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S.B. 228

             1     

SALES AND USE TAX FOR COMMUNITY

             2     
DEVELOPMENT

             3     
2001 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Sponsor: Pete Suazo

             6      This act modifies the Sales and Use Tax Act to expand the purposes of the tourism,
             7      recreation, cultural, and convention facilities tax to include affordable housing, to change
             8      the name of the tax, and to make technical and conforming amendments.
             9      This act affects sections of Utah Code Annotated 1953 as follows:
             10      AMENDS:
             11          59-1-302, as last amended by Chapter 107, Laws of Utah 1994
             12          59-12-601, as last amended by Chapter 265, Laws of Utah 1991
             13          59-12-602, as last amended by Chapter 248, Laws of Utah 1995
             14          59-12-603, as last amended by Chapter 319, Laws of Utah 2000
             15      Be it enacted by the Legislature of the state of Utah:
             16          Section 1. Section 59-1-302 is amended to read:
             17           59-1-302. Penalty for nonpayment of sales, use, withholding, or fuels taxes --
             18      Jeopardy proceedings.
             19          (1) [The provisions of this] This section [apply] applies to the following taxes in this title:
             20          (a) [state and local] S [ sales and use ] s [tax] taxes collected by the commission under
             20a      Chapter
             21      12[, Parts 1 and 2];
             22          [(b) transient room tax under Chapter 12, Part 3;]
             23          [(c) resort communities tax under Chapter 12, Part 4;]
             24          [(d) public transit tax under Chapter 12, Part 5;]
             25          [(e) tourism, recreation, cultural, and convention facilities tax under Chapter 12, Part 6;]
             26          [(f)] (b) motor fuel, clean fuel, special fuel, and aviation fuel taxes under Chapter 13, Parts
             27      2, 3, and 4; [and] or


             28          [(g)] (c) withholding tax under Chapter 10, Part 4.
             29          (2) Any person required to collect, truthfully account for, and pay over any tax listed in
             30      Subsection (1) who willfully fails to collect the tax, fails to truthfully account for and pay over the
             31      tax, or attempts in any manner to evade or defeat any tax or the payment of the tax, shall be liable
             32      for a penalty equal to the total amount of the tax evaded, not collected, not accounted for, or not
             33      paid over. This penalty is in addition to other penalties provided by law.
             34          (3) (a) If the commission determines in accordance with Subsection (2) that a person is
             35      liable for the penalty, the commission shall notify the taxpayer of the proposed penalty.
             36          (b) The notice of proposed penalty shall:
             37          (i) set forth the basis of the assessment; and
             38          (ii) be mailed by registered mail, postage prepaid, to the person's last-known address.
             39          (4) Upon receipt of the notice of proposed penalty, the person against whom the penalty
             40      is proposed may:
             41          (a) pay the amount of the proposed penalty at the place and time stated in the notice; or
             42          (b) proceed in accordance with the review procedures of Subsection (5).
             43          (5) Any person against whom a penalty has been proposed in accordance with Subsections
             44      (2) and (3) may contest the proposed penalty by filing a petition for an adjudicative proceeding
             45      with the commission.
             46          (6) If the commission determines that the collection of the penalty is in jeopardy, nothing
             47      in this section may prevent the immediate collection of the penalty in accordance with the
             48      procedures and requirements for emergency proceedings in Title 63, Chapter 46b, Administrative
             49      Procedures Act.
             50          (7) (a) In any hearing before the commission and in any judicial review of the hearing, the
             51      commission and the court shall consider any inference and evidence that a person has willfully
             52      failed to collect, truthfully account for, or pay over any tax listed in Subsection (1).
             53          (b) It is prima facie evidence that a person has willfully failed to collect, truthfully account
             54      for, or pay over any of the taxes listed in Subsection (1) if the commission or a court finds that the
             55      person charged with the responsibility of collecting, accounting for, or paying over the taxes:
             56          (i) made a voluntary, conscious, and intentional decision to prefer other creditors over the
             57      state government or utilize the tax money for personal purposes;
             58          (ii) recklessly disregarded obvious or known risks, which resulted in the failure to collect,


