Download Zipped Introduced WP 9 HB0333.ZIP 27,779 Bytes
[Status][Bill Documents][Fiscal Note][Bills Directory]

H.B. 333

             1     

SALES AND USE TAX EXEMPTION FOR

             2     
SALES OF UNSORTED MERCHANDISE

             3     
2001 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Sponsor: Greg J. Curtis

             6      This act modifies the Sales and Use Tax Act by providing an exemption for sales of unsorted
             7      merchandise through a coin-operated vending machine under certain circumstances, and
             8      making technical changes. This act takes effect on July 1, 2001.
             9      This act affects sections of Utah Code Annotated 1953 as follows:
             10      AMENDS:
             11          59-12-102 (Effective 07/01/01), as last amended by Chapter 253, Laws of Utah 2000
             12          59-12-104, as last amended by Chapter 325, Laws of Utah 2000
             13      Be it enacted by the Legislature of the state of Utah:
             14          Section 1. Section 59-12-102 (Effective 07/01/01) is amended to read:
             15           59-12-102 (Effective 07/01/01). Definitions.
             16          As used in this chapter:
             17          (1) (a) "Admission or user fees" includes season passes.
             18          (b) "Admission or user fees" does not include annual membership dues to private
             19      organizations.
             20          (2) "Area agency on aging" is as defined in Section 62A-3-101 .
             21          (3) "Authorized carrier" means:
             22          (a) in the case of vehicles operated over public highways, the holder of credentials
             23      indicating that the vehicle is or will be operated pursuant to both the International Registration
             24      Plan (IRP) and the International Fuel Tax Agreement (IFTA);
             25          (b) in the case of aircraft, the holder of a Federal Aviation Administration (FAA) operating
             26      certificate or air carrier's operating certificate; or
             27          (c) in the case of locomotives, freight cars, railroad work equipment, or other rolling stock,


             28      the holder of a certificate issued by the United States Interstate Commerce Commission.
             29          (4) (a) For purposes of Subsection 59-12-104 (43), "coin-operated amusement device"
             30      means:
             31          (i) a coin-operated amusement, skill, or ride device;
             32          (ii) that is not controlled through vendor-assisted, over-the-counter, sales of tokens; and
             33          (iii) includes a music machine, pinball machine, billiard machine, video game machine,
             34      arcade machine, and a mechanical or electronic skill game or ride.
             35          (b) For purposes of Subsection 59-12-104 (43), "coin-operated amusement device" does
             36      not mean a coin-operated amusement device possessing a coinage mechanism that:
             37          (i) accepts and registers multiple denominations of coins; and
             38          (ii) allows the vendor to collect the sales and use tax at the time an amusement device is
             39      activated and operated by a person inserting coins into the device.
             40          (5) "Commercial use" means the use of gas, electricity, heat, coal, fuel oil, or other fuels
             41      that does not constitute industrial use under Subsection (13) or residential use under Subsection
             42      (21).
             43          (6) (a) "Common carrier" means a person engaged in or transacting the business of
             44      transporting passengers, freight, merchandise, or other property for hire within this state.
             45          (b) (i) "Common carrier" does not include a person who, at the time the person is traveling
             46      to or from that person's place of employment, transports a passenger to or from the passenger's
             47      place of employment.
             48          (ii) For purposes of Subsection (6)(b)(i), in accordance with Title 63, Chapter 46a, Utah
             49      Administrative Rulemaking Act, the commission may make rules defining what constitutes a
             50      person's place of employment.
             51          (7) "Component part" includes:
             52          (a) poultry, dairy, and other livestock feed, and their components;
             53          (b) baling ties and twine used in the baling of hay and straw;
             54          (c) fuel used for providing temperature control of orchards and commercial greenhouses
             55      doing a majority of their business in wholesale sales, and for providing power for off-highway type
             56      farm machinery; and
             57          (d) feed, seeds, and seedlings.
             58          (8) "Construction materials" means any tangible personal property that will be converted


