincorporated area of the county.
             908          Section 6. Section 59-12-401 is amended to read:
             909           59-12-401. Resort communities tax -- Rate -- Collection fees.
             910          (1) In addition to other sales taxes, a legislative body of a city or town in which the
             911      transient room capacity is greater than or equal to 66% of the permanent census population may
             912      impose a sales tax [of up to 1%]:
             913          (a) on the sales and uses described in Subsection 59-12-103 (1), subject to the following
             914      exemptions:
             915          (i) the exemptions provided for in Section 59-12-104 [, and shall exempt from that
             916      additional tax];
             917          (ii) an exemption for wholesale sales; and
             918          (iii) an exemption for sales of single items for which consideration paid is $2,500 or
             919      more[.]; and
             920          (b) (i) through December 31, 2000, at a rate that is less than or equal to 1%; and
             921          (ii) beginning on January 1, 2001, at a rate that is less than or equal to 1.125%.
             922          (2) (a) An amount equal to the total of any costs incurred by the state in connection with
             923      the implementation of Subsection (1) which exceed, in any year, the revenues received by the state
             924      from its collection fees received in connection with the implementation of Subsection (1) shall be
             925      paid over to the state General Fund by the cities and towns which impose the tax provided for in
             926      Subsection (1). [Payment costs]


             927          (b) Amounts paid under Subsection (2)(a) shall be allocated proportionally among those
             928      cities and towns according to the amount of revenue the respective cities and towns generate in that
             929      year through imposition of that tax.
             930          Section 7. Section 59-12-402 is amended to read:
             931           59-12-402. Additional resort communities sales tax -- Rate -- Collection fees --
             932      Resolution and voter approval requirements -- Election requirements -- Notice requirements
             933      -- Ordinance requirements.
             934          (1) (a) Subject to the limitations of Subsections (2) through (6), [the governing] a
             935      legislative body of a municipality in which the transient room capacity is greater than or equal to
             936      66% of the permanent census population may, in addition to the sales tax authorized under Section
             937      59-12-401 , impose an additional resort communities sales tax [in an amount]:
             938          (i) through December 31, 2000, at a rate that is less than or equal to [1/2%] .5%; and
             939          (ii) beginning on January 1, 2001, at a rate that is equal to the sum of:
             940          (A) a rate that is less than or equal to .5%; and
             941          (B) a rate that is less than or equal to .05%.
             942          (b) A legislative body of a municipality imposing a tax under Subsection (1)(a) shall:
             943          (i) impose the tax on the sales and uses described in Subsection 59-12-103 (1), subject to
             944      the following exemptions:
             945          (A) the exemptions provided for in Section 59-12-104 [, and shall exempt from that
             946      additional tax];
             947          (B) an exemption for wholesale sales; and
             948          (C) an exemption for sales of single items for which consideration paid is $2,500 or more.
             949          (2) (a) An amount equal to the total of any costs incurred by the state in connection with
             950      the implementation of Subsection (1) which exceed, in any year, the revenues received by the state
             951      from its collection fees received in connection with the implementation of Subsection (1) shall be
             952      paid over to the state General Fund by the cities and towns which impose the tax provided for in
             953      Subsection (1).
             954          (b) Payment costs shall be allocated proportionally among those cities and towns according
             955      to the amount of revenue the respective cities and towns generate in that year through imposition
             956      of that tax.
             957          (3) To impose [an additional resort communities sales] or increase a tax under this section,