             59      account for, or pay over the tax; or
             60          (iii) failed to investigate or to correct mismanagement, having notice that the tax was not
             61      or is not being collected, accounted for, or paid over as provided by law.
             62          (c) The commission or court need not find a bad motive or specific intent to defraud the
             63      government or deprive it of revenue to establish willfulness under this section.
             64          (d) If the commission determines that a person is liable for the penalty under Subsection
             65      (2), the commission shall assess the penalty and give notice and demand for payment. The notice
             66      and demand for payment shall be mailed by registered mail, postage prepaid, to the person's
             67      last-known address.
             68          Section 2. Section 59-12-601 is amended to read:
             69           59-12-601. Purpose statement.
             70          (1) The Utah Legislature finds and declares that:
             71          (a) the development of tourism, recreation, cultural, [and] convention facilities, and
             72      affordable housing throughout Utah is necessary to insure continued growth in the tourism,
             73      recreation, and convention industry and in community development in Utah;
             74          (b) [modern and] state-of-the-art tourism, recreation, cultural, and convention facilities
             75      [would] attract tourists, recreation, and convention business in a substantially greater amount than
             76      facilities that are obsolete or do not [otherwise] fill the needs of such business;
             77          (c) available sources of assistance and capital in the individual counties are inadequate [by
             78      themselves] without state assistance to assure necessary development of tourism, recreation,
             79      cultural, [and] convention facilities, and affordable housing;
             80          (d) other states have programs of aid to their political subdivisions to foster the
             81      development of tourism, recreation, cultural, [and] convention facilities, and affordable housing;
             82      and
             83          (e) fostering the development of tourism, recreation, cultural, [and] convention facilities,
             84      and affordable housing is a state purpose affecting the welfare of all state citizens and the growth
             85      of the economy statewide.
             86          (2) It is therefore the purpose of this part that the state provide a means to foster the
             87      development of tourism, recreation, cultural, [and] convention facilities [in order], and affordable
             88      housing to further the welfare of the citizens of the state and its economic growth.
             89          Section 3. Section 59-12-602 is amended to read:


             90           59-12-602. Definitions.
             91          As used in this part:
             92          (1) "Affordable housing" is as defined in Section 11-38-102 .
             93          [(1)] (2) "Convention facility" means [any] a publicly owned or operated convention
             94      center, sports arena, or other facility:
             95          (a) at which conventions, conferences, and other gatherings are held; and
             96          (b) whose primary business or function is to host such conventions, conferences, and other
             97      gatherings.
             98          [(2)] (3) "Cultural facility" means any publicly owned or operated:
             99          (a) museum[,];
             100          (b) theater[,];
             101          (c) art center[,];
             102          (d) music hall[,]; or
             103          (e) other cultural or arts facility.
             104          [(3)] (4) "Recreation facility" or "tourist facility" means any publicly owned or operated:
             105          (a) park[,];
             106          (b) campground[,];
             107          (c) marina[,];
             108          (d) dock[,];
             109          (e) golf course[,];
             110          (f) water park[,];
             111          (g) historic park[,];
             112          (h) monument[,];
             113          (i) planetarium[,];
             114          (j) zoo[,];
             115          (k) bicycle trails[, and]; or
             116          (l) other recreation or tourism-related facility.
             117          [(4)] (5) (a) "Restaurant" includes any coffee shop, cafeteria, luncheonette, soda fountain,
             118      or fast-food service where food is prepared for immediate consumption.
             119          (b) "Restaurant" does not include:
             120          (i) any retail establishment [whose], the primary business or function of which is the sale