             59      into real property.
             60          (9) (a) "Fundraising sales" means sales:
             61          (i) (A) made by a public or private elementary or secondary school; or
             62          (B) made by a public or private elementary or secondary school student, grades
             63      kindergarten through 12;
             64          (ii) that are for the purpose of raising funds for the school to purchase equipment,
             65      materials, or provide transportation; and
             66          (iii) that are part of an officially sanctioned school activity.
             67          (b) For purposes of Subsection (9)(a)(iii), "officially sanctioned school activity" means a
             68      school activity:
             69          (i) that is conducted in accordance with a formal policy adopted by the school or school
             70      district governing the authorization and supervision of fundraising activities;
             71          (ii) that does not directly or indirectly compensate an individual teacher or other
             72      educational personnel by direct payment, commissions, or payment in kind; and
             73          (iii) the net or gross revenues from which are deposited in a dedicated account controlled
             74      by the school or school district.
             75          (10) (a) "Hearing aid" means:
             76          (i) an instrument or device having an electronic component that is designed to:
             77          (A) (I) improve impaired human hearing; or
             78          (II) correct impaired human hearing; and
             79          (B) (I) be worn in the human ear; or
             80          (II) affixed behind the human ear;
             81          (ii) an instrument or device that is surgically implanted into the cochlea; or
             82          (iii) a telephone amplifying device.
             83          (b) "Hearing aid" does not include:
             84          (i) except as provided in Subsection (10)(a)(i)(B) or (10)(a)(ii), an instrument or device
             85      having an electronic component that is designed to be worn on the body;
             86          (ii) except as provided in Subsection (10)(a)(iii), an assistive listening device or system
             87      designed to be used by one individual, including:
             88          (A) a personal amplifying system;
             89          (B) a personal FM system;


             90          (C) a television listening system; or
             91          (D) a device or system similar to a device or system described in Subsections
             92      (10)(b)(ii)(A) through (C); or
             93          (iii) an assistive listening device or system designed to be used by more than one
             94      individual, including:
             95          (A) a device or system installed in:
             96          (I) an auditorium;
             97          (II) a church;
             98          (III) a conference room;
             99          (IV) a synagogue; or
             100          (V) a theater; or
             101          (B) a device or system similar to a device or system described in Subsections
             102      (10)(b)(iii)(A)(I) through (V).
             103          (11) (a) "Hearing aid accessory" means a hearing aid:
             104          (i) component;
             105          (ii) attachment; or
             106          (iii) accessory.
             107          (b) "Hearing aid accessory" includes:
             108          (i) a hearing aid neck loop;
             109          (ii) a hearing aid cord;
             110          (iii) a hearing aid ear mold;
             111          (iv) hearing aid tubing;
             112          (v) a hearing aid ear hook; or
             113          (vi) a hearing aid remote control.
             114          (c) "Hearing aid accessory" does not include:
             115          (i) a component, attachment, or accessory designed to be used only with an:
             116          (A) instrument or device described in Subsection (10)(b)(i); or
             117          (B) assistive listening device or system described in Subsection (10)(b)(ii) or (iii); or
             118          (ii) a hearing aid battery.
             119          (12) (a) "Home medical equipment and supplies" means equipment and supplies that:
             120          (i) a licensed physician prescribes or authorizes in writing as necessary for the treatment


             121      of a medical illness or injury or as necessary to mitigate an impairment resulting from illness or
             122      injury;
             123          (ii) are used exclusively by the person for whom they are prescribed to serve a medical
             124      purpose; and
             125          (iii) are listed as eligible for payment under Title 18 of the federal Social Security Act or
             126      under the state plan for medical assistance under Title 19 of the federal Social Security Act.
             127          (b) "Home medical equipment and supplies" does not include:
             128          (i) equipment and supplies purchased by, for, or on behalf of any health care facility, as
             129      defined in Subsection (12)(c), doctor, nurse, or other health care provider for use in their
             130      professional practice;
             131          (ii) eyeglasses, contact lenses, or equipment to correct impaired vision; or
             132          (iii) hearing aids or hearing aid accessories.
             133          (c) For purposes of Subsection (12)(b)(i), "health care facility" includes:
             134          (i) a clinic;
             135          (ii) a doctor's office; and
             136          (iii) a health care facility as defined in Section 26-21-2 .
             137          (13) "Industrial use" means the use of natural gas, electricity, heat, coal, fuel oil, or other
             138      fuels in:
             139          (a) mining or extraction of minerals;
             140          (b) agricultural operations to produce an agricultural product up to the time of harvest or
             141      placing the agricultural product into a storage facility, including:
             142          (i) commercial greenhouses;
             143          (ii) irrigation pumps;
             144          (iii) farm machinery;
             145          (iv) implements of husbandry as defined in Subsection 41-1a-102 (23) that are not
             146      registered under Title 41, Chapter 1a, Part 2, Registration; and
             147          (v) other farming activities; and
             148          (c) manufacturing tangible personal property at an establishment described in SIC Codes
             149      2000 to 3999 of the 1987 Standard Industrial Classification Manual of the federal Executive Office
             150      of the President, Office of Management and Budget.
             151          (14) "Manufactured home" means any manufactured home or mobile home as defined in


