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Second Substitute S.B. 223
This document includes House Floor Amendments incorporated into the bill on Wed, Feb
28, 2007 at 2:30 PM by ddonat. -->
Senator Wayne L. Niederhauser proposes the following substitute bill:
1
TAX AMENDMENTS
2
2007 GENERAL SESSION
3
STATE OF UTAH
4
Chief Sponsor: Wayne L. Niederhauser
5
House Sponsor:
John Dougall
6
7
LONG TITLE
8
General Description:
9
This bill amends the Revenue and Taxation title and the Rural Health Services chapter.
10
Highlighted Provisions:
11
This bill:
12
. modifies the membership of the Utah Tax Review Commission to include the chairs
13
of the Revenue and Taxation Interim Committee;
14
. repeals a repeal date for tax credits for research activities in the state;
15
. increases the percentage of expenses or payments that serve as the basis for
16
calculating tax credits for research activities in the state;
17
. provides a nonrefundable tax credit equal to 5% of a taxpayer's qualified research
18
expenses for the current taxable year in addition to other tax credits for research
19
activities in the state allowed under current statute;
20
. provides that the tax credits for qualified research expenses may not be carried
21
forward;
22
. requires a review of the tax credits for research activities in the state by the Utah
23
Tax Review Commission;
24
. extends the availability of the renewable energy tax credit;
25
. provides for the Utah Tax Review Commission to review the renewable energy tax
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credit;
27
. expands the renewable energy tax credit to include some geothermal sources;
28
. makes the renewable energy tax credit on commercial energy systems a refundable
29
tax credit;
30
. changes the calculation of the tax credit for commercial energy systems;
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. removes language reimbursing the Uniform School Fund for renewable energy tax
32
credits taken;
33
. provides that a tax under the Individual Income Tax Act that is imposed on the basis
34
of graduated brackets and rates may not be imposed for taxable years beginning on
35
or after January 1, 2008;
36
. provides and modifies definitions;
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. reduces the single rate individual income tax rate from 5.35% to 5%;
38
. enacts a nonrefundable tax credit under the Single Rate Individual Income Tax Act
39
allowed on the basis of:
40
. the deductions a person claims ; and
41
. personal exemptions;
42
. enacts H. [
a
] .H nonrefundable retirement tax H. [
credit
] credits .H under the
42a
Single Rate Individual
43
Income Tax Act;
44
. phases out the above nonrefundable tax credits under the Single Rate Individual
45
Income Tax Act at certain income levels;
46
. requires the apportionment of the above nonrefundable tax credits under the Single
47
Rate Individual Income Tax Act for a nonresident individual or part-year resident
48
individual;
49
. modifies the definition of "prosthetic device," the sale of which is exempt from
50
sales and use taxation, to include a dental prosthesis;
51
. reduces the state sales and use tax rate from 4.75% to 4.65%;
52
. reduces the state sales and use tax rate imposed on food and food ingredients,
53
except with respect to certain bundled transactions;
54
. provides a sales and use tax exemption for certain machinery, equipment, or repair
55
or replacement parts purchased or leased by certain establishments relating to
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mining that are listed under the North American Industry Classification System;
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. modifies State Tax Commission rulemaking authority;
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. authorizes certain counties, cities, or towns to increase certain tax rates from .25%
59
to .30% and exempts those tax rate increases from voter approval requirements;
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. provides that food and food ingredients are not subject to certain local sales and use
61
taxes, except with respect to certain bundled transactions;
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. addresses State Tax Commission notice requirements to enact, repeal, or change the
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tax rate of certain local sales and use taxes;
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. creates a restricted special revenue fund to distribute monies to fund rural health
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care facilities and services that are impacted by providing that food and food
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ingredients are not generally subject to local sales and use taxes for rural health care
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facilities and services, including:
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. addressing the distribution and expenditure of fund revenues; and
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. providing that unexpended monies remaining in the fund at the end of a fiscal
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year lapse into the General Fund;
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. requires the State Tax Commission to provide data to the executive director of the
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Department of Health;
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. increases the maximum tax rate for the resort communities local sales and use tax
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from 1% to 1.1%; and
74a
H. . enacts an additional state sales and use tax and provides that the revenues
74b
collected from the tax shall be deposited into the General Fund; .H
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. provides a nonrefundable tax credit under the Multi-Channel Video or Audio
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Service Tax Act for a multi-channel video or audio service provider;
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. requires a multi-channel video or audio service provider to pass through an amount
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equal to the tax credit to purchasers located within the state;
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. provides that a tax on amounts paid or charged for multi-channel video or audio
80
service may not be reduced as a result of the amount a multi-channel video or audio
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service provider passes through to its customers within the state;
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. requires a Revenue and Taxation Interim Committee study on repealing the state
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individual income tax imposed on the basis of graduated brackets and rates; and
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. makes technical changes.
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Monies Appropriated in this Bill:
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This bill appropriates:
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. for fiscal year 2007-08 only, $277,500 from the General Fund to the Rural Health
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Care Facilities Fund; and
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. as an ongoing appropriation subject to future budget constraints, $555,000 from the
90
General Fund for fiscal year 2008-09 to the Rural Health Care Facilities Fund.
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Other Special Clauses:
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This bill provides effective dates H. and provides for retrospective operation .H .
93
This bill provides revisor instructions.
93a
H. This bill coordinates with H.B. 27, Sales and Use Tax Modifications, by merging
93b
substantive amendments. .H
94
Utah Code Sections Affected:
95
AMENDS:
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59-1-210, as last amended by Chapter 271, Laws of Utah 1995
97
59-1-901, as last amended by Chapter 243, Laws of Utah 1996
98
59-7-612, as last amended by Chapter 9, Laws of Utah 2001
99
59-10-104, as last amended by Chapter 2, Laws of Utah 2006, Fourth Special Session
100
59-10-1012, as renumbered and amended by Chapter 223, Laws of Utah 2006
101
59-10-1014, as renumbered and amended by Chapter 223, Laws of Utah 2006
102
59-10-1202, as enacted by Chapter 2, Laws of Utah 2006, Fourth Special Session
103
59-10-1203, as enacted by Chapter 2, Laws of Utah 2006, Fourth Special Session
104
59-12-102, as last amended by Chapter 1, Laws of Utah 2006, Fourth Special Session
105
59-12-103, as last amended by Chapter 9, Laws of Utah 2006, Third Special Session
106
59-12-104, as last amended by Chapters 181, 182, 217, 218, 219, 220, 246, 268 and
107
346, Laws of Utah 2006
108
59-12-401, as last amended by Chapter 253, Laws of Utah 2006
109
59-12-402, as last amended by Chapter 253, Laws of Utah 2006
110
59-12-403, as last amended by Chapter 253, Laws of Utah 2006
111
59-12-501, as last amended by Chapter 253, Laws of Utah 2006
112
59-12-502, as last amended by Chapters 253 and 329, Laws of Utah 2006
113
59-12-504, as last amended by Chapter 253, Laws of Utah 2006
114
59-12-703, as last amended by Chapter 253, Laws of Utah 2006
115
59-12-802, as last amended by Chapters 253 and 302, Laws of Utah 2006
116
59-12-804, as last amended by Chapter 253, Laws of Utah 2006
117
59-12-1001, as last amended by Chapter 253, Laws of Utah 2006
118
59-12-1302, as last amended by Chapter 253, Laws of Utah 2006
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59-12-1402, as last amended by Chapter 253, Laws of Utah 2006
120
59-12-1503, as last amended by Chapter 253, Laws of Utah 2006
121
59-12-1703, as enacted by Chapter 1, Laws of Utah 2006, Fourth Special Session
122
59-26-102, as enacted by Chapter 300, Laws of Utah 2004
123
59-26-103, as enacted by Chapter 300, Laws of Utah 2004
124
ENACTS:
125
26-9-4, Utah Code Annotated 1953
126
59-10-1106, Utah Code Annotated 1953
127
59-10-1206.1, Utah Code Annotated 1953
128
59-10-1206.2, Utah Code Annotated 1953
129
59-10-1206.9, Utah Code Annotated 1953
129a
H. 59-12-1801, Utah Code Annotated 1953
129b
59-12-1802, Utah Code Annotated 1953
129c
59-12-1803, Utah Code Annotated 1953 .H
130
59-26-104.5, Utah Code Annotated 1953
131
REPEALS AND REENACTS:
132
59-7-614, as last amended by Chapter 223, Laws of Utah 2006
133
Uncodified Material Affected:
134
ENACTS UNCODIFIED MATERIAL
135
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Be it enacted by the Legislature of the state of Utah:
137
Section 1.
Section
26-9-4
is enacted to read:
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26-9-4. Rural Health Care Facilities Fund -- Source of revenues -- Interest --
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Distribution of revenues -- Expenditure of revenues -- Unexpended revenues lapse into
140
the General Fund.
141
(1) As used in this section:
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(a) "Emergency medical services" is as defined in Section
26-8a-102
.
143
(b) "Federally qualified health center" is as defined in 42 U.S.C. Sec. 1395x.
144
(c) "Fiscal year" means a one-year period beginning on July 1 of each year.
145
(d) "Freestanding urgent care center" is as defined in Section
59-12-801
.
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(e) "Fund" means the Rural Health Care Facilities Fund created by this section.
147
(f) "Nursing care facility" is as defined in Section
26-21-2
.
148
(g) "Rural city hospital" is as defined in Section
59-12-801
.
149
(h) "Rural county health care facility" is as defined in Section
59-12-801
.
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(i) "Rural county hospital" is as defined in Section
59-12-801
.
151
(j) "Rural county nursing care facility" is as defined in Section
59-12-801
.
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(k) "Rural emergency medical services" is as defined in Section
59-12-801
.
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(l) "Rural health clinic" is as defined in 42 U.S.C. Sec. 1395x.
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(2) There is created a restricted special revenue fund known as the Rural Health Care
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Facilities Fund.
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(3) (a) The fund shall be funded by amounts appropriated by the Legislature.
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(b) Any interest earned on the fund shall be deposited into the General Fund.
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(4) Subject to Subsection (5), the executive director shall for a fiscal year distribute
159
monies deposited into the fund to each:
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(a) county legislative body of a county that, on January 1, 2007, imposes a tax in
161
accordance with Section
59-12-802
; or
162
(b) city legislative body of a city that, on January 1, 2007, imposes a tax in accordance
163
with Section
59-12-804
.
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(5) (a) For purposes of the distribution required by Subsection (4), the executive
165
director shall:
166
(i) estimate for each county and city described in Subsection (4) the amount by which
167
the revenues collected from the taxes imposed under Sections
59-12-802
and
59-12-804
for
168
fiscal year 2005-06 would have been reduced had:
169
(A) the amendments made by this bill to Sections
59-12-802
and
59-12-804
been in
170
effect for fiscal year 2005-06; and
171
(B) each county and city described in Subsection (4) imposed the tax under Sections
172
59-12-802
and
59-12-804
for the entire fiscal year 2005-06;
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(ii) calculate a percentage for each county and city described in Subsection (4) by
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dividing the amount estimated for each county and city in accordance with Subsection (5)(a)(i)
175
by $555,000; and
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(iii) distribute to each county and city described in Subsection (4) an amount equal to
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the product of:
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H. [
(I)
] (A) .H the percentage calculated in accordance with Subsection (5)(a)(ii); and
179
H. [
(II)
] (B) .H the amount appropriated by the Legislature to the fund for the fiscal year.
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(b) The executive director shall make the estimations, calculations, and distributions
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required by Subsection (5)(a) on the basis of data provided to the executive director by the
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State Tax Commission.