             121      of fuel or food items for off-premise, but not immediate, consumption; [and] or
             122          (ii) a theater that sells food items, but not a dinner theater.
             123          Section 4. Section 59-12-603 is amended to read:
             124           59-12-603. County tax -- Bases -- Rates -- Ordinance required -- Collection --
             125      Administration -- Distribution -- Imposition of tax -- Tax rate change -- Effective date --
             126      Notice requirements.
             127          (1) In addition to any other taxes, a county legislative body may, as provided in this part,
             128      impose a [tourism, recreation, cultural, and convention] community development tax as follows:
             129          (a) (i) a county legislative body of any county may impose a tax of not to exceed 3% on
             130      all short-term leases and rentals of motor vehicles not exceeding 30 days, except for leases and
             131      rentals of motor vehicles made for the purpose of temporarily replacing a person's motor vehicle
             132      that is being repaired pursuant to a repair or an insurance agreement;
             133          (ii) beginning on or after January 1, 1999, a county legislative body of any county
             134      imposing a tax under Subsection (1)(a)(i) may, in addition to imposing the tax under Subsection
             135      (1)(a)(i), impose a tax of not to exceed 4% on all short-term leases and rentals of motor vehicles
             136      not exceeding 30 days, except for leases and rentals of motor vehicles made for the purpose of
             137      temporarily replacing a person's motor vehicle that is being repaired pursuant to a repair or an
             138      insurance agreement;
             139          (b) a county legislative body of any county may impose a tax of not to exceed 1% of all
             140      sales of prepared foods and beverages that are sold by restaurants; and
             141          (c) a county legislative body of any county may impose a tax of not to exceed 1/2% of the
             142      rent for every occupancy of a suite, room, or rooms on all persons, companies, corporations, or
             143      other similar persons, groups, or organizations doing business as motor courts, motels, hotels, inns,
             144      or similar public accommodations.
             145          (2) The revenue from the imposition of the taxes provided for in Subsections (1)(a)
             146      through (c) may be used for the purposes of financing[, in whole or in part,]:
             147          (a) tourism promotion[, and];
             148          (b) the development, operation, and maintenance of:
             149          (i) a tourist[,] facility;
             150          (ii) recreation[,] facility;
             151          (iii) a cultural[, and] facility; or


             152          (iv) a convention [facilities as defined in Section 59-12-602 .] facility; or
             153          (c) affordable housing.
             154          (3) The tax imposed under Subsection (1)(c) shall be in addition to the transient room tax
             155      imposed under Part 3, Transient Room Tax, and may be imposed only by a county of the first class.
             156          (4) (a) A tax imposed under this part shall be levied at the same time and collected in the
             157      same manner as provided in Part 2, Local Sales and Use Tax Act, except that the collection and
             158      distribution of the tax revenue is not subject to the provisions of Subsection 59-12-205 (2).
             159          (b) A tax imposed under this part may be pledged as security for bonds, notes, or other
             160      evidences of indebtedness incurred by a county under Title 11, Chapter 14, Utah Municipal Bond
             161      Act, to finance [tourism,]:
             162          (i) a tourist facility;
             163          (ii) a recreation[,] facility;
             164          (iii) a cultural[,] facility; and
             165          (iv) a convention [facilities.] facility; or
             166          (v) affordable housing.
             167          (5) (a) In order to impose the tax under Subsection (1), each county legislative body shall
             168      annually adopt an ordinance imposing the tax.
             169          (b) (i) The ordinance under Subsection (5)(a) shall include provisions substantially the
             170      same as those contained in Part 1, Tax Collection, except that the tax shall be imposed only on
             171      those items and sales described in Subsection (1).
             172          (ii) A county legislative body imposing a tax under this part shall impose the tax as
             173      provided in this section on the leases, rentals, and sales described in Subsection (1) relating to the
             174      Olympic Winter Games of 2002 made to or by an organization exempt from federal income
             175      taxation under Section 501(c)(3), Internal Revenue Code, except for leases, rentals, and sales
             176      described in Subsection (1):
             177          (A) paid for in full by the Salt Lake Organizing Committee for the Olympic Winter Games
             178      of 2002;
             179          (B) exclusively used by:
             180          (I) an officer, a trustee, or an employee of the Salt Lake Organizing Committee for the
             181      Olympic Winter Games of 2002; or
             182          (II) a volunteer supervised by the Salt Lake Organizing Committee for the Olympic Winter