             152      Title 58, Chapter 56, Utah Uniform Building Standards Act.
             153          (15) For purposes of Subsection 59-12-104 (14), "manufacturing facility" means:
             154          (a) an establishment described in SIC Codes 2000 to 3999 of the 1987 Standard Industrial
             155      Classification Manual of the federal Executive Office of the President, Office of Management and
             156      Budget; or
             157          (b) a scrap recycler if:
             158          (i) from a fixed location, the scrap recycler utilizes machinery or equipment to process one
             159      or more of the following items into prepared grades of processed materials for use in new products:
             160          (A) iron;
             161          (B) steel;
             162          (C) nonferrous metal;
             163          (D) paper;
             164          (E) glass;
             165          (F) plastic;
             166          (G) textile; or
             167          (H) rubber; and
             168          (ii) the new products under Subsection (15)(b)(i) would otherwise be made with
             169      nonrecycled materials.
             170          (16) (a) "Medicine" means:
             171          (i) insulin, syringes, and any medicine prescribed for the treatment of human ailments by
             172      a person authorized to prescribe treatments and dispensed on prescription filled by a registered
             173      pharmacist, or supplied to patients by a physician, surgeon, or podiatric physician;
             174          (ii) any medicine dispensed to patients in a county or other licensed hospital if prescribed
             175      for that patient and dispensed by a registered pharmacist or administered under the direction of a
             176      physician; and
             177          (iii) any oxygen or stoma supplies prescribed by a physician or administered under the
             178      direction of a physician or paramedic.
             179          (b) "Medicine" does not include:
             180          (i) any auditory, prosthetic, ophthalmic, or ocular device or appliance; or
             181          (ii) any alcoholic beverage.
             182          (17) "Olympic merchandise" means tangible personal property bearing an Olympic


             183      designation, emblem, insignia, mark, logo, service mark, symbol, terminology, trademark, or other
             184      copyrighted or protected material, including:
             185          (a) one or more of the following terms:
             186          (i) "Olympic";
             187          (ii) "Olympiad"; or
             188          (iii) "Citius Altius Fortius";
             189          (b) the symbol of the International Olympic Committee, consisting of five interlocking
             190      rings;
             191          (c) the emblem of the International Olympic Committee Corporation;
             192          (d) a United States Olympic Committee designation, emblem, insignia, mark, logo, service
             193      mark, symbol, terminology, trademark, or other copyrighted or protected material;
             194          (e) any emblem of the Olympic Winter Games of 2002 that is officially designated by the
             195      Salt Lake Organizing Committee of the Olympic Winter Games of 2002; or
             196          (f) the mascot of the Olympic Winter Games of 2002.
             197          (18) (a) "Other fuels" means products that burn independently to produce heat or energy.
             198          (b) "Other fuels" includes oxygen when it is used in the manufacturing of tangible personal
             199      property.
             200          (19) "Person" includes any individual, firm, partnership, joint venture, association,
             201      corporation, estate, trust, business trust, receiver, syndicate, this state, any county, city,
             202      municipality, district, or other local governmental entity of the state, or any group or combination
             203      acting as a unit.
             204          (20) "Purchase price" means the amount paid or charged for tangible personal property or
             205      any other taxable transaction under Subsection 59-12-103 (1), excluding only cash discounts taken
             206      or any excise tax imposed on the purchase price by the federal government.
             207          (21) "Residential use" means the use in or around a home, apartment building, sleeping
             208      quarters, and similar facilities or accommodations.
             209          (22) (a) "Retail sale" means any sale within the state of tangible personal property or any
             210      other taxable transaction under Subsection 59-12-103 (1), other than resale of such property, item,
             211      or service by a retailer or wholesaler to a user or consumer.
             212          (b) "Retail sale" includes sales by any farmer or other agricultural producer of poultry,
             213      eggs, or dairy products to consumers if the sales have an average monthly sales value of $125 or