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(6) (a) Subject to Subsection (6)(b), a county legislative body shall distribute the
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monies the county legislative body receives in accordance with Subsection (5):
185
(i) for a county of the third, fourth, or fifth class, to fund rural county health care
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facilities in that county; and
187
(ii) for a county of the sixth class, to fund:
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(A) emergency medical services in that county;
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(B) federally qualified health centers in that county;
190
(C) freestanding urgent care centers in that county;
191
(D) rural county health care facilities in that county;
192
(E) rural health clinics in that county; or
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(F) a combination of Subsections (6)(a)(ii)(A) through (E).
194
(b) A county legislative body shall distribute a percentage of the monies the county
195
legislative body receives in accordance with Subsection (5) to each center, clinic, facility, or
196
service described in Subsection (6)(a) equal to the same percentage that the county legislative
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body distributes to that center, clinic, facility, or service in accordance with Section
59-12-803
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for the calendar year ending on the December 31 immediately preceding the first day of the
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fiscal year for which the county legislative body receives the distribution in accordance with
200
Subsection (5).
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(c) A center, clinic, facility, or service that receives a distribution in accordance with
202
this Subsection (6) shall expend that distribution for the same purposes for which monies
203
generated by a tax under Section
59-12-802
may be expended.
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(7) (a) Subject to Subsection (7)(b), a city legislative body shall distribute the monies
205
the city legislative body receives in accordance with Subsection (5) to fund rural city hospitals
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in that city.
207
(b) A city legislative body shall distribute a percentage of the monies the city
208
legislative body receives in accordance with Subsection (5) to each rural city hospital described
209
in Subsection (7)(a) equal to the same percentage that the city legislative body distributes to
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that rural city hospital in accordance with Section
59-12-805
for the calendar year ending on
211
the December 31 immediately preceding the first day of the fiscal year for which the city
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legislative body receives the distribution in accordance with Subsection (5).
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(c) A rural city hospital that receives a distribution in accordance with this Subsection
214
(7) shall expend that distribution for the same purposes for which monies generated by a tax
215
under Section
59-12-804
may be expended.
216
(8) Any monies remaining in the Rural Health Care Facilities Fund at the end of a
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fiscal year after the executive director makes the distributions required by this section shall
218
lapse into the General Fund.
219
Section 2.
Section
59-1-210
is amended to read:
220
59-1-210. General powers and duties.
221
The powers and duties of the commission are as follows:
222
(1) to sue and be sued in its own name;
223
(2) to adopt rules and policies consistent with the Constitution and laws of this state to
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govern the commission, executive director, division directors, and commission employees in
225
the performance of their duties;
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(3) to adopt rules and policies consistent with the Constitution and laws of the state, to
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govern county boards and officers in the performance of any duty relating to assessment,
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equalization, and collection of taxes;
229
(4) to prescribe the use of forms relating to the assessment of property for state or local
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taxation, the equalization of those assessments, the reporting of property or income for state or
231
local taxation purposes, or for the computation of those taxes and the reporting of any
232
information, statistics, or data required by the commission;
233
(5) to administer and supervise the tax laws of the state;
234
(6) to prepare and maintain from year to year a complete record of all lands subject to
235
taxation in this state, and all machinery used in mining and all property or surface
236
improvements upon or appurtenant to mines or mining claims;
237
(7) to exercise general supervision over assessors and county boards of equalization
238
including the authority to enforce Section
59-2-303.1
, and over other county officers in the
239
performance of their duties relating to the assessment of property and collection of taxes, so
240
that all assessments of property are just and equal, according to fair market value, and that the
241
tax burden is distributed without favor or discrimination;
242
(8) to reconvene any county board of equalization which, when reconvened, may only
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address business approved by the commission and extend the time for which any county board
244
of equalization may sit for the equalization of assessments;
245
(9) to confer with, advise, and direct county treasurers, assessors, and other county
246
officers in matters relating to the assessment and equalization of property for taxation and the
247
collection of taxes;
248
(10) to provide for and hold annually at such time and place as may be convenient a
249
district or state convention of county assessors, auditors, and other county officers to consider
250
and discuss matters relative to taxation, uniformity of valuation, and changes in the law relative
251
to taxation and methods of assessment, to which county assessors and other officers called to
252
attend shall attend at county expense;
253
(11) to direct proceedings, actions, and prosecutions to enforce the laws relating to the
254
penalties, liabilities, and punishments of public officers, persons, and officers or agents of
255
corporations for failure or neglect to comply with the statutes governing the reporting,
256
assessment, and taxation of property;
257
(12) to cause complaints to be made in the proper court seeking removal from office of
258
assessors, auditors, members of county boards, and other assessing, taxing, or disbursing
259
officers, who are guilty of official misconduct or neglect of duty;
260
(13) to require county attorneys to immediately institute and prosecute actions and
261
proceedings in respect to penalties, forfeitures, removals, and punishments for violations of the
262
laws relating to the assessment and taxation of property in their respective counties;
263
(14) to require any person to furnish any information required by the commission to
264
ascertain the value and the relative burden borne by all kinds of property in the state, and to
265
require from all state and local officers any information necessary for the proper discharge of
266
the duties of the commission;
267
(15) to examine all records relating to the valuation of property of any person;
268
(16) to subpoena witnesses to appear and give testimony and produce records relating
269
to any matter before the commission;
270
(17) to cause depositions of witnesses to be taken as in civil actions at the request of
271
the commission or any party to any matter or proceeding before the commission;
272
(18) to authorize any member or employee of the commission to administer oaths and
273
affirmations in any matter or proceeding relating to the exercise of the powers and duties of the
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commission;
275
(19) to visit periodically each county of the state, to investigate and direct the work and
276
methods of local assessors and other officials in the assessment, equalization, and taxation of
277
property, and to ascertain whether the law requiring the assessment of all property not exempt
278
from taxation, and the collection of taxes, have been properly administered and enforced;
279
(20) to carefully examine all cases where evasion or violation of the laws for
280
assessment and taxation of property is alleged, to ascertain whether existing laws are defective
281
or improperly administered;
282
(21) to furnish to the governor from time to time such assistance and information as the
283
governor requires;
284
(22) to transmit to the governor and to each member of the Legislature
285
recommendations as to legislation which will correct or eliminate defects in the operation of
286
the tax laws and will equalize the burden of taxation within the state;
287
(23) to correct any error in any assessment made by it at any time before the tax is due
288
and report the correction to the county auditor, who shall enter the corrected assessment upon
289
the assessment roll;
290
(24) to compile and publish statistics relating to taxation in the state and prepare and
291
submit an annual budget to the governor for inclusion in the state budget to be submitted to the
292
Legislature;
293
(25) to perform any further duties imposed by law, and exercise all powers necessary in
294
the performance of its duties;
295
(26) to adopt a schedule of fees assessed for services provided by the commission,
296
unless otherwise provided by statute. The fee shall be reasonable and fair, and shall reflect the
297
cost of services provided. Each fee established in this manner shall be submitted to and
298
approved by the Legislature as part of the commission's annual appropriations request. The
299
commission may not charge or collect any fee proposed in this manner without approval by the
300
Legislature; [and]
301
(27) to comply with the procedures and requirements of Title 63, Chapter 46b,
302
Administrative Procedures Act, in its adjudicative proceedings[.]; and
303
(28) to provide data to the executive director of the Department of Health for purposes
304
of the distributions required by Section
26-9-4
.
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Section 3.
Section
59-1-901
is amended to read:
306
59-1-901. Creation -- Members -- Terms.
307
(1) There is created a state commission to be known as the Utah Tax Review
308
Commission.
309
(2) (a) The [review commission] Utah Tax Review Commission shall be composed of
310
[14] 16 members as follows:
311
(i) [Two] two members shall be appointed by the speaker of the House of
312
Representatives from the House of Representatives, not more than one of whom may be from
313
the same political party[.];
314
(ii) [Two] two members shall be appointed by the president of the Senate from the
315
Senate, not more than one of whom may be from the same political party[.];
316
(iii) [Five] five members shall be appointed by the governor, not more than three of
317
whom may be from the same political party[.];
318
(iv) [A] one member who is a member of the State Tax Commission, appointed by the
319
State Tax Commission, shall be an ex officio member of the [review commission.] Utah Tax
320
Review Commission;
321
(v) one member who is the House of Representatives chair of the Revenue and
322
Taxation Interim Committee shall be an ex officio member of the Utah Tax Review
323
Commission; and
324
(vi) one member who is the Senate chair of the Revenue and Taxation Interim
325
Committee shall be an ex officio member of the Utah Tax Review Commission.
326
(b) The [ten] 12 members appointed under Subsection (2)(a) shall then select four
327
additional members with consideration to be given to achieving ethnic, cultural, and gender
328
diversity, representation from the major geographical areas of the state, and equal bipartisan
329
representation.
330
(3) (a) Except for members appointed under Subsections (2)(a)(i) [and], (ii), (v), and
331
(vi), and except as required by Subsection (3)(b), members shall be appointed to four-year
332
terms.
333
(b) Notwithstanding the requirements of Subsection (3)(a), the governor shall, at the
334
time of appointment or reappointment, adjust the length of terms to ensure that the terms of
335
commission members are staggered so that approximately half of the commission is appointed
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every two years.
337
Section 4.
Section
59-7-612
is amended to read:
338
59-7-612. Tax credits for research activities conducted in the state -- Carry
339
forward -- Commission to report modification or repeal of certain federal provisions --
340
Utah Tax Review Commission study.
341
(1) (a) [For taxable years beginning on or after January 1, 1999, but beginning before
342
December 31, 2010, a] A taxpayer meeting the requirements of this section [shall qualify for]
343
may claim the following nonrefundable tax credits [for increasing research activities in this
344
state]:
345
(i) a research tax credit of [6%] 7% of the taxpayer's qualified research expenses for
346
the current taxable year that exceed the base amount provided for under Subsection (4); [and]
347
(ii) a tax credit for payments to qualified organizations for basic research as provided
348
in Section 41(e), Internal Revenue Code, of [6%] 7% for the current taxable year that exceed
349
the base amount provided for under Subsection (4)[.]; and
350
(iii) a tax credit equal to 5% of the taxpayer's qualified research expenses for the
351
current taxable year.
352
[(b) If a taxpayer qualifying for a credit under Subsection (1)(a) seeks to claim the
353
credit, the taxpayer shall:]
354
(b) (i) Except as provided in Subsection (1)(b)(ii), a taxpayer may:
355
[(i)] (A) claim the tax credit or a portion of the tax credit for the taxable year
356
immediately following the taxable year for which the taxpayer qualifies for the tax credit;
357
[(ii)] (B) carry forward the tax credit or a portion of the tax credit [forward] as
358
provided in Subsection [(4)(f)] (5); or
359
[(iii)] (C) claim a portion of the tax credit and carry forward a portion of the tax credit
360
as provided in Subsections (1)(b)(i)(A) and [(ii)] (B).
361
(ii) A taxpayer may not carry forward the tax credit allowed by Subsection (1)(a)(iii).
362
(c) The tax credits provided for in this section do not include the alternative
363
incremental credit provided for in Section 41(c)(4), Internal Revenue Code.
364
(2) For purposes of claiming a tax credit under this section, a unitary group as defined
365
in Section
59-7-101
is considered to be one taxpayer.
366
(3) Except as specifically provided for in this section:
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(a) the tax credits authorized under Subsection (1) shall be calculated as provided in
368
Section 41, Internal Revenue Code; and
369
(b) the definitions provided in Section 41, Internal Revenue Code, apply in calculating
370
the tax credits authorized under Subsection (1).