             958      the [governing] legislative body of the municipality shall:
             959          (a) [pass a resolution approving] by ordinance:
             960          (i) impose the tax; [and] or
             961          (ii) increase the tax; and
             962          (b) except as provided in Subsection (6), obtain voter approval [for] to impose or increase
             963      the tax as provided in Subsection (4).
             964          (4) To obtain voter approval [for an additional resort communities sales tax] under
             965      Subsection (3)(b), a legislative body of a municipality shall:
             966          (a) hold the [additional resort communities sales tax] election during:
             967          (i) a regular general election; or
             968          (ii) a municipal general election; and
             969          (b) publish notice of the election:
             970          (i) 15 days or more before the day on which the election is held; and
             971          (ii) in a newspaper of general circulation in the municipality.
             972          (5) (a) An ordinance approving [an additional resort communities sales] the imposition of
             973      a tax or a tax increase under this section shall provide an effective date for the tax or the tax
             974      increase.
             975          (b) A legislative body of a municipality imposing or increasing a tax under this section
             976      shall:
             977          (i) collect the tax on the first day of a calendar quarter; and
             978          (ii) notify the commission at least 30 days before the day on which the commission is
             979      required to collect the tax.
             980          (6) (a) [Except as provided in Subsection (6)(b), a] A legislative body of a municipality
             981      is not subject to the voter approval requirements of Subsection (3)(b) if[,]:
             982          (i) except as provided in Subsection (6)(b), on or before January 1, 1996, the legislative
             983      body of the municipality imposed a license fee or tax on businesses based on gross receipts
             984      pursuant to Section 10-1-203 [.]; or
             985          (ii) (A) on December 31, 2000, the legislative body of the municipality imposes and
             986      collects a tax under Subsection (1)(a)(i); and
             987          (B) on or after January 1, 2001, the legislative body of the municipality increases the tax
             988      under this section by an amount that is less than or equal to the tax rate described in Subsection


             989      (1)(a)(ii)(B).
             990          (b) The exception from the voter approval requirements in Subsection (6)(a)(i) does not
             991      apply to a municipality that, on or before January 1, 1996, imposed a license fee or tax on only one
             992      class of businesses based on gross receipts pursuant to Section 10-1-203 .
             993          Section 8. Section 59-12-501 is amended to read:
             994           59-12-501. Public transit tax -- Rate -- Voter approval.
             995          (1) (a) In addition to other sales and use taxes, [any] legislative body of a county, city, or
             996      town within a transit district organized under Title 17A, Chapter 2, Part 10, may impose a sales
             997      and use tax [of 1/4 of 1%]:
             998          (i) through December 31, 2000, at a rate of .25%; and
             999          (ii) beginning on January 1, 2001, at a rate that is equal to the sum of:
             1000          (A) .25%; and
             1001          (B) a rate that is less than or equal to .025%.
             1002          (b) A legislative body of a county, city, or town imposing a tax under Subsection (1)(a)
             1003      shall impose the tax:
             1004          (i) on the sales and uses described in Subsection 59-12-103 (1), subject to the exemptions
             1005      provided for in Section 59-12-104 [,]; and
             1006          (ii) to fund a public transportation system.
             1007          [(b) A] (2) (a) Except as provided in Subsection (2)(b), a legislative body of a county, city,
             1008      or town may impose or increase a tax under this section only if the [governing] legislative body
             1009      of the county, city, or town, by resolution, submits the proposal to all the qualified voters within
             1010      the county, city, or town as provided in Subsection (3) for approval at a general or special election
             1011      conducted in the manner provided by statute.
             1012          (b) Notwithstanding Subsection (2)(a), a legislative body of a county, city, or town is not
             1013      required to meet the voter approval requirements of Subsection (2)(a) if:
             1014          (i) on December 31, 2000, the legislative body of the county, city, or town imposes and
             1015      collects a tax under Subsection (1)(a)(i); and
             1016          (ii) on or after January 1, 2001, the legislative body of the county, city, or town increases
             1017      the tax under this section by an amount that is less than or equal to the tax rate described in
             1018      Subsection (1)(a)(ii)(B).
             1019          [(2)] (3) (a) If only a portion of a county is included within a public transit district, the