             214      more.
             215          (c) "Retail sale" does not include, and no additional sales or use tax shall be assessed
             216      against, those transactions where a purchaser of tangible personal property pays applicable sales
             217      or use taxes on its initial nonexempt purchases of property and then enters into a sale-leaseback
             218      transaction by which title to such property is transferred by the purchaser-lessee to a lessor for
             219      consideration, provided:
             220          (i) the transaction is intended as a form of financing for the property to the
             221      purchaser-lessee; and
             222          (ii) pursuant to generally accepted accounting principles, the purchaser-lessee is required
             223      to capitalize the subject property for financial reporting purposes, and account for the lease
             224      payments as payments made under a financing arrangement.
             225          (23) (a) "Retailer" means any person engaged in a regularly organized retail business in
             226      tangible personal property or any other taxable transaction under Subsection 59-12-103 (1), and
             227      who is selling to the user or consumer and not for resale.
             228          (b) "Retailer" includes commission merchants, auctioneers, and any person regularly
             229      engaged in the business of selling to users or consumers within the state.
             230          (c) "Retailer" does not include farmers, gardeners, stockmen, poultrymen, or other growers
             231      or agricultural producers producing and doing business on their own premises, except those who
             232      are regularly engaged in the business of buying or selling for a profit.
             233          (d) For purposes of this chapter the commission may regard as retailers the following if
             234      they determine it is necessary for the efficient administration of this chapter: salesmen,
             235      representatives, peddlers, or canvassers as the agents of the dealers, distributors, supervisors, or
             236      employers under whom they operate or from whom they obtain the tangible personal property sold
             237      by them, irrespective of whether they are making sales on their own behalf or on behalf of these
             238      dealers, distributors, supervisors, or employers, except that:
             239          (i) a printer's facility with which a retailer has contracted for printing shall not be
             240      considered to be a salesman, representative, peddler, canvasser, or agent of the retailer; and
             241          (ii) the ownership of property that is located at the premises of a printer's facility with
             242      which the retailer has contracted for printing and that consists of the final printed product, property
             243      that becomes a part of the final printed product, or copy from which the printed product is
             244      produced, shall not result in the retailer being deemed to have or maintain an office, distribution


             245      house, sales house, warehouse, service enterprise, or other place of business, or to maintain a stock
             246      of goods, within this state.
             247          (24) "Sale" means any transfer of title, exchange, or barter, conditional or otherwise, in any
             248      manner, of tangible personal property or any other taxable transaction under Subsection
             249      59-12-103 (1), for consideration. It includes:
             250          (a) installment and credit sales;
             251          (b) any closed transaction constituting a sale;
             252          (c) any sale of electrical energy, gas, services, or entertainment taxable under this chapter;
             253          (d) any transaction if the possession of property is transferred but the seller retains the title
             254      as security for the payment of the price; and
             255          (e) any transaction under which right to possession, operation, or use of any article of
             256      tangible personal property is granted under a lease or contract and the transfer of possession would
             257      be taxable if an outright sale were made.
             258          (25) (a) "Sales relating to schools" means sales by a public school district or public or
             259      private elementary or secondary school, grades kindergarten through 12, that are directly related
             260      to the school's or school district's educational functions or activities and include:
             261          (i) the sale of textbooks, textbook fees, laboratory fees, laboratory supplies, and safety
             262      equipment;
             263          (ii) the sale of clothing that:
             264          (A) a student is specifically required to wear as a condition of participation in a
             265      school-related event or activity; and
             266          (B) is not readily adaptable to general or continued usage to the extent that it takes the
             267      place of ordinary clothing;
             268          (iii) sales of food if the net or gross revenues generated by the food sales are deposited into
             269      a school district fund or school fund dedicated to school meals; and
             270          (iv) transportation charges for official school activities.
             271          (b) "Sales relating to schools" does not include:
             272          (i) gate receipts;
             273          (ii) special event admission fees;
             274          (iii) bookstore sales of items that are not educational materials or supplies; and
             275          (iv) except as provided in Subsection (25)(a)(ii), clothing.


             276          (26) "Senior citizen center" means a facility having the primary purpose of providing
             277      services to the aged as defined in Section 62A-3-101 .
             278          (27) "State" means the state of Utah, its departments, and agencies.
             279          (28) "Storage" means any keeping or retention of tangible personal property or any other
             280      taxable transaction under Subsection 59-12-103 (1), in this state for any purpose except sale in the
             281      regular course of business.
             282          (29) (a) "Tangible personal property" means:
             283          (i) all goods, wares, merchandise, produce, and commodities;
             284          (ii) all tangible or corporeal things and substances which are dealt in or capable of being
             285      possessed or exchanged;
             286          (iii) water in bottles, tanks, or other containers; and
             287          (iv) all other physically existing articles or things, including property severed from real
             288      estate.
             289          (b) "Tangible personal property" does not include:
             290          (i) real estate or any interest or improvements in real estate;
             291          (ii) bank accounts, stocks, bonds, mortgages, notes, and other evidence of debt;
             292          (iii) insurance certificates or policies;
             293          (iv) personal or governmental licenses;
             294          (v) water in pipes, conduits, ditches, or reservoirs;
             295          (vi) currency and coinage constituting legal tender of the United States or of a foreign
             296      nation; and
             297          (vii) all gold, silver, or platinum ingots, bars, medallions, or decorative coins, not
             298      constituting legal tender of any nation, with a gold, silver, or platinum content of not less than
             299      80%.
             300          (30) "Unsorted merchandise" means unsorted merchandise:
             301          (a) sold through a coin-operated vending machine that:
             302          (i) dispenses the merchandise at random; and
             303          (ii) does not allow a purchaser to select a particular item or type of item; and
             304          (b) includes:
             305          (i) food;
             306          (ii) candy;