371
(4) For purposes of this section:
372
(a) the base amount shall be calculated as provided in Sections 41(c) and 41(h),
373
Internal Revenue Code, except that:
374
(i) the base amount does not include the calculation of the alternative incremental
375
credit provided for in Section 41(c)(4), Internal Revenue Code;
376
(ii) a taxpayer's gross receipts include only those gross receipts attributable to sources
377
within this state as provided in Part 3, Allocation and Apportionment of Income -- Utah
378
UDITPA Provisions; and
379
(iii) notwithstanding Section 41(c), Internal Revenue Code, for purposes of calculating
380
the base amount, a taxpayer:
381
(A) may elect to be treated as a start-up company as provided in Section 41(c)(3)(B)
382
regardless of whether the taxpayer meets the requirements of Section 41(c)(3)(B)(i)(I) or (II);
383
and
384
(B) may not revoke an election to be treated as a start-up company under Subsection
385
(4)(a)(iii)(A);
386
(b) "basic research" is as defined in Section 41(e)(7), Internal Revenue Code, except
387
that the term includes only basic research conducted in this state;
388
(c) "qualified research" is as defined in Section 41(d), Internal Revenue Code, except
389
that the term includes only qualified research conducted in this state;
390
(d) "qualified research expenses" is as defined and calculated in Section 41(b), Internal
391
Revenue Code, except that the term includes only [those expenses incurred in conducting
392
qualified research in this state;]:
393
(i) in-house research expenses incurred in this state; and
394
(ii) contract research expenses incurred in this state; and
395
(e) [notwithstanding the provisions of Section 41(h), Internal Revenue Code, the
396
credits] a tax credit provided for in this section [shall] is not [terminate] terminated if [the
397
credits terminate] a credit terminates under Section 41, Internal Revenue Code[; and].
Text Box
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398
[(f) notwithstanding the provisions of Sections 39 and 41(g), Internal Revenue Code,
399
governing the carry forward and carry back of federal tax credits, if]
400
(5) If the amount of a tax credit claimed by a taxpayer under [this section] Subsection
401
(1)(a)(i) or (ii) exceeds the taxpayer's tax liability under this chapter for a taxable year, the
402
amount of the tax credit exceeding the tax liability:
403
[(i)] (a) may be carried forward for a period that does not exceed the next 14 taxable
404
years; and
405
[(ii)] (b) may not be carried back to a taxable year preceding the current taxable year.
406
[(5)] (6) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking
407
Act, the commission may make rules for purposes of this section prescribing a certification
408
process for qualified organizations to ensure that amounts paid to the qualified organizations
409
are for basic research conducted in this state.
410
[(6)] (7) If a [federal tax credit under] provision of Section 41, Internal Revenue Code,
411
is modified or repealed, the commission shall report the modification or repeal to the Utah Tax
412
Review Commission within 60 days after the day on which the modification or repeal becomes
413
effective.
414
[(7)] (8) (a) [Except as provided in Subsection (7)(b), the] The Utah Tax Review
415
Commission shall review the tax credits provided for in this section on or before [the earlier of:
416
(i)] October 1 of the year after the year in which the commission reports under Subsection [(6)]
417
(7) a modification or repeal of a [federal tax credit under] provision of Section 41, Internal
418
Revenue Code[; or (ii) October 1, 2004].
419
(b) Notwithstanding Subsection [(7)] (8)(a), the Utah Tax Review Commission is not
420
required to review the tax credits provided for in this section if the only modification to a
421
[federal tax credit under] provision of Section 41, Internal Revenue Code, is the extension of
422
the termination date provided for in Section 41(h), Internal Revenue Code.
423
(c) The Utah Tax Review Commission shall address in a review under this section
424
[the]:
425
(i) the cost of the [credit] tax credits provided for in this section;
426
(ii) the purpose and effectiveness of the [credit] tax credits provided for in this section;
427
(iii) whether the [credit benefits] tax credits provided for in this section benefit the
428
state; and
Text Box
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429
(iv) whether the [credit] tax credits provided for in this section should be:
430
(A) continued;
431
(B) modified; or
432
(C) repealed.
433
(d) If the Utah Tax Review Commission reviews the tax credits provided for in this
434
section, the Utah Tax Review Commission shall report its findings to the Revenue and
435
Taxation Interim Committee on or before the November interim meeting of the year in which
436
the Utah Tax Review Commission reviews the tax credits.
437
Section 5.
Section
59-7-614
is repealed and reenacted to read:
438
59-7-614. Renewable energy systems tax credit -- Definitions -- Limitations --
439
State tax credit in addition to allowable federal credits -- Certification -- Rulemaking
440
authority.
441
(1) As used in this section:
442
(a) "Active solar system":
443
(i) means a system of equipment capable of collecting and converting incident solar
444
radiation into thermal, mechanical, or electrical energy, and transferring these forms of energy
445
by a separate apparatus to storage or to the point of use; and
446
(ii) includes water heating, space heating or cooling, and electrical or mechanical
447
energy generation.
448
(b) "Biomass system" means any system of apparatus and equipment for use in
449
converting material into biomass energy, as defined in Section
59-12-102
, and transporting that
450
energy by separate apparatus to the point of use or storage.
451
(c) "Business entity" means any sole proprietorship, estate, trust, partnership,
452
association, corporation, cooperative, or other entity under which business is conducted or
453
transacted.
454
(d) "Commercial energy system" means any active solar, passive solar, geothermal
455
electricity, direct-use geothermal, geothermal heat-pump system, wind, hydroenergy, or
456
biomass system used to supply energy to a commercial unit or as a commercial enterprise.
457
(e) "Commercial enterprise" means a business entity whose purpose is to produce
458
electrical, mechanical, or thermal energy for sale from a commercial energy system.
459
(f) (i) "Commercial unit" means any building or structure that a business entity uses to
Text Box
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460
transact its business.
461
(ii) Notwithstanding Subsection (1)(f)(i):
462
(A) in the case of an active solar system used for agricultural water pumping or a wind
463
system, each individual energy generating device shall be a commercial unit; and
464
(B) if an energy system is the building or structure that a business entity uses to
465
transact its business, a commercial unit is the complete energy system itself.
466
(g) "Direct-use geothermal system" means a system of apparatus and equipment
467
enabling the direct use of thermal energy, generally between 100 and 300 degrees Fahrenheit,
468
that is contained in the earth to meet energy needs, including heating a building, an industrial
469
process, and aquaculture.
470
(h) "Geothermal electricity" means energy contained in heat that continuously flows
471
outward from the earth that is used as a sole source of energy to produce electricity.
472
(i) "Geothermal heat-pump system" means a system of apparatus and equipment
473
enabling the use of thermal properties contained in the earth at temperatures well below 100
474
degrees Fahrenheit to help meet heating and cooling needs of a structure.
475
(j) "Hydroenergy system" means a system of apparatus and equipment capable of
476
intercepting and converting kinetic water energy into electrical or mechanical energy and
477
transferring this form of energy by separate apparatus to the point of use or storage.
478
(k) "Individual taxpayer" means any person who is a taxpayer as defined in Section
479
59-10-103
and an individual as defined in Section
59-10-103
.
480
(l) "Passive solar system":
481
(i) means a direct thermal system that utilizes the structure of a building and its
482
operable components to provide for collection, storage, and distribution of heating or cooling
483
during the appropriate times of the year by utilizing the climate resources available at the site;
484
and
485
(ii) includes those portions and components of a building that are expressly designed
486
and required for the collection, storage, and distribution of solar energy.
487
(m) "Residential energy system" means any active solar, passive solar, biomass,
488
direct-use geothermal, geothermal heat-pump system, wind, or hydroenergy system used to
489
supply energy to or for any residential unit.
490
(n) "Residential unit" means any house, condominium, apartment, or similar dwelling
Text Box
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House Floor Amendments 2-28-2007 dd/
491
unit that serves as a dwelling for a person, group of persons, or a family but does not include
492
property subject to a fee under:
493
(i) Section
59-2-404
;
494
(ii) Section
59-2-405
;
495
(iii) Section
59-2-405.1
;
496
(iv) Section
59-2-405.2
; or
497
(v) Section
59-2-405.3
.
498
(o) "Utah Geological Survey" means the Utah Geological Survey established in Section
499
63-73-5
.
500
(p) "Wind system" means a system of apparatus and equipment capable of intercepting
501
and converting wind energy into mechanical or electrical energy and transferring these forms of
502
energy by a separate apparatus to the point of use, sale, or storage.
503
(2) (a) (i) For taxable years beginning on or after January 1, H. [
2008
] 2007 .H , a
503a
business entity that
504
purchases and completes or participates in the financing of a residential energy system to
505
supply all or part of the energy required for a residential unit owned or used by the business
506
entity and situated in Utah is entitled to a nonrefundable tax credit as provided in this
507
Subsection (2)(a).
508
(ii) (A) A business entity is entitled to a tax credit equal to 25% of the reasonable costs
509
of each residential energy system installed with respect to each residential unit it owns or uses,
510
including installation costs, against any tax due under this chapter for the taxable year in which
511
the energy system is completed and placed in service.
512
(B) The total amount of each credit under this Subsection (2)(a) may not exceed $2,000
513
per residential unit.
514
(C) The credit under this Subsection (2)(a) is allowed for any residential energy system
515
completed and placed in service on or after January 1, H. [
2008
] 2007 .H .
516
(iii) If a business entity sells a residential unit to an individual taxpayer before making
517
a claim for the tax credit under this Subsection (2)(a), the business entity may:
518
(A) assign its right to this tax credit to the individual taxpayer; and
519
(B) if the business entity assigns its right to the tax credit to an individual taxpayer
520
under Subsection (2)(a)(iii)(A), the individual taxpayer may claim the tax credit as if the
521
individual taxpayer had completed or participated in the costs of the residential energy system
Text Box
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House Floor Amendments 2-28-2007 dd/
522
under Section
59-10-1014
.
523
(b) (i) For taxable years beginning on or after January 1, H. [
2008
] 2007 .H , a business
523a
entity that
524
purchases or participates in the financing of a commercial energy system situated in Utah is
525
entitled to a refundable tax credit as provided in this Subsection (2)(b) if the commercial
526
energy system does not use wind, geothermal electricity, or biomass equipment capable of
527
producing a total of 660 or more kilowatts of electricity, and:
528
(A) the commercial energy system supplies all or part of the energy required by
529
commercial units owned or used by the business entity; or
530
(B) the business entity sells all or part of the energy produced by the commercial
531
energy system as a commercial enterprise.
532
(ii) (A) A business entity is entitled to a tax credit of up to 10% of the reasonable costs
533
of any commercial energy system installed, including installation costs, against any tax due
534
under this chapter for the taxable year in which the commercial energy system is completed and
535
placed in service.
536
(B) Notwithstanding Subsection (2)(b)(ii)(A), the total amount of the credit under this
537
Subsection (2)(b) may not exceed $50,000 per commercial unit.
538
(C) The credit under this Subsection (2)(b) is allowed for any commercial energy
539
system completed and placed in service on or after January 1, H. [
2008
] 2007 .H .
540
(iii) A business entity that leases a commercial energy system installed on a
541
commercial unit is eligible for the tax credit under this Subsection (2)(b) if the lessee can
542
confirm that the lessor irrevocably elects not to claim the credit.
