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S.B. 22 Enrolled
This act modifies the Revenue and Tax Code to provide for a reduction of motor and special
fuel taxes if the motor or special fuel is taxed by the Navajo Nation and to make technical
changes. The act authorizes agreements with the Navajo Nation related to administration
of motor and special fuels taxes. The act has an immediate effective date.
This act affects sections of Utah Code Annotated 1953 as follows:
AMENDS:
59-13-201, as last amended by Chapter 283, Laws of Utah 1999
59-13-204, as last amended by Chapter 258, Laws of Utah 2000
59-13-301, as last amended by Chapter 86, Laws of Utah 2000
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 59-13-201 is amended to read:
59-13-201. Rate -- Tax basis -- Exemptions -- Revenue deposited in the
Transportation Fund -- Restricted account for boating uses -- Refunds -- Reduction of tax
in limited circumstances.
(1) (a) A tax is imposed at the rate of 24-1/2 cents per gallon upon all motor fuel that is
sold, used, or received for sale or used in this state.
(b) A tax is imposed at the rate of 3/19 of the rate imposed under Subsection (1)(a),
rounded up to the nearest penny, upon all motor fuels that meet the definition of clean fuel in
Section 59-13-102 and are sold, used, or received for sale or use in this state.
(2) Any increase or decrease in tax rate applies to motor fuel that is imported to the state
or sold at refineries in the state on or after the effective date of the rate change.
(3) (a) No tax is imposed upon:
(i) motor fuel that is brought into and sold in this state in original packages as purely
interstate commerce sales;
(ii) motor fuel that is exported from this state if proof of actual exportation on forms
prescribed by the commission is made within 180 days after exportation;
(iii) motor fuel or components of motor fuel that is sold and used in this state and distilled
from coal, oil shale, rock asphalt, bituminous sand, or solid hydrocarbons located in this state; or
(iv) motor fuel that is sold to the United States government, this state, or the political
subdivisions of this state where sale and delivery is made in quantities of 750 gallons or more.
(b) For purposes of this subsection, the state and its political subdivisions may make
collective purchases for purposes of meeting the 750 gallon requirement, and the state and political
subdivisions may provide for this purchase in any manner approved by the commission.
(4) The commission may either collect no tax on motor fuel exported from the state or, upon
application, refund the tax paid.
(5) (a) All revenue received by the commission under this part shall be deposited daily with
the state treasurer and credited to the Transportation Fund.
(b) An appropriation from the Transportation Fund shall be made to the commission to cover
expenses incurred in the administration and enforcement of this part and the collection of the motor
fuel tax.
(6) (a) The commission shall determine what amount of motor fuel tax revenue is received
from the sale or use of motor fuel used in motorboats registered under the provisions of the State
Boating Act, and this amount shall be deposited in a restricted revenue account in the General Fund
of the state.
(b) The funds from this account shall be used for the construction, improvement, operation,
and maintenance of state-owned boating facilities and for the payment of the costs and expenses of
the Division of Parks and Recreation in administering and enforcing the State Boating Act.
(7) (a) The United States government or any of its instrumentalities, this state, or a political
subdivision of this state that has purchased motor fuel from a licensed distributor or from a retail
dealer of motor fuel and has paid the tax on the motor fuel as provided in this section is entitled to
a refund of the tax and may file with the commission for a quarterly refund.
(b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
commission shall make rules governing the application and refund provided for in Subsection (7)(a).
(8) (a) The commission shall refund annually into the Off-Highway Vehicle Account in the
General Fund an amount equal to the lesser of the following:
(i) .5% of the motor fuel tax revenues collected under this section; or
(ii) $850,000.
(b) This amount shall be used as provided in Section 41-22-19 .
(c) This Subsection (8) sunsets on July 1, 2010.
(9) (a) Beginning on April 1, 2001, a tax imposed under this section on motor fuel that is
sold, used, or received for sale or use in this state is reduced to the extent provided in Subsection
(9)(b) if:
(i) a tax imposed on the basis of the sale, use, or receipt for sale or use of the motor fuel is
paid to the Navajo Nation;
(ii) the tax described in Subsection (9)(a)(i) is imposed without regard to whether or not the
person required to pay the tax is an enrolled member of the Navajo Nation; and
(iii) the commission and the Navajo Nation execute and maintain an agreement as provided
in this Subsection (9) for the administration of the reduction of tax.