             1020      proposal may be submitted only to the qualified voters residing within the boundaries of the
             1021      proposed or existing public transit district.
             1022          (b) Notice of [any such] an election under this section shall be given by the legislative
             1023      body of the county, city, or town [governing body] 15 days in advance in the manner prescribed
             1024      by statute.
             1025          (c) If a majority of the voters voting in [such] an election under this section approve the
             1026      proposal[, it] to impose or increase a tax under Subsection (1)(a)(i), the imposition of the tax or
             1027      tax increase shall become effective on the date provided by the legislative body of the county, city,
             1028      or town [governing body].
             1029          [(3)] (4) This section may not be construed to require an election in jurisdictions where
             1030      voters have previously approved a public transit sales or use tax, unless a county, city, or town
             1031      increases a tax imposed under this section.
             1032          Section 9. Section 59-12-801 is amended to read:
             1033           59-12-801. Definitions.
             1034          As used in this part:
             1035          (1) "Nursing care facility" is as defined in Section 26-21-2 .
             1036          (2) "Rural city hospital" means a hospital owned by a city that is located within a third,
             1037      fourth, fifth, or sixth class county.
             1038          [(2)] (3) "Rural county health care facility" means a rural county hospital or a rural county
             1039      nursing care facility.
             1040          [(3)] (4) "Rural county hospital" means a hospital owned by a third, fourth, fifth, or sixth
             1041      class county, as defined in Section 17-16-13 , which is located outside of a standard metropolitan
             1042      statistical area, as designated by the United States Bureau of the Census.
             1043          [(4)] (5) "Rural county nursing care facility" means a nursing care facility owned by a
             1044      third, fourth, fifth, or sixth class county, as defined in Section 17-16-13 , which is located outside
             1045      of a standard metropolitan statistical area, as designated by the United States Bureau of the Census.
             1046          Section 10. Section 59-12-802 is amended to read:
             1047           59-12-802. Imposition of rural county health care facilities tax -- Base -- Rates.
             1048          (1) (a) [Any] A county legislative body may[, by a majority vote of all members, submit
             1049      an opinion question to the residents of that county so that each resident has an opportunity to
             1050      express the resident's opinion on the imposition of a local] impose a sales and use tax [of up to


             1051      1%]:
             1052          (i) through December 31, 2000, at a rate that is less than or equal to 1%; and
             1053          (ii) beginning on January 1, 2001, at a rate that is equal to the sum of:
             1054          (A) a rate that is less than or equal to 1%; and
             1055          (B) a rate that is less than or equal to .1%.
             1056          (b) A county legislative body imposing a tax under Subsection (1)(a) shall impose the tax:
             1057          (i) on the sales and uses described in Subsection 59-12-103 (1), subject to the exemptions
             1058      provided for in Section 59-12-104 [,]; and
             1059          (ii) to fund rural county health care facilities in that county.
             1060          (2) (a) Except as provided in Subsection (2)(c), before imposing or increasing a tax under
             1061      Subsection (1)(a), a county legislative body shall obtain approval to impose or increase the tax
             1062      from a majority of the:
             1063          (i) members of the county's legislative body; and
             1064          (ii) county's registered voters voting on the imposition of the tax.
             1065          (b) The county legislative body shall conduct the election [shall follow] according to the
             1066      procedures [outlined in] and requirements of Title 11, Chapter 14, Utah Municipal Bond Act.
             1067          [(2) If the legislative governing body determines that a majority of the qualified electors
             1068      voting on the opinion question has assented to the imposition of a local sales and use tax as
             1069      prescribed in Subsection (1)(a), the county legislative body may, by majority vote of all members,
             1070      impose such a tax.]
             1071          (c) Notwithstanding Subsection (2)(a), a county legislative body is not required to meet
             1072      the voter approval requirements of Subsection (2)(a)(ii) if:
             1073          (i) on December 31, 2000, the county legislative body imposes and collects a tax under
             1074      Subsection (1)(a)(i); and
             1075          (ii) on or after January 1, 2001, the county legislative body increases the tax under this
             1076      section by an amount that is less than or equal to the tax rate described in Subsection (1)(a)(ii)(B).
             1077          (3) The monies generated [from] by a tax imposed under Subsection (1) may only be used
             1078      for the financing of:
             1079          (a) ongoing operating expenses of a rural county health care facility; [and]
             1080          (b) the acquisition of land for[, and] a rural county health care facility; or
             1081          (c) the design, construction, equipping, [and] or furnishing of a rural county health care