             183      Games of 2002; and
             184          (C) for which the Salt Lake Organizing Committee for the Olympic Winter Games of 2002
             185      does not receive reimbursement.
             186          (c) The name of the county as the taxing agency shall be substituted for that of the state
             187      where necessary, and an additional license is not required if one has been or is issued under
             188      Section 59-12-106 .
             189          (6) [In order to] To maintain in effect [its] a tax ordinance adopted under this part, [each]
             190      a county legislative body shall, within 30 days of any amendment of any applicable provisions of
             191      Part 1, Tax Collection, adopt amendments to its tax ordinance to conform with the applicable
             192      amendments to Part 1, Tax Collection.
             193          (7) The commission shall:
             194          (a) administer, collect, and enforce the tax authorized under this part pursuant to:
             195          (i) the same procedures used to administer, collect, and enforce the sales and use tax under
             196      Part 1, Tax Collection; and
             197          (ii) Chapter 1, General Taxation Policies;
             198          (b) (i) except as provided in Subsection (7)(c), for a tax under this part other than the tax
             199      under Subsection (1)(a)(ii), distribute the revenues to the county imposing the tax; and
             200          (ii) except as provided in Subsection (7)(c), for a tax under Subsection (1)(a)(ii), distribute
             201      the revenues according to the distribution formula provided in Subsection (8); and
             202          (c) deduct from the distributions under Subsection (7)(b) an administrative charge for
             203      collecting the tax as provided in Section 59-12-206 .
             204          (8) The commission shall distribute the revenues generated by the tax under Subsection
             205      (1)(a)(ii) to each county collecting a tax under Subsection (1)(a)(ii) according to the following
             206      formula:
             207          (a) the commission shall distribute 70% of the revenues based on the percentages
             208      generated by dividing the revenues collected by each county under Subsection (1)(a)(ii) by the total
             209      revenues collected by all counties under Subsection (1)(a)(ii); and
             210          (b) the commission shall distribute 30% of the revenues based on the percentages
             211      generated by dividing the population of each county collecting a tax under Subsection (1)(a)(ii)
             212      by the total population of all counties collecting a tax under Subsection (1)(a)(ii).
             213          (9) (a) For purposes of this Subsection (9):


             214          (i) "Annexation" means an annexation to a county under Title 17, Chapter 2, Annexation
             215      to County.
             216          (ii) "Annexing area" means an area that is annexed into a county.
             217          (b) (i) If, on or after May 1, 2000, a county enacts or repeals a tax or changes the rate of
             218      a tax under this part, the enactment, repeal, or change shall take effect:
             219          (A) on the first day of a calendar quarter; and
             220          (B) after a 75-day period beginning on the date the commission receives notice meeting
             221      the requirements of Subsection (9)(b)(ii) from the county.
             222          (ii) The notice described in Subsection (9)(b)(i)(B) shall state:
             223          (A) that the county will enact or repeal a tax or change the rate of a tax under this part;
             224          (B) the statutory authority for the tax described in Subsection (9)(b)(ii)(A);
             225          (C) the effective date of the tax described in Subsection (9)(b)(ii)(A); and
             226          (D) if the county enacts the tax or changes the rate of the tax described in Subsection
             227      (9)(b)(ii)(A), the new rate of the tax.
             228          (c) (i) If, for an annexation that occurs on or after May 1, 2000, the annexation will result
             229      in a change in the rate of a tax under this part for an annexing area, the change shall take effect:
             230          (A) on the first day of a calendar quarter; and
             231          (B) after a 75-day period beginning on the date the commission receives notice meeting
             232      the requirements of Subsection (9)(c)(ii) from the county that annexes the annexing area.
             233          (ii) The notice described in Subsection (9)(c)(i)(B) shall state:
             234          (A) that the annexation described in Subsection (9)(c)(i) will result in a change in the rate
             235      of a tax under this part for the annexing area;
             236          (B) the statutory authority for the tax described in Subsection (9)(c)(ii)(A);
             237          (C) the effective date of the tax described in Subsection (9)(c)(ii)(A); and
             238          (D) the new rate of the tax described in Subsection (9)(c)(ii)(A).




Legislative Review Note
    as of 2-14-01 10:22 AM


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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