543
(iv) Only the principal recovery portion of the lease payments, which is the cost
544
incurred by a business entity in acquiring a commercial energy system, excluding interest
545
charges and maintenance expenses, is eligible for the tax credit under this Subsection (2)(b).
546
(v) A business entity that leases a commercial energy system is eligible to use the tax
547
credit under this Subsection (2)(b) for a period no greater than seven years from the initiation
548
of the lease.
548a
H. (vi) A tax credit allowed by this Subsection (2)(b) may not be carried forward or
548b
carried back. .H
549
(c) (i) For taxable years beginning on or after January 1, H. [
2008
] 2007 .H , a business
549a
entity that
550
owns a commercial energy system situated in Utah using wind, geothermal electricity, or
551
biomass equipment capable of producing a total of 660 or more kilowatts of electricity is
552
entitled to a refundable tax credit as provided in this Subsection (2)(c) if:
Text Box
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House Floor Amendments 2-28-2007 dd/
553
(A) the commercial energy system supplies all or part of the energy required by
554
commercial units owned or used by the business entity; or
555
(B) the business entity sells all or part of the energy produced by the commercial
556
energy system as a commercial enterprise.
557
(ii) (A) A business entity is entitled to a tax credit under this section equal to the
558
product of:
559
(I) 0.35 cents; and
560
(II) the kilowatt hours of electricity produced and either used or sold during the taxable
561
year.
562
(B) (I) The credit calculated under Subsection (2)(c)(ii)(A) may be claimed for
563
production occurring during a period of 48 months beginning with the month in which the
564
commercial energy system is placed in commercial service.
565
(II) The credit allowed by this Subsection (2)(c) for each year may not be carried
566
forward or carried back.
567
(C) The credit under this Subsection (2)(c) is allowed for any commercial energy
568
system completed and placed in service on or after January 1, H. [
2008
] 2007 .H .
569
(iii) A business entity that leases a commercial energy system installed on a
570
commercial unit is eligible for the tax credit under this Subsection (2)(c) if the lessee can
571
confirm that the lessor irrevocably elects not to claim the credit.
572
(d) (i) A tax credit under Subsection (2)(a) or (b) may be claimed for the taxable year
573
in which the energy system is completed and placed in service.
574
(ii) Additional energy systems or parts of energy systems may be claimed for
575
subsequent years.
576
(iii) If the amount of a tax credit under Subsection (2)(a) H. [
or (b)
] .H exceeds a
576a
business
577
entity's tax liability under this chapter for a taxable year, the amount of the credit exceeding the
578
liability may be carried H. [
over
] forward .H for a period which does not exceed the next four
578a
taxable years.
579
(3) (a) The tax credits provided for under Subsection (2) are in addition to any tax
580
credits provided under the laws or rules and regulations of the United States.
581
(b) (i) The Utah Geological Survey may set standards for residential and commercial
582
energy systems claiming a credit under Subsections (2)(a) and (b) that cover the safety,
583
reliability, efficiency, leasing, and technical feasibility of the systems to ensure that the systems
Text Box
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House Floor Amendments 2-28-2007 dd/
584
eligible for the tax credit use the state's renewable and nonrenewable energy resources in an
585
appropriate and economic manner.
586
(ii) The Utah Geological Survey may set standards for residential and commercial
587
energy systems that establish the reasonable costs of an energy system, as used in Subsections
588
(2)(a)(ii)(A) and (2)(b)(ii)(A), as an amount per unit of energy production.
589
(iii) A tax credit may not be taken under Subsection (2) until the Utah Geological
590
Survey has certified that the energy system has been completely installed and is a viable system
591
for saving or production of energy from renewable resources.
592
(c) The Utah Geological Survey and the commission may make rules in accordance
593
with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, that are necessary to
594
implement this section.
595
(4) (a) On or before October 1, 2012, and every five years thereafter, the Utah Tax
596
Review Commission shall review H. [
the
] each .H tax credit provided by this section and make
597
recommendations to the Revenue and Taxation Interim Committee concerning whether the
598
credit should be continued, modified, or repealed.
599
(b) The Utah Tax Review Commission's report under Subsection (4)(a) shall include
600
information concerning the cost of the credit, the purpose and effectiveness of the credit, and
601
the state's benefit from the credit.
602
Section 6.
Section
59-10-104
is amended to read:
603
59-10-104. Tax basis -- Rates -- Adjustment for changes in the consumer price
604
index -- Exemption.
605
(1) Except as provided in Subsection (5) or Part 12, Single Rate Individual Income Tax
606
Act, for taxable years beginning on or after January 1, 2006, but beginning on or before
607
December 31, 2007, a tax is imposed on the state taxable income of every resident individual
608
as provided in this section.
609
(2) For an individual, other than a husband and wife or head of household required to
610
use the tax table under Subsection (3), the tax under this section is imposed in accordance with
611
the following income brackets:
612
If the state taxable income is: The tax is:
613
Less than or equal to $1,000 2.3% of the state taxable income
614
Greater than $1,000 but less than $23, plus 3.3% of state taxable
Text Box
- 21 -
615
or equal to $2,000 income greater than $1,000
616
Greater than $2,000 but less than $56, plus 4.2% of state taxable
617
or equal to $3,000 income greater than $2,000
618
Greater than $3,000 but less than $98, plus 5.2% of state taxable
619
or equal to $4,000 income greater than $3,000
620
Greater than $4,000 but less than $150, plus 6% of state taxable
621
or equal to $5,500 income greater than $4,000
622
Greater than $5,500 $240, plus 6.98% of state taxable
623
income greater than $5,500
624
(3) For a husband and wife filing a single return jointly, or a head of household as
625
defined in Section 2(b), Internal Revenue Code, filing a single return, the tax under this section
626
is imposed in accordance with the following income brackets:
627
If the state taxable income is: The tax is:
628
Less than or equal to $2,000 2.3% of the state taxable income
629
Greater than $2,000 but less than $46, plus 3.3% of state taxable
630
or equal to $4,000 income greater than $2,000
631
Greater than $4,000 but less than $112, plus 4.2% of state taxable
632
or equal to $6,000 income greater than $4,000
633
Greater than $6,000 but less than $196, plus 5.2% of state taxable
634
or equal to $8,000 income greater than $6,000
635
Greater than $8,000 but less than $300, plus 6% of state taxable
636
or equal to $11,000 income greater than $8,000
637
Greater than $11,000 $480, plus 6.98% of state taxable
638
income greater than $11,000
639
(4) (a) For taxable years beginning on or after January 1, 2009, the commission shall:
640
(i) make the following adjustments to the income brackets under Subsection (2):
641
(A) increase or decrease the income brackets under Subsection (2) by a percentage
642
equal to the percentage difference between the consumer price index for the preceding calendar
643
year and the consumer price index for the calendar year 2007; and
644
(B) after making an increase or decrease under Subsection (4)(a)(i)(A), round the
645
income brackets under Subsection (2) to the nearest whole dollar;
Text Box
- 22 -
646
(ii) after making the adjustments described in Subsection (4)(a)(i) to the income
647
brackets under Subsection (2), adjust the income brackets under Subsection (3) so that for each
648
income bracket under Subsection (2) there is a corresponding income bracket under Subsection
649
(3) that is equal to the product of:
650
(A) each income bracket under Subsection (2); and
651
(B) two; and
652
(iii) to the extent necessary to reflect an adjustment under Subsection (4)(a)(i) or (ii):
653
(A) increase or decrease the amount of tax under Subsection (2) or (3) prior to adding
654
in the portion of the tax calculated as a percentage of state taxable income; and
655
(B) after making an increase or decrease under Subsection (4)(a)(iii)(A), round the
656
amount of tax under Subsection (2) or (3) to the nearest whole dollar.
657
(b) The commission may not increase or decrease the tax rate percentages provided in
658
Subsection (2) or (3).
659
(c) For purposes of Subsection (4)(a)(i), the commission shall calculate the consumer
660
price index as provided in Sections 1(f)(4) and 1(f)(5), Internal Revenue Code.
661
(5) This section does not apply to a resident individual exempt from taxation under
662
Section
59-10-104.1
.
663
Section 7.
Section
59-10-1012
is amended to read:
664
59-10-1012. Tax credits for research activities conducted in the state -- Carry
665
forward -- Commission to report modification or repeal of certain federal provisions --
666
Utah Tax Review Commission study.
667
(1) (a) [For taxable years beginning on or after January 1, 1999, but beginning before
668
December 31, 2010, a] A claimant, estate, or trust meeting the requirements of this section
669
[shall qualify for] may claim the following nonrefundable tax credits [for increasing research
670
activities in this state]:
671
(i) a research tax credit of [6%] 7% of the claimant's, estate's, or trust's qualified
672
research expenses for the current taxable year that exceed the base amount provided for under
673
Subsection [(4)] (3); [and]
674
(ii) a tax credit for payments to qualified organizations for basic research as provided
675
in Section 41(e), Internal Revenue Code of [6%] 7% for the current taxable year that exceed
676
the base amount provided for under Subsection [(4).] (3); and
Text Box
- 23 -
677
(iii) a tax credit equal to 5% of the claimant's, estate's, or trust's qualified research
678
expenses for the current taxable year.
679
(b) (i) [If a claimant, estate, or trust qualifying for a tax credit under Subsection (1)(a)
680
seeks to claim the tax credit, the] Except as provided in Subsection (1)(b)(ii), a claimant, estate,
681
or trust [shall] may:
682
[(i)] (A) claim the tax credit or a portion of the tax credit for the taxable year
683
immediately following the taxable year for which the claimant, estate, or trust qualifies for the
684
tax credit;
685
[(ii)] (B) carry forward the tax credit or a portion of the tax credit [forward] as
686
provided in Subsection (4)[(f)]; or
687
[(iii)] (C) claim a portion of the tax credit and carry forward a portion of the tax credit
688
as provided in Subsections (1)(b)(i)(A) and [(ii)] (B).
689
(ii) A claimant, estate, or trust may not carry forward the tax credit allowed by
690
Subsection (1)(a)(iii).
691
(c) The tax credits provided for in this section do not include the alternative
692
incremental credit provided for in Section 41(c)(4), Internal Revenue Code.
693
[(2) For purposes of claiming a tax credit under this section, a unitary group as defined
694
in Section
59-7-101
is considered to be one claimant.]
695
[(3)] (2) Except as specifically provided for in this section:
696
(a) the tax credits authorized under Subsection (1) shall be calculated as provided in
697
Section 41, Internal Revenue Code; and
698
(b) the definitions provided in Section 41, Internal Revenue Code, apply in calculating
699
the tax credits authorized under Subsection (1).
700
[(4)] (3) For purposes of this section:
701
(a) the base amount shall be calculated as provided in Sections 41(c) and 41(h),
702
Internal Revenue Code, except that:
703
(i) the base amount does not include the calculation of the alternative incremental
704
credit provided for in Section 41(c)(4), Internal Revenue Code;
705
(ii) a claimant's, estate's, or trust's gross receipts include only those gross receipts
706
attributable to sources within this state as provided in Section
59-10-118
; and
707
(iii) notwithstanding Section 41(c), Internal Revenue Code, for purposes of calculating
Text Box
- 24 -
708
the base amount, a claimant, estate, or trust:
709
(A) may elect to be treated as a start-up company as provided in Section 41(c)(3)(B)
710
regardless of whether the claimant, estate, or trust meets the requirements of Section
711
41(c)(3)(B)(i)(I) or (II); and
712
(B) may not revoke an election to be treated as a start-up company under Subsection
713
[(4)] (3)(a)(iii)(A);
714
(b) "basic research" is as defined in Section 41(e)(7), Internal Revenue Code, except
715
that the term includes only basic research conducted in this state;
716
(c) "qualified research" is as defined in Section 41(d), Internal Revenue Code, except
717
that the term includes only qualified research conducted in this state;
718
(d) "qualified research expenses" is as defined and calculated in Section 41(b), Internal
719
Revenue Code, except that the term includes only [those expenses incurred in conducting
720
qualified research in this state;]:
721
(i) in-house research expenses incurred in this state; and
722
(ii) contract research expenses incurred in this state; and
723
(e) [notwithstanding the provisions of Section 41(h), Internal Revenue Code, the tax
724
credits] a tax credit provided for in this section [shall] is not [terminate] terminated if [the
725
credits terminate] a credit terminates under Section 41, Internal Revenue Code[; and].
