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H.B. 384

This document includes House Committee Amendments incorporated into the bill on Thu, Feb 23, 2012 at 11:47 AM by jeyring. -->              1     

SALES AND USE TAX SELLER NEXUS AMENDMENTS

             2     
2012 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Wayne A. Harper

             5     
Senate Sponsor: ____________

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill makes changes related to the requirement to pay or collect and remit sales and
             10      use taxes.
             11      Highlighted Provisions:
             12          This bill:
             13          .    provides definitions;
             14          .    expands the types of sellers who are required to pay or collect and remit sales and
             15      use taxes; and
             16          .    makes technical and conforming changes.
             17      Money Appropriated in this Bill:
             18          None
             19      Other Special Clauses:
             20          This bill takes effect on July 1, 2012.
             21      Utah Code Sections Affected:
             22      AMENDS:
             23          59-1-401, as last amended by Laws of Utah 2010, Chapter 233
             24          59-12-102, as last amended by Laws of Utah 2011, Chapters 14, 285, and 314
             25          59-12-103.1, as last amended by Laws of Utah 2011, Chapter 384
             26          59-12-107, as last amended by Laws of Utah 2009, Chapter 212
             27          59-12-108, as last amended by Laws of Utah 2011, Chapter 309


             28          59-12-211, as last amended by Laws of Utah 2011, Chapter 285
             29          59-12-211.1, as enacted by Laws of Utah 2010, Chapter 142
             30     
             31      Be it enacted by the Legislature of the state of Utah:
             32          Section 1. Section 59-1-401 is amended to read:
             33           59-1-401. Definitions -- Offenses and penalties -- Rulemaking authority -- Statute
             34      of limitations -- Exceptions -- Commission authority to waive, reduce, or compromise
             35      penalty or interest.
             36          (1) As used in this section:
             37          (a) "Activated tax, fee, or charge" means a tax, fee, or charge with respect to which the
             38      commission:
             39          (i) has implemented the commission's GenTax system; and
             40          (ii) at least 30 days before implementing the commission's GenTax system as described
             41      in Subsection (1)(a)(i), has provided notice in a conspicuous place on the commission's website
             42      stating:
             43          (A) the date the commission will implement the GenTax system with respect to the tax,
             44      fee, or charge; and
             45          (B) that, at the time the commission implements the GenTax system with respect to the
             46      tax, fee, or charge:
             47          (I) a person that files a return after the due date as described in Subsection (2)(a) is
             48      subject to the penalty described in Subsection (2)(c)(ii); and
             49          (II) a person that fails to pay the tax, fee, or charge as described in Subsection (3)(a) is
             50      subject to the penalty described in Subsection (3)(b)(ii).
             51          (b) "Activation date for a tax, fee, or charge" means with respect to a tax, fee, or
             52      charge, the later of:
             53          (i) the date on which the commission implements the commission's GenTax system
             54      with respect to the tax, fee, or charge; or
             55          (ii) 30 days after the date the commission provides the notice described in Subsection
             56      (1)(a)(ii) with respect to the tax, fee, or charge.
             57          (c) (i) Except as provided in Subsection (1)(c)(ii), "tax, fee, or charge" means:
             58          (A) a tax, fee, or charge the commission administers under:


             59          (I) this title;
             60          (II) Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;
             61          (III) Title 10, Chapter 1, Part 4, Municipal Telecommunications License Tax Act;
             62          (IV) Section 19-6-410.5 ;
             63          (V) Section 19-6-714 ;
             64          (VI) Section 19-6-805 ;
             65          (VII) Section 34A-2-202 ;
             66          (VIII) Section 40-6-14 ;
             67          (IX) Section 69-2-5 ;
             68          (X) Section 69-2-5.5 ; or
             69          (XI) Section 69-2-5.6 ; or
             70          (B) another amount that by statute is subject to a penalty imposed under this section.
             71          (ii) "Tax, fee, or charge" does not include a tax, fee, or charge imposed under:
             72          (A) Title 41, Chapter 1a, Motor Vehicle Act, except for Section 41-1a-301 ;
             73          (B) Title 41, Chapter 3, Motor Vehicle Business Regulation Act;
             74          (C) Chapter 2, Property Tax Act, except for Section 59-2-1309 ;
             75          (D) Chapter 3, Tax Equivalent Property Act; or
             76          (E) Chapter 4, Privilege Tax.
             77          (d) "Unactivated tax, fee, or charge" means a tax, fee, or charge except for an activated
             78      tax, fee, or charge.
             79          (2) (a) The due date for filing a return is:
             80          (i) if the person filing the return is not allowed by law an extension of time for filing
             81      the return, the day on which the return is due as provided by law; or
             82          (ii) if the person filing the return is allowed by law an extension of time for filing the
             83      return, the earlier of:
             84          (A) the date the person files the return; or
             85          (B) the last day of that extension of time as allowed by law.
             86          (b) A penalty in the amount described in Subsection (2)(c) is imposed if a person files a
             87      return after the due date described in Subsection (2)(a).
             88          (c) For purposes of Subsection (2)(b), the penalty is an amount equal to the greater of:
             89          (i) if the return described in Subsection (2)(b) is filed with respect to an unactivated