             1082      facility.
             1083          (4) Taxes imposed under this [part] section shall be:
             1084          (a) levied at the same time and collected in the same manner as provided in [Title 59,
             1085      Chapter 12,] Part 2, The Local Sales and Use Tax Act, except that the collection and distribution
             1086      of the tax revenue is not subject to Subsection 59-12-205 (2); and
             1087          (b) levied for a period of ten years and may be reauthorized at the end of the ten-year
             1088      period by the county legislative body as provided in Section (1).
             1089          (5) The [tax] commission may retain an amount not to exceed 1-1/2% of the [county
             1090      option funding] tax collected under this [part] section for the cost of administering this tax.
             1091          Section 11. Section 59-12-803 is amended to read:
             1092           59-12-803. Distribution of revenues generated by rural county health care facilities
             1093      tax.
             1094          [All] (1) Except as provided in Subsection 59-12-802 (5) and Subsection (2), all revenues
             1095      collected by a county under [this part] Section 59-12-802 shall be distributed quarterly by the
             1096      county legislative body to rural county health care facilities. [If]
             1097          (2) Notwithstanding Subsection (1), if there is more than one rural county health care
             1098      facility in a county, the revenues collected by a county under Section 59-12-802 shall be distributed
             1099      as determined by the county legislative body.
             1100          Section 12. Section 59-12-804 is amended to read:
             1101           59-12-804. Imposition of rural city hospital tax -- Base -- Rates.
             1102          [(1) As used in this section, "rural city hospital" means any hospital owned by a city which
             1103      is located within a third, fourth, fifth, or sixth class county.]
             1104          [(2) Any] (1) (a) A city legislative body may[, by a majority vote of all members submit
             1105      an opinion question to the residents of that city so that each resident has an opportunity to express
             1106      his opinion on the imposition of a local] impose a sales and use tax [of up to 1%]:
             1107          (i) through December 31, 2000, at a rate that is less than or equal to 1%; and
             1108          (ii) beginning on January 1, 2001, at a rate that is equal to the sum of:
             1109          (A) a rate that is less than or equal to 1%; and
             1110          (B) a rate that is less than or equal to .1%.
             1111          (b) A city legislative body imposing a tax under Subsection (1)(a) shall impose the tax:
             1112          (i) on the sales and uses described in Subsection 59-12-103 (1), subject to the exemptions


             1113      provided for in Section 59-12-104 ; and
             1114          (ii) to fund rural city hospitals in that city.
             1115          [(3) The city legislative body and the tax commission shall follow the procedures and
             1116      requirements established in Sections 59-12-802 and 59-12-803 for the tax imposed under this
             1117      section.]
             1118          (2) (a) Except as provided in Subsection (2)(c), before imposing or increasing a tax under
             1119      Subsection (1)(a), a city legislative body shall obtain approval to impose the tax from a majority
             1120      of the:
             1121          (i) members of the city legislative body; and
             1122          (ii) city's registered voters voting on the imposition of the tax.
             1123          (b) The city legislative body shall conduct the election according to the procedures and
             1124      requirements of Title 11, Chapter 14, Utah Municipal Bond Act.
             1125          (c) Notwithstanding Subsection (2)(a), a city legislative body is not required to meet the
             1126      voter approval requirements of Subsection (2)(a)(ii) if:
             1127          (i) on December 31, 2000, the city legislative body imposes and collects a tax under
             1128      Subsection (1)(a)(i); and
             1129          (ii) on or after January 1, 2001, the city legislative body increases the tax under this section
             1130      by an amount that is less than or equal to the tax rate described in Subsection (1)(a)(ii)(B).
             1131          (3) The monies generated by a tax imposed under Subsection (1) may only be used for the
             1132      financing of:
             1133          (a) ongoing operating expenses of a rural city hospital;
             1134          (b) the acquisition of land for a rural city hospital; or
             1135          (c) the design, construction, equipping, or furnishing of a rural city hospital.
             1136          (4) Taxes imposed under this section shall be:
             1137          (a) levied at the same time and collected in the same manner as provided in Part 2, The
             1138      Local Sales and Use Tax Act, except that the collection and distribution of the tax revenue is not
             1139      subject to Section 59-12-205 ;
             1140          (b) levied for a period of ten years and may be reauthorized at the end of the ten-year
             1141      period by the city legislative body as provided in Subsection (1).
             1142          (5) The commission may retain an amount not to exceed 1-1/2% of the tax collected under
             1143      this section for the cost of administering the tax.