726
[(f) notwithstanding the provisions of Sections 39 and 41(g), Internal Revenue Code,
727
governing the carry forward and carry back of federal tax credits, if]
728
(4) If the amount of a tax credit claimed by a claimant, estate, or trust under [this
729
section] Subsection (1)(a)(i) or (ii) exceeds the claimant's, estate's, or trust's tax liability under
730
this chapter for a taxable year, the amount of the tax credit exceeding the tax liability:
731
[(i)] (a) may be carried forward for a period that does not exceed the next 14 taxable
732
years; and
733
[(ii)] (b) may not be carried back to a taxable year preceding the current taxable year.
734
(5) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
735
commission may make rules for purposes of this section prescribing a certification process for
736
qualified organizations to ensure that amounts paid to the qualified organizations are for basic
737
research conducted in this state.
738
(6) If a [federal credit under] provision of Section 41, Internal Revenue Code, is
Text Box
- 25 -
739
modified or repealed, the commission shall report the modification or repeal to the Utah Tax
740
Review Commission within 60 days after the day on which the modification or repeal becomes
741
effective.
742
(7) (a) The Utah Tax Review Commission shall review the tax credits provided for in
743
this section on or before October 1 of the year after the year in which the commission reports
744
under Subsection (6) a modification or repeal of a provision of Section 41, Internal Revenue
745
Code.
746
(b) Notwithstanding Subsection (7)(a), the Utah Tax Review Commission is not
747
required to review the tax credits provided for in this section if the only modification to a
748
provision of Section 41, Internal Revenue Code, is the extension of the termination date
749
provided for in Section 41(h), Internal Revenue Code.
750
(c) The Utah Tax Review Commission shall address in a review under this section:
751
(i) the cost of the tax credits provided for in this section;
752
(ii) the purpose and effectiveness of the tax credits provided for in this section;
753
(iii) whether the tax credits provided for in this section benefit the state; and
754
(iv) whether the tax credits provided for in this section should be:
755
(A) continued;
756
(B) modified; or
757
(C) repealed.
758
(d) If the Utah Tax Review Commission reviews the tax credits provided for in this
759
section, the Utah Tax Review Commission shall report its findings to the Revenue and
760
Taxation Interim Committee on or before the November interim meeting of the year in which
761
the Utah Tax Review Commission reviews the tax credits.
762
Section 8.
Section
59-10-1014
is amended to read:
763
59-10-1014. Renewable energy systems tax credit -- Definitions -- Limitations --
764
State tax credit in addition to allowable federal credits -- Certification -- Rulemaking
765
authority.
766
(1) As used in this part:
767
(a) "Active solar system":
768
(i) means a system of equipment capable of collecting and converting incident solar
769
radiation into thermal, mechanical, or electrical energy, and transferring these forms of energy
Text Box
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770
by a separate apparatus to storage or to the point of use; and
771
(ii) includes water heating, space heating or cooling, and electrical or mechanical
772
energy generation.
773
(b) "Biomass system" means any system of apparatus and equipment [capable of
774
converting organic plant, wood, or waste products into electrical and thermal energy and
775
transferring these forms of energy by a separate apparatus to the point of use or storage] for use
776
in converting material into biomass energy, as defined in Section
59-12-102
, and transporting
777
that energy by separate apparatus to the point of use or storage.
778
(c) "Business entity" means any entity under which business is conducted or transacted.
779
[(d) "Commercial energy system" means any active solar, passive solar, wind,
780
hydroenergy, or biomass system used to supply energy to a commercial unit or as a commercial
781
enterprise.]
782
[(e) "Commercial enterprise" means a business entity whose purpose is to produce
783
electrical, mechanical, or thermal energy for sale from a commercial energy system.]
784
[(f) (i) "Commercial unit" means any building or structure which that a business entity
785
uses to transact its business, except as provided in Subsection (1)(f)(ii); and]
786
[(ii) (A) in the case of an active solar system used for agricultural water pumping or a
787
wind system, each individual energy generating device shall be a commercial unit; and]
788
[(B) if an energy system is the building or structure which a business entity uses to
789
transact its business, a commercial unit is the complete energy system itself.]
790
(d) "Direct-use geothermal system" means a system of apparatus and equipment
791
enabling the direct use of thermal energy, generally between 100 and 300 degrees Fahrenheit,
792
that is contained in the earth to meet energy needs, including heating a building, an industrial
793
process, and aquaculture.
794
(e) "Geothermal electricity" means energy contained in heat that continuously flows
795
outward from the earth that is used as a sole source of energy to produce electricity.
796
(f) "Geothermal heat-pump system" means a system of apparatus and equipment
797
enabling the use of thermal properties contained in the earth at temperatures well below 100
798
degrees Fahrenheit to help meet heating and cooling needs of a structure.
799
(g) "Hydroenergy system" means a system of apparatus and equipment capable of
800
intercepting and converting kinetic water energy into electrical or mechanical energy and
Text Box
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801
transferring this form of energy by separate apparatus to the point of use or storage.
802
(h) "Passive solar system":
803
(i) means a direct thermal system [which] that utilizes the structure of a building and its
804
operable components to provide for collection, storage, and distribution of heating or cooling
805
during the appropriate times of the year by utilizing the climate resources available at the site;
806
and
807
(ii) includes those portions and components of a building that are expressly designed
808
and required for the collection, storage, and distribution of solar energy.
809
(i) "Residential energy system" means any active solar, passive solar, biomass,
810
direct-use geothermal, geothermal heat-pump system, wind, or hydroenergy system used to
811
supply energy to or for any residential unit.
812
(j) "Residential unit" means any house, condominium, apartment, or similar dwelling
813
unit [which] that serves as a dwelling for a person, group of persons, or a family but does not
814
include property subject to a fee under:
815
(i) Section
59-2-404
;
816
(ii) Section
59-2-405
;
817
(iii) Section
59-2-405.1
;
818
(iv) Section
59-2-405.2
; or
819
(v) Section
59-2-405.3
.
820
(k) "Utah Geological Survey" means the Utah Geological Survey established in Section
821
63-73-5
.
822
(l) "Wind system" means a system of apparatus and equipment capable of intercepting
823
and converting wind energy into mechanical or electrical energy and transferring these forms of
824
energy by a separate apparatus to the point of use or storage.
825
(2) For taxable years beginning on or after January 1, [2001] H. [
2008
] 2007 .H , [but
825a
beginning on
826
or before December 31, 2006,] a claimant, estate, or trust may claim a nonrefundable tax credit
827
as provided in this section if:
828
(a) a claimant, estate, or trust that is not a business entity purchases and completes or
829
participates in the financing of a residential energy system to supply all or part of the energy for
830
the claimant's, estate's, or trust's residential unit in the state; or
831
(b) (i) a claimant, estate, or trust that is a business entity sells a residential unit to
Text Box
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House Floor Amendments 2-28-2007 dd/
832
another claimant, estate, or trust that is not a business entity [prior to] before making a claim
833
for a tax credit under Subsection (6) or Section
59-7-614
; and
834
(ii) the claimant, estate, or trust that is a business entity assigns its right to the tax credit
835
to the claimant, estate, or trust that is not a business entity as provided in Subsection (6)(c) or
836
Subsection
59-7-614
(2)(a)(iii).
837
(3) (a) The tax credit described in Subsection (2) is equal to 25% of the reasonable
838
costs of [the] each residential energy system, including installation costs, against any income
839
tax liability of the claimant, estate, or trust under this chapter for the taxable year in which the
840
residential energy system is completed and placed in service.
841
(b) The total amount of [the] each tax credit under this section may not exceed $2,000
842
per residential unit.
843
(c) The tax credit under this section is allowed for any residential energy system
844
completed and placed in service on or after January 1, [2001] H. [
2008
] 2007 .H [, but on or
844a
before
845
December 31, 2006].
846
(4) (a) The tax credit provided for in this section shall be claimed in the return for the
847
taxable year in which the residential energy system is completed and placed in service.
848
(b) Additional residential energy systems or parts of residential energy systems may be
849
similarly claimed in returns for subsequent taxable years as long as the total amount claimed
850
does not exceed $2,000 per residential unit.
851
(c) If the amount of the tax credit under this section exceeds the income tax liability of
852
the claimant, estate, or trust claiming the tax credit under this section for that taxable year, then
853
the amount not used may be carried over for a period [which] that does not exceed the next
854
four taxable years.
855
(5) (a) A claimant, estate, or trust that is not a business entity that leases a residential
856
energy system installed on a residential unit is eligible for the residential energy tax [credits]
857
credit if that claimant, estate, or trust confirms that the lessor irrevocably elects not to claim the
858
tax credit.
859
(b) Only the principal recovery portion of the lease payments, which is the cost
860
incurred by the claimant, estate, or trust in acquiring the residential energy system excluding
861
interest charges and maintenance expenses, is eligible for the tax credits.
862
(c) A claimant, estate, or trust described in this Subsection (5) may use the tax credits
Text Box
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863
for a period that does not exceed seven years from the initiation of the lease.
864
(6) (a) A claimant, estate, or trust that is a business entity that purchases and completes
865
or participates in the financing of a residential energy system to supply all or part of the energy
866
required for a residential unit owned or used by the claimant, estate, or trust that is a business
867
entity and situated in Utah is entitled to a nonrefundable tax credit as provided in this
868
Subsection (6).
869
(b) (i) For taxable years beginning on or after January 1, [2001] H. [
2008
] 2007 .H , [but
869a
beginning
870
on or before December 31, 2006,] a claimant, estate, or trust that is a business entity is entitled
871
to a nonrefundable tax credit equal to 25% of the reasonable costs of a residential energy
872
system installed with respect to each residential unit it owns or uses, including installation
873
costs, against any tax due under this chapter for the taxable year in which the energy system is
874
completed and placed in service.
875
(ii) The total amount of the tax credit under this Subsection (6) may not exceed $2,000
876
per residential unit.
877
(iii) The tax credit under this Subsection (6) is allowed for any residential energy
878
system completed and placed in service on or after January 1, [2001] H. [
2008
] 2007 .H [, but on
878a
or before
879
December 31, 2006].
880
(c) If a claimant, estate, or trust that is a business entity sells a residential unit to a
881
claimant, estate, or trust that is not a business entity [prior to] before making a claim for the tax
882
credit under this Subsection (6), the claimant, estate, or trust that is a business entity may:
883
(i) assign its right to this tax credit to the claimant, estate, or trust that is not a business
884
entity; and
885
(ii) if the claimant, estate, or trust that is a business entity assigns its right to the tax
886
credit to a claimant, estate, or trust that is not a business entity under Subsection (6)(c)(i), the
887
claimant, estate, or trust that is not a business entity may claim the tax credit as if that claimant,
888
estate, or trust that is not a business entity had completed or participated in the costs of the
889
residential energy system under this section.