             90      tax, fee, or charge:
             91          (A) $20; or
             92          (B) 10% of the unpaid unactivated tax, fee, or charge due on the return; or
             93          (ii) if the return described in Subsection (2)(b) is filed with respect to an activated tax,
             94      fee, or charge, beginning on the activation date for the tax, fee, or charge:
             95          (A) $20; or
             96          (B) (I) 2% of the unpaid activated tax, fee, or charge due on the return if the return is
             97      filed no later than five days after the due date described in Subsection (2)(a);
             98          (II) 5% of the unpaid activated tax, fee, or charge due on the return if the return is filed
             99      more than five days after the due date but no later than 15 days after the due date described in
             100      Subsection (2)(a); or
             101          (III) 10% of the unpaid activated tax, fee, or charge due on the return if the return is
             102      filed more than 15 days after the due date described in Subsection (2)(a).
             103          (d) This Subsection (2) does not apply to:
             104          (i) an amended return; or
             105          (ii) a return with no tax due.
             106          (3) (a) A person is subject to a penalty for failure to pay a tax, fee, or charge if:
             107          (i) the person files a return on or before the due date for filing a return described in
             108      Subsection (2)(a), but fails to pay the tax, fee, or charge due on the return on or before that due
             109      date;
             110          (ii) the person:
             111          (A) is subject to a penalty under Subsection (2)(b); and
             112          (B) fails to pay the tax, fee, or charge due on a return within a 90-day period after the
             113      due date for filing a return described in Subsection (2)(a);
             114          (iii) (A) the person is subject to a penalty under Subsection (2)(b); and
             115          (B) the commission estimates an amount of tax due for that person in accordance with
             116      Subsection 59-1-1406 (2);
             117          (iv) the person:
             118          (A) is mailed a notice of deficiency; and
             119          (B) within a 30-day period after the day on which the notice of deficiency described in
             120      Subsection (3)(a)(iv)(A) is mailed:


             121          (I) does not file a petition for redetermination or a request for agency action; and
             122          (II) fails to pay the tax, fee, or charge due on a return;
             123          (v) (A) the commission:
             124          (I) issues an order constituting final agency action resulting from a timely filed petition
             125      for redetermination or a timely filed request for agency action; or
             126          (II) is considered to have denied a request for reconsideration under Subsection
             127      63G-4-302 (3)(b) resulting from a timely filed petition for redetermination or a timely filed
             128      request for agency action; and
             129          (B) the person fails to pay the tax, fee, or charge due on a return within a 30-day period
             130      after the date the commission:
             131          (I) issues the order constituting final agency action described in Subsection
             132      (3)(a)(v)(A)(I); or
             133          (II) is considered to have denied the request for reconsideration described in
             134      Subsection (3)(a)(v)(A)(II); or
             135          (vi) the person fails to pay the tax, fee, or charge within a 30-day period after the date
             136      of a final judicial decision resulting from a timely filed petition for judicial review.
             137          (b) For purposes of Subsection (3)(a), the penalty is an amount equal to the greater of:
             138          (i) if the failure to pay a tax, fee, or charge as described in Subsection (3)(a) is with
             139      respect to an unactivated tax, fee, or charge:
             140          (A) $20; or
             141          (B) 10% of the unpaid unactivated tax, fee, or charge due on the return; or
             142          (ii) if the failure to pay a tax, fee, or charge as described in Subsection (3)(a) is with
             143      respect to an activated tax, fee, or charge, beginning on the activation date:
             144          (A) $20; or
             145          (B) (I) 2% of the unpaid activated tax, fee, or charge due on the return if the activated
             146      tax, fee, or charge due on the return is paid no later than five days after the due date for filing a
             147      return described in Subsection (2)(a);
             148          (II) 5% of the unpaid activated tax, fee, or charge due on the return if the activated tax,
             149      fee, or charge due on the return is paid more than five days after the due date for filing a return
             150      described in Subsection (2)(a) but no later than 15 days after that due date; or
             151          (III) 10% of the unpaid activated tax, fee, or charge due on the return if the activated


             152      tax, fee, or charge due on the return is paid more than 15 days after the due date for filing a
             153      return described in Subsection (2)(a).
             154          (4) (a) Beginning January 1, 1995, in the case of any underpayment of estimated tax or
             155      quarterly installments required by Sections 59-5-107 , 59-5-207 , 59-7-504 , and 59-9-104 , there
             156      shall be added a penalty in an amount determined by applying the interest rate provided under
             157      Section 59-1-402 plus four percentage points to the amount of the underpayment for the period
             158      of the underpayment.
             159          (b) (i) For purposes of Subsection (4)(a), the amount of the underpayment shall be the
             160      excess of the required installment over the amount, if any, of the installment paid on or before
             161      the due date for the installment.
             162          (ii) The period of the underpayment shall run from the due date for the installment to
             163      whichever of the following dates is the earlier:
             164          (A) the original due date of the tax return, without extensions, for the taxable year; or
             165          (B) with respect to any portion of the underpayment, the date on which that portion is
             166      