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H.B. 27 Enrolled

             1     

SALES AND USE TAX MODIFICATIONS

             2     
2007 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Ben C. Ferry

             5     
Senate Sponsor: Howard A. Stephenson

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill amends the Sales and Use Tax Act and related provisions.
             10      Highlighted Provisions:
             11          This bill:
             12          .    modifies definitions;
             13          .    addresses the tax rates at which a seller that does not have sufficient contacts with
             14      the state to be required to collect and remit sales and use taxes may voluntarily
             15      collect and remit sales and use taxes on:
             16              .    food and food ingredients; or
             17              .    a bundled transaction attributable to food and food ingredients and tangible
             18      personal property other than food and food ingredients;
             19          .    addresses the effective dates of sales and use tax repeals, changes, or increases for
             20      certain taxes and transactions;
             21          .    addresses the distribution of the local taxes that are voluntarily collected and
             22      remitted by a seller that does not have sufficient contacts with the state to be
             23      required to collect and remit sales and use taxes;
             24          .    addresses the revenues to be deposited into the:
             25              .    Centennial Highway Fund Restricted Account; and
             26              .    Transportation Investment Fund of 2005;
             27          .    addresses the calculation of the credit for certain repossessions of a motor vehicle;
             28          .    addresses the calculation of the amount a seller that collects and remits sales and
             29      use taxes on a monthly basis may retain;


             30          .    provides that the portion of the tax under the Tourism, Recreation, Cultural, and
             31      Convention Facilities Tax part, that is imposed on sales by restaurants, is imposed
             32      on sales of prepared food and food and food ingredients;
             33          .    modifies an appropriation to the State Tax Commission to provide that:
             34              .    in addition to other purposes allowed in the appropriation language, monies may
             35      be expended to reimburse certain business locations for expenditures to pay for
             36      in-house programming to account for sales under the reduced sales and use tax
             37      rate imposed on food and food ingredients; and
             38              .    the deadline for a business location to submit a request for reimbursement to the
             39      State Tax Commission is extended from before January 1, 2007, to before April
             40      1, 2007; and
             41          .    makes technical changes.
             42      Monies Appropriated in this Bill:
             43          None
             44      Other Special Clauses:
             45          This bill provides an immediate effective date and provides for retrospective operation.
             46      Utah Code Sections Affected:
             47      AMENDS:
             48          10-1-405, as last amended by Chapter 253, Laws of Utah 2006
             49          11-41-102, as last amended by Chapter 282, Laws of Utah 2006
             50          59-12-102, as last amended by Chapter 1, Laws of Utah 2006, Fourth Special Session
             51          59-12-103, as last amended by Chapter 9, Laws of Utah 2006, Third Special Session
             52          59-12-104.3, as last amended by Chapter 253, Laws of Utah 2006
             53          59-12-108, as last amended by Chapters 253 and 282, Laws of Utah 2006
             54          59-12-603, as last amended by Chapters 134 and 253, Laws of Utah 2006
             55      Uncodified Material Affected:
             56      AMENDS UNCODIFIED MATERIAL:
             57      Uncodified Section 3, Chapter 9, Laws of Utah 2006, Third Special Session


             58     
             59      Be it enacted by the Legislature of the state of Utah:
             60          Section 1. Section 10-1-405 is amended to read:
             61           10-1-405. Collection of taxes by commission -- Uniform interlocal agreement --
             62      Rulemaking authority -- Charge for services.
             63          (1) Subject to the other provisions of this section, the commission shall collect,
             64      enforce, and administer any municipal telecommunications license tax imposed under this part
             65      pursuant to:
             66          (a) the same procedures used in the administration, collection, and enforcement of the
             67      state sales and use tax under:
             68          (i) Title 59, Chapter 1, General Taxation Policies; and
             69          (ii) Title 59, Chapter 12, Part 1, Tax Collection:
             70          (A) except for:
             71          (I) Subsection 59-12-103 (2)[(e)](h);
             72          (II) Section 59-12-104 ;
             73          (III) Section 59-12-104.1 ;
             74          (IV) Section 59-12-104.2 ; and
             75          (V) Section 59-12-107.1 ; and
             76          (B) except that for purposes of Section 59-12-110 , the term "taxpayer" may include a
             77      customer from whom a municipal telecommunications license tax is recovered in accordance
             78      with Subsection 10-1-403 (2); and
             79          (b) a uniform interlocal agreement:
             80          (i) between:
             81          (A) the municipality that imposes the municipal telecommunications license tax; and
             82          (B) the commission;
             83          (ii) that is executed under Title 11, Chapter 13, Interlocal Cooperation Act;
             84          (iii) that complies with Subsection (2)(a); and
             85          (iv) that is developed by rule in accordance with Subsection (2)(b).


             86          (2) (a) The uniform interlocal agreement described in Subsection (1) shall provide that
             87      the commission shall:
             88          (i) transmit monies collected under this part:
             89          (A) monthly; and
             90          (B) by electronic funds transfer by the commission to the municipality;
             91          (ii) conduct audits of the municipal telecommunications license tax;
             92          (iii) charge the municipality for the commission's services under this section in an
             93      amount:
             94          (A) sufficient to reimburse the commission for the cost to the commission in rendering
             95      the services; and
             96          (B) that may not exceed an amount equal to 1.5% of the municipal telecommunications
             97      license tax imposed by the ordinance of the municipality; and
             98          (iv) collect, enforce, and administer the municipal telecommunications license tax
             99      authorized under this part pursuant to the same procedures used in the administration,
             100      collection, and enforcement of the state sales and use tax as provided in Subsection (1)(a).
             101          (b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             102      commission shall develop a uniform interlocal agreement that meets the requirements of this
             103      section.
             104          (3) The administrative fee charged under Subsection (2)(a) shall be:
             105          (a) deposited in the Sales and Use Tax Administrative Fees Account; and
             106          (b) used for administration of municipal telecommunications license taxes under this
             107      part.
             108          Section 2. Section 11-41-102 is amended to read:
             109           11-41-102. Definitions.
             110          As used in this chapter:
             111          (1) "Agreement" means an oral or written agreement between a:
             112          (a) (i) county; or
             113          (ii) municipality; and


             114          (b) person.
             115          (2) "Municipality" means a:
             116          (a) city; or
             117          (b) town.
             118          (3) "Payment" includes:
             119          (a) a payment;
             120          (b) a rebate;
             121          (c) a refund; or
             122          (d) an amount similar to Subsections (3)(a) through (c).
             123          (4) "Regional retail business" means a:
             124          (a) retail business that occupies a floor area of more than 80,000 square feet;
             125          (b) dealer as defined in Section 41-1a-102 ;
             126          (c) retail shopping facility that has at least two anchor tenants if the total number of
             127      anchor tenants in the shopping facility occupy a total floor area of more than 150,000 square
             128      feet; or
             129          (d) grocery store that occupies a floor area of more than 30,000 square feet.
             130          (5) (a) "Sales and use tax" means a tax:
             131          (i) imposed on transactions within a:
             132          (A) county; or
             133          (B) municipality; and
             134          (ii) except as provided in Subsection (5)(b), authorized under Title 59, Chapter 12,
             135      Sales and Use Tax Act.
             136          (b) Notwithstanding Subsection (5)(a)(ii), "sales and use tax" does not include a tax
             137      authorized under:
             138          (i) Subsection 59-12-103 (2)(a)(i);
             139          (ii) Subsection 59-12-103 (2)(b)(i)[(A)];
             140          (iii) Subsection 59-12-103 (2)[(b)(iii)(A)](c)(i);
             141          (iv) Subsection 59-12-103 (2)(d)(i);


             142          (v) Subsection 59-12-103 (2)(e)(ii)(A);
             143          (vi) Subsection 59-12-103 (2)(e)(iii)(A);
             144          [(iv)] (vii) Section 59-12-301 ;
             145          [(v)] (viii) Section 59-12-352 ;
             146          [(vi)] (ix) Section 59-12-353 ;
             147          [(vii)] (x) Section 59-12-603 ; or
             148          [(viii)] (xi) Section 59-12-1201 .
             149          (6) (a) "Sales and use tax incentive payment" means a payment of revenues:
             150          (i) to a person;
             151          (ii) by a:
             152          (A) county; or
             153          (B) municipality;
             154          (iii) to induce the person to locate or relocate a regional retail business within the:
             155          (A) county; or
             156          (B) municipality; and
             157          (iv) that are derived from a sales and use tax.
             158          (b) "Sales and use tax incentive payment" does not include funding for public
             159      infrastructure.
             160          Section 3. Section 59-12-102 is amended to read:
             161           59-12-102. Definitions.
             162          As used in this chapter:
             163          (1) (a) "Admission or user fees" includes season passes.
             164          (b) "Admission or user fees" does not include annual membership dues to private
             165      organizations.
             166          (2) "Agreement" means the Streamlined Sales and Use Tax Agreement described in
             167      Section 59-12-102.1 .
             168          (3) "Agreement combined tax rate" means the sum of the tax rates:
             169          (a) listed under Subsection (4); and


             170          (b) that are imposed within a local taxing jurisdiction.
             171          (4) "Agreement sales and use tax" means a tax imposed under:
             172          (a) Subsection 59-12-103 (2)(a)(i) [or (2)(b)(iii)(A)];
             173          (b) Subsection 59-12-103 (2)(b)(i);
             174          (c) Subsection 59-12-103 (2)(c)(i);
             175          (d) Subsection 59-12-103 (2)(d)(i);
             176          (e) Subsection 59-12-103 (2)(e)(ii)(A);
             177          (f) Subsection 59-12-103 (2)(e)(iii)(A);
             178          [(b)] (g) Section 59-12-204 ;
             179          [(c)] (h) Section 59-12-401 ;
             180          [(d)] (i) Section 59-12-402 ;
             181          [(e)] (j) Section 59-12-501 ;
             182          [(f)] (k) Section 59-12-502 ;
             183          [(g)] (l) Section 59-12-703 ;
             184          [(h)] (m) Section 59-12-802 ;
             185          [(i)] (n) Section 59-12-804 ;
             186          [(j)] (o) Section 59-12-1001 ;
             187          [(k)] (p) Section 59-12-1102 ;
             188          [(l)] (q) Section 59-12-1302 ;
             189          [(m)] (r) Section 59-12-1402 ; or
             190          [(n)] (s) Section 59-12-1503 .
             191          (5) "Aircraft" is as defined in Section 72-10-102 .
             192          (6) "Alcoholic beverage" means a beverage that:
             193          (a) is suitable for human consumption; and
             194          (b) contains .5% or more alcohol by volume.
             195          (7) "Area agency on aging" is as defined in Section 62A-3-101 .
             196          (8) "Assisted amusement device" means an amusement device, skill device, or ride
             197      device that is started and stopped by an individual:


             198          (a) who is not the purchaser or renter of the right to use or operate the amusement
             199      device, skill device, or ride device; and
             200          (b) at the direction of the seller of the right to use the amusement device, skill device,
             201      or ride device.
             202          (9) "Assisted cleaning or washing of tangible personal property" means cleaning or
             203      washing of tangible personal property if the cleaning or washing labor is primarily performed
             204      by an individual:
             205          (a) who is not the purchaser of the cleaning or washing of the tangible personal
             206      property; and
             207          (b) at the direction of the seller of the cleaning or washing of the tangible personal
             208      property.
             209          (10) "Authorized carrier" means:
             210          (a) in the case of vehicles operated over public highways, the holder of credentials
             211      indicating that the vehicle is or will be operated pursuant to both the International Registration
             212      Plan and the International Fuel Tax Agreement;
             213          (b) in the case of aircraft, the holder of a Federal Aviation Administration operating
             214      certificate or air carrier's operating certificate; or
             215          (c) in the case of locomotives, freight cars, railroad work equipment, or other rolling
             216      stock, the holder of a certificate issued by the United States Surface Transportation Board.
             217          (11) (a) Except as provided in Subsection (11)(b), "biomass energy" means any of the
             218      following that is used as the primary source of energy to produce fuel or electricity:
             219          (i) material from a plant or tree; or
             220          (ii) other organic matter that is available on a renewable basis, including:
             221          (A) slash and brush from forests and woodlands;
             222          (B) animal waste;
             223          (C) methane produced:
             224          (I) at landfills; or
             225          (II) as a byproduct of the treatment of wastewater residuals;


             226          (D) aquatic plants; and
             227          (E) agricultural products.
             228          (b) "Biomass energy" does not include:
             229          (i) black liquor;
             230          (ii) treated woods; or
             231          (iii) biomass from municipal solid waste other than methane produced:
             232          (A) at landfills; or
             233          (B) as a byproduct of the treatment of wastewater residuals.
             234          (12) (a) "Bundled transaction" means the sale of two or more items of tangible personal
             235      property if:
             236          (i) one or more of the items of tangible personal property is food and food ingredients;
             237      and
             238          (ii) the items of tangible personal property are:
             239          (A) distinct and identifiable; and
             240          (B) sold for one price that is not itemized.
             241          (b) "Bundled transaction" does not include the sale of tangible personal property if the
             242      sales price varies, or is negotiable, on the basis of the selection by the purchaser of the items of
             243      tangible personal property included in the transaction.
             244          (c) For purposes of Subsection (12)(a)(ii)(A), tangible personal property that is distinct
             245      and identifiable does not include:
             246          (i) packaging that:
             247          (A) accompanies the sale of the tangible personal property; and
             248          (B) is incidental or immaterial to the sale of the tangible personal property;
             249          (ii) tangible personal property provided free of charge with the purchase of another
             250      item of tangible personal property; or
             251          (iii) an item of tangible personal property included in the definition of "purchase
             252      price."
             253          (d) For purposes of Subsection (12)(c)(ii), an item of tangible personal property is


             254      provided free of charge with the purchase of another item of tangible personal property if the
             255      sales price of the purchased item of tangible personal property does not vary depending on the
             256      inclusion of the tangible personal property provided free of charge.
             257          (13) "Certified automated system" means software certified by the governing board of
             258      the agreement in accordance with Section 59-12-102.1 that:
             259          (a) calculates the agreement sales and use tax imposed within a local taxing
             260      jurisdiction:
             261          (i) on a transaction; and
             262          (ii) in the states that are members of the agreement;
             263          (b) determines the amount of agreement sales and use tax to remit to a state that is a
             264      member of the agreement; and
             265          (c) maintains a record of the transaction described in Subsection (13)(a)(i).
             266          (14) "Certified service provider" means an agent certified:
             267          (a) by the governing board of the agreement in accordance with Section 59-12-102.1 ;
             268      and
             269          (b) to perform all of a seller's sales and use tax functions for an agreement sales and
             270      use tax other than the seller's obligation under Section 59-12-107.4 to remit a tax on the seller's
             271      own purchases.
             272          (15) (a) Subject to Subsection (15)(b), "clothing" means all human wearing apparel
             273      suitable for general use.
             274          (b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             275      commission shall make rules:
             276          (i) listing the items that constitute "clothing"; and
             277          (ii) that are consistent with the list of items that constitute "clothing" under the
             278      agreement.
             279          (16) "Coal-to-liquid" means the process of converting coal into a liquid synthetic fuel.
             280          (17) "Commercial use" means the use of gas, electricity, heat, coal, fuel oil, or other
             281      fuels that does not constitute industrial use under Subsection (39) or residential use under