890
[(7) (a) A claimant, estate, or trust that is a business entity that purchases or
891
participates in the financing of a commercial energy system is entitled to a nonrefundable tax
892
credit as provided in this Subsection (7) if:]
893
[(i) the commercial energy system supplies all or part of the energy required by
Text Box
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894
commercial units owned or used by the claimant, estate, or trust that is a business entity; or]
895
[(ii) the claimant, estate, or trust that is a business entity sells all or part of the energy
896
produced by the commercial energy system as a commercial enterprise.]
897
[(b) (i) A claimant, estate, or trust that is a business entity is entitled to a tax credit
898
equal to 10% of the costs of any commercial energy system installed, including installation
899
costs, against any tax due under this chapter for the taxable year in which the commercial
900
energy system is completed and placed in service.]
901
[(ii) The total amount of the tax credit under this Subsection (7) may not exceed
902
$50,000 per commercial unit.]
903
[(iii) The tax credit under this Subsection (7) is allowed for any commercial energy
904
system completed and placed in service on or after January 1, 2001 , but on or before
905
December 31, 2006 .]
906
[(c) A claimant, estate, or trust that is a business entity that leases a commercial energy
907
system installed on a commercial unit is eligible for the tax credit under this Subsection (7) if
908
the claimant, estate, or trust confirms that the lessor irrevocably elects not to claim the tax
909
credit.]
910
[(d) Only the principal recovery portion of the lease payments, which is the cost
911
incurred by a claimant, estate, or trust that is not a business entity in acquiring a commercial
912
energy system, excluding interest charges and maintenance expenses, is eligible for the tax
913
credit under this Subsection (7).]
914
[(e) A claimant, estate, or trust that is a business entity that leases a commercial energy
915
system is eligible to use the tax credit under this Subsection (7) for a period that does not
916
exceed seven years from the initiation of the lease.]
917
[(8)] (7) (a) A tax credit under this section may be claimed for the taxable year in
918
which the residential energy system is completed and placed in service.
919
(b) Additional residential energy systems or parts of residential energy systems may be
920
claimed for subsequent years.
921
(c) If the amount of a tax credit under this section exceeds the tax liability of the
922
claimant, estate, or trust claiming the tax credit under this section for a taxable year, the amount
923
of the tax credit exceeding the tax liability may be carried over for a period which does not
924
exceed the next four taxable years.
Text Box
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House Floor Amendments 2-28-2007 dd/
925
[(9)] (8) The tax credits provided for under this section are in addition to any tax
926
credits provided under the laws or rules and regulations of the United States.
927
[(10)] (9) (a) The Utah Geological Survey may set standards for residential [and
928
commercial] energy systems that cover the safety, reliability, efficiency, leasing, and technical
929
feasibility of the systems to ensure that the systems eligible for the tax credit use the state's
930
renewable and nonrenewable energy resources in an appropriate and economic manner.
931
(b) The Utah Geological Survey may set standards for residential and commercial
932
energy systems that establish the reasonable costs of an energy system, as used in Subsections
933
(3)(a) and (6)(b)(i), as an amount per unit of energy production.
934
[(b)] (c) A tax credit may not be taken under this section until the Utah Geological
935
Survey has certified that the energy system has been completely installed and is a viable system
936
for saving or production of energy from renewable resources.
937
[(11)] (10) The Utah Geological Survey and the commission [are authorized to
938
promulgate] may make rules in accordance with Title 63, Chapter 46a, Utah Administrative
939
Rulemaking Act, [which] that are necessary to implement this section.
940
[(12) The Uniform School Fund shall be reimbursed by transfers from the General
941
Fund for any tax credits taken under this section.]
942
(11) (a) On or before October 1, 2012, and every five years thereafter, the Utah Tax
943
Review Commission shall review H. [
the
] each .H tax credit provided by this section and make
944
recommendations to the Revenue and Taxation Interim Committee concerning whether the
945
credit should be continued, modified, or repealed.
946
(b) The Utah Tax Review Commission's report under Subsection (11)(a) shall include
947
information concerning the cost of the credit, the purpose and effectiveness of the credit, and
948
the state's benefit from the credit.
949
Section 9.
Section
59-10-1106
is enacted to read:
950
59-10-1106. Renewable energy tax credit.
951
(1) As used in this section:
952
(a) "Active solar system" is as defined in Section
59-10-1014
.
953
(b) "Biomass system" is as defined in Section
59-10-1014
.
954
(c) "Business entity" is as defined in Section
59-10-1014
.
955
(d) "Commercial energy system" means any active solar, passive solar, geothermal
Text Box
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House Floor Amendments 2-28-2007 dd/
956
electricity, direct-use geothermal, geothermal heat-pump system, wind, hydroenergy, or
957
biomass system used to supply energy to a commercial unit or as a commercial enterprise.
958
(e) "Commercial enterprise" means a business entity whose purpose is to produce
959
electrical, mechanical, or thermal energy for sale from a commercial energy system.
960
(f) (i) "Commercial unit" means any building or structure that a business entity uses to
961
transact its business.
962
(ii) Notwithstanding Subsection (1)(f)(i):
963
(A) in the case of an active solar system used for agricultural water pumping or a wind
964
system, each individual energy generating device shall be a commercial unit; and
965
(B) if an energy system is the building or structure that a business entity uses to
966
transact its business, a commercial unit is the complete energy system itself.
967
(g) "Direct-use geothermal system" is as defined in Section
59-10-1014
.
968
(h) "Geothermal electricity" is as defined in Section
59-10-1014
.
969
(i) "Geothermal heat-pump system" is as defined in Section
59-10-1014
.
970
(j) "Hydroenergy system" is as defined in Section
59-10-1014
.
971
(k) "Individual taxpayer" means any person who is a taxpayer as defined in Section
972
59-10-103
and an individual as defined in Section
59-10-103
.
973
(l) "Passive solar system" is as defined in Section
59-10-1014
.
974
(m) "Utah Geological Survey" means the Utah Geological Survey established in
975
Section
63-73-5
.
976
(n) "Wind system" is as defined in Section
59-10-1014
.
977
(2) (a) (i) For taxable years beginning on or after January 1, H. [
2008
] 2007 .H , a
977a
business entity that
978
purchases or participates in the financing of a commercial energy system situated in Utah is
979
entitled to a refundable tax credit as provided in this Subsection (2)(a) if the commercial energy
980
system does not use wind, geothermal electricity, or biomass equipment capable of producing a
981
total of 660 or more kilowatts of electricity and:
982
(A) the commercial energy system supplies all or part of the energy required by
983
commercial units owned or used by the business entity; or
984
(B) the business entity sells all or part of the energy produced by the commercial
985
energy system as a commercial enterprise.
986
(ii) (A) A business entity is entitled to a tax credit of up to 10% of the reasonable costs
Text Box
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House Floor Amendments 2-28-2007 dd/
987
of any commercial energy system installed, including installation costs, against any tax due
988
under this chapter for the taxable year in which the commercial energy system is completed and
989
placed in service.
990
(B) Notwithstanding Subsection (2)(a)(ii)(A), the total amount of the credit under this
991
Subsection (2)(a) may not exceed $50,000 per commercial unit.
992
(C) The credit under this Subsection (2)(a) is allowed for any commercial energy
993
system completed and placed in service on or after January 1, H. [
2008
] 2007 .H .
994
(iii) A business entity that leases a commercial energy system installed on a
995
commercial unit is eligible for the tax credit under this Subsection (2)(a) if the lessee can
996
confirm that the lessor irrevocably elects not to claim the credit.
997
(iv) Only the principal recovery portion of the lease payments, which is the cost
998
incurred by a business entity in acquiring a commercial energy system, excluding interest
999
charges and maintenance expenses, is eligible for the tax credit under this Subsection (2)(a).
1000
(v) A business entity that leases a commercial energy system is eligible to use the tax
1001
credit under this Subsection (2)(a) for a period no greater than seven years from the initiation of
1002
the lease.
1003
(b) (i) For taxable years beginning on or after January 1, H. [
2008
] 2007 .H , a business
1003a
entity that
1004
owns a commercial energy system situated in Utah using wind, geothermal electricity, or
1005
biomass equipment capable of producing a total of 660 or more kilowatts of electricity is
1006
entitled to a refundable tax credit as provided in this section if:
1007
(A) the commercial energy system supplies all or part of the energy required by
1008
commercial units owned or used by the business entity; or
1009
(B) the business entity sells all or part of the energy produced by the commercial
1010
energy system as a commercial enterprise.
1011
(ii) A business entity is entitled to a tax credit under this Subsection (2)(b) equal to the
1012
product of:
1013
(A) 0.35 cents; and
1014
(B) the kilowatt hours of electricity produced and either used or sold during the taxable
1015
year.
1016
(iii) The credit allowed by this Subsection (2)(b):
1017
(A) may be claimed for production occurring during a period of 48 months beginning
Text Box
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House Floor Amendments 2-28-2007 dd/
1018
with the month in which the commercial energy system is placed in service; and
1019
(B) may not be carried forward or back.
1020
(iv) A business entity that leases a commercial energy system installed on a
1021
commercial unit is eligible for the tax credit under this section if the lessee can confirm that the
1022
lessor irrevocably elects not to claim the credit.
1023
(3) The tax credits provided for under this section are in addition to any tax credits
1024
provided under the laws or rules and regulations of the United States.
1025
(4) (a) The Utah Geological Survey may set standards for commercial energy systems
1026
claiming a tax credit under Subsection (2)(a) that cover the safety, reliability, efficiency,
1027
leasing, and technical feasibility of the systems to ensure that the systems eligible for the tax
1028
credit use the state's renewable and nonrenewable energy resources in an appropriate and
1029
economic manner.
1030
(b) A tax credit may not be taken under this section until the Utah Geological Survey
1031
has certified that the commercial energy system has been completely installed and is a viable
1032
system for saving or production of energy from renewable resources.
1033
(5) The Utah Geological Survey and the commission may make rules in accordance
1034
with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, that are necessary to
1035
implement this section.
1036
(6) (a) On or before October 1, 2012, and every five years thereafter, the Utah Tax
1037
Review Commission shall review H. [
the
] each .H tax credit provided by this section and make
1038
recommendations to the Revenue and Taxation Interim Committee concerning whether the
1039
credit should be continued, modified, or repealed.
1040
(b) The Utah Tax Review Commission's report under Subsection (6)(a) shall include
1041
information concerning the cost of the credit, the purpose and effectiveness of the credit, and
1042
the state's benefit from the credit.
1043
Section 10.
Section
59-10-1202
is amended to read:
1044
59-10-1202. Definitions.
1045
As used in this part:
1046
(1) "Military service" is as defined in Pub. L. No. 108-189, Sec. 101.
1047
(2) "Servicemember" is as defined in Pub. L. No. 108-189, Sec. 101.
1048
(3) "State income tax percentage for a nonresident individual" means a percentage
Text Box
- 35 -
1049
equal to a nonresident individual's adjusted gross income for the taxable year received from
1050
Utah sources, as determined under Section
59-10-117
, divided by the difference between:
1051
(a) the nonresident individual's total adjusted gross income for that taxable year; and
1052
(b) if the nonresident individual described in Subsection (3)(a) is a servicemember, the
1053
compensation the servicemember receives for military service if the servicemember is serving
1054
in compliance with military orders.