(b) (i) If but for Subsection (9)(a) the motor fuel is subject to a tax imposed by this section:
(A) the state shall be paid the difference described in Subsection (9)(b)(ii) if that difference
is greater than $0; and
(B) a person may not require the state to provide a refund, a credit, or similar tax relief if the
difference described in Subsection (9)(b)(ii) is less than or equal to $0.
(ii) The difference described in Subsection (9)(b)(i) is equal to the difference between:
(A) the amount of tax imposed on the motor fuel by this section; less
(B) the tax imposed and collected by the Navajo Nation on the motor fuel.
(c) For purposes of Subsections (9)(a) and (b), the tax paid to the Navajo Nation under a tax
imposed by the Navajo Nation on the basis of the sale, use, or receipt for sale or use of motor fuel
does not include any interest or penalties a taxpayer may be required to pay to the Navajo Nation.
(d) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
commission shall make rules governing the procedures for administering the reduction of tax
provided under this Subsection (9).
(e) The agreement required under Subsection (9)(a):
(i) may not:
(A) authorize the state to impose a tax in addition to a tax imposed under this chapter;
(B) provide a reduction of taxes greater than or different from the reduction described in this
Subsection (9); or
(C) affect the power of the state to establish rates of taxation;
(ii) shall:
(A) be in writing;
(B) be signed by:
(I) the chair of the commission or the chair's designee; and
(II) a person designated by the Navajo Nation that may bind the Navajo Nation;
(C) be conditioned on obtaining any approval required by federal law;
(D) state the effective date of the agreement; and
(E) state any accommodation the Navajo Nation makes related to the construction and
maintenance of state highways and other infrastructure within the Utah portion of the Navajo Nation;
and
(iii) may:
(A) notwithstanding Section 59-1-403 , authorize the commission to disclose to the Navajo
Nation information that is:
(I) contained in a document filed with the commission; and
(II) related to the tax imposed under this section;
(B) provide for maintaining records by the commission or the Navajo Nation; or
(C) provide for inspections or audits of distributors, carriers, or retailers located or doing
business within the Utah portion of the Navajo Nation.
(f) (i) If, on or after April 1, 2001, the Navajo Nation changes the tax rate of a tax imposed
on motor fuel, any change in the reduction of taxes under this Subsection (9) as a result of the change
in the tax rate is not effective until the first day of the calendar quarter after a 60-day period
beginning on the date the commission receives notice:
(A) from the Navajo Nation; and
(B) meeting the requirements of Subsection (9)(f)(ii).
(ii) The notice described in Subsection (9)(f)(i) shall state:
(A) that the Navajo Nation has changed or will change the tax rate of a tax imposed on motor
fuel;
(B) the effective date of the rate change of the tax described in Subsection (9)(f)(ii)(A); and
(C) the new rate of the tax described in Subsection (9)(f)(ii)(A).
(g) If the agreement required by Subsection (9)(a) terminates, a reduction of tax is not
permitted under this Subsection (9) beginning on the first day of the calender quarter after a 30-day
period beginning on the day the agreement terminates.
(h) If there is a conflict between this Subsection (9) and the agreement required by
Subsection (9)(a), this Subsection (9) governs.
Section 2. Section 59-13-204 is amended to read:
59-13-204. Distributors liable for tax -- Computations -- Exceptions -- Assumption of
liability statements -- Motor fuel received -- Tax to be added to price of motor fuel.
(1) Distributors licensed under this part who receive motor fuel are liable for the tax as
provided by this part, and shall report the receipt of the motor fuel to the commission and pay the
tax as prescribed.
(2) (a) Distributors shall compute the tax on the total taxable amount of motor fuel produced,
purchased, received, imported, or refined in this state, and all distributors shipping motor fuels into
this state shall compute the tax on the total taxable amount of motor fuels received for sale or use
in this state.
(b) All motor fuel distributed by any distributor to the distributor's branches within this state
is considered to be sold at the time of this distribution and is subject to this part as if actually sold.
(c) Distributors licensed under this part may sell motor fuel to other licensed distributors
without the payment or collection of the tax, if the purchasing distributor furnishes the seller with
an assumption of liability statement indicating the purchasing distributor is a licensed and bonded
Utah motor fuel distributor and will assume the Utah motor fuel tax responsibility on all motor fuel
purchased from the seller. The seller shall report each sale to the commission in a monthly report of
sales as provided under Section 59-13-206 .