             1144          Section 13. Section 59-12-805 is enacted to read:
             1145          59-12-805. Distribution of revenues generated by rural city hospital tax.
             1146          (1) Except as provided in Subsection 59-12-804 (5) and Subsection (2), all revenues
             1147      collected by a city under Section 59-12-804 shall be distributed quarterly by the city legislative
             1148      body to rural city hospitals.
             1149          (2) Notwithstanding Subsection (1), if there is more than one rural city hospital in a city,
             1150      the revenues collected by the city under Section 59-12-804 shall be distributed as determined by
             1151      the city legislative body.
             1152          Section 14. Section 59-12-1001 is amended to read:
             1153           59-12-1001. Authority to impose highways tax -- Resolution and voter approval
             1154      requirements -- Election requirements -- Notice requirements -- Ordinance requirements.
             1155          (1) (a) A legislative body of a municipality in which sales and uses described in Subsection
             1156      59-12-103 (1) are not subject to a sales and use tax under Section 59-12-501 may as provided in
             1157      this part impose a sales and use tax [of 1/4%]:
             1158          (i) through December 31, 2000, at a rate of .25%; and
             1159          (ii) beginning on January 1, 2001, at a rate that is equal to the sum of:
             1160          (A) .25%; and
             1161          (B) a rate that is less than or equal to .025%.
             1162          (b) A legislative body of a municipality imposing a tax under Subsection (1)(a) shall
             1163      impose the tax on the sales and uses described in Subsection 59-12-103 (1), subject to the
             1164      exemptions provided for in Section 59-12-104 .
             1165          (2) A tax imposed under this part by a legislative body of a municipality shall be used for
             1166      the construction and maintenance of highways under the jurisdiction of the municipality imposing
             1167      the tax.
             1168          (3) To impose or increase a highways tax under this part, the [governing] legislative body
             1169      of the municipality shall:
             1170          (a) pass an ordinance approving the imposition of the tax or tax increase; and
             1171          (b) except as provided in Subsection (7), obtain voter approval [for] to impose or increase
             1172      the tax as provided in Subsection (4).
             1173          (4) To obtain voter approval [for a highways tax] under Subsection (3)(b), a legislative
             1174      body of a municipality shall:


             1175          (a) hold the [highways tax] election during:
             1176          (i) a regular general election; or
             1177          (ii) a municipal general election; and
             1178          (b) publish notice of the election:
             1179          (i) 15 days or more before the day on which the election is held; and
             1180          (ii) in a newspaper of general circulation in the municipality.
             1181          (5) An ordinance approving [a highways] the imposition of a tax or a tax increase under
             1182      this part shall provide an effective date for the tax.
             1183          (6) A legislative body of a municipality imposing or increasing a tax under this part shall:
             1184          (a) begin collecting the tax on the first day of a calendar quarter; and
             1185          (b) notify the commission at least 30 days before the day on which the commission is
             1186      required to collect the tax.
             1187          (7) (a) [Except as provided in Subsection (7)(b), a] A legislative body of a municipality
             1188      is not subject to the voter approval requirements of Subsection (3)(b) if[,]:
             1189          (i) except as provided in Subsection(7)(b), on or before January 1, 1996, the legislative
             1190      body of the municipality imposed a licensee fee or tax on businesses based on gross receipts
             1191      pursuant to Section 10-1-203 [.]; or
             1192          (ii) (A) on December 31, 2000, the legislative body of the municipality imposes and
             1193      collects a tax under Subsection (1)(a)(i); and
             1194          (B) on or after January 1, 2001, the legislative body of the municipality increases the tax
             1195      under this section in an amount that is less than or equal to the tax rate described in Subsection
             1196      (1)(a)(ii)(B).
             1197          (b) The exception from the voter approval requirements in Subsection (7)(a)(i) does not
             1198      apply to a municipality that, on or before January 1, 1996, imposed a license fee or tax on only one
             1199      class of businesses based on gross receipts pursuant to Section 10-1-203 .
             1200          Section 15. Section 59-12-1102 is amended to read:
             1201           59-12-1102. Base -- Rate -- Imposition of tax -- Distribution of revenue --
             1202      Administration.
             1203          (1) (a) Subject to the provisions of Subsections (2) through (4), and in addition to any other
             1204      tax authorized by this chapter, a county legislative body may impose by ordinance a county option
             1205      sales and use tax [of 1/4% upon]:


             1206          (i) through December 31, 2000, at a rate of .25%; and
             1207          (ii) beginning on January 1, 2001, at a rate that is less than or equal to the sum of:
             1208          (A) .25%; and
             1209          (B) a rate that is less than or equal to .025%.
             1210          (b) A county legislative body imposing a tax under Subsection (1)(a) shall impose the tax:
             1211          (i) on the sales and uses described in Subsection 59-12-103 (1), subject to the exemptions
             1212      provided for in Section 59-12-104 [.];
             1213          [(b) The county option sales and use tax under this section shall be imposed:]
             1214          [(i) upon] (ii) on the sales and uses made in the county, including sales and uses made
             1215      within municipalities in the county; and
             1216          [(ii)] (iii) except as provided in Subsection (1)(c), beginning on the first day of January:
             1217          (A) of the next calendar year after adoption of the ordinance imposing the tax if the
             1218      ordinance is adopted on or before May 25; or
             1219          (B) of the second calendar year after adoption of the ordinance imposing the tax if the
             1220      ordinance is adopted after May 25.
             1221          (c) Notwithstanding Subsection (1)(b)[(ii)] (iii), the county option sales and use tax under
             1222      this section shall be imposed:
             1223          (i) beginning January 1, 1998, if an ordinance adopting the tax imposed on or before
             1224      September 4, 1997; or
             1225          (ii) beginning January 1, 1999, if an ordinance adopting the tax is imposed during 1997
             1226      but after September 4, 1997.
             1227          (2) (a) Before imposing a county option sales and use tax under Subsection (1), a county
             1228      legislative body shall:
             1229          (i) hold two public hearings on separate days in geographically diverse locations in the
             1230      county; and
             1231          (ii) notify the commission at least 30 days prior to the adoption of the ordinance.
             1232          (b) (i) At least one of the hearings required by Subsection (2)(a)(i) shall have a starting
             1233      time of no earlier than 6:00 p.m.
             1234          (ii) The earlier of the hearings required by Subsection (2)(a)(i) shall be no less than seven
             1235      days after the day the first advertisement required by Subsection (2)(c) is published.
             1236          (c) (i) Before holding the public hearings required by Subsection (2)(a)(i), the county


             1237      legislative body shall advertise in a newspaper of general circulation in the county:
             1238          (A) its intent to adopt a county option sales and use tax;
             1239          (B) the date, time, and location of each public hearing; and
             1240          (C) a statement that the purpose of each public hearing is to obtain public comments
             1241      regarding the proposed tax.
             1242          (ii) The advertisement shall be published once each week for the two weeks preceding the
             1243      earlier of the two public hearings.
             1244          (iii) The advertisement shall be no less than 1/8 page in size, and the type used shall be no
             1245      smaller than 18 point and surrounded by a 1/4-inch border.
             1246          (iv) The advertisement may not be placed in that portion of the newspaper where legal
             1247      notices and classified advertisements appear.
             1248          (v) Whenever possible:
             1249          (A) the advertisement shall appear in a newspaper that is published at least five days a
             1250      week, unless the only newspaper in the county is published less than five days a week; and
             1251          (B) the newspaper selected shall be one of general interest and readership in the
             1252      community, and not one of limited subject matter.
             1253          (d) [The] Except as provided in Subsection (2)(e), the adoption of an ordinance imposing
             1254      or increasing a county option sales and use tax is subject to a local referendum election as provided
             1255      in Title 20A, Chapter 7, Part 6, Local Referenda - Procedures, except that:
             1256          (i) notwithstanding Subsection 20A-7-609 (2)(a), the county clerk shall hold a referendum
             1257      election that qualifies for the ballot on the earlier of the next regular general election date or the
             1258      next municipal general election date more than 155 days after adoption of an ordinance under this
             1259      section;
             1260          (ii) for 1997 only, the 120-day period in Subsection 20A-7-606 (1) shall be 30 days; and
             1261          (iii) the deadlines in Subsection 20A-7-606 (2) and (3) do not apply, and the clerk shall
             1262      take the actions required by those subsections before the referendum election.
             1263          (e) Notwithstanding Subsection (2)(d), a county legislative body is not required to meet
             1264      the voter approval requirements of Subsection (2)(d) if:
             1265          (i) on December 31, 2000, the county legislative body imposes and collects a tax under
             1266      Subsection (1)(a)(i); and
             1267          (ii) on or after January 1, 2001, the county legislative body increases the tax under this