1055
(4) "State income tax percentage for a part-year resident individual" means, for a
1056
taxable year, a fraction:
1057
(a) the numerator of which is the sum of:
1058
(i) for the time period during the taxable year that the part-year resident individual is a
1059
resident, the part-year resident individual's total adjusted gross income for that time period; and
1060
(ii) for the time period during the taxable year that the part-year resident individual is a
1061
nonresident, the part-year resident individual's adjusted gross income for that time period
1062
received from Utah sources, as determined under Section
59-10-117
; and
1063
(b) the denominator of which is the difference between:
1064
(i) the part-year resident individual's total adjusted gross income for that taxable year;
1065
and
1066
(ii) if the part-year resident individual is a servicemember, any compensation the
1067
servicemember receives for military service during the portion of the taxable year that the
1068
servicemember is a nonresident if the servicemember is serving in compliance with military
1069
orders.
1070
[(4)] (5) "State taxable income" means a resident or nonresident individual's adjusted
1071
gross income after making the:
1072
(a) additions and subtractions required by Section
59-10-1204
; and
1073
(b) adjustments required by Section
59-10-1205
.
1074
[(5)] (6) "Unapportioned state tax" means the product of the:
1075
(a) difference between:
1076
(i) a nonresident individual's state taxable income; and
1077
(ii) if the nonresident individual described in Subsection [(5)] (6)(a)(i) is a
1078
servicemember, compensation the servicemember receives for military service if the
1079
servicemember is serving in compliance with military orders; and
Text Box
- 36 -
1080
(b) percentage listed in Subsection
59-10-1203
(2)(a)(i)(B).
1081
Section 11.
Section
59-10-1203
is amended to read:
1082
59-10-1203. Single rate tax for resident or nonresident individual -- Tax rate --
1083
Contributions -- Exemption -- Amended returns.
1084
(1) [For taxable years beginning on or after January 1, 2007, a] A resident or
1085
nonresident individual may calculate and pay a tax under this section as provided in this part.
1086
(2) (a) A resident individual that calculates and pays a tax under this section:
1087
(i) shall pay for a taxable year an amount equal to the product of:
1088
(A) the resident individual's state taxable income for that taxable year; and
1089
(B) [5.35%] 5%; and
1090
(ii) is exempt from paying the tax imposed by Section
59-10-104
.
1091
(b) A nonresident individual that calculates and pays a tax under this section:
1092
(i) shall pay for a taxable year an amount equal to the product of the nonresident
1093
individual's:
1094
(A) unapportioned state tax; and
1095
(B) state income tax percentage for the nonresident individual; and
1096
(ii) is exempt from paying the tax imposed by Section
59-10-116
.
1097
(3) Except as required by Section
59-10-1204
or
59-10-1205
, a resident or nonresident
1098
individual that calculates and pays a tax under this section may not make any addition or
1099
adjustment to or subtraction from adjusted gross income.
1100
(4) A resident or nonresident individual that calculates and pays a tax under this
1101
section may designate on the resident or nonresident individual's individual income tax return
1102
for a taxable year a contribution allowed by:
1103
(a) Section
59-10-530
;
1104
(b) Section
59-10-530.5
;
1105
(c) Section
59-10-547
;
1106
(d) Section
59-10-549
;
1107
(e) Section
59-10-550
;
1108
(f) Section
59-10-550.1
; or
1109
(g) Section
59-10-550.2
.
1110
(5) This section does not apply to a resident or nonresident individual exempt from
Text Box
- 37 -
1111
taxation under Section
59-10-104.1
.
1112
(6) (a) A resident or nonresident individual may determine for each taxable year for
1113
which the resident or nonresident individual files an individual income tax return under this
1114
chapter whether to calculate and pay a tax under this section as provided in this part.
1115
(b) If a resident or nonresident individual files an amended return for a taxable year
1116
beginning on or after January 1, 2007, the resident or nonresident individual may determine
1117
whether to calculate and pay a tax under this section as provided in this part for that taxable
1118
year.
1119
Section 12.
Section
59-10-1206.1
is enacted to read:
1120
59-10-1206.1. Definitions -- Nonrefundable taxpayer tax credits.
1121
(1) As used in this section:
1122
(a) "Claimant" means a resident or nonresident individual that has state taxable income
1123
under this part.
1124
(b) "Head of household filing status" means a head of household, as defined in Section
1125
2(b), Internal Revenue Code, who files a single return.
1126
(c) "Joint filing status" means:
1127
(i) a husband and wife who file a single return jointly; or
1128
(ii) a surviving spouse, as defined in Section 2(a), Internal Revenue Code, who files a
1129
single return.
1130
(d) "Single filing status" means:
1131
(i) a single individual who files a single return; or
1132
(ii) a married individual who:
1133
(A) does not file a single return jointly with that individual's spouse; and
1134
(B) files a single return.
1135
(2) Except as provided in Section
59-10-1206.9
and subject to Subsections (3) through
1136
(5), for taxable years beginning on or after January 1, 2008, a claimant may claim a
1137
nonrefundable tax credit against taxes otherwise due under this part equal to the sum of:
1138
(a) (i) for a claimant that deducts the standard deduction on the claimant's federal
1139
individual income tax return for the taxable year, 6% of the amount the claimant deducts as
1140
allowed as the standard deduction on the claimant's federal individual income tax return for
1141
that taxable year; or
Text Box
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House Floor Amendments 2-28-2007 dd/
1142
(ii) for a claimant that itemizes deductions on the claimant's federal individual income
1143
tax return for the taxable year, the product of:
1144
(A) the difference between:
1145
(I) the amount the claimant deducts as allowed as an itemized deduction on the
1146
claimant's federal individual income tax return for that taxable year; and
1147
(II) any amount of state or local income taxes the claimant deducts as allowed as an
1148
itemized deduction on the claimant's federal individual income tax return for that taxable year;
1149
and
1150
(B) 6%; and
1151
(b) 6% of the total amount the claimant would have been allowed to claim as a
1152
personal exemption deduction on the claimant's state individual income tax return had the
1153
claimant filed an individual income tax return under Part 1, Determination and Reporting of
1154
Tax Liability and Information, for the taxable year.
1155
(3) A claimant may not carry forward or carry back a tax credit under this section.
1156
(4) The tax credit allowed by Subsection (2) shall be reduced by H. [
$.014
] $.013 .H for
1156a
each dollar
1157
by which a claimant's state taxable income exceeds:
1158
(a) for a claimant who has a single filing status, H. [
$14,000
] $12,000 .H ;
1159
(b) for a claimant who has a head of household filing status, H. [
$21,000
] $18,000 .H ; or
1160
(c) for a claimant who has a joint filing status, H. [
$28,000
] $24,000 .H .
1161
(5) (a) For taxable years beginning on or after January 1, 2009, the commission shall
1162
increase or decrease the following dollar amounts by a percentage equal to the percentage
1163
difference between the consumer price index for the preceding calendar year and the consumer
1164
price index for calendar year 2007:
1165
(i) the dollar amount listed in Subsection (4)(a); and
1166
(ii) the dollar amount listed in Subsection (4)(b).
1167
(b) After the commission increases or decreases the dollar amounts listed in Subsection
1168
(5)(a), the commission shall round those dollar amounts listed in Subsection (5)(a) to the
1169
nearest whole dollar.
1170
(c) After the commission rounds the dollar amounts as required by Subsection (5)(b),
1171
the commission shall increase or decrease the dollar amount listed in Subsection (4)(c) so that
1172
the dollar amount listed in Subsection (4)(c) is equal to the product of:
Text Box
- 39 -
House Floor Amendments 2-28-2007 dd/
1173
(i) the dollar amount listed in Subsection (4)(a); and
1174
(ii) two.
1175
(d) For purposes of Subsection (5)(a), the commission shall calculate the consumer
1176
price index as provided in Sections 1(f)(4) and 1(f)(5), Internal Revenue Code.
1177
Section 13.
Section
59-10-1206.2
is enacted to read:
1178
59-10-1206.2. Definitions -- Nonrefundable retirement H. [
credit
] tax credits .H .
1179
(1) As used in this section:
1180
(a) "Eligible H. age 65 or older .H retiree" means a resident or nonresident individual,
1180a
regardless of whether
1181
that individual is retired, who:
1182
(i) is 65 years of age or older;
1183
(ii) was born on or before December 31, 1952; and
1184
(iii) has state taxable income under this part.
1184a
H. (b) (i) "Eligible retirement income" means income received by an eligible under
1184b
age 65 retiree as a pension or annuity if that pension or annuity is:
1184c
(A) paid to the eligible under age 65 retiree or the surviving spouse of an eligible under
1184d
age 65 retiree; and
1184e
(B) (I) paid from an annuity contract purchased by an employer under a plan that
1184f
meets the requirements of Section 404(a)(2), Internal Revenue Code;
1184g
(II) purchased by an employee under a plan that meets the requirements of Section
1184h
408, Internal Revenue Code; or
1184i
(III) paid by:
1184j
(Aa) the United States;
1184k
(Bb) a state or a political subdivision of a state; or
1184l
(Cc) the District of Columbia.
1184m
(ii) "Eligible retirement income" does not include amounts received by the spouse of a
1184n
living eligible under age 65 retiree because of the eligible under age 65 retiree's having been
1184o
employed in a community property state.
1184p
(c) "Eligible under age 65 retiree" means a resident or nonresident individual,
1184q
regardless of whether that individual is retired, who:
1184r
(i) is younger than 65 years of age;
1184s
(ii) was born on or before December 31, 1952;
1184t
(iii) has eligible retirement income for the taxable year for which a tax credit is claimed
1184u
under this section; and
1184v
(iv) has state taxable income under this part.
1185
[
(b)
] (d) .H "Head of household filing status" is as defined in Section
59-10-1206.1
.
Text Box
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House Floor Amendments 2-28-2007 dd/
1186
H. [
(c)
] (e) .H "Joint filing status" is as defined in Section
59-10-1206.1
.
1187
H. [
(d)
] (f) .H "Married filing separately status" means a married individual who:
1188
(i) does not file a single return jointly with that individual's spouse; and
1189
(ii) files a single return.
1190
H. [
(e)
] (g) .H "Modified adjusted gross income" means the sum of an eligible H. age
1190a
65 or older .H retiree's H. or eligible under age 65 retiree's .H :
1191
(i) adjusted gross income for the taxable year for which H. [
the eligible retiree claims
] .H
1191a
a tax
1192
credit H. is claimed .H under this section; and
1193
(ii) any interest income that is not included in adjusted gross income for the taxable
1194
year described in Subsection (1) H. [
(e)
] (g) .H (i).
1195
H. [
(f)
] (h) .H "Single filing status" means a single individual who files a single return.
1196
(2) Except as provided in Section
59-10-1206.9
and subject to Subsections (3) H. [
and (4)
]
1196a
through (6) .H ,
1197
for taxable years beginning on or after January 1, 2008 H. [
,
] :
1197a
(a) .H each eligible H. age 65 or older .H retiree may claim a
1198
nonrefundable tax credit of H.[
$600
] $450 .H against taxes otherwise due under this part H. [
.
]
1198a
; or
1198b
(b) each eligible under age 65 retiree may claim a nonrefundable tax credit against
1198c
taxes otherwise due under this part in an amount equal to the lesser of:
1198d
(i) $288; or
1198e
(ii) the product of:
1198f
(A) the eligible under age 65 retiree's eligible retirement income for the taxable year for
1198g
which the eligible under age 65 retiree claims a tax credit under this section; and
1198h
(B) 6%. .H
1199
(3) H. [
An eligible retiree may not carry forward or carry back a
] A .H tax credit under
1199a
this
1200
section H. may not be carried forward or carried back .H .