             307          (iii) gum;
             308          (iv) toys; or
             309          (v) merchandise similar to Subsections (30)(b)(i) through (iv).
             310          [(30)] (31) (a) "Use" means the exercise of any right or power over tangible personal
             311      property under Subsection 59-12-103 (1), incident to the ownership or the leasing of that property,
             312      item, or service.
             313          (b) "Use" does not include the sale, display, demonstration, or trial of that property in the
             314      regular course of business and held for resale.
             315          [(31)] (32) "Vehicle" means any aircraft, as defined in Section 72-10-102 ; any vehicle, as
             316      defined in Section 41-1a-102 ; any off-highway vehicle, as defined in Section 41-22-2 ; and any
             317      vessel, as defined in Section 41-1a-102 ; that is required to be titled, registered, or both. "Vehicle"
             318      for purposes of Subsection 59-12-104 (36) only, also includes any locomotive, freight car, railroad
             319      work equipment, or other railroad rolling stock.
             320          [(32)] (33) "Vehicle dealer" means a person engaged in the business of buying, selling, or
             321      exchanging vehicles as defined in Subsection [(31)] (32).
             322          [(33)] (34) (a) "Vendor" means any person receiving any payment or consideration upon
             323      a sale of tangible personal property or any other taxable transaction under Subsection
             324      59-12-103 (1), or to whom the payment or consideration is payable.
             325          (b) "Vendor" does not mean a printer's facility described in Subsection (23)(d).
             326          Section 2. Section 59-12-104 is amended to read:
             327           59-12-104. Exemptions.
             328          The following sales and uses are exempt from the taxes imposed by this chapter:
             329          (1) sales of aviation fuel, motor fuel, and special fuel subject to a Utah state excise tax
             330      under Title 59, Chapter 13, Motor and Special Fuel Tax Act;
             331          (2) sales to the state, its institutions, and its political subdivisions; however, this exemption
             332      does not apply to sales of construction materials except:
             333          (a) construction materials purchased by or on behalf of institutions of the public education
             334      system as defined in Utah Constitution Article X, Section 2, provided the construction materials
             335      are clearly identified and segregated and installed or converted to real property which is owned by
             336      institutions of the public education system; and
             337          (b) construction materials purchased by the state, its institutions, or its political


             338      subdivisions which are installed or converted to real property by employees of the state, its
             339      institutions, or its political subdivisions;
             340          (3) (a) sales of food, beverage, [and] or dairy products from a vending [machines in which]
             341      machine if:
             342          (i) the proceeds of each sale do not exceed $1 [if]; and
             343          (ii) the vendor or operator of the vending machine reports an amount equal to 150% of the
             344      cost of [items] the food, beverage, or dairy products as goods consumed; or
             345          (b) sales of unsorted merchandise from a coin-operated vending machine if:
             346          (i) the proceeds of each sale do not exceed 50 cents; and
             347          (ii) the vendor or operator of the coin-operated vending machine reports an amount equal
             348      to 150% of the cost of the unsorted merchandise as goods consumed;
             349          (4) sales of food, beverage, dairy products, similar confections, and related services to
             350      commercial airline carriers for in-flight consumption;
             351          (5) sales of parts and equipment installed in aircraft operated by common carriers in
             352      interstate or foreign commerce;
             353          (6) sales of commercials, motion picture films, prerecorded audio program tapes or
             354      records, and prerecorded video tapes by a producer, distributor, or studio to a motion picture
             355      exhibitor, distributor, or commercial television or radio broadcaster;
             356          (7) sales of cleaning or washing of tangible personal property by a coin-operated laundry
             357      or dry cleaning machine;
             358          (8) (a) except as provided in Subsection (8)(b), sales made to or by religious or charitable
             359      institutions in the conduct of their regular religious or charitable functions and activities, if the
             360      requirements of Section 59-12-104.1 are fulfilled;
             361          (b) the exemption provided for in Subsection (8)(a) does not apply to the following sales,
             362      uses, leases, or rentals relating to the Olympic Winter Games of 2002 made to or by an
             363      organization exempt from federal income taxation under Section 501(c)(3), Internal Revenue
             364      Code:
             365          (i) retail sales of Olympic merchandise;
             366          (ii) except as provided in Subsection (51), admissions or user fees described in Subsection
             367      59-12-103 (1)(f);
             368          (iii) sales of accommodations and services as provided in Subsection 59-12-103 (1)(i),