(3) If motor fuels have been purchased outside of this state and brought into this state in
original packages from a distributor for the use of the consumer, then the tax shall be imposed when
the motor fuel is received.
(4) (a) Every distributor and retail dealer of motor fuels shall add the amount of the taxes
levied and assessed by this part to the price of the motor fuels.
(b) This Subsection (4) in no way affects the method of the collection of the taxes as
specified in this part.
(c) Notwithstanding Subsection (4)(a), if the Ute tribe may receive a refund under Section
59-13-201.5 , the Ute tribe is not required to add the amount of the taxes levied and assessed by this
part to the price of motor fuel that is purchased:
(i) by a Ute tribal member; and
(ii) at a retail station:
(A) wholly owned by the Ute tribe; and
(B) located on Ute trust land.
(d) For purposes of Subsection (4)(a), the amount of taxes levied and assessed by this part
do not include the amount of the reduction of tax under Subsection 59-3-201 (9).
Section 3. Section 59-13-301 is amended to read:
59-13-301. Tax basis -- Rate -- Exemptions -- Revenue deposited with treasurer and
credited to Transportation Fund -- Reduction of tax in limited circumstances.
(1) (a) Except as provided in Subsections (2) [
tax is imposed at the same rate imposed under Subsection 59-13-201 (1)(a) on the:
(i) removal of undyed diesel fuel from any refinery;
(ii) removal of undyed diesel fuel from any terminal;
(iii) entry into the state of any undyed diesel fuel for consumption, use, sale, or warehousing;
(iv) sale of undyed diesel fuel to any person who is not registered as a supplier under this
part unless the tax has been collected under this section;
(v) any untaxed special fuel blended with undyed diesel fuel; or
(vi) use of untaxed special fuel, other than a clean special fuel.
(b) The tax imposed under this section shall only be imposed once upon any special fuel.
(2) (a) No special fuel tax is imposed or collected upon dyed diesel fuel which:
(i) is sold or used for any purpose other than to operate or propel a motor vehicle upon the
public highways of the state, but this exemption applies only in those cases where the purchasers or
the users of special fuel establish to the satisfaction of the commission that the special fuel was used
for purposes other than to operate a motor vehicle upon the public highways of the state; or
(ii) is sold to this state or any of its political subdivisions.
(b) No special fuel tax is imposed on undyed diesel fuel which:
(i) is sold to the United States government or any of its instrumentalities or to this state or
any of its political subdivisions;
(ii) is exported from this state if proof of actual exportation on forms prescribed by the
commission is made within 180 days after exportation;
(iii) is used in a vehicle off-highway;
(iv) is used to operate a power take-off unit of a vehicle;
(v) is used for off-highway agricultural uses;
(vi) is used in a separately fueled engine on a vehicle that does not propel the vehicle upon
the highways of the state; or
(vii) is used in machinery and equipment not registered and not required to be registered for
highway use.
(3) No tax is imposed or collected on special fuel if it is:
(a) purchased for business use in machinery and equipment not registered and not required
to be registered for highway use; and
(b) used pursuant to the conditions of a state implementation plan approved under Title 19,
Chapter 2, Air Conservation Act.
(4) Upon request of a buyer meeting the requirements under Subsection (3), the Division of
Air Quality shall issue an exemption certificate that may be shown to a seller.
(5) The special fuel tax shall be paid by the supplier.
(6) (a) The special fuel tax shall be paid by every user who is required by Sections 59-13-303
and 59-13-305 to obtain a special fuel permit and file special fuel tax reports.
(b) The user shall receive a refundable credit for special fuel taxes paid on purchases which
are delivered into vehicles and for which special fuel tax liability is reported.
(7) (a) All revenue received by the commission from taxes and license fees under this part
shall be deposited daily with the state treasurer and credited to the Transportation Fund.
(b) An appropriation from the Transportation Fund shall be made to the commission to cover
expenses incurred in the administration and enforcement of this part and the collection of the special
fuel tax.
(8) The commission may either collect no tax on special fuel exported from the state or,
upon application, refund the tax paid.
(9) (a) The United States government or any of its instrumentalities, this state, or a political
subdivision of this state that has purchased special fuel from a supplier or from a retail dealer of
special fuel and has paid the tax on the special fuel as provided in this section is entitled to a refund
of the tax and may file with the commission for a quarterly refund in a manner prescribed by the
commission.
(b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
commission shall make rules governing the application and refund provided for in Subsection (9)(a).