1201
(4) The sum of the tax credits allowed by Subsection (2) H. (a) .H claimed on one return
1201a
filed
1202
under this part shall be reduced by H. [
$.04
] $.025 .H for each dollar by which an eligible
1202a
H. age 65 or older .H retiree's modified
1203
adjusted gross income exceeds:
Text Box
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House Floor Amendments 2-28-2007 dd/
1204
(a) for an eligible H. age 65 or older .H retiree who has a married filing separately
1204a
status, $16,000;
1205
(b) for an eligible H. age 65 or older .H retiree who has a single filing status, $25,000;
1205a
or
1206
(c) for an eligible H. age 65 or older .H retiree who has a head of household filing
1206a
status or a joint filing
1207
status, $32,000.
1207a
H. (5) The sum of the tax credits allowed by Subsection (2)(b) claimed on one return
1207b
filed under this part shall be reduced by $.025 for each dollar by which an eligible under age
1207c
65 retiree's modified adjusted gross income exceeds:
1207d
(a) for an eligible under age 65 retiree who has a married filing separately status,
1207e
$16,000;
1207f
(b) for an eligible under age 65 retiree who has a single filing status, $25,000; or
1207g
(c) for an eligible under age 65 retiree who has a head of household filing status or a
1207h
joint filing status, $32,000.
1207i
(6) For purposes of determining the ownership of items of retirement income under this
1207j
section, common law doctrine shall be applied in all cases even though some items of
1207k
retirement income may have originated from service or investments in a community property
1207l
state. .H
1208
Section 14.
Section
59-10-1206.9
is enacted to read:
1209
59-10-1206.9. Apportionment of tax credits.
1210
A nonresident individual or a part-year resident individual that claims a tax credit in
1211
accordance with Section
59-10-1206.1
or
59-10-1206.2
may only claim an apportioned amount
1212
of the tax credit equal to:
1213
(1) for a nonresident individual, the product of:
1214
(a) the state income tax percentage for the nonresident individual; and
1215
(b) the amount of the tax credit that the nonresident individual would have been
1216
allowed to claim but for the apportionment requirements of this section; or
1217
(2) for a part-year resident individual, the product of:
1218
(a) the state income tax percentage for the part-year resident individual; and
1219
(b) the amount of the tax credit that the part-year resident individual would have been
1220
allowed to claim but for the apportionment requirements of this section.
1221
Section 15.
Section
59-12-102
is amended to read:
1222
59-12-102. Definitions.
Text Box
- 40a -
House Floor Amendments 2-28-2007 dd/
1223
As used in this chapter:
1224
(1) (a) "Admission or user fees" includes season passes.
1225
(b) "Admission or user fees" does not include annual membership dues to private
1226
organizations.
1227
(2) "Agreement" means the Streamlined Sales and Use Tax Agreement described in
1228
Section
59-12-102.1
.
1229
(3) "Agreement combined tax rate" means the sum of the tax rates:
1230
(a) listed under Subsection (4); and
1231
(b) that are imposed within a local taxing jurisdiction.
1232
(4) "Agreement sales and use tax" means a tax imposed under:
1233
(a) Subsection
59-12-103
(2)(a)(i) or (2)(b)(iii)(A);
1234
(b) Section
59-12-204
;
Text Box
- 41 -
1235
(c) Section
59-12-401
;
1236
(d) Section
59-12-402
;
1237
(e) Section
59-12-501
;
1238
(f) Section
59-12-502
;
1239
(g) Section
59-12-703
;
1240
(h) Section
59-12-802
;
1241
(i) Section
59-12-804
;
1242
(j) Section
59-12-1001
;
1243
(k) Section
59-12-1102
;
1244
(l) Section
59-12-1302
;
1245
(m) Section
59-12-1402
; [or]
1246
(n) Section
59-12-1503
[.]; or
1247
(o) Section
59-12-1703
.
1248
(5) "Aircraft" is as defined in Section
72-10-102
.
1249
(6) "Alcoholic beverage" means a beverage that:
1250
(a) is suitable for human consumption; and
1251
(b) contains .5% or more alcohol by volume.
1252
(7) "Area agency on aging" is as defined in Section
62A-3-101
.
1253
(8) "Assisted amusement device" means an amusement device, skill device, or ride
1254
device that is started and stopped by an individual:
1255
(a) who is not the purchaser or renter of the right to use or operate the amusement
1256
device, skill device, or ride device; and
1257
(b) at the direction of the seller of the right to use the amusement device, skill device,
1258
or ride device.
1259
(9) "Assisted cleaning or washing of tangible personal property" means cleaning or
1260
washing of tangible personal property if the cleaning or washing labor is primarily performed
1261
by an individual:
1262
(a) who is not the purchaser of the cleaning or washing of the tangible personal
1263
property; and
1264
(b) at the direction of the seller of the cleaning or washing of the tangible personal
1265
property.
Text Box
- 42 -
1266
(10) "Authorized carrier" means:
1267
(a) in the case of vehicles operated over public highways, the holder of credentials
1268
indicating that the vehicle is or will be operated pursuant to both the International Registration
1269
Plan and the International Fuel Tax Agreement;
1270
(b) in the case of aircraft, the holder of a Federal Aviation Administration operating
1271
certificate or air carrier's operating certificate; or
1272
(c) in the case of locomotives, freight cars, railroad work equipment, or other rolling
1273
stock, the holder of a certificate issued by the United States Surface Transportation Board.
1274
(11) (a) Except as provided in Subsection (11)(b), "biomass energy" means any of the
1275
following that is used as the primary source of energy to produce fuel or electricity:
1276
(i) material from a plant or tree; or
1277
(ii) other organic matter that is available on a renewable basis, including:
1278
(A) slash and brush from forests and woodlands;
1279
(B) animal waste;
1280
(C) methane produced:
1281
(I) at landfills; or
1282
(II) as a byproduct of the treatment of wastewater residuals;
1283
(D) aquatic plants; and
1284
(E) agricultural products.
1285
(b) "Biomass energy" does not include:
1286
(i) black liquor;
1287
(ii) treated woods; or
1288
(iii) biomass from municipal solid waste other than methane produced:
1289
(A) at landfills; or
1290
(B) as a byproduct of the treatment of wastewater residuals.
1291
(12) (a) "Bundled transaction" means the sale of two or more items of tangible personal
1292
property if:
1293
(i) one or more of the items of tangible personal property is food and food ingredients;
1294
and
1295
(ii) the items of tangible personal property are:
1296
(A) distinct and identifiable; and
Text Box
- 43 -
1297
(B) sold for one price that is not itemized.
1298
(b) "Bundled transaction" does not include the sale of tangible personal property if the
1299
sales price varies, or is negotiable, on the basis of the selection by the purchaser of the items of
1300
tangible personal property included in the transaction.
1301
(c) For purposes of Subsection (12)(a)(ii)(A), tangible personal property that is distinct
1302
and identifiable does not include:
1303
(i) packaging that:
1304
(A) accompanies the sale of the tangible personal property; and
1305
(B) is incidental or immaterial to the sale of the tangible personal property;
1306
(ii) tangible personal property provided free of charge with the purchase of another
1307
item of tangible personal property; or
1308
(iii) an item of tangible personal property included in the definition of "purchase
1309
price."
1310
(d) For purposes of Subsection (12)(c)(ii), an item of tangible personal property is
1311
provided free of charge with the purchase of another item of tangible personal property if the
1312
sales price of the purchased item of tangible personal property does not vary depending on the
1313
inclusion of the tangible personal property provided free of charge.
1314
(13) "Certified automated system" means software certified by the governing board of
1315
the agreement in accordance with Section
59-12-102.1
that:
1316
(a) calculates the agreement sales and use tax imposed within a local taxing
1317
jurisdiction:
1318
(i) on a transaction; and
1319
(ii) in the states that are members of the agreement;
1320
(b) determines the amount of agreement sales and use tax to remit to a state that is a
1321
member of the agreement; and
1322
(c) maintains a record of the transaction described in Subsection (13)(a)(i).
1323
(14) "Certified service provider" means an agent certified:
1324
(a) by the governing board of the agreement in accordance with Section
59-12-102.1
;
1325
and
1326
(b) to perform all of a seller's sales and use tax functions for an agreement sales and
1327
use tax other than the seller's obligation under Section
59-12-107.4
to remit a tax on the seller's
Text Box
- 44 -
1328
own purchases.
1329
(15) (a) Subject to Subsection (15)(b), "clothing" means all human wearing apparel
1330
suitable for general use.
1331
(b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
1332
commission shall make rules:
1333
(i) listing the items that constitute "clothing"; and
1334
(ii) that are consistent with the list of items that constitute "clothing" under the
1335
agreement.
1336
(16) "Coal-to-liquid" means the process of converting coal into a liquid synthetic fuel.
1337
(17) "Commercial use" means the use of gas, electricity, heat, coal, fuel oil, or other
1338
fuels that does not constitute industrial use under Subsection [(39)] (40) or residential use
1339
under Subsection [(76)] (77).
1340
(18) (a) "Common carrier" means a person engaged in or transacting the business of
1341
transporting passengers, freight, merchandise, or other property for hire within this state.
1342
(b) (i) "Common carrier" does not include a person who, at the time the person is
1343
traveling to or from that person's place of employment, transports a passenger to or from the
1344
passenger's place of employment.
1345
(ii) For purposes of Subsection (18)(b)(i), in accordance with Title 63, Chapter 46a,
1346
Utah Administrative Rulemaking Act, the commission may make rules defining what
1347
constitutes a person's place of employment.
1348
(19) "Component part" includes:
1349
(a) poultry, dairy, and other livestock feed, and their components;
1350
(b) baling ties and twine used in the baling of hay and straw;
1351
(c) fuel used for providing temperature control of orchards and commercial
1352
greenhouses doing a majority of their business in wholesale sales, and for providing power for
1353
off-highway type farm machinery; and
1354
(d) feed, seeds, and seedlings.
1355
(20) "Computer" means an electronic device that accepts information:
1356
(a) (i) in digital form; or
1357
(ii) in a form similar to digital form; and
1358
(b) manipulates that information for a result based on a sequence of instructions.
Text Box
- 45 -
1359
(21) "Computer software" means a set of coded instructions designed to cause:
1360
(a) a computer to perform a task; or
1361
(b) automatic data processing equipment to perform a task.
1362
(22) "Construction materials" means any tangible personal property that will be
1363
converted into real property.
1364
(23) "Delivered electronically" means delivered to a purchaser by means other than
1365
tangible storage media.
1366
(24) (a) "Delivery charge" means a charge:
1367
(i) by a seller of:
1368
(A) tangible personal property; or
1369
(B) services; and
1370
(ii) for preparation and delivery of the tangible personal property or services described
1371
in Subsection (24)(a)(i) to a location designated by the purchaser.
1372
(b) "Delivery charge" includes a charge for the following:
1373
(i) transportation;
1374
(ii) shipping;
1375
(iii) postage;
1376
(iv) handling;
1377
(v) crating; or
1378
(vi) packing.
1379
(25) (a) "Dental prosthesis" means the following if fabricated in a laboratory:
1380
(i) a bridge;
1381
(ii) a crown if that crown covers at least 75% of a tooth structure;
1382
(iii) a denture;
1383
(iv) an implant;
1384
(v) an orthodontic device designed to:
1385
(A) retain the position or spacing of teeth; and
1386
(B) replace a missing tooth;
1387
(vi) a partial denture; or
1388
(vii) a device similar to Subsections (