             369      except for accommodations and services:
             370          (A) paid for in full by the Salt Lake Organizing Committee for the Olympic Winter Games
             371      of 2002;
             372          (B) exclusively used by:
             373          (I) an officer, a trustee, or an employee of the Salt Lake Organizing Committee for the
             374      Olympic Winter Games of 2002; or
             375          (II) a volunteer supervised by the Salt Lake Organizing Committee for the Olympic Winter
             376      Games of 2002; and
             377          (C) for which the Salt Lake Organizing Committee for the Olympic Winter Games of 2002
             378      does not receive reimbursement; or
             379          (iv) a lease or rental of a vehicle as defined in Section 41-1a-102 , except for a lease or
             380      rental of a vehicle:
             381          (A) paid for in full by the Salt Lake Organizing Committee for the Olympic Winter Games
             382      of 2002;
             383          (B) exclusively used by:
             384          (I) an officer, a trustee, or an employee of the Salt Lake Organizing Committee for the
             385      Olympic Winter Games of 2002; or
             386          (II) a volunteer supervised by the Salt Lake Organizing Committee for the Olympic Winter
             387      Games of 2002; and
             388          (C) for which the Salt Lake Organizing Committee for the Olympic Winter Games of 2002
             389      does not receive reimbursement;
             390          (9) sales of vehicles of a type required to be registered under the motor vehicle laws of this
             391      state which are made to bona fide nonresidents of this state and are not afterwards registered or
             392      used in this state except as necessary to transport them to the borders of this state;
             393          (10) sales of medicine;
             394          (11) sales or use of property, materials, or services used in the construction of or
             395      incorporated in pollution control facilities allowed by Sections 19-2-123 through 19-2-127 ;
             396          (12) sales of meals served by:
             397          (a) churches, charitable institutions, and institutions of higher education, if the meals are
             398      not available to the general public; and
             399          (b) inpatient meals provided at medical or nursing facilities;


             400          (13) isolated or occasional sales by persons not regularly engaged in business, except the
             401      sale of vehicles or vessels required to be titled or registered under the laws of this state in which
             402      case the tax is based upon:
             403          (a) the bill of sale or other written evidence of value of the vehicle or vessel being sold;
             404      or
             405          (b) in the absence of a bill of sale or other written evidence of value, the then existing fair
             406      market value of the vehicle or vessel being sold as determined by the commission;
             407          (14) (a) the following purchases or leases by a manufacturer on or after July 1, 1995:
             408          (i) machinery and equipment:
             409          (A) used in the manufacturing process;
             410          (B) having an economic life of three or more years; and
             411          (C) used:
             412          (I) to manufacture an item sold as tangible personal property; and
             413          (II) in new or expanding operations in a manufacturing facility in the state; and
             414          (ii) subject to the provisions of Subsection (14)(b), normal operating replacements that:
             415          (A) have an economic life of three or more years;
             416          (B) are used in the manufacturing process in a manufacturing facility in the state;
             417          (C) are used to replace or adapt an existing machine to extend the normal estimated useful
             418      life of the machine; and
             419          (D) do not include repairs and maintenance;
             420          (b) the rates for the exemption under Subsection (14)(a)(ii) are as follows:
             421          (i) beginning July 1, 1996, through June 30, 1997, 30% of the sale or lease described in
             422      Subsection (14)(a)(ii) is exempt;
             423          (ii) beginning July 1, 1997, through June 30, 1998, 60% of the sale or lease described in
             424      Subsection (14)(a)(ii) is exempt; and
             425          (iii) beginning July 1, 1998, 100% of the sale or lease described in Subsection (14)(a)(ii)
             426      is exempt;
             427          (c) for purposes of this Subsection (14), the commission shall by rule define the terms
             428      "new or expanding operations" and "establishment"; and
             429          (d) on or before October 1, 1991, and every five years after October 1, 1991, the
             430      commission shall:


             431          (i) review the exemptions described in Subsection (14)(a) and make recommendations to
             432      the Revenue and Taxation Interim Committee concerning whether the exemptions should be
             433      continued, modified, or repealed; and
             434          (ii) include in its report:
             435          (A) the cost of the exemptions;
             436          (B) the purpose and effectiveness of the exemptions; and
             437          (C) the benefits of the exemptions to the state;
             438          (15) sales of tooling, special tooling, support equipment, and special test equipment used
             439      or consumed exclusively in the performance of any aerospace or electronics industry contract with
             440      the United States government or any subcontract under that contract, but only if, under the terms
             441      of that contract or subcontract, title to the tooling and equipment is vested in the United States
             442      government as evidenced by a government identification tag placed on the tooling and equipment
             443      or by listing on a government-approved property record if a tag is impractical;
             444          (16) intrastate movements of:
             445          (a) freight by common carriers; and
             446          (b) passengers:
             447          (i) by taxicabs as described in SIC Code 4121 of the 1987 Standard Industrial
             448      Classification Manual of the federal Executive Office of the President, Office of Management and
             449      Budget; or
             450          (ii) transported by an establishment described in SIC Code 4111 of the 1987 Standard
             451      Industrial Classification Manual of the federal Executive Office of the President, Office of
             452      Management and Budget, if the transportation originates and terminates within a county of the
             453      first, second, or third class;
             454          (17) sales of newspapers or newspaper subscriptions;
             455          (18) tangible personal property, other than money, traded in as full or part payment of the
             456      purchase price, except that for purposes of calculating sales or use tax upon vehicles not sold by
             457      a vehicle dealer, trade-ins are limited to other vehicles only, and the tax is based upon:
             458          (a) the bill of sale or other written evidence of value of the vehicle being sold and the
             459      vehicle being traded in; or
             460          (b) in the absence of a bill of sale or other written evidence of value, the then existing fair
             461      market value of the vehicle being sold and the vehicle being traded in, as determined by the


             462      commission;
             463          (19) sprays and insecticides used to control insects, diseases, and weeds for commercial
             464      production of fruits, vegetables, feeds, seeds, and animal products, but not those sprays and
             465      insecticides used in the processing of the products;
             466          (20) (a) sales of tangible personal property used or consumed primarily and directly in
             467      farming operations, including sales of irrigation equipment and supplies used for agricultural
             468      production purposes, whether or not they become part of real estate and whether or not installed
             469      by farmer, contractor, or subcontractor, but not sales of:
             470          (i) machinery, equipment, materials, and supplies used in a manner that is incidental to
             471      farming, such as hand tools with a unit purchase price not in excess of $250, and maintenance and
             472      janitorial equipment and supplies;
             473          (ii) tangible personal property used in any activities other than farming, such as office
             474      equipment and supplies, equipment and supplies used in sales or distribution of farm products, in
             475      research, or in transportation; or
             476          (iii) any vehicle required to be registered by the laws of this state, without regard to the use
             477      to which the vehicle is put;
             478          (b) sales of hay;
             479          (21) exclusive sale of locally grown seasonal crops, seedling plants, or garden, farm, or
             480      other agricultural produce if sold by a producer during the harvest season;
             481          (22) purchases of food as defined in 7 U.S.C. Sec. 2012(g) under the Food Stamp Program,
             482      7 U.S.C. Sec. 2011 et seq.;
             483          (23) sales of nonreturnable containers, nonreturnable labels, nonreturnable bags,
             484      nonreturnable shipping cases, and nonreturnable casings to a manufacturer, processor, wholesaler,
             485      or retailer for use in packaging tangible personal property to be sold by that manufacturer,
             486      processor, wholesaler, or retailer;
             487          (24) property stored in the state for resale;
             488          (25) property brought into the state by a nonresident for his or her own personal use or
             489      enjoyment while within the state, except property purchased for use in Utah by a nonresident living
             490      and working in Utah at the time of purchase;
             491          (26) property purchased for resale in this state, in the regular course of business, either in
             492      its original form or as an ingredient or component part of a manufactured or compounded product;


             493          (27) property upon which a sales or use tax was paid to some other state, or one of its
             494      subdivisions, except that the state shall be paid any difference between the tax paid and the tax
             495      imposed by this part and Part 2, Local Sales and Use Tax Act, and no adjustment is allowed if the
             496      tax paid was greater than the tax imposed by this part and Part 2, Local Sales and Use Tax Act;
             497          (28) any sale of a service described in Subsections 59-12-103 (1)(b), (c), and (d) to a person
             498      for use in compounding a service taxable under the subsections;
             499          (29) purchases of supplemental foods as defined in 42 U.S.C. Sec. 1786(b)(14) under the
             500      special supplemental nutrition program for women, infants, and children established in 42 U.S.C.
             501      Sec. 1786;
             502          (30) beginning on July 1, 1999, through June 30, 2004, sales or leases of rolls, rollers,
             503      refractory brick, electric motors, or other replacement parts used in the furnaces, mills, or ovens
             504      of a steel mill described in SIC Code 3312 of the 1987 Standard Industrial Classification Manual
             505      of the federal Executive Office of the President, Office of Management and Budget;
             506          (31) sales of boats of a type required to be registered under Title 73, Chapter 18, State
             507      Boating Act, boat trailers, and outboard motors which are made to bona fide nonresidents of this
             508      state and are not thereafter registered or used in this state except as necessary to transport them to
             509      the borders of this state;
             510          (32) sales of tangible personal property to persons within this state that is subsequently
             511      shipped outside the state and incorporated pursuant to contract into and becomes a part of real
             512      property located outside of this state, except to the extent that the other state or political entity
             513      imposes a sales, use, gross receipts, or other similar transaction excise tax on it against which the
             514      other state or political entity allows a credit for taxes imposed by this chapter;
             515          (33) sales of aircraft manufactured in Utah if sold for delivery and use outside Utah where
             516      a sales or use tax is not imposed, even if the title is passed in Utah;
             517          (34) amounts paid for the purchase of telephone service for purposes of providing
             518      telephone service;
             519          (35) fares charged to persons transported directly by a public transit district created under
             520      the authority of Title 17A, Chapter 2, Part 10, Utah Public Transit District Act;
             521          (36) sales or leases of vehicles to, or use of vehicles by an authorized carrier;
             522          (37) (a) 45% of the sales price of any new manufactured home; and
             523          (b) 100% of the sales price of any used manufactured home;


             524          (38) sales relating to schools and fundraising sales;
             525          (39) sales or rentals of home medical equipment and supplies;
             526          (40) (a) sales to a ski resort of electricity to operate a passenger ropeway as defined in
             527      Section 72-11-102 ; and
             528          (b) the commission shall by rule determine the method for calculating sales exempt under
             529      Subsection (40)(a) that are not separately metered and accounted for in utility billings;
             530          (41) sales to a ski resort of:
             531          (a) snowmaking equipment;
             532          (b) ski slope grooming equipment; and
             533          (c) passenger ropeways as defined in Section 72-11-102 ;
             534          (42) sales of natural gas, electricity, heat, coal, fuel oil, or other fuels for industrial use;
             535          (43) sales or rentals of the right to use or operate for amusement, entertainment, or
             536      recreation a coin-operated amusement device as defined in Section 59-12-102 ;
             537          (44) sales of cleaning or washing of tangible personal property by a coin-operated car wash
             538      machine;
             539          (45) sales by the state or a political subdivision of the state, except state institutions of
             540      higher education as defined in Section 53B-3-102 , of:
             541          (a) photocopies; or
             542          (b) other copies of records held or maintained by the state or a political subdivision of the
             543      state; and
             544          (46) (a) amounts paid:
             545          (i) to a person providing intrastate transportation to an employer's employee to or from the
             546      employee's primary place of employment;
             547          (ii) by an:
             548          (A) employee; or
             549          (B) employer; and
             550          (iii) pursuant to a written contract between:
             551          (A) the employer; and
             552          (B) (I) the employee; or
             553          (II) a person providing transportation to the employer's employee; and
             554          (b) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the


             555      commission may for purposes of Subsection (46)(a) make rules defining what constitutes an
             556      employee's primary place of employment;
             557          (47) amounts paid for admission to an athletic event at an institution of higher education
             558      that is subject to the provisions of Title IX of the Education Amendments of 1972, 20 U.S.C. Sec.
             559      1681 et seq.;
             560          (48) sales of telephone service charged to a prepaid telephone calling card;
             561          (49) (a) sales of hearing aids; and
             562          (b) sales of hearing aid accessories;
             563          (50) (a) sales made to or by:
             564          (i) an area agency on aging; or
             565          (ii) a senior citizen center owned by a county, city, or town; or
             566          (b) sales made by a senior citizen center that contracts with an area agency on aging; and
             567          (51) (a) beginning on July 1, 2000, through June 30, 2002, amounts paid or charged as
             568      admission or user fees described in Subsection 59-12-103 (1)(f) relating to the Olympic Winter
             569      Games of 2002 if the amounts paid or charged are established by the Salt Lake Organizing
             570      Committee for the Olympic Winter Games of 2002 in accordance with requirements of the
             571      International Olympic Committee; and
             572          (b) the State Olympic Officer and the Salt Lake Organizing Committee for the Olympic
             573      Winter Games of 2002 shall make at least two reports during the 2000 interim:
             574          (i) to the:
             575          (A) Olympic Coordination Committee; and
             576          (B) Revenue and Taxation Interim Committee; and
             577          (ii) regarding the status of:
             578          (A) agreements relating to the funding of public safety services for the Olympic Winter
             579      Games of 2002;
             580          (B) agreements relating to the funding of services, other than public safety services, for
             581      the Olympic Winter Games of 2002;
             582          (C) other agreements relating to the Olympic Winter Games of 2002 as requested by the
             583      Olympic Coordination Committee or the Revenue and Taxation Interim Committee;
             584          (D) other issues as requested by the Olympic Coordination Committee or the Revenue and
             585      Taxation Interim Committee; or


             586          (E) a combination of Subsections (51)(b)(ii)(A) through (D).
             587          Section 3. Effective date.
             588          This act takes effect on July 1, 2001.




Legislative Review Note
    as of 2-14-01 8:02 AM


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

Office of Legislative Research and General Counsel


[Bill Documents][Bills Directory]