             1268      section in an amount that is less than or equal to the tax rate described in Subsection (1)(a)(ii)(B).
             1269          (3) (a) If the aggregate population of the counties imposing a county option sales and use
             1270      tax under Subsection (1) is less than 75% of the state population, the tax levied under Subsection
             1271      (1) shall be distributed to the county in which the tax was collected.
             1272          (b) If the aggregate population of the counties imposing a county option sales and use tax
             1273      under Subsection (1) is greater than or equal to 75% of the state population:
             1274          (i) 50% of the tax collected under Subsection (1) in each county shall be distributed to the
             1275      county in which the tax was collected; and
             1276          (ii) except as provided in Subsection (3)(c), 50% of the tax collected under Subsection (1)
             1277      in each county shall be distributed proportionately among all counties imposing the tax, based on
             1278      the total population of each county.
             1279          (c) If the amount to be distributed annually to a county under Subsection (3)(b)(ii), when
             1280      combined with the amount distributed to the county under Subsection (3)(b)(i), does not equal at
             1281      least $75,000, then:
             1282          (i) the amount to be distributed annually to that county under Subsection (3)(b)(ii) shall
             1283      be increased so that, when combined with the amount distributed to the county under Subsection
             1284      (3)(b)(i), the amount distributed annually to the county is $75,000; and
             1285          (ii) the amount to be distributed annually to all other counties under Subsection (3)(b)(ii)
             1286      shall be reduced proportionately to offset the additional amount distributed under Subsection
             1287      (3)(c)(i).
             1288          (d) The commission shall establish rules to implement the distribution of the tax under
             1289      Subsections (3)(a), (b), and (c).
             1290          (4) (a) Except as provided in Subsections (4)(b) and (c), a county option sales and use tax
             1291      under Subsection (1) shall be imposed and administered in the same manner as a tax imposed
             1292      under Title 59, Chapter 12, Part 2, The Local Sales and Use Tax Act.
             1293          (b) A county option sales and use tax imposed under this part is not subject to:
             1294          (i) the distribution provisions of Subsections 59-12-205 (2) and (3); and
             1295          (ii) the earmarking provisions of Subsection 59-12-205 (4).
             1296          (c) The fee charged by the commission under Section 59-12-206 shall be based on the
             1297      distribution amounts resulting after all the applicable distribution calculations under Subsection
             1298      (3) have been made.


             1299          Section 16. Section 59-12-1302 is amended to read:
             1300           59-12-1302. Authority to impose -- Base -- Rate.
             1301          (1) Beginning on or after January 1, 1998, the [governing] legislative body of a town may
             1302      impose a tax as provided in this part [in an amount that does not exceed 1%.]:
             1303          (a) through December 31, 2000, at a rate that is less than or equal to 1%; and
             1304          (b) beginning on January 1, 2001, at a rate that is equal to the sum of:
             1305          (i) a rate that is less than or equal to 1%; and
             1306          (ii) a rate that is less than or equal to .1%.
             1307          (2) A legislative body of a town may impose a tax as provided in this part if the legislative
             1308      body of the town imposed a license fee or tax on businesses based on gross receipts under Section
             1309      10-1-203 on or before January 1, 1996.
             1310          (3) A legislative body of a town imposing a tax under this section shall:
             1311          (a) adopt an ordinance:
             1312          (i) imposing the tax on the sales and uses described in Section 59-12-103 ;
             1313          (ii) exempting from the tax the sales and uses described in Section 59-12-104 ; and
             1314          (iii) providing an effective date for the tax;
             1315          (b) impose the tax on the first day of a calendar quarter; and
             1316          (c) notify the commission at least 30 days before the day on which the commission is
             1317      required to collect the tax.
             1318          (4) The commission shall:
             1319          (a) except as provided in Subsection (4)(c), distribute the revenues generated by the tax
             1320      under this section to the town imposing the tax;
             1321          (b) administer, collect, and enforce the tax authorized under this section pursuant to:
             1322          (i) the same procedures used to administer, collect, and enforce the sales and use tax under
             1323      Title 59, Chapter 12, Part 1, Tax Collection; and
             1324          (ii) Title 59, Chapter 1, General Taxation Policies; and
             1325          (c) deduct from the distribution under Subsection (4)(a) an administrative charge for
             1326      collecting the tax as provided in Section 59-12-206 .





Legislative Review Note
    as of 2-9-00 2:13 PM


A limited legal review of this legislation raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel


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