(10) (a) The purchaser shall pay the tax on diesel fuel purchased for uses under Subsections
(2)(b)(i), (iii), (iv), (v), (vi), and (vii) and apply for a refund for the tax paid as provided in
Subsections (9) and (10).
(b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
commission shall make rules governing the application and refund for off-highway and nonhighway
uses provided under Subsections (2)(b)(iii), (iv), (vi), and (vii).
(c) A refund of tax paid under this part on diesel fuel used for nonhighway agricultural uses
shall be made in accordance with the tax return procedures under Section 59-13-202 .
(11) (a) Beginning on April 1, 2001, a tax imposed under this section on special fuel is
reduced to the extent provided in Subsection (11)(b) if:
(i) the Navajo Nation imposes a tax on the special fuel;
(ii) the tax described in Subsection (11)(a)(i) is imposed without regard to whether the
person required to pay the tax is an enrolled member of the Navajo Nation; and
(iii) the commission and the Navajo Nation execute and maintain an agreement as provided
in this Subsection (11) for the administration of the reduction of tax.
(b) (i) If but for Subsection (11)(a) the special fuel is subject to a tax imposed by this section:
(A) the state shall be paid the difference described in Subsection (11)(b)(ii) if that difference
is greater than $0; and
(B) a person may not require the state to provide a refund, a credit, or similar tax relief if the
difference described in Subsection (11)(b)(ii) is less than or equal to $0.
(ii) The difference described in Subsection (11)(b)(i) is equal to the difference between:
(A) the amount of tax imposed on the special fuel by this section; less
(B) the tax imposed and collected by the Navajo Nation on the special fuel.
(c) For purposes of Subsections (11)(a) and (b), the tax paid to the Navajo Nation on the
special fuel does not include any interest or penalties a taxpayer may be required to pay to the Navajo
Nation.
(d) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
commission shall make rules governing the procedures for administering the reduction of tax
provided under this Subsection (11).
(e) The agreement required under Subsection (11)(a):
(i) may not:
(A) authorize the state to impose a tax in addition to a tax imposed under this chapter;
(B) provide a reduction of taxes greater than or different from the reduction described in this
Subsection (11); or
(C) affect the power of the state to establish rates of taxation;
(ii) shall:
(A) be in writing;
(B) be signed by:
(I) the chair of the commission or the chair's designee; and
(II) a person designated by the Navajo Nation that may bind the Navajo Nation;
(C) be conditioned on obtaining any approval required by federal law;
(D) state the effective date of the agreement; and
(E) state any accommodation the Navajo Nation makes related to the construction and
maintenance of state highways and other infrastructure within the Utah portion of the Navajo Nation;
and
(iii) may:
(A) notwithstanding Section 59-1-403 , authorize the commission to disclose to the Navajo
Nation information that is:
(I) contained in a document filed with the commission; and
(II) related to the tax imposed under this section;
(B) provide for maintaining records by the commission or the Navajo Nation; or
(C) provide for inspections or audits of suppliers, distributors, carriers, or retailers located
or doing business within the Utah portion of the Navajo Nation.
(f) (i) If, on or after April 1, 2001, the Navajo Nation changes the tax rate of a tax imposed
on special fuel, any change in the amount of the reduction of taxes under this Subsection (11) as a
result of the change in the tax rate is not effective until the first day of the calendar quarter after a
60-day period beginning on the date the commission receives notice:
(A) from the Navajo Nation; and
(B) meeting the requirements of Subsection (11)(f)(ii).
(ii) The notice described in Subsection (11)(f)(i) shall state:
(A) that the Navajo Nation has changed or will change the tax rate of a tax imposed on
special fuel;
(B) the effective date of the rate change of the tax described in Subsection (11)(f)(ii)(A); and
(C) the new rate of the tax described in Subsection (11)(f)(ii)(A).
(g) If the agreement required by Subsection (11)(a) terminates, a reduction of tax is not
permitted under this Subsection (11) beginning on the first day of the calender quarter after a 30-day
period beginning on the day the agreement terminates.
(h) If there is a conflict between this Subsection (11) and the agreement required by
Subsection (11)(a), this Subsection (11) governs.
Section 4. Effective date.
If approved by two-thirds of all the members elected to each house, this act takes effect upon
approval by the governor, or the day following the constitutional time limit of Utah Constitution
Article VII, Section 8, without the governor's signature, or in the case of a veto, the date of veto
override.
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