             282      Subsection (76).
             283          (18) (a) "Common carrier" means a person engaged in or transacting the business of
             284      transporting passengers, freight, merchandise, or other property for hire within this state.
             285          (b) (i) "Common carrier" does not include a person who, at the time the person is
             286      traveling to or from that person's place of employment, transports a passenger to or from the
             287      passenger's place of employment.
             288          (ii) For purposes of Subsection (18)(b)(i), in accordance with Title 63, Chapter 46a,
             289      Utah Administrative Rulemaking Act, the commission may make rules defining what
             290      constitutes a person's place of employment.
             291          (19) "Component part" includes:
             292          (a) poultry, dairy, and other livestock feed, and their components;
             293          (b) baling ties and twine used in the baling of hay and straw;
             294          (c) fuel used for providing temperature control of orchards and commercial
             295      greenhouses doing a majority of their business in wholesale sales, and for providing power for
             296      off-highway type farm machinery; and
             297          (d) feed, seeds, and seedlings.
             298          (20) "Computer" means an electronic device that accepts information:
             299          (a) (i) in digital form; or
             300          (ii) in a form similar to digital form; and
             301          (b) manipulates that information for a result based on a sequence of instructions.
             302          (21) "Computer software" means a set of coded instructions designed to cause:
             303          (a) a computer to perform a task; or
             304          (b) automatic data processing equipment to perform a task.
             305          (22) "Construction materials" means any tangible personal property that will be
             306      converted into real property.
             307          (23) "Delivered electronically" means delivered to a purchaser by means other than
             308      tangible storage media.
             309          (24) (a) "Delivery charge" means a charge:


             310          (i) by a seller of:
             311          (A) tangible personal property; or
             312          (B) services; and
             313          (ii) for preparation and delivery of the tangible personal property or services described
             314      in Subsection (24)(a)(i) to a location designated by the purchaser.
             315          (b) "Delivery charge" includes a charge for the following:
             316          (i) transportation;
             317          (ii) shipping;
             318          (iii) postage;
             319          (iv) handling;
             320          (v) crating; or
             321          (vi) packing.
             322          (25) "Dietary supplement" means a product, other than tobacco, that:
             323          (a) is intended to supplement the diet;
             324          (b) contains one or more of the following dietary ingredients:
             325          (i) a vitamin;
             326          (ii) a mineral;
             327          (iii) an herb or other botanical;
             328          (iv) an amino acid;
             329          (v) a dietary substance for use by humans to supplement the diet by increasing the total
             330      dietary intake; or
             331          (vi) a concentrate, metabolite, constituent, extract, or combination of any ingredient
             332      described in Subsections (25)(b)(i) through (v);
             333          (c) (i) except as provided in Subsection (25)(c)(ii), is intended for ingestion in:
             334          (A) tablet form;
             335          (B) capsule form;
             336          (C) powder form;
             337          (D) softgel form;


             338          (E) gelcap form; or
             339          (F) liquid form; or
             340          (ii) notwithstanding Subsection (25)(c)(i), if the product is not intended for ingestion in
             341      a form described in Subsections (25)(c)(i)(A) through (F), is not represented:
             342          (A) as conventional food; and
             343          (B) for use as a sole item of:
             344          (I) a meal; or
             345          (II) the diet; and
             346          (d) is required to be labeled as a dietary supplement:
             347          (i) identifiable by the "Supplemental Facts" box found on the label; and
             348          (ii) as required by 21 C.F.R. Sec. 101.36.
             349          (26) (a) "Direct mail" means printed material delivered or distributed by United States
             350      mail or other delivery service:
             351          (i) to:
             352          (A) a mass audience; or
             353          (B) addressees on a mailing list provided by a purchaser of the mailing list; and
             354          (ii) if the cost of the printed material is not billed directly to the recipients.
             355          (b) "Direct mail" includes tangible personal property supplied directly or indirectly by a
             356      purchaser to a seller of direct mail for inclusion in a package containing the printed material.
             357          (c) "Direct mail" does not include multiple items of printed material delivered to a
             358      single address.
             359          (27) (a) "Drug" means a compound, substance, or preparation, or a component of a
             360      compound, substance, or preparation that is:
             361          (i) recognized in:
             362          (A) the official United States Pharmacopoeia;
             363          (B) the official Homeopathic Pharmacopoeia of the United States;
             364          (C) the official National Formulary; or
             365          (D) a supplement to a publication listed in Subsections (27)(a)(i)(A) through (C);


             366          (ii) intended for use in the:
             367          (A) diagnosis of disease;
             368          (B) cure of disease;
             369          (C) mitigation of disease;
             370          (D) treatment of disease; or
             371          (E) prevention of disease; or
             372          (iii) intended to affect:
             373          (A) the structure of the body; or
             374          (B) any function of the body.
             375          (b) "Drug" does not include:
             376          (i) food and food ingredients;
             377          (ii) a dietary supplement;
             378          (iii) an alcoholic beverage; or
             379          (iv) a prosthetic device.
             380          (28) (a) Except as provided in Subsection (28)(c), "durable medical equipment" means
             381      equipment that:
             382          (i) can withstand repeated use;
             383          (ii) is primarily and customarily used to serve a medical purpose;
             384          (iii) generally is not useful to a person in the absence of illness or injury; and
             385          (iv) is not worn in or on the body.
             386          (b) "Durable medical equipment" includes parts used in the repair or replacement of the
             387      equipment described in Subsection (28)(a).
             388          (c) Notwithstanding Subsection (28)(a), "durable medical equipment" does not include
             389      mobility enhancing equipment.
             390          (29) "Electronic" means:
             391          (a) relating to technology; and
             392          (b) having:
             393          (i) electrical capabilities;


             394          (ii) digital capabilities;
             395          (iii) magnetic capabilities;
             396          (iv) wireless capabilities;
             397          (v) optical capabilities;
             398          (vi) electromagnetic capabilities; or
             399          (vii) capabilities similar to Subsections (29)(b)(i) through (vi).
             400          (30) "Employee" is as defined in Section 59-10-401 .
             401          (31) "Fixed guideway" means a public transit facility that uses and occupies:
             402          (a) rail for the use of public transit; or
             403          (b) a separate right-of-way for the use of public transit.
             404          (32) (a) "Food and food ingredients" means substances:
             405          (i) regardless of whether the substances are in:
             406          (A) liquid form;
             407          (B) concentrated form;
             408          (C) solid form;
             409          (D) frozen form;
             410          (E) dried form; or
             411          (F) dehydrated form; and
             412          (ii) that are:
             413          (A) sold for:
             414          (I) ingestion by humans; or
             415          (II) chewing by humans; and
             416          (B) consumed for the substance's:
             417          (I) taste; or
             418          (II) nutritional value.
             419          (b) "Food and food ingredients" includes an item described in Subsection (63)(b)(iii).
             420          (c) "Food and food ingredients" does not include:
             421          (i) an alcoholic beverage;


             422          (ii) tobacco; or
             423          (iii) prepared food.
             424          (33) (a) "Fundraising sales" means sales:
             425          (i) (A) made by a school; or
             426          (B) made by a school student;
             427          (ii) that are for the purpose of raising funds for the school to purchase equipment,
             428      materials, or provide transportation; and
             429          (iii) that are part of an officially sanctioned school activity.
             430          (b) For purposes of Subsection (33)(a)(iii), "officially sanctioned school activity"
             431      means a school activity:
             432          (i) that is conducted in accordance with a formal policy adopted by the school or school
             433      district governing the authorization and supervision of fundraising activities;
             434          (ii) that does not directly or indirectly compensate an individual teacher or other
             435      educational personnel by direct payment, commissions, or payment in kind; and
             436          (iii) the net or gross revenues from which are deposited in a dedicated account
             437      controlled by the school or school district.
             438          (34) "Geothermal energy" means energy contained in heat that continuously flows
             439      outward from the earth that is used as the sole source of energy to produce electricity.
             440          (35) "Governing board of the agreement" means the governing board of the agreement
             441      that is:
             442          (a) authorized to administer the agreement; and
             443          (b) established in accordance with the agreement.
             444          (36) (a) "Hearing aid" means:
             445          (i) an instrument or device having an electronic component that is designed to:
             446          (A) (I) improve impaired human hearing; or
             447          (II) correct impaired human hearing; and
             448          (B) (I) be worn in the human ear; or
             449          (II) affixed behind the human ear;


             450          (ii) an instrument or device that is surgically implanted into the cochlea; or
             451          (iii) a telephone amplifying device.
             452          (b) "Hearing aid" does not include:
             453          (i) except as provided in Subsection (36)(a)(i)(B) or (36)(a)(ii), an instrument or device
             454      having an electronic component that is designed to be worn on the body;
             455          (ii) except as provided in Subsection (36)(a)(iii), an assistive listening device or system
             456      designed to be used by one individual, including:
             457          (A) a personal amplifying system;
             458          (B) a personal FM system;
             459          (C) a television listening system; or
             460          (D) a device or system similar to a device or system described in Subsections
             461      (36)(b)(ii)(A) through (C); or
             462          (iii) an assistive listening device or system designed to be used by more than one
             463      individual, including:
             464          (A) a device or system installed in:
             465          (I) an auditorium;
             466          (II) a church;
             467          (III) a conference room;
             468          (IV) a synagogue; or
             469          (V) a theater; or
             470          (B) a device or system similar to a device or system described in Subsections
             471      (36)(b)(iii)(A)(I) through (V).
             472          (37) (a) "Hearing aid accessory" means a hearing aid:
             473          (i) component;
             474          (ii) attachment; or
             475          (iii) accessory.
             476          (b) "Hearing aid accessory" includes:
             477          (i) a hearing aid neck loop;


             478          (ii) a hearing aid cord;
             479          (iii) a hearing aid ear mold;
             480          (iv) hearing aid tubing;
             481          (v) a hearing aid ear hook; or
             482          (vi) a hearing aid remote control.
             483          (c) "Hearing aid accessory" does not include:
             484          (i) a component, attachment, or accessory designed to be used only with an:
             485          (A) instrument or device described in Subsection (36)(b)(i); or
             486          (B) assistive listening device or system described in Subsection (36)(b)(ii) or (iii); or
             487          (ii) a hearing aid battery.
             488          (38) "Hydroelectric energy" means water used as the sole source of energy to produce
             489      electricity.
             490          (39) "Industrial use" means the use of natural gas, electricity, heat, coal, fuel oil, or
             491      other fuels:
             492          (a) in mining or extraction of minerals;
             493          (b) in agricultural operations to produce an agricultural product up to the time of
             494      harvest or placing the agricultural product into a storage facility, including:
             495          (i) commercial greenhouses;
             496          (ii) irrigation pumps;
             497          (iii) farm machinery;
             498          (iv) implements of husbandry as defined in Subsection 41-1a-102 (23) that are not
             499      registered under Title 41, Chapter 1a, Part 2, Registration; and
             500          (v) other farming activities;
             501          (c) in manufacturing tangible personal property at an establishment described in SIC
             502      Codes 2000 to 3999 of the 1987 Standard Industrial Classification Manual of the federal
             503      Executive Office of the President, Office of Management and Budget;
             504          (d) by a scrap recycler if:
             505          (i) from a fixed location, the scrap recycler utilizes machinery or equipment to process


             506      one or more of the following items into prepared grades of processed materials for use in new
             507      products:
             508          (A) iron;
             509          (B) steel;
             510          (C) nonferrous metal;
             511          (D) paper;
             512          (E) glass;
             513          (F) plastic;
             514          (G) textile; or
             515          (H) rubber; and
             516          (ii) the new products under Subsection (39)(d)(i) would otherwise be made with
             517      nonrecycled materials; or
             518          (e) in producing a form of energy or steam described in Subsection 54-2-1 (2)(a) by a
             519      cogeneration facility as defined in Section 54-2-1 .
             520          (40) (a) Except as provided in Subsection (40)(b), "installation charge" means a charge
             521      for installing tangible personal property.
             522          (b) Notwithstanding Subsection (40)(a), "installation charge" does not include a charge
             523      for repairs or renovations of tangible personal property.
             524          (41) (a) "Lease" or "rental" means a transfer of possession or control of tangible
             525      personal property for:
             526          (i) (A) a fixed term; or
             527          (B) an indeterminate term; and
             528          (ii) consideration.
             529          (b) "Lease" or "rental" includes an agreement covering a motor vehicle and trailer if the
             530      amount of consideration may be increased or decreased by reference to the amount realized
             531      upon sale or disposition of the property as defined in Section 7701(h)(1), Internal Revenue
             532      Code.
             533          (c) "Lease" or "rental" does not include:


             534          (i) a transfer of possession or control of property under a security agreement or
             535      deferred payment plan that requires the transfer of title upon completion of the required
             536      payments;
             537          (ii) a transfer of possession or control of property under an agreement that requires the
             538      transfer of title:
             539          (A) upon completion of required payments; and
             540          (B) if the payment of an option price does not exceed the greater of:
             541          (I) $100; or
             542          (II) 1% of the total required payments; or
             543          (iii) providing tangible personal property along with an operator for a fixed period of
             544      time or an indeterminate period of time if the operator is necessary for equipment to perform as
             545      designed.
             546          (d) For purposes of Subsection (41)(c)(iii), an operator is necessary for equipment to
             547      perform as designed if the operator's duties exceed the:
             548          (i) set-up of tangible personal property;
             549          (ii) maintenance of tangible personal property; or
             550          (iii) inspection of tangible personal property.
             551          (42) "Load and leave" means delivery to a purchaser by use of a tangible storage media
             552      if the tangible storage media is not physically transferred to the purchaser.
             553          (43) "Local taxing jurisdiction" means a:
             554          (a) county that is authorized to impose an agreement sales and use tax;
             555          (b) city that is authorized to impose an agreement sales and use tax; or
             556          (c) town that is authorized to impose an agreement sales and use tax.
             557          (44) "Manufactured home" is as defined in Section 58-56-3 .
             558          (45) For purposes of Section 59-12-104 , "manufacturing facility" means:
             559          (a) an establishment described in SIC Codes 2000 to 3999 of the 1987 Standard
             560      Industrial Classification Manual of the federal Executive Office of the President, Office of
             561      Management and Budget;


             562          (b) a scrap recycler if:
             563          (i) from a fixed location, the scrap recycler utilizes machinery or equipment to process
             564      one or more of the following items into prepared grades of processed materials for use in new
             565      products:
             566          (A) iron;
             567          (B) steel;
             568          (C) nonferrous metal;
             569          (D) paper;
             570          (E) glass;
             571          (F) plastic;
             572          (G) textile; or
             573          (H) rubber; and
             574          (ii) the new products under Subsection (45)(b)(i) would otherwise be made with
             575      nonrecycled materials; or
             576          (c) a cogeneration facility as defined in Section 54-2-1 .
             577          (46) "Member of the immediate family of the producer" means a person who is related
             578      to a producer described in Subsection 59-12-104 (20)(a) as a:
             579          (a) child or stepchild, regardless of whether the child or stepchild is:
             580          (i) an adopted child or adopted stepchild; or
             581          (ii) a foster child or foster stepchild;
             582          (b) grandchild or stepgrandchild;
             583          (c) grandparent or stepgrandparent;
             584          (d) nephew or stepnephew;
             585          (e) niece or stepniece;
             586          (f) parent or stepparent;
             587          (g) sibling or stepsibling;
             588          (h) spouse;
             589          (i) person who is the spouse of a person described in Subsections (46)(a) through (g);


             590      or
             591          (j) person similar to a person described in Subsections (46)(a) through (i) as
             592      determined by the commission by rule made in accordance with Title 63, Chapter 46a, Utah
             593      Administrative Rulemaking Act.
             594          (47) "Mobile home" is as defined in Section 58-56-3 .
             595          (48) "Mobile telecommunications service" is as defined in the Mobile
             596      Telecommunications Sourcing Act, 4 U.S.C. Sec. 124.
             597          (49) (a) Except as provided in Subsection (49)(c), "mobility enhancing equipment"
             598      means equipment that is:
             599          (i) primarily and customarily used to provide or increase the ability to move from one
             600      place to another;
             601          (ii) appropriate for use in a:
             602          (A) home; or
             603          (B) motor vehicle; and
             604          (iii) not generally used by persons with normal mobility.
             605          (b) "Mobility enhancing equipment" includes parts used in the repair or replacement of
             606      the equipment described in Subsection (49)(a).
             607          (c) Notwithstanding Subsection (49)(a), "mobility enhancing equipment" does not
             608      include:
             609          (i) a motor vehicle;
             610          (ii) equipment on a motor vehicle if that equipment is normally provided by the motor
             611      vehicle manufacturer;
             612          (iii) durable medical equipment; or
             613          (iv) a prosthetic device.
             614          (50) "Model 1 seller" means a seller that has selected a certified service provider as the
             615      seller's agent to perform all of the seller's sales and use tax functions for agreement sales and
             616      use taxes other than the seller's obligation under Section 59-12-107.4 to remit a tax on the
             617      seller's own purchases.


             618          (51) "Model 2 seller" means a seller that:
             619          (a) except as provided in Subsection (51)(b), has selected a certified automated system
             620      to perform the seller's sales tax functions for agreement sales and use taxes; and
             621          (b) notwithstanding Subsection (51)(a), retains responsibility for remitting all of the
             622      sales tax:
             623          (i) collected by the seller; and
             624          (ii) to the appropriate local taxing jurisdiction.
             625          (52) (a) Subject to Subsection (52)(b), "model 3 seller" means a seller that has:
             626          (i) sales in at least five states that are members of the agreement;
             627          (ii) total annual sales revenues of at least $500,000,000;
             628          (iii) a proprietary system that calculates the amount of tax:
             629          (A) for an agreement sales and use tax; and
             630          (B) due to each local taxing jurisdiction; and
             631          (iv) entered into a performance agreement with the governing board of the agreement.
             632          (b) For purposes of Subsection (52)(a), "model 3 seller" includes an affiliated group of
             633      sellers using the same proprietary system.
             634          (53) "Modular home" means a modular unit as defined in Section 58-56-3 .
             635          (54) "Motor vehicle" is as defined in Section 41-1a-102 .
             636          (55) "Oil shale" means a group of fine black to dark brown shales containing
             637      bituminous material that yields petroleum upon distillation.
             638          (56) (a) "Other fuels" means products that burn independently to produce heat or
             639      energy.
             640          (b) "Other fuels" includes oxygen when it is used in the manufacturing of tangible
             641      personal property.
             642          (57) "Pawnbroker" is as defined in Section 13-32a-102 .
             643          (58) "Pawn transaction" is as defined in Section 13-32a-102 .
             644          (59) (a) "Permanently attached to real property" means that for tangible personal
             645      property attached to real property:


             646          (i) the attachment of the tangible personal property to the real property:
             647          (A) is essential to the use of the tangible personal property; and
             648          (B) suggests that the tangible personal property will remain attached to the real
             649      property in the same place over the useful life of the tangible personal property; or
             650          (ii) if the tangible personal property is detached from the real property, the detachment
             651      would:
             652          (A) cause substantial damage to the tangible personal property; or
             653          (B) require substantial alteration or repair of the real property to which the tangible
             654      personal property is attached.
             655          (b) "Permanently attached to real property" includes:
             656          (i) the attachment of an accessory to the tangible personal property if the accessory is:
             657          (A) essential to the operation of the tangible personal property; and
             658          (B) attached only to facilitate the operation of the tangible personal property;
             659          (ii) a temporary detachment of tangible personal property from real property for a
             660      repair or renovation if the repair or renovation is performed where the tangible personal
             661      property and real property are located; or
             662          (iii) an attachment of the following tangible personal property to real property,
             663      regardless of whether the attachment to real property is only through a line that supplies water,
             664      electricity, gas, telephone, cable, or supplies a similar item as determined by the commission by
             665      rule made in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act:
             666          (A) property attached to oil, gas, or water pipelines, other than the property listed in
             667      Subsection (59)(c)(iii);
             668          (B) a hot water heater;
             669          (C) a water softener system; or
             670          (D) a water filtration system, other than a water filtration system manufactured as part
             671      of a refrigerator.
             672          (c) "Permanently attached to real property" does not include:
             673          (i) the attachment of portable or movable tangible personal property to real property if


             674      that portable or movable tangible personal property is attached to real property only for:
             675          (A) convenience;
             676          (B) stability; or
             677          (C) for an obvious temporary purpose;
             678          (ii) the detachment of tangible personal property from real property other than the
             679      detachment described in Subsection (59)(b)(ii); or
             680          (iii) an attachment of the following tangible personal property to real property if the
             681      attachment to real property is only through a line that supplies water, electricity, gas, telephone,
             682      cable, or supplies a similar item as determined by the commission by rule made in accordance
             683      with Title 63, Chapter 46a, Utah Administrative Rulemaking Act:
             684          (A) a refrigerator;
             685          (B) a washer;
             686          (C) a dryer;
             687          (D) a stove;
             688          (E) a television;
             689          (F) a computer;
             690          (G) a telephone; or
             691          (H) tangible personal property similar to Subsections (59)(c)(iii)(A) through (G) as
             692      determined by the commission by rule made in accordance with Title 63, Chapter 46a, Utah
             693      Administrative Rulemaking Act.
             694          (60) "Person" includes any individual, firm, partnership, joint venture, association,
             695      corporation, estate, trust, business trust, receiver, syndicate, this state, any county, city,
             696      municipality, district, or other local governmental entity of the state, or any group or
             697      combination acting as a unit.
             698          (61) "Place of primary use":
             699          (a) for telephone service other than mobile telecommunications service, means the
             700      street address representative of where the purchaser's use of the telephone service primarily
             701      occurs, which shall be:


             702          (i) the residential street address of the purchaser; or
             703          (ii) the primary business street address of the purchaser; or
             704          (b) for mobile telecommunications service, is as defined in the Mobile
             705      Telecommunications Sourcing Act, 4 U.S.C. Sec. 124.
             706          (62) "Postproduction" means an activity related to the finishing or duplication of a
             707      medium described in Subsection 59-12-104 (56)(a).
             708          (63) (a) "Prepared food" means:
             709          (i) food:
             710          (A) sold in a heated state; or
             711          (B) heated by a seller;
             712          (ii) two or more food ingredients mixed or combined by the seller for sale as a single
             713      item; or
             714          (iii) except as provided in Subsection (63)(c), food sold with an eating utensil provided
             715      by the seller, including a:
             716          (A) plate;
             717          (B) knife;
             718          (C) fork;
             719          (D) spoon;
             720          (E) glass;
             721          (F) cup;
             722          (G) napkin; or
             723          (H) straw.
             724          (b) "Prepared food" does not include:
             725          (i) food that a seller only:
             726          (A) cuts;
             727          (B) repackages; or
             728          (C) pasteurizes; or
             729          (ii) (A) the following:


             730          (I) raw egg;
             731          (II) raw fish;
             732          (III) raw meat;
             733          (IV) raw poultry; or
             734          (V) a food containing an item described in Subsections (63)(b)(ii)(A)(I) through (IV);
             735      and
             736          (B) if the Food and Drug Administration recommends in Chapter 3, Part 401.11 of the
             737      Food and Drug Administration's Food Code that a consumer cook the items described in
             738      Subsection (63)(b)(ii)(A) to prevent food borne illness; or
             739          (iii) the following if sold without eating utensils provided by the seller:
             740          (A) food and food ingredients sold by a seller if the seller's proper primary
             741      classification under the 2002 North American Industry Classification System of the federal
             742      Executive Office of the President, Office of Management and Budget, is manufacturing in
             743      Sector 311, Food Manufacturing, except for Subsector 3118, Bakeries and Tortilla
             744      Manufacturing;
             745          (B) food and food ingredients sold in an unheated state:
             746          (I) by weight or volume; and
             747          (II) as a single item; or
             748          (C) a bakery item, including:
             749          (I) a bagel;
             750          (II) a bar;
             751          (III) a biscuit;
             752          (IV) bread;
             753          (V) a bun;
             754          (VI) a cake;
             755          (VII) a cookie;
             756          (VIII) a croissant;
             757          (IX) a danish;


             758          (X) a donut;
             759          (XI) a muffin;
             760          (XII) a pastry;
             761          (XIII) a pie;
             762          (XIV) a roll;
             763          (XV) a tart;
             764          (XVI) a torte; or
             765          (XVII) a tortilla.
             766          (c) Notwithstanding Subsection (63)(a)(iii), an eating utensil provided by the seller
             767      does not include the following used to transport the food:
             768          (i) a container; or
             769          (ii) packaging.
             770          (64) "Prescription" means an order, formula, or recipe that is issued:
             771          (a) (i) orally;
             772          (ii) in writing;
             773          (iii) electronically; or
             774          (iv) by any other manner of transmission; and
             775          (b) by a licensed practitioner authorized by the laws of a state.
             776          (65) (a) Except as provided in Subsection (65)(b)(ii) or (iii), "prewritten computer
             777      software" means computer software that is not designed and developed:
             778          (i) by the author or other creator of the computer software; and
             779          (ii) to the specifications of a specific purchaser.
             780          (b) "Prewritten computer software" includes:
             781          (i) a prewritten upgrade to computer software if the prewritten upgrade to the computer
             782      software is not designed and developed:
             783          (A) by the author or other creator of the computer software; and
             784          (B) to the specifications of a specific purchaser;
             785          (ii) notwithstanding Subsection (65)(a), computer software designed and developed by


             786      the author or other creator of the computer software to the specifications of a specific purchaser
             787      if the computer software is sold to a person other than the purchaser; or
             788          (iii) notwithstanding Subsection (65)(a) and except as provided in Subsection (65)(c),
             789      prewritten computer software or a prewritten portion of prewritten computer software:
             790          (A) that is modified or enhanced to any degree; and
             791          (B) if the modification or enhancement described in Subsection (65)(b)(iii)(A) is
             792      designed and developed to the specifications of a specific purchaser.
             793          (c) Notwithstanding Subsection (65)(b)(iii), "prewritten computer software" does not
             794      include a modification or enhancement described in Subsection (65)(b)(iii) if the charges for
             795      the modification or enhancement are:
             796          (i) reasonable; and
             797          (ii) separately stated on the invoice or other statement of price provided to the
             798      purchaser.
             799          (66) (a) "Prosthetic device" means a device that is worn on or in the body to:
             800          (i) artificially replace a missing portion of the body;
             801          (ii) prevent or correct a physical deformity or physical malfunction; or
             802          (iii) support a weak or deformed portion of the body.
             803          (b) "Prosthetic device" includes:
             804          (i) parts used in the repairs or renovation of a prosthetic device; or
             805          (ii) replacement parts for a prosthetic device.
             806          (c) "Prosthetic device" does not include:
             807          (i) corrective eyeglasses;
             808          (ii) contact lenses;
             809          (iii) hearing aids; or
             810          (iv) dental prostheses.
             811          (67) (a) "Protective equipment" means an item:
             812          (i) for human wear; and
             813          (ii) that is:


             814          (A) designed as protection:
             815          (I) to the wearer against injury or disease; or
             816          (II) against damage or injury of other persons or property; and
             817          (B) not suitable for general use.
             818          (b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             819      commission shall make rules:
             820          (i) listing the items that constitute "protective equipment"; and
             821          (ii) that are consistent with the list of items that constitute "protective equipment"
             822      under the agreement.
             823          (68) (a) "Purchase price" and "sales price" mean the total amount of consideration:
             824          (i) valued in money; and
             825          (ii) for which tangible personal property or services are:
             826          (A) sold;
             827          (B) leased; or
             828          (C) rented.
             829          (b) "Purchase price" and "sales price" include:
             830          (i) the seller's cost of the tangible personal property or services sold;
             831          (ii) expenses of the seller, including:
             832          (A) the cost of materials used;
             833          (B) a labor cost;
             834          (C) a service cost;
             835          (D) interest;
             836          (E) a loss;
             837          (F) the cost of transportation to the seller; or
             838          (G) a tax imposed on the seller; or
             839          (iii) a charge by the seller for any service necessary to complete the sale.
             840          (c) "Purchase price" and "sales price" do not include:
             841          (i) a discount:


             842          (A) in a form including:
             843          (I) cash;
             844          (II) term; or
             845          (III) coupon;
             846          (B) that is allowed by a seller;
             847          (C) taken by a purchaser on a sale; and
             848          (D) that is not reimbursed by a third party; or
             849          (ii) the following if separately stated on an invoice, bill of sale, or similar document
             850      provided to the purchaser:
             851          (A) the amount of a trade-in;
             852          (B) the following from credit extended on the sale of tangible personal property or
             853      services:
             854          (I) interest charges;
             855          (II) financing charges; or
             856          (III) carrying charges;
             857          (C) a tax or fee legally imposed directly on the consumer;
             858          (D) a delivery charge; or
             859          (E) an installation charge.
             860          (69) "Purchaser" means a person to whom:
             861          (a) a sale of tangible personal property is made; or
             862          (b) a service is furnished.
             863          (70) "Regularly rented" means:
             864          (a) rented to a guest for value three or more times during a calendar year; or
             865          (b) advertised or held out to the public as a place that is regularly rented to guests for
             866      value.
             867          (71) "Renewable energy" means:
             868          (a) biomass energy;
             869          (b) hydroelectric energy;


             870          (c) geothermal energy;
             871          (d) solar energy; or
             872          (e) wind energy.
             873          (72) (a) "Renewable energy production facility" means a facility that:
             874          (i) uses renewable energy to produce electricity; and
             875          (ii) has a production capacity of 20 kilowatts or greater.
             876          (b) A facility is a renewable energy production facility regardless of whether the
             877      facility is:
             878          (i) connected to an electric grid; or
             879          (ii) located on the premises of an electricity consumer.
             880          (73) "Rental" is as defined in Subsection (41).
             881          (74) "Repairs or renovations of tangible personal property" means:
             882          (a) a repair or renovation of tangible personal property that is not permanently attached
             883      to real property; or
             884          (b) attaching tangible personal property to other tangible personal property if the other
             885      tangible personal property to which the tangible personal property is attached is not
             886      permanently attached to real property.
             887          (75) "Research and development" means the process of inquiry or experimentation
             888      aimed at the discovery of facts, devices, technologies, or applications and the process of
             889      preparing those devices, technologies, or applications for marketing.
             890          (76) "Residential use" means the use in or around a home, apartment building, sleeping
             891      quarters, and similar facilities or accommodations.
             892          (77) "Retail sale" or "sale at retail" means a sale, lease, or rental for a purpose other
             893      than:
             894          (a) resale;
             895          (b) sublease; or
             896          (c) subrent.
             897          (78) (a) "Retailer" means any person engaged in a regularly organized business in


             898      tangible personal property or any other taxable transaction under Subsection 59-12-103 (1), and
             899      who is selling to the user or consumer and not for resale.
             900          (b) "Retailer" includes commission merchants, auctioneers, and any person regularly
             901      engaged in the business of selling to users or consumers within the state.
             902          (79) (a) "Sale" means any transfer of title, exchange, or barter, conditional or
             903      otherwise, in any manner, of tangible personal property or any other taxable transaction under
             904      Subsection 59-12-103 (1), for consideration.
             905          (b) "Sale" includes:
             906          (i) installment and credit sales;
             907          (ii) any closed transaction constituting a sale;
             908          (iii) any sale of electrical energy, gas, services, or entertainment taxable under this
             909      chapter;
             910          (iv) any transaction if the possession of property is transferred but the seller retains the
             911      title as security for the payment of the price; and
             912          (v) any transaction under which right to possession, operation, or use of any article of
             913      tangible personal property is granted under a lease or contract and the transfer of possession
             914      would be taxable if an outright sale were made.
             915          (80) "Sale at retail" is as defined in Subsection (77).
             916          (81) "Sale-leaseback transaction" means a transaction by which title to tangible
             917      personal property that is subject to a tax under this chapter is transferred:
             918          (a) by a purchaser-lessee;
             919          (b) to a lessor;
             920          (c) for consideration; and
             921          (d) if:
             922          (i) the purchaser-lessee paid sales and use tax on the purchaser-lessee's initial purchase
             923      of the tangible personal property;
             924          (ii) the sale of the tangible personal property to the lessor is intended as a form of
             925      financing:


             926          (A) for the property; and
             927          (B) to the purchaser-lessee; and
             928          (iii) in accordance with generally accepted accounting principles, the purchaser-lessee
             929      is required to:
             930          (A) capitalize the property for financial reporting purposes; and
             931          (B) account for the lease payments as payments made under a financing arrangement.
             932          (82) "Sales price" is as defined in Subsection (68).
             933          (83) (a) "Sales relating to schools" means the following sales by, amounts paid to, or
             934      amounts charged by a school:
             935          (i) sales that are directly related to the school's educational functions or activities
             936      including:
             937          (A) the sale of:
             938          (I) textbooks;
             939          (II) textbook fees;
             940          (III) laboratory fees;
             941          (IV) laboratory supplies; or
             942          (V) safety equipment;
             943          (B) the sale of a uniform, protective equipment, or sports or recreational equipment
             944      that:
             945          (I) a student is specifically required to wear as a condition of participation in a
             946      school-related event or school-related activity; and
             947          (II) is not readily adaptable to general or continued usage to the extent that it takes the
             948      place of ordinary clothing;
             949          (C) sales of the following if the net or gross revenues generated by the sales are
             950      deposited into a school district fund or school fund dedicated to school meals:
             951          (I) food and food ingredients; or
             952          (II) prepared food; or
             953          (D) transportation charges for official school activities; or


             954          (ii) amounts paid to or amounts charged by a school for admission to a school-related
             955      event or school-related activity.
             956          (b) "Sales relating to schools" does not include:
             957          (i) bookstore sales of items that are not educational materials or supplies;
             958          (ii) except as provided in Subsection (83)(a)(i)(B):
             959          (A) clothing;
             960          (B) clothing accessories or equipment;
             961          (C) protective equipment; or
             962          (D) sports or recreational equipment; or
             963          (iii) amounts paid to or amounts charged by a school for admission to a school-related
             964      event or school-related activity if the amounts paid or charged are passed through to a person:
             965          (A) other than a:
             966          (I) school;
             967          (II) nonprofit organization authorized by a school board or a governing body of a
             968      private school to organize and direct a competitive secondary school activity; or
             969          (III) nonprofit association authorized by a school board or a governing body of a
             970      private school to organize and direct a competitive secondary school activity; and
             971          (B) that is required to collect sales and use taxes under this chapter.
             972          (c) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             973      commission may make rules defining the term "passed through."
             974          (84) For purposes of this section and Section 59-12-104 , "school" means:
             975          (a) an elementary school or a secondary school that:
             976          (i) is a:
             977          (A) public school; or
             978          (B) private school; and
             979          (ii) provides instruction for one or more grades kindergarten through 12; or
             980          (b) a public school district.
             981          (85) "Seller" means a person that makes a sale, lease, or rental of:


             982          (a) tangible personal property; or
             983          (b) a service.
             984          (86) (a) "Semiconductor fabricating, processing, research, or development materials"
             985      means tangible personal property:
             986          (i) used primarily in the process of:
             987          (A) (I) manufacturing a semiconductor;
             988          (II) fabricating a semiconductor; or
             989          (III) research or development of a:
             990          (Aa) semiconductor; or
             991          (Bb) semiconductor manufacturing process; or
             992          (B) maintaining an environment suitable for a semiconductor; or
             993          (ii) consumed primarily in the process of:
             994          (A) (I) manufacturing a semiconductor;
             995          (II) fabricating a semiconductor; or
             996          (III) research or development of a:
             997          (Aa) semiconductor; or
             998          (Bb) semiconductor manufacturing process; or
             999          (B) maintaining an environment suitable for a semiconductor.
             1000          (b) "Semiconductor fabricating, processing, research, or development materials"
             1001      includes:
             1002          (i) parts used in the repairs or renovations of tangible personal property described in
             1003      Subsection (86)(a); or
             1004          (ii) a chemical, catalyst, or other material used to:
             1005          (A) produce or induce in a semiconductor a:
             1006          (I) chemical change; or
             1007          (II) physical change;
             1008          (B) remove impurities from a semiconductor; or
             1009          (C) improve the marketable condition of a semiconductor.


             1010          (87) "Senior citizen center" means a facility having the primary purpose of providing
             1011      services to the aged as defined in Section 62A-3-101 .
             1012          (88) "Simplified electronic return" means the electronic return:
             1013          (a) described in Section 318(C) of the agreement; and
             1014          (b) approved by the governing board of the agreement.
             1015          (89) "Solar energy" means the sun used as the sole source of energy for producing
             1016      electricity.
             1017          (90) (a) "Sports or recreational equipment" means an item:
             1018          (i) designed for human use; and
             1019          (ii) that is:
             1020          (A) worn in conjunction with:
             1021          (I) an athletic activity; or
             1022          (II) a recreational activity; and
             1023          (B) not suitable for general use.
             1024          (b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             1025      commission shall make rules:
             1026          (i) listing the items that constitute "sports or recreational equipment"; and
             1027          (ii) that are consistent with the list of items that constitute "sports or recreational
             1028      equipment" under the agreement.
             1029          (91) "State" means the state of Utah, its departments, and agencies.
             1030          (92) "Storage" means any keeping or retention of tangible personal property or any
             1031      other taxable transaction under Subsection 59-12-103 (1), in this state for any purpose except
             1032      sale in the regular course of business.
             1033          (93) (a) "Tangible personal property" means personal property that:
             1034          (i) may be:
             1035          (A) seen;
             1036          (B) weighed;
             1037          (C) measured;


             1038          (D) felt; or
             1039          (E) touched; or
             1040          (ii) is in any manner perceptible to the senses.
             1041          (b) "Tangible personal property" includes:
             1042          (i) electricity;
             1043          (ii) water;
             1044          (iii) gas;
             1045          (iv) steam; or
             1046          (v) prewritten computer software.
             1047          (94) "Tar sands" means impregnated sands that yield mixtures of liquid hydrocarbon
             1048      and require further processing other than mechanical blending before becoming finished
             1049      petroleum products.
             1050          (95) (a) "Telecommunications enabling or facilitating equipment, machinery, or
             1051      software" means an item listed in Subsection (95)(b) if that item is purchased or leased
             1052      primarily to enable or facilitate one or more of the following to function:
             1053          (i) telecommunications switching or routing equipment, machinery, or software; or
             1054          (ii) telecommunications transmission equipment, machinery, or software.
             1055          (b) The following apply to Subsection (95)(a):
             1056          (i) a pole;
             1057          (ii) software;
             1058          (iii) a supplementary power supply;
             1059          (iv) temperature or environmental equipment or machinery;
             1060          (v) test equipment;
             1061          (vi) a tower; or
             1062          (vii) equipment, machinery, or software that functions similarly to an item listed in
             1063      Subsections (95)(b)(i) through (vi) as determined by the commission by rule made in
             1064      accordance with Subsection (95)(c).
             1065          (c) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the


             1066      commission may by rule define what constitutes equipment, machinery, or software that
             1067      functions similarly to an item listed in Subsections (95)(b)(i) through (vi).
             1068          (96) "Telecommunications equipment, machinery, or software required for 911
             1069      service" means equipment, machinery, or software that is required to comply with 47 C.F.R.
             1070      Sec. 20.18.
             1071          (97) "Telecommunications maintenance or repair equipment, machinery, or software"
             1072      means equipment, machinery, or software purchased or leased primarily to maintain or repair
             1073      one or more of the following, regardless of whether the equipment, machinery, or software is
             1074      purchased or leased as a spare part or as an upgrade or modification to one or more of the
             1075      following:
             1076          (a) telecommunications enabling or facilitating equipment, machinery, or software;
             1077          (b) telecommunications switching or routing equipment, machinery, or software; or
             1078          (c) telecommunications transmission equipment, machinery, or software.
             1079          (98) (a) "Telecommunications switching or routing equipment, machinery, or software"
             1080      means an item listed in Subsection (98)(b) if that item is purchased or leased primarily for
             1081      switching or routing:
             1082          (i) voice communications;
             1083          (ii) data communications; or
             1084          (iii) telephone service.
             1085          (b) The following apply to Subsection (98)(a):
             1086          (i) a bridge;
             1087          (ii) a computer;
             1088          (iii) a cross connect;
             1089          (iv) a modem;
             1090          (v) a multiplexer;
             1091          (vi) plug in circuitry;
             1092          (vii) a router;
             1093          (viii) software;


             1094          (ix) a switch; or
             1095          (x) equipment, machinery, or software that functions similarly to an item listed in
             1096      Subsections (98)(b)(i) through (ix) as determined by the commission by rule made in
             1097      accordance with Subsection (98)(c).
             1098          (c) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             1099      commission may by rule define what constitutes equipment, machinery, or software that
             1100      functions similarly to an item listed in Subsections (98)(b)(i) through (ix).
             1101          (99) (a) "Telecommunications transmission equipment, machinery, or software" means
             1102      an item listed in Subsection (99)(b) if that item is purchased or leased primarily for sending,
             1103      receiving, or transporting:
             1104          (i) voice communications;
             1105          (ii) data communications; or
             1106          (iii) telephone service.
             1107          (b) The following apply to Subsection (99)(a):
             1108          (i) an amplifier;
             1109          (ii) a cable;
             1110          (iii) a closure;
             1111          (iv) a conduit;
             1112          (v) a controller;
             1113          (vi) a duplexer;
             1114          (vii) a filter;
             1115          (viii) an input device;
             1116          (ix) an input/output device;
             1117          (x) an insulator;
             1118          (xi) microwave machinery or equipment;
             1119          (xii) an oscillator;
             1120          (xiii) an output device;
             1121          (xiv) a pedestal;


             1122          (xv) a power converter;
             1123          (xvi) a power supply;
             1124          (xvii) a radio channel;
             1125          (xviii) a radio receiver;
             1126          (xix) a radio transmitter;
             1127          (xx) a repeater;
             1128          (xxi) software;
             1129          (xxii) a terminal;
             1130          (xxiii) a timing unit;
             1131          (xxiv) a transformer;
             1132          (xxv) a wire; or
             1133          (xxvi) equipment, machinery, or software that functions similarly to an item listed in
             1134      Subsections (99)(b)(i) through (xxv) as determined by the commission by rule made in
             1135      accordance with Subsection (99)(c).
             1136          (c) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             1137      commission may by rule define what constitutes equipment, machinery, or software that
             1138      functions similarly to an item listed in Subsections (99)(b)(i) through (xxv).
             1139          (100) (a) "Telephone service" means a two-way transmission:
             1140          (i) by:
             1141          (A) wire;
             1142          (B) radio;
             1143          (C) lightwave; or
             1144          (D) other electromagnetic means; and
             1145          (ii) of one or more of the following:
             1146          (A) a sign;
             1147          (B) a signal;
             1148          (C) writing;
             1149          (D) an image;


             1150          (E) sound;
             1151          (F) a message;
             1152          (G) data; or
             1153          (H) other information of any nature.
             1154          (b) "Telephone service" includes:
             1155          (i) mobile telecommunications service;
             1156          (ii) private communications service; or
             1157          (iii) automated digital telephone answering service.
             1158          (c) "Telephone service" does not include a service or a transaction that a state or a
             1159      political subdivision of a state is prohibited from taxing as of July 1, 2001, under the Internet
             1160      Tax Freedom Act, Pub. L. No. 105-277.
             1161          (101) Notwithstanding where a call is billed or paid, "telephone service address"
             1162      means:
             1163          (a) if the location described in this Subsection (101)(a) is known, the location of the
             1164      telephone service equipment:
             1165          (i) to which a call is charged; and
             1166          (ii) from which the call originates or terminates;
             1167          (b) if the location described in Subsection (101)(a) is not known but the location
             1168      described in this Subsection (101)(b) is known, the location of the origination point of the
             1169      signal of the telephone service first identified by:
             1170          (i) the telecommunications system of the seller; or
             1171          (ii) if the system used to transport the signal is not that of the seller, information
             1172      received by the seller from its service provider; or
             1173          (c) if the locations described in Subsection (101)(a) or (b) are not known, the location
             1174      of a purchaser's primary place of use.
             1175          (102) (a) "Telephone service provider" means a person that:
             1176          (i) owns, controls, operates, or manages a telephone service; and
             1177          (ii) engages in an activity described in Subsection (102)(a)(i) for the shared use with or


             1178      resale to any person of the telephone service.
             1179          (b) A person described in Subsection (102)(a) is a telephone service provider whether
             1180      or not the Public Service Commission of Utah regulates:
             1181          (i) that person; or
             1182          (ii) the telephone service that the person owns, controls, operates, or manages.
             1183          (103) "Tobacco" means:
             1184          (a) a cigarette;
             1185          (b) a cigar;
             1186          (c) chewing tobacco;
             1187          (d) pipe tobacco; or
             1188          (e) any other item that contains tobacco.
             1189          (104) "Unassisted amusement device" means an amusement device, skill device, or
             1190      ride device that is started and stopped by the purchaser or renter of the right to use or operate
             1191      the amusement device, skill device, or ride device.
             1192          (105) (a) "Use" means the exercise of any right or power over tangible personal
             1193      property under Subsection 59-12-103 (1), incident to the ownership or the leasing of that
             1194      property, item, or service.
             1195          (b) "Use" does not include the sale, display, demonstration, or trial of that property in
             1196      the regular course of business and held for resale.
             1197          (106) (a) Subject to Subsection (106)(b), "vehicle" means the following that are
             1198      required to be titled, registered, or titled and registered:
             1199          (i) an aircraft as defined in Section 72-10-102 ;
             1200          (ii) a vehicle as defined in Section 41-1a-102 ;
             1201          (iii) an off-highway vehicle as defined in Section 41-22-2 ; or
             1202          (iv) a vessel as defined in Section 41-1a-102 .
             1203          (b) For purposes of Subsection 59-12-104 (33) only, "vehicle" includes:
             1204          (i) a vehicle described in Subsection (106)(a); or
             1205          (ii) (A) a locomotive;


             1206          (B) a freight car;
             1207          (C) railroad work equipment; or
             1208          (D) other railroad rolling stock.
             1209          (107) "Vehicle dealer" means a person engaged in the business of buying, selling, or
             1210      exchanging a vehicle as defined in Subsection (106).
             1211          (108) (a) Except as provided in Subsection (108)(b), "waste energy facility" means a
             1212      facility that generates electricity:
             1213          (i) using as the primary source of energy waste materials that would be placed in a
             1214      landfill or refuse pit if it were not used to generate electricity, including:
             1215          (A) tires;
             1216          (B) waste coal; or
             1217          (C) oil shale; and
             1218          (ii) in amounts greater than actually required for the operation of the facility.
             1219          (b) "Waste energy facility" does not include a facility that incinerates:
             1220          (i) municipal solid waste;
             1221          (ii) hospital waste as defined in 40 C.F.R. 60.51c; or
             1222          (iii) medical/infectious waste as defined in 40 C.F.R. 60.51c.
             1223          (109) "Watercraft" means a vessel as defined in Section 73-18-2 .
             1224          (110) "Wind energy" means wind used as the sole source of energy to produce
             1225      electricity.
             1226          (111) "ZIP Code" means a Zoning Improvement Plan Code assigned to a geographic
             1227      location by the United States Postal Service.
             1228          Section 4. Section 59-12-103 is amended to read:
             1229           59-12-103. Sales and use tax base -- Rates -- Effective dates -- Use of sales and use
             1230      tax revenues.
             1231          (1) A tax is imposed on the purchaser as provided in this part for amounts paid or
             1232      charged for the following transactions:
             1233          (a) retail sales of tangible personal property made within the state;


             1234          (b) amounts paid:
             1235          (i) (A) to a common carrier; or
             1236          (B) whether the following are municipally or privately owned, to a:
             1237          (I) telephone service provider; or
             1238          (II) telegraph corporation as defined in Section 54-2-1 ; and
             1239          (ii) for:
             1240          (A) telephone service, other than mobile telecommunications service, that originates
             1241      and terminates within the boundaries of this state;
             1242          (B) mobile telecommunications service that originates and terminates within the
             1243      boundaries of one state only to the extent permitted by the Mobile Telecommunications
             1244      Sourcing Act, 4 U.S.C. Sec. 116 et seq.; or
             1245          (C) telegraph service;
             1246          (c) sales of the following for commercial use:
             1247          (i) gas;
             1248          (ii) electricity;
             1249          (iii) heat;
             1250          (iv) coal;
             1251          (v) fuel oil; or
             1252          (vi) other fuels;
             1253          (d) sales of the following for residential use:
             1254          (i) gas;
             1255          (ii) electricity;
             1256          (iii) heat;
             1257          (iv) coal;
             1258          (v) fuel oil; or
             1259          (vi) other fuels;
             1260          (e) sales of prepared food;
             1261          (f) except as provided in Section 59-12-104 , amounts paid or charged as admission or


             1262      user fees for theaters, movies, operas, museums, planetariums, shows of any type or nature,
             1263      exhibitions, concerts, carnivals, amusement parks, amusement rides, circuses, menageries,
             1264      fairs, races, contests, sporting events, dances, boxing matches, wrestling matches, closed circuit
             1265      television broadcasts, billiard parlors, pool parlors, bowling lanes, golf, miniature golf, golf
             1266      driving ranges, batting cages, skating rinks, ski lifts, ski runs, ski trails, snowmobile trails,
             1267      tennis courts, swimming pools, water slides, river runs, jeep tours, boat tours, scenic cruises,
             1268      horseback rides, sports activities, or any other amusement, entertainment, recreation,
             1269      exhibition, cultural, or athletic activity;
             1270          (g) amounts paid or charged for services for repairs or renovations of tangible personal
             1271      property, unless Section 59-12-104 provides for an exemption from sales and use tax for:
             1272          (i) the tangible personal property; and
             1273          (ii) parts used in the repairs or renovations of the tangible personal property described
             1274      in Subsection (1)(g)(i), whether or not any parts are actually used in the repairs or renovations
             1275      of that tangible personal property;
             1276          (h) except as provided in Subsection 59-12-104 (7), amounts paid or charged for
             1277      assisted cleaning or washing of tangible personal property;
             1278          (i) amounts paid or charged for tourist home, hotel, motel, or trailer court
             1279      accommodations and services that are regularly rented for less than 30 consecutive days;
             1280          (j) amounts paid or charged for laundry or dry cleaning services;
             1281          (k) amounts paid or charged for leases or rentals of tangible personal property if within
             1282      this state the tangible personal property is:
             1283          (i) stored;
             1284          (ii) used; or
             1285          (iii) otherwise consumed;
             1286          (l) amounts paid or charged for tangible personal property if within this state the
             1287      tangible personal property is:
             1288          (i) stored;
             1289          (ii) used; or


             1290          (iii) consumed; and
             1291          (m) amounts paid or charged for prepaid telephone calling cards.
             1292          (2) (a) Except as provided in [Subsection] Subsections (2)(b) [or (f),] through (e), a
             1293      state tax and a local tax is imposed on a transaction described in Subsection (1) equal to the
             1294      sum of:
             1295          (i) a state tax imposed on the transaction at a tax rate of 4.75%; and
             1296          (ii) a local tax equal to the sum of the tax rates a county, city, or town imposes on the
             1297      transaction under this chapter other than this part.
             1298          (b) [(i) A] Except as provided in Subsection (2)(d) or (e), a state tax and a local tax is
             1299      imposed on a transaction described in Subsection (1)(d) equal to the sum of:
             1300          [(A)] (i) a state tax imposed on the transaction at a tax rate of 2%; and
             1301          [(B)] (ii) a local tax equal to the sum of the tax rates a county, city, or town imposes on
             1302      the transaction under this chapter other than this part[; or].
             1303          (c) Except as provided in Subsection (2)(d) or (e), beginning on January 1, 2007, a
             1304      state tax and a local tax is imposed on amounts paid or charged for food and food ingredients
             1305      equal to the sum of:
             1306          (i) a state tax imposed on the amounts paid or charged for food and food ingredients at
             1307      a tax rate of 2.75%; and
             1308          (ii) a local tax equal to the sum of the tax rates a county, city, or town imposes on the
             1309      amounts paid or charged for food and food ingredients under this chapter other than this part.
             1310          [(ii) if] (d) Except as provided in Subsection (2)(e), if a seller collects a tax in
             1311      accordance with Subsection 59-12-107 (1)(b) on a transaction described in Subsection (1), a
             1312      state tax and a local tax is imposed on the transaction equal to the sum of:
             1313          [(A)] (i) a state tax imposed on the transaction at a tax rate of:
             1314          [(I)] (A) 4.75% for a transaction other than a transaction described in Subsection
             1315      [(1)(d)] (2)(d)(i)(B) or (2)(d)(i)(C); [or]
             1316          [(II)] (B) 2% for a transaction described in Subsection (1)(d); [and] or
             1317          (C) beginning on January 1, 2007, 2.75% on the amounts paid or charged for food and


             1318      food ingredients; and
             1319          [(B)] (ii) a local tax imposed on the transaction at a tax rate equal to the sum of the
             1320      following tax rates:
             1321          [(I)] (A) the tax rate authorized by Section 59-12-204 , but only if all of the counties,
             1322      cities, and towns in the state impose the tax [under] authorized by Section 59-12-204 ; and
             1323          [(II)] (B) the tax rate authorized by Section 59-12-1102 , but only if all of the counties
             1324      in the state impose the tax [under] authorized by Section 59-12-1102 .
             1325          [(iii) Except as provided in Subsection (2)(f), beginning on January 1, 2007, a state tax
             1326      and a local tax is imposed on amounts paid or charged for food and food ingredients equal to
             1327      the sum of:]
             1328          [(A) a state tax imposed on the amounts paid or charged for food and food ingredients
             1329      at a rate of 2.75%; and]
             1330          [(B) a local tax equal to the sum of the tax rates a county, city, or town imposes on the
             1331      amounts paid or charged for food and food ingredients under this chapter other than this part.]
             1332          (e) (i) A state tax and a local tax is imposed on an entire bundled transaction as
             1333      provided in this Subsection (2)(e) if the bundled transaction is attributable to food and food
             1334      ingredients and tangible personal property other than food and food ingredients.
             1335          (ii) If the tax on a bundled transaction described in Subsection (2)(e)(i) is collected by a
             1336      seller other than a seller that collects a tax in accordance with Subsection 59-12-107 (1)(b),
             1337      beginning on January 1, 2007, a state tax and a local tax is imposed on the entire bundled
             1338      transaction equal to the sum of:
             1339          (A) a state tax imposed on the entire bundled transaction at the tax rate described in
             1340      Subsection (2)(a)(i); and
             1341          (B) a local tax imposed on the entire bundled transaction at the sum of the tax rates
             1342      described in Subsection (2)(a)(ii).
             1343          (iii) If the tax on a bundled transaction described in Subsection (2)(e)(i) is collected by
             1344      a seller in accordance with Subsection 59-12-107 (1)(b), beginning on January 1, 2007, a state
             1345      tax and a local tax is imposed on the entire bundled transaction equal to the sum of:


             1346          (A) a state tax imposed on the entire bundled transaction at the tax rate described in
             1347      Subsection (2)(d)(i)(A); and
             1348          (B) a local tax imposed on the entire bundled transaction at a tax rate equal to the sum
             1349      of the following tax rates:
             1350          (I) the tax rate authorized by Section 59-12-204 , but only if all of the counties, cities,
             1351      and towns in the state impose the tax authorized by Section 59-12-204 ; and
             1352          (II) the tax rate authorized by Section 59-12-1102 , but only if all of the counties in the
             1353      state impose the tax authorized by Section 59-12-1102 .
             1354          [(c)] (f) Subject to Subsections (2)[(d)](g) and [(e)] (h), a tax rate repeal or tax rate
             1355      change for a tax rate imposed under the following shall take effect on the first day of a calendar
             1356      quarter:
             1357          (i) Subsection (2)(a)(i);
             1358          (ii) Subsection (2)(b)(i)[(A)];
             1359          (iii) Subsection (2)[(b)(ii)(A)](c)(i); [or]
             1360          (iv) Subsection (2)[(b)(iii)(A).](d)(i);
             1361          (v) Subsection (2)(e)(ii)(A); or
             1362          (vi) Subsection (2)(e)(iii)(A).
             1363          [(d)] (g) (i) For a transaction described in Subsection (2)[(d)](g)(iii), a tax rate increase
             1364      shall take effect on the first day of the first billing period[: (A)] that begins after the effective
             1365      date of the tax rate increase[; and (B)] if the billing period for the transaction begins before the
             1366      effective date of a tax rate increase imposed under:
             1367          [(I)] (A) Subsection (2)(a)(i);
             1368          [(II)] (B) Subsection (2)(b)(i)[(A)]; [or]
             1369          [(III)] (C) Subsection (2)[(b)(ii)(A).](c)(i);
             1370          (D) Subsection (2)(d)(i);
             1371          (E) Subsection (2)(e)(ii)(A); or
             1372          (F) Subsection (2)(e)(iii)(A).
             1373          (ii) For a transaction described in Subsection (2)[(d)](g)(iii), the repeal of a tax or a tax


             1374      rate decrease shall take effect on the first day of the last billing period[: (A)] that began before
             1375      the effective date of the repeal of the tax or the tax rate decrease[; and (B)] if the billing period
             1376      for the transaction begins before the effective date of the repeal of the tax or the tax rate
             1377      decrease imposed under:
             1378          [(I)] (A) Subsection (2)(a)(i);
             1379          [(II)] (B) Subsection (2)(b)(i)[(A)]; [or]
             1380          [(III)] (C) Subsection (2)[(b)(ii)(A).](c)(i);
             1381          (D) Subsection (2)(d)(i);
             1382          (E) Subsection (2)(e)(ii)(A); or
             1383          (F) Subsection (2)(e)(iii)(A).
             1384          (iii) Subsections (2)[(d)](g)(i) and (ii) apply to transactions subject to a tax under:
             1385          (A) Subsection (1)(b);
             1386          (B) Subsection (1)(c);
             1387          (C) Subsection (1)(d);
             1388          (D) Subsection (1)(e);
             1389          (E) Subsection (1)(f);
             1390          (F) Subsection (1)(g);
             1391          (G) Subsection (1)(h);
             1392          (H) Subsection (1)(i);
             1393          (I) Subsection (1)(j); or
             1394          (J) Subsection (1)(k).
             1395          [(e) (i) If a tax due under Subsection (2)(a)(i) or (2)(b)(ii)(A)]
             1396          (h) (i) For a tax rate described in Subsection (2)(h)(ii), if a tax due on a catalogue sale
             1397      is computed on the basis of sales and use tax rates published in the catalogue, a tax rate repeal
             1398      or change in a tax rate [imposed under Subsection (2)(a)(i) or (2)(b)(ii)(A)] takes effect:
             1399          (A) on the first day of a calendar quarter; and
             1400          (B) beginning 60 days after the effective date of the tax rate repeal or tax rate change
             1401      [under Subsection (2)(a)(i) or (2)(b)(ii)(A)].


             1402          (ii) Subsection (2)(h)(i) applies to the tax rates described in the following:
             1403          (A) Subsection (2)(a)(i);
             1404          (B) Subsection (2)(b)(i);
             1405          (C) Subsection (2)(c)(i);
             1406          (D) Subsection (2)(d)(i);
             1407          (E) Subsection (2)(e)(ii)(A); or
             1408          (F) Subsection (2)(e)(iii)(A).
             1409          [(ii)] (iii) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking
             1410      Act, the commission may by rule define the term "catalogue sale."
             1411          [(f) If the price of a bundled transaction is attributable to food and food ingredients and
             1412      tangible personal property other than food and food ingredients, the tax imposed on the entire
             1413      bundled transaction is the sum of the tax rates described in Subsection (2)(a).]
             1414          (3) (a) Except as provided in Subsections (4) through (9), the following state taxes
             1415      shall be deposited into the General Fund:
             1416          (i) the tax imposed by Subsection (2)(a)(i);
             1417          (ii) the tax imposed by Subsection (2)(b)(i)[(A)];
             1418          (iii) the tax imposed by Subsection (2)[(b)(ii)(A)](c)(i); [or]
             1419          (iv) the tax imposed by Subsection (2)[(b)(iii)(A).] (d)(i);
             1420          (v) the tax imposed by Subsection (2)(e)(ii)(A); and
             1421          (vi) the tax imposed by Subsection (2)(e)(iii)(A).
             1422          (b) The following local taxes [described in Subsections (2)(a)(ii), (2)(b)(i)(B), and
             1423      (2)(b)(iii)(B)] shall be distributed to a county, city, or town as provided in this chapter[.]:
             1424          (i) the tax imposed by Subsection (2)(a)(ii);
             1425          (ii) the tax imposed by Subsection (2)(b)(ii);
             1426          (iii) the tax imposed by Subsection (2)(c)(ii); and
             1427          (iv) the tax imposed by Subsection (2)(e)(ii)(B).
             1428          (c) (i) Notwithstanding any provision of this chapter, each county, city, or town in the
             1429      state shall receive the county's, city's, or town's proportionate share of the revenues generated


             1430      by the following local [tax described in Subsection (2)(b)(ii)(B)] taxes as provided in
             1431      Subsection (3)(c)(ii)[.]:
             1432          (A) the local tax described in Subsection (2)(d)(ii); and
             1433          (B) the local tax described in Subsection (2)(e)(iii)(B).
             1434          (ii) [The] For revenues generated by a tax described in Subsection (3)(c)(i), the
             1435      commission shall determine a county's, city's, or town's proportionate share of the revenues
             1436      [under Subsection (3)(c)(i)] by:
             1437          (A) calculating an amount equal to the population of the unincorporated area of the
             1438      county, city, or town divided by the total population of the state; and
             1439          (B) multiplying the amount determined under Subsection (3)(c)(ii)(A) by the total
             1440      amount of revenues generated by the [local tax under Subsection (2)(b)(ii)(B)] taxes described
             1441      in Subsection (3)(c)(i) for all counties, cities, and towns.
             1442          (iii) (A) Except as provided in Subsection (3)(c)(iii)(B), population figures for
             1443      purposes of this section shall be derived from the most recent official census or census estimate
             1444      of the United States Census Bureau.
             1445          (B) If a needed population estimate is not available from the United States Census
             1446      Bureau, population figures shall be derived from the estimate from the Utah Population
             1447      Estimates Committee created by executive order of the governor.
             1448          (4) (a) Notwithstanding Subsection (3)(a), for a fiscal year beginning on or after July 1,
             1449      2003, the lesser of the following amounts shall be used as provided in Subsections (4)(b)
             1450      through (g):
             1451          (i) for taxes listed under Subsection (3)(a), the amount of tax revenue generated:
             1452          (A) by a 1/16% tax rate on the transactions described in Subsection (1); and
             1453          (B) for the fiscal year; or
             1454          (ii) $17,500,000.
             1455          (b) (i) For a fiscal year beginning on or after July 1, 2003, 14% of the amount
             1456      described in Subsection (4)(a) shall be transferred each year as dedicated credits to the
             1457      Department of Natural Resources to:


             1458          (A) implement the measures described in Subsections 63-34-14 (4)(a) through (d) to
             1459      protect sensitive plant and animal species; or
             1460          (B) award grants, up to the amount authorized by the Legislature in an appropriations
             1461      act, to political subdivisions of the state to implement the measures described in Subsections
             1462      63-34-14 (4)(a) through (d) to protect sensitive plant and animal species.
             1463          (ii) Money transferred to the Department of Natural Resources under Subsection
             1464      (4)(b)(i) may not be used to assist the United States Fish and Wildlife Service or any other
             1465      person to list or attempt to have listed a species as threatened or endangered under the
             1466      Endangered Species Act of 1973, 16 U.S.C. Sec. 1531 et seq.
             1467          (iii) At the end of each fiscal year:
             1468          (A) 50% of any unexpended dedicated credits shall lapse to the Water Resources
             1469      Conservation and Development Fund created in Section 73-10-24 ;
             1470          (B) 25% of any unexpended dedicated credits shall lapse to the Utah Wastewater Loan
             1471      Program Subaccount created in Section 73-10c-5 ; and
             1472          (C) 25% of any unexpended dedicated credits shall lapse to the Drinking Water Loan
             1473      Program Subaccount created in Section 73-10c-5 .
             1474          (c) For a fiscal year beginning on or after July 1, 2003, 3% of the amount described in
             1475      Subsection (4)(a) shall be deposited each year in the Agriculture Resource Development Fund
             1476      created in Section 4-18-6 .
             1477          (d) (i) For a fiscal year beginning on or after July 1, 2003, 1% of the amount described
             1478      in Subsection (4)(a) shall be transferred each year as dedicated credits to the Division of Water
             1479      Rights to cover the costs incurred in hiring legal and technical staff for the adjudication of
             1480      water rights.
             1481          (ii) At the end of each fiscal year:
             1482          (A) 50% of any unexpended dedicated credits shall lapse to the Water Resources
             1483      Conservation and Development Fund created in Section 73-10-24 ;
             1484          (B) 25% of any unexpended dedicated credits shall lapse to the Utah Wastewater Loan
             1485      Program Subaccount created in Section 73-10c-5 ; and


             1486          (C) 25% of any unexpended dedicated credits shall lapse to the Drinking Water Loan
             1487      Program Subaccount created in Section 73-10c-5 .
             1488          (e) (i) For a fiscal year beginning on or after July 1, 2003, 41% of the amount described
             1489      in Subsection (4)(a) shall be deposited in the Water Resources Conservation and Development
             1490      Fund created in Section 73-10-24 for use by the Division of Water Resources.
             1491          (ii) In addition to the uses allowed of the Water Resources Conservation and
             1492      Development Fund under Section 73-10-24 , the Water Resources Conservation and
             1493      Development Fund may also be used to:
             1494          (A) conduct hydrologic and geotechnical investigations by the Division of Water
             1495      Resources in a cooperative effort with other state, federal, or local entities, for the purpose of
             1496      quantifying surface and ground water resources and describing the hydrologic systems of an
             1497      area in sufficient detail so as to enable local and state resource managers to plan for and
             1498      accommodate growth in water use without jeopardizing the resource;
             1499          (B) fund state required dam safety improvements; and
             1500          (C) protect the state's interest in interstate water compact allocations, including the
             1501      hiring of technical and legal staff.
             1502          (f) For a fiscal year beginning on or after July 1, 2003, 20.5% of the amount described
             1503      in Subsection (4)(a) shall be deposited in the Utah Wastewater Loan Program Subaccount
             1504      created in Section 73-10c-5 for use by the Water Quality Board to fund wastewater projects.
             1505          (g) For a fiscal year beginning on or after July 1, 2003, 20.5% of the amount described
             1506      in Subsection (4)(a) shall be deposited in the Drinking Water Loan Program Subaccount
             1507      created in Section 73-10c-5 for use by the Division of Drinking Water to:
             1508          (i) provide for the installation and repair of collection, treatment, storage, and
             1509      distribution facilities for any public water system, as defined in Section 19-4-102 ;
             1510          (ii) develop underground sources of water, including springs and wells; and
             1511          (iii) develop surface water sources.
             1512          (5) (a) Notwithstanding Subsection (3)(a), for a fiscal year beginning on or after July 1,
             1513      2006, the difference between the following amounts shall be expended as provided in this


             1514      Subsection (5), if that difference is greater than $1:
             1515          (i) for taxes listed under Subsection (3)(a), the amount of tax revenue generated for the
             1516      fiscal year by a 1/16% tax rate on the transactions described in Subsection (1); and
             1517          (ii) $17,500,000.
             1518          (b) (i) The first $500,000 of the difference described in Subsection (5)(a) shall be:
             1519          (A) transferred each fiscal year to the Department of Natural Resources as dedicated
             1520      credits; and
             1521          (B) expended by the Department of Natural Resources for watershed rehabilitation or
             1522      restoration.
             1523          (ii) At the end of each fiscal year, 100% of any unexpended dedicated credits described
             1524      in Subsection (5)(b)(i) shall lapse to the Water Resources Conservation and Development Fund
             1525      created in Section 73-10-24 .
             1526          (c) (i) After making the transfer required by Subsection (5)(b)(i), $150,000 of the
             1527      remaining difference described in Subsection (5)(a) shall be:
             1528          (A) transferred each fiscal year to the Division of Water Resources as dedicated
             1529      credits; and
             1530          (B) expended by the Division of Water Resources for cloud-seeding projects
             1531      authorized by Title 73, Chapter 15, Modification of Weather.
             1532          (ii) At the end of each fiscal year, 100% of any unexpended dedicated credits described
             1533      in Subsection (5)(c)(i) shall lapse to the Water Resources Conservation and Development Fund
             1534      created in Section 73-10-24 .
             1535          (d) After making the transfers required by Subsections (5)(b) and (c), 94% of the
             1536      remaining difference described in Subsection (5)(a) shall be deposited into the Water
             1537      Resources Conservation and Development Fund created in Section 73-10-24 for use by the
             1538      Division of Water Resources for:
             1539          (i) preconstruction costs:
             1540          (A) as defined in Subsection 73-26-103 (6) for projects authorized by Title 73, Chapter
             1541      26, Bear River Development Act; and


             1542          (B) as defined in Subsection 73-28-103 (8) for the Lake Powell Pipeline project
             1543      authorized by Title 73, Chapter 28, Lake Powell Pipeline Development Act;
             1544          (ii) the cost of employing a civil engineer to oversee any project authorized by Title 73,
             1545      Chapter 26, Bear River Development Act;
             1546          (iii) the cost of employing a civil engineer to oversee the Lake Powell Pipeline project
             1547      authorized by Title 73, Chapter 28, Lake Powell Pipeline Development Act; and
             1548          (iv) other uses authorized under Sections 73-10-24 , 73-10-25.1 , 73-10-30 , and
             1549      Subsection (4)(e)(ii) after funding the uses specified in Subsections (5)(d)(i) through (iii).
             1550          (e) Any unexpended monies described in Subsection (5)(d) that remain in the Water
             1551      Resources Conservation and Development Fund at the end of the fiscal year are nonlapsing.
             1552          (f) After making the transfers required by Subsections (5)(b) and (c) and subject to
             1553      Subsection (5)(g), 6% of the remaining difference described in Subsection (5)(a) shall be
             1554      transferred each year as dedicated credits to the Division of Water Rights to cover the costs
             1555      incurred for employing additional technical staff for the administration of water rights.
             1556          (g) At the end of each fiscal year, any unexpended dedicated credits described in
             1557      Subsection (5)(f) over $150,000 lapse to the Water Resources Conservation and Development
             1558      Fund created in Section 73-10-24 .
             1559          (6) (a) Notwithstanding Subsection (3)(a), for a fiscal year beginning on or after July 1,
             1560      2003, the lesser of the following amounts shall be used as provided in Subsections (6)(b)
             1561      through (d):
             1562          (i) for taxes listed under Subsection (3)(a), the amount of tax revenue generated:
             1563          (A) by a 1/16% tax rate on the transactions described in Subsection (1); and
             1564          (B) for the fiscal year; or
             1565          (ii) $18,743,000.
             1566          (b) (i) For a fiscal year beginning on or after July 1, 2003, 3% of the amount described
             1567      in Subsection (6)(a) shall be deposited each year in the Transportation Corridor Preservation
             1568      Revolving Loan Fund created in Section 72-2-117 .
             1569          (ii) At least 50% of the money deposited in the Transportation Corridor Preservation


             1570      Revolving Loan Fund under Subsection (6)(b)(i) shall be used to fund loan applications made
             1571      by the Department of Transportation at the request of local governments.
             1572          (c) For a fiscal year beginning on or after July 1, 2003, 3% of the amount described in
             1573      Subsection (6)(a) shall be transferred each year as nonlapsing dedicated credits to the
             1574      Department of Transportation for the State Park Access Highways Improvement Program
             1575      created in Section 72-3-207 .
             1576          (d) For a fiscal year beginning on or after July 1, 2003, 94% of the amount described in
             1577      Subsection (6)(a) shall be deposited in the class B and class C roads account to be expended as
             1578      provided in Title 72, Chapter 2, Transportation Finances Act, for the use of class B and C
             1579      roads.
             1580          (7) (a) Notwithstanding Subsection (3)(a) and until Subsection (7)(b) applies,
             1581      beginning on January 1, 2000, the Division of Finance shall deposit into the Centennial
             1582      Highway Fund Restricted Account created in Section 72-2-118 a portion of the taxes listed
             1583      under Subsection (3)(a) equal to the revenues generated by a 1/64% tax rate on the taxable
             1584      transactions under Subsection (1).
             1585          (b) Notwithstanding Subsection (3)(a), when the highway general obligation bonds
             1586      have been paid off and the highway projects completed that are intended to be paid from
             1587      revenues deposited in the Centennial Highway Fund Restricted Account as determined by the
             1588      Executive Appropriations Committee under Subsection 72-2-118 (6)(d), the Division of
             1589      Finance shall deposit into the Transportation Investment Fund of 2005 created by Section
             1590      72-2-124 a portion of the taxes listed under Subsection (3)(a) equal to the revenues generated
             1591      by a 1/64% tax rate on the taxable transactions under Subsection (1).
             1592          (8) (a) Notwithstanding Subsection (3)(a), for fiscal years beginning on or after fiscal
             1593      year 2004-05, the commission shall each year on or before the September 30 immediately
             1594      following the last day of the fiscal year deposit the difference described in Subsection (8)(b)
             1595      into the Remote Sales Restricted Account created in Section 59-12-103.2 if that difference is
             1596      greater than $0.
             1597          (b) The difference described in Subsection (8)(a) is equal to the difference between:


             1598          (i) the total amount of the revenues [under Subsections (2)(b)(ii)(A) and (2)(b)(iii)(A)]
             1599      the commission received from sellers collecting [a tax in accordance with Subsection
             1600      59-12-107 (1)(b)] the taxes described in Subsections (2)(d)(i) and (2)(e)(iii)(A) for the fiscal
             1601      year immediately preceding the September 30 described in Subsection (8)(a); and
             1602          (ii) $7,279,673.
             1603          (9) (a) Notwithstanding Subsection (3)(a), in addition to the amount deposited in
             1604      Subsection (7)(a), and until Subsection (9)(b) applies, for a fiscal year beginning on or after
             1605      July 1, [2006] 2007, the Division of Finance shall deposit into the Centennial Highway Fund
             1606      Restricted Account created by Section 72-2-118 a portion of the taxes listed under Subsection
             1607      (3)(a) equal to 8.3% of the revenues collected from the following taxes [described in
             1608      Subsections (2)(a)(i), (2)(b)(i)(A), and (2)(b)(iii)(A)], which represents a portion of the
             1609      approximately 17% of sales and use tax revenues generated annually by the sales and use tax
             1610      on vehicles and vehicle-related products[.]:
             1611          (i) the tax imposed by Subsection (2)(a)(i);
             1612          (ii) the tax imposed by Subsection (2)(b)(i);
             1613          (iii) the tax imposed by Subsection (2)(c)(i); and
             1614          (iv) the tax imposed by Subsection (2)(e)(ii)(A).
             1615          (b) Notwithstanding Subsection (3)(a) and in addition to the amounts deposited under
             1616      Subsection (7)(b), when the highway general obligation bonds have been paid off and the
             1617      highway projects completed that are intended to be paid from revenues deposited in the
             1618      Centennial Highway Fund Restricted Account as determined by the Executive Appropriations
             1619      Committee under Subsection 72-2-118 (6)(d), the Division of Finance shall deposit into the
             1620      Transportation Investment Fund of 2005 created by Section 72-2-124 a portion of the taxes
             1621      listed under Subsection (3)(a) equal to 8.3% of the revenues collected from the following taxes
             1622      [described in Subsections (2)(a)(i), (2)(b)(i)(A), and (2)(b)(iii)(A)], which represents a portion
             1623      of the approximately 17% of sales and use tax revenues generated annually by the sales and use
             1624      tax on vehicles and vehicle-related products[.]:
             1625          (i) the tax imposed by Subsection (2)(a)(i);


             1626          (ii) the tax imposed by Subsection (2)(b)(i);
             1627          (iii) the tax imposed by Subsection (2)(c)(i); and
             1628          (iv) the tax imposed by Subsection (2)(e)(ii)(A).
             1629          Section 5. Section 59-12-104.3 is amended to read:
             1630           59-12-104.3. Credit for certain repossessions of a motor vehicle.
             1631          (1) (a) Subject to Subsections (2) and (3), a seller that collects a tax under this chapter
             1632      on the sale of a motor vehicle may claim a credit for a tax under this chapter for a motor
             1633      vehicle that:
             1634          (i) has been repossessed; and
             1635          (ii) that the seller resells.
             1636          (b) A seller of a motor vehicle other than the seller that collects a tax under this chapter
             1637      on the sale of that motor vehicle may claim a credit for a tax under this chapter:
             1638          (i) for a motor vehicle that the seller:
             1639          (A) repossessed; and
             1640          (B) resells; and
             1641          (ii) if the seller that collected the tax under this chapter on that motor vehicle:
             1642          (A) is no longer doing business in this state; and
             1643          (B) does not owe a tax under this chapter.
             1644          (2) The amount of the credit allowed by Subsection (1) is equal to the product of:
             1645          (a) the portion of the motor vehicle's purchase price that:
             1646          (i) was subject to a tax under this chapter; and
             1647          (ii) remains unpaid after the motor vehicle is resold; and
             1648          (b) the sum of the tax [rate] rates imposed:
             1649          [(i) (A) for a seller that collects a tax in accordance with Subsection 59-12-107 (1)(b),
             1650      described in Subsection 59-12-103 (2)(b)(ii); or]
             1651          [(B) for a seller other than a seller described in Subsection (2)(b)(i)(A), described in
             1652      Subsection 59-12-103 (2)(a);]
             1653          (i) under this chapter;


             1654          (ii) [imposed] on the motor vehicle's purchase price; and
             1655          (iii) [imposed] on the date the motor vehicle was purchased by the person that owns the
             1656      motor vehicle at the time of the repossession.
             1657          (3) If a seller recovers any portion of a motor vehicle's unpaid purchase price that is
             1658      used to calculate a credit allowed by Subsection (1)(b), the seller shall report and remit a tax
             1659      under this chapter to the commission:
             1660          (a) on the portion of the motor vehicle's unpaid purchase price that:
             1661          (i) the seller recovers; and
             1662          (ii) is used to calculate the credit allowed by Subsection (1)(b); and
             1663          (b) on a return filed for the time period for which the portion of the motor vehicle's
             1664      unpaid purchase price is recovered.
             1665          Section 6. Section 59-12-108 is amended to read:
             1666           59-12-108. Monthly payment -- Amount of tax a seller may retain -- Penalty --
             1667      Certain amounts allocated to local taxing jurisdictions.
             1668          (1) (a) Notwithstanding Section 59-12-107 , a seller that has a tax liability under this
             1669      chapter of $50,000 or more for the previous calendar year shall:
             1670          (i) file a return with the commission:
             1671          (A) monthly on or before the last day of the month immediately following the month
             1672      for which the seller collects a tax under this chapter; and
             1673          (B) for the month for which the seller collects a tax under this chapter; and
             1674          (ii) remit with the return required by Subsection (1)(a)(i) the amount the person is
             1675      required to remit to the commission for each tax, fee, or charge described in Subsection (1)(b):
             1676          (A) if that seller's tax liability under this chapter for the previous calendar year is less
             1677      than $96,000, by any method permitted by the commission; or
             1678          (B) if that seller's tax liability under this chapter for the previous calendar year is
             1679      $96,000 or more, by electronic funds transfer.
             1680          (b) Subsections (1)(a)(i) and (ii) apply to the following taxes, fees, or charges:
             1681          (i) a tax under Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;


             1682          (ii) a fee under Section 19-6-716 ;
             1683          (iii) a fee under Section 19-6-805 ;
             1684          (iv) a charge under Section 69-2-5.5 ; or
             1685          (v) a tax under this chapter.
             1686          (c) Notwithstanding Subsection (1)(a)(ii) and in accordance with Title 63, Chapter 46a,
             1687      Utah Administrative Rulemaking Act, the commission shall make rules providing for a method
             1688      for making same-day payments other than by electronic funds transfer if making payments by
             1689      electronic funds transfer fails.
             1690          (d) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             1691      commission shall establish by rule procedures and requirements for determining the amount a
             1692      seller is required to remit to the commission under this Subsection (1).
             1693          (2) (a) Except as provided in Subsection [(2)(b)] (3), a seller subject to Subsection (1)
             1694      or a seller described in Subsection [(3)] (4) may retain each month [an] the amount [not to
             1695      exceed:] allowed by this Subsection (2).
             1696          [(i)] (b) A seller subject to Subsection (1) or a seller described in Subsection (4) may
             1697      retain each month 1.31% of any amounts the seller is required to remit to the commission:
             1698          [(A)] (i) for a transaction described in Subsection 59-12-103 (1) that is subject to [the
             1699      sum of the tax rates described in Subsection 59-12-103 (2)(a)] a state tax and a local tax
             1700      imposed in accordance with the following, for the month for which the seller is filing a return
             1701      in accordance with Subsection (1)[; and]:
             1702          (A) Subsection 59-12-103 (2)(a);
             1703          (B) Subsection 59-12-103 (2)(b);
             1704          (C) Subsection 59-12-103 (2)(d), except for the state tax and the local tax imposed on
             1705      the amounts paid or charged for food and food ingredients in accordance with Subsections
             1706      59-12-103 (2)(d)(i)(C) and (2)(d)(ii); and
             1707          (D) Subsection 59-12-103 (2)(e); and
             1708          [(B)] (ii) for an agreement sales and use tax[; and].
             1709          [(ii)]     (c) (i) A seller subject to Subsection (1) or a seller described in Subsection (4)


             1710      may retain each month the amount calculated under Subsection (2)(c)(ii) for a transaction
             1711      described in Subsection 59-12-103 (1) that is subject to [the sum of the tax rates described in
             1712      Subsection 59-12-103 (2)(b)(iii), the sum of:] the state tax and the local tax imposed in
             1713      accordance with Subsection 59-12-103 (2)(c).
             1714          (ii) For purposes of Subsection (2)(c)(i), the amount a seller may retain is an amount
             1715      equal to the sum of:
             1716          (A) 1.31% of any amounts the seller is required to remit to the commission [in
             1717      accordance with Subsection 59-12-103 (2)(b)(iii)] for:
             1718          (I) the state tax and the local tax imposed in accordance with Subsection
             1719      59-12-103 (2)(c);
             1720          [(I)] (II) the month for which the seller is filing a return in accordance with Subsection
             1721      (1); and
             1722          [(II)] (III) an agreement sales and use tax; and
             1723          (B) 1.31% of the difference between:
             1724          (I) the amounts the seller would have been required to remit to the commission:
             1725          (Aa) in accordance with Subsection 59-12-103 (2)(a) if the transaction had been subject
             1726      to the [sum of the tax rates described in] state tax and the local tax imposed in accordance with
             1727      Subsection 59-12-103 (2)(a);
             1728          (Bb) for the month for which the seller is filing a return in accordance with Subsection
             1729      (1); and
             1730          (Cc) for an agreement sales and use tax; and
             1731          (II) the amounts the seller is required to remit to the commission for:
             1732          (Aa) the state tax and the local tax imposed in accordance with Subsection
             1733      59-12-103 (2)[(b)(iii)](c);
             1734          (Bb) [for] the month for which the seller is filing a return in accordance with
             1735      Subsection (1); and
             1736          (Cc) [for] an agreement sales and use tax[; and].
             1737          (d) (i) A seller subject to Subsection (1) or a seller described in Subsection (4) may


             1738      retain each month the amount calculated under Subsection (2)(d)(ii) for a transaction described
             1739      in Subsection 59-12-103 (1) that is subject to the state tax and the local tax imposed on the
             1740      amounts paid or charged for food and food ingredients in accordance with Subsections
             1741      59-12-103 (2)(d)(i)(C) and (2)(d)(ii).
             1742          (ii) For purposes of Subsection (2)(d)(i), the amount a seller may retain is an amount
             1743      equal to the sum of:
             1744          (A) 1.31% of any amounts the seller is required to remit to the commission for:
             1745          (I) the state tax and the local tax imposed on the amounts paid or charged for food and
             1746      food ingredients in accordance with Subsections 59-12-103 (2)(d)(i)(C) and (2)(d)(ii);
             1747          (II) the month for which the seller is filing a return in accordance with Subsection (1);
             1748      and
             1749          (III) an agreement sales and use tax; and
             1750          (B) 1.31% of the difference between:
             1751          (I) the amounts the seller would have been required to remit to the commission:
             1752          (Aa) in accordance with Subsections 59-12-103 (2)(d)(i)(A) and (2)(d)(ii) if the
             1753      transaction had been subject to the state tax and the local tax imposed in accordance with
             1754      Subsections 59-12-103 (2)(d)(i)(A) and (2)(d)(ii);
             1755          (Bb) for the month for which the seller is filing a return in accordance with Subsection
             1756      (1); and
             1757          (Cc) for an agreement sales and use tax; and
             1758          (II) the amounts the seller is required to remit to the commission for:
             1759          (Aa) the state tax and the local tax imposed in accordance with Subsections
             1760      59-12-103 (2)(d)(i)(C) and (2)(d)(ii);
             1761          (Bb) the month for which the seller is filing a return in accordance with Subsection (1);
             1762      and
             1763          (Cc) an agreement sales and use tax.
             1764          [(iii)] (e) A seller subject to Subsection (1) or a seller described in Subsection (4) may
             1765      retain each month 1% of any amounts the seller is required to remit to the commission:


             1766          [(A)] (i) for the month for which the seller is filing a return in accordance with
             1767      Subsection (1); and
             1768          [(B)] (ii) under:
             1769          [(I)] (A) Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;
             1770          [(II)] (B) Subsection 59-12-603 (1)(a)(i)(A); or
             1771          [(III)] (C) Subsection 59-12-603 (1)(a)(i)(B).
             1772          [(b)] (3) A state government entity that is required to remit taxes monthly in
             1773      accordance with Subsection (1) may not retain any amount under Subsection (2)[(a)].
             1774          [(3)] (4) A seller that has a tax liability under this chapter for the previous calendar
             1775      year of less than $50,000 may:
             1776          (a) voluntarily meet the requirements of Subsection (1); and
             1777          (b) if the seller voluntarily meets the requirements of Subsection (1), retain the
             1778      amounts allowed by Subsection (2)[(a)].
             1779          [(4)] (5) Penalties for late payment shall be as provided in Section 59-1-401 .
             1780          [(5)] (6) (a) For any amounts required to be remitted to the commission under this part,
             1781      the commission shall each month calculate an amount equal to the difference between:
             1782          (i) the total amount retained for that month by all sellers had the percentages listed
             1783      under [Subsection (2)(a)(i) and (ii)] Subsections (2)(b), (2)(c)(ii), and (2)(d)(ii) been 1.5%; and
             1784          (ii) the total amount retained for that month by all sellers at the percentages listed
             1785      under [Subsection (2)(a)(i) and (ii)] Subsections (2)(b), (2)(c)(ii), and (2)(d)(ii).
             1786          (b) The commission shall each month allocate the amount calculated under Subsection
             1787      [(5)] (6)(a) to each county, city, and town on the basis of the proportion of agreement sales and
             1788      use tax that the commission distributes to each county, city, and town for that month compared
             1789      to the total agreement sales and use tax that the commission distributes for that month to all
             1790      counties, cities, and towns.
             1791          Section 7. Section 59-12-603 is amended to read:
             1792           59-12-603. County tax -- Bases -- Rates -- Use of revenues -- Adoption of
             1793      ordinance required -- Administration -- Collection -- Distribution -- Enactment or repeal


             1794      of tax or tax rate change -- Effective date -- Notice requirements.
             1795          (1) (a) In addition to any other taxes, a county legislative body may, as provided in this
             1796      part, impose a tax as follows:
             1797          (i) (A) a county legislative body of any county may impose a tax of not to exceed 3%
             1798      on all short-term leases and rentals of motor vehicles not exceeding 30 days, except for leases
             1799      and rentals of motor vehicles made for the purpose of temporarily replacing a person's motor
             1800      vehicle that is being repaired pursuant to a repair or an insurance agreement; and
             1801          (B) beginning on or after January 1, 1999, a county legislative body of any county
             1802      imposing a tax under Subsection (1)(a)(i)(A) may, in addition to imposing the tax under
             1803      Subsection (1)(a)(i)(A), impose a tax of not to exceed 4% on all short-term leases and rentals
             1804      of motor vehicles not exceeding 30 days, except for leases and rentals of motor vehicles made
             1805      for the purpose of temporarily replacing a person's motor vehicle that is being repaired pursuant
             1806      to a repair or an insurance agreement;
             1807          (ii) a county legislative body of any county may impose a tax of not to exceed 1% of all
             1808      sales of [prepared foods and beverages] the following that are sold by [restaurants; and] a
             1809      restaurant:
             1810          (A) prepared food; or
             1811          (B) food and food ingredients; and
             1812          (iii) a county legislative body of any county may impose a tax of not to exceed .5% on
             1813      charges for the accommodations and services described in Subsection 59-12-103 (1)(i).
             1814          (b) A tax imposed under Subsection (1)(a) is in addition to the transient room tax
             1815      authorized under Part 3, Transient Room Tax, and is subject to the audit provisions of Section
             1816      17-31-5.5 .
             1817          (2) (a) Subject to Subsection (2)(b), revenue from the imposition of the taxes provided
             1818      for in Subsections (1)(a)(i) through (iii) may be used for the purposes of:
             1819          (i) financing tourism promotion; and
             1820          (ii) the development, operation, and maintenance of tourist, recreation, cultural, and
             1821      convention facilities as defined in Section 59-12-602 .


             1822          (b) A county of the first class shall expend at least $450,000 each year of the revenues
             1823      from the imposition of a tax authorized by Subsection (1)(a)(iii) within the county to fund a
             1824      marketing and ticketing system designed to:
             1825          (i) promote tourism in ski areas within the county by persons that do not reside within
             1826      the state; and
             1827          (ii) combine the sale of:
             1828          (A) ski lift tickets; and
             1829          (B) accommodations and services described in Subsection 59-12-103 (1)(i).
             1830          (3) The tax imposed under Subsection (1)(a)(iii) shall be in addition to the tax imposed
             1831      under Part 3, Transient Room Tax, and may be imposed only by a county of the first class.
             1832          (4) A tax imposed under this part may be pledged as security for bonds, notes, or other
             1833      evidences of indebtedness incurred by a county under Title 11, Chapter 14, Local Government
             1834      Bonding Act, to finance tourism, recreation, cultural, and convention facilities.
             1835          (5) (a) In order to impose the tax under Subsection (1), each county legislative body
             1836      shall annually adopt an ordinance imposing the tax.
             1837          (b) The ordinance under Subsection (5)(a) shall include provisions substantially the
             1838      same as those contained in Part 1, Tax Collection, except that the tax shall be imposed only on
             1839      those items and sales described in Subsection (1).
             1840          (c) The name of the county as the taxing agency shall be substituted for that of the state
             1841      where necessary, and an additional license is not required if one has been or is issued under
             1842      Section 59-12-106 .
             1843          (6) In order to maintain in effect its tax ordinance adopted under this part, each county
             1844      legislative body shall, within 30 days of any amendment of any applicable provisions of Part 1,
             1845      Tax Collection, adopt amendments to its tax ordinance to conform with the applicable
             1846      amendments to Part 1, Tax Collection.
             1847          (7) (a) (i) Except as provided in Subsection (7)(a)(ii), a tax authorized under this part
             1848      shall be administered, collected, and enforced in accordance with:
             1849          (A) the same procedures used to administer, collect, and enforce the tax under:


             1850          (I) Part 1, Tax Collection; or
             1851          (II) Part 2, Local Sales and Use Tax Act; and
             1852          (B) Chapter 1, General Taxation Policies.
             1853          (ii) A tax under this part is not subject to Section 59-12-107.1 or Subsections
             1854      59-12-205 (2) through (7).
             1855          (b) Except as provided in Subsection (7)(c):
             1856          (i) for a tax under this part other than the tax under Subsection (1)(a)(i)(B), the
             1857      commission shall distribute the revenues to the county imposing the tax; and
             1858          (ii) for a tax under Subsection (1)(a)(i)(B), the commission shall distribute the revenues
             1859      according to the distribution formula provided in Subsection (8).
             1860          (c) Notwithstanding Subsection (7)(b), the commission shall deduct from the
             1861      distributions under Subsection (7)(b) an administrative charge for collecting the tax as provided
             1862      in Section 59-12-206 .
             1863          (8) The commission shall distribute the revenues generated by the tax under Subsection
             1864      (1)(a)(i)(B) to each county collecting a tax under Subsection (1)(a)(i)(B) according to the
             1865      following formula:
             1866          (a) the commission shall distribute 70% of the revenues based on the percentages
             1867      generated by dividing the revenues collected by each county under Subsection (1)(a)(i)(B) by
             1868      the total revenues collected by all counties under Subsection (1)(a)(i)(B); and
             1869          (b) the commission shall distribute 30% of the revenues based on the percentages
             1870      generated by dividing the population of each county collecting a tax under Subsection
             1871      (1)(a)(i)(B) by the total population of all counties collecting a tax under Subsection (1)(a)(i)(B).
             1872          (9) (a) For purposes of this Subsection (9):
             1873          (i) "Annexation" means an annexation to a county under Title 17, Chapter 2,
             1874      Annexation to County.
             1875          (ii) "Annexing area" means an area that is annexed into a county.
             1876          (b) (i) Except as provided in Subsection (9)(c), if, on or after July 1, 2004, a county
             1877      enacts or repeals a tax or changes the rate of a tax under this part, the enactment, repeal, or


             1878      change shall take effect:
             1879          (A) on the first day of a calendar quarter; and
             1880          (B) after a 90-day period beginning on the date the commission receives notice meeting
             1881      the requirements of Subsection (9)(b)(ii) from the county.
             1882          (ii) The notice described in Subsection (9)(b)(i)(B) shall state:
             1883          (A) that the county will enact or repeal a tax or change the rate of a tax under this part;
             1884          (B) the statutory authority for the tax described in Subsection (9)(b)(ii)(A);
             1885          (C) the effective date of the tax described in Subsection (9)(b)(ii)(A); and
             1886          (D) if the county enacts the tax or changes the rate of the tax described in Subsection
             1887      (9)(b)(ii)(A), the rate of the tax.
             1888          (c) (i) Notwithstanding Subsection (9)(b)(i), for a transaction described in Subsection
             1889      (9)(c)(iii), the enactment of a tax or a tax rate increase shall take effect on the first day of the
             1890      first billing period:
             1891          (A) that begins after the effective date of the enactment of the tax or the tax rate
             1892      increase; and
             1893          (B) if the billing period for the transaction begins before the effective date of the
             1894      enactment of the tax or the tax rate increase imposed under Subsection (1).
             1895          (ii) Notwithstanding Subsection (9)(b)(i), for a transaction described in Subsection
             1896      (9)(c)(iii), the repeal of a tax or a tax rate decrease shall take effect on the first day of the last
             1897      billing period:
             1898          (A) that began before the effective date of the repeal of the tax or the tax rate decrease;
             1899      and
             1900          (B) if the billing period for the transaction begins before the effective date of the repeal
             1901      of the tax or the tax rate decrease imposed under Subsection (1).
             1902          (iii) Subsections (9)(c)(i) and (ii) apply to transactions subject to a tax under:
             1903          (A) Subsection 59-12-103 (1)(e);
             1904          (B) Subsection 59-12-103 (1)(i); or
             1905          (C) Subsection 59-12-103 (1)(k).


             1906          (d) (i) Except as provided in Subsection (9)(e), if, for an annexation that occurs on or
             1907      after July 1, 2004, the annexation will result in the enactment, repeal, or change in the rate of a
             1908      tax under this part for an annexing area, the enactment, repeal, or change shall take effect:
             1909          (A) on the first day of a calendar quarter; and
             1910          (B) after a 90-day period beginning on the date the commission receives notice meeting
             1911      the requirements of Subsection (9)(d)(ii) from the county that annexes the annexing area.
             1912          (ii) The notice described in Subsection (9)(d)(i)(B) shall state:
             1913          (A) that the annexation described in Subsection (9)(d)(i) will result in an enactment,
             1914      repeal, or change in the rate of a tax under this part for the annexing area;
             1915          (B) the statutory authority for the tax described in Subsection (9)(d)(ii)(A);
             1916          (C) the effective date of the tax described in Subsection (9)(d)(ii)(A); and
             1917          (D) if the county enacts the tax or changes the rate of the tax described in Subsection
             1918      (9)(d)(ii)(A), the rate of the tax.
             1919          (e) (i) Notwithstanding Subsection (9)(d)(i), for a transaction described in Subsection
             1920      (9)(e)(iii), the enactment of a tax or a tax rate increase shall take effect on the first day of the
             1921      first billing period:
             1922          (A) that begins after the effective date of the enactment of the tax or the tax rate
             1923      increase; and
             1924          (B) if the billing period for the transaction begins before the effective date of the
             1925      enactment of the tax or the tax rate increase imposed under Subsection (1).
             1926          (ii) Notwithstanding Subsection (9)(d)(i), for a transaction described in Subsection
             1927      (9)(e)(iii), the repeal of a tax or a tax rate decrease shall take effect on the first day of the last
             1928      billing period:
             1929          (A) that began before the effective date of the repeal of the tax or the tax rate decrease;
             1930      and
             1931          (B) if the billing period for the transaction begins before the effective date of the repeal
             1932      of the tax or the tax rate decrease imposed under Subsection (1).
             1933          (iii) Subsections (9)(e)(i) and (ii) apply to transactions subject to a tax under:


             1934          (A) Subsection 59-12-103 (1)(e);
             1935          (B) Subsection 59-12-103 (1)(i); or
             1936          (C) Subsection 59-12-103 (1)(k).
             1937          Section 8. Uncodified Section 3, Chapter 9, Laws of Utah 2006, Third Special
             1938      Session, which amends Uncodified Section 5, Chapter 282, Laws of Utah 2006, is amended to
             1939      read:
             1940          Section 5. Appropriation.
             1941          (1) Subject to Subsection (2), there is appropriated from the General Fund, for fiscal
             1942      year 2006-07 only, $6,000,000 to the State Tax Commission for distribution to certain business
             1943      locations to reimburse some of the business location's costs in complying with the reduced
             1944      sales and use tax rate imposed on food and food ingredients.
             1945          (2) The Legislature intends that the State Tax Commission may expend up to 2% of the
             1946      amount appropriated for administrative costs.
             1947          (3) The Legislature intends that, to the extent funds are available, the State Tax
             1948      Commission distribute these monies as provided in Subsections (4) through (6).
             1949          (4) (a) Except as provided in Subsection (4)(b), the State Tax Commission shall
             1950      reimburse a business location:
             1951          (i) that:
             1952          (A) in 2005, remitted taxes imposed by Title 59, Chapter 12, Sales and Use Tax Act, in
             1953      an amount greater than or equal to $15,000 but less than or equal to $150,000;
             1954          (B) remitted sales and use taxes on food and food ingredients as defined in Section
             1955      59-12-102 to the State Tax Commission before March 1, 2006; and
             1956          (C) submits a request for reimbursement to the State Tax Commission postmarked
             1957      before [January] April 1, 2007;
             1958          (ii) for the verifiable amounts that the business location actually expended:
             1959          (A) after May 1, 2006, but on or before December 31, 2006; and
             1960          (B) to:
             1961          (I) purchase computer hardware, software, or programming to account for sales under


             1962      the reduced sales and use tax rate imposed on food and food ingredients; [and] or
             1963          (II) pay for in-house programming to account for sales under the reduced sales and use
             1964      tax rate imposed on food and food ingredients; and
             1965          (iii) in an amount that does not exceed the lesser of:
             1966          (A) 75% of the verifiable amounts described in Subsection (4)(a)(ii); or
             1967          (B) $5,000.
             1968          (b) If the total amount of requests for reimbursement under Subsection (4)(a) exceed
             1969      the monies that are available for reimbursement, the State Tax Commission shall reduce each
             1970      claim by a pro rata share.
             1971          (5) (a) Except as provided in Subsection (5)(b), if, after the State Tax Commission
             1972      makes the reimbursements required by Subsection (4), monies described in Subsection (1)
             1973      remain for reimbursement, the State Tax Commission shall reimburse a business location:
             1974          (i) that:
             1975          (A) in 2005, remitted taxes imposed by Title 59, Chapter 12, Sales and Use Tax Act, in
             1976      an amount greater than $150,000 but less than or equal to $500,000;
             1977          (B) remitted sales and use taxes on food and food ingredients as defined in Section
             1978      59-12-102 to the State Tax Commission before March 1, 2006; and
             1979          (C) submits a request for reimbursement to the State Tax Commission postmarked
             1980      before [January] April 1, 2007;
             1981          (ii) for the verifiable amounts that the business location actually expended:
             1982          (A) after May 1, 2006, but on or before December 31, 2006; and
             1983          (B) to:
             1984          (I) purchase computer hardware, software, or programming to account for sales under
             1985      the reduced sales and use tax rate imposed on food and food ingredients; [and] or
             1986          (II) pay for in-house programming to account for sales under the reduced sales and use
             1987      tax rate imposed on food and food ingredients; and
             1988          (iii) in an amount that does not exceed the lesser of:
             1989          (A) 50% of the verifiable amounts described in Subsection (5)(a)(ii); or


             1990          (B) $10,000.
             1991          (b) If the total amount of requests for reimbursement under Subsection (5)(a) exceed
             1992      the monies that are available for reimbursement, the State Tax Commission shall reduce each
             1993      claim by a pro rata share.
             1994          (6) (a) Except as provided in Subsection (6)(b), if, after the State Tax Commission
             1995      makes the reimbursements required by Subsections (4) and (5), monies described in Subsection
             1996      (1) remain for reimbursement, the State Tax Commission shall reimburse a business location:
             1997          (i) that:
             1998          (A) in 2005, remitted taxes imposed by Title 59, Chapter 12, Sales and Use Tax Act, in
             1999      an amount greater than or equal to $15,000;
             2000          (B) remitted sales and use taxes on food and food ingredients as defined in Section
             2001      59-12-102 to the State Tax Commission before March 1, 2006; and
             2002          (C) submits a request for reimbursement to the State Tax Commission postmarked
             2003      before [January] April 1, 2007;
             2004          (ii) for the verifiable amounts that the business location actually expended:
             2005          (A) after May 1, 2006, but on or before December 31, 2006; and
             2006          (B) for a business location that, in 2005, remitted taxes imposed by Title 59, Chapter
             2007      12, Sales and Use Tax Act:
             2008          (I) in an amount greater than or equal to $15,000 but less than or equal to $500,000, for
             2009      amounts expended that were not reimbursed in accordance with Subsection (4) or (5), to:
             2010          (Aa) purchase computer hardware, software, or programming[: (Aa)] to account for
             2011      sales under the reduced sales and use tax rate imposed on food and food ingredients; [and] or
             2012          [(Bb) that were not reimbursed in accordance with Subsection (4) or (5); or]
             2013          (Bb) pay for in-house programming to account for sales under the reduced sales and
             2014      use tax rate imposed on food and food ingredients; or
             2015          (II) in an amount greater than $500,000, for amounts expended to:
             2016          (Aa) purchase computer hardware, software, or programming to account for sales
             2017      under the reduced sales and use tax rate imposed on food and food ingredients; [and] or


             2018          (Bb) pay for in-house programming to account for sales under the reduced sales and
             2019      use tax rate imposed on food and food ingredients; and
             2020          (iii) in an amount that does not exceed 50% of the verifiable amounts described in
             2021      Subsection (6)(a)(ii).
             2022          (b) If the total amount of requests for reimbursement under Subsection (6)(a) exceed
             2023      the monies that are available for reimbursement, the State Tax Commission shall reduce each
             2024      claim by a pro rata share.
             2025          Section 9. Effective date -- Retrospective operation.
             2026          If approved by two-thirds of all the members elected to each house, this bill:
             2027          (1) takes effect upon approval by the governor, or the day following the constitutional
             2028      time limit of Utah Constitution Article VII, Section 8, without the governor's signature, or in
             2029      the case of a veto, the date of veto override; and
             2030          (2) has retrospective operation to January 1, 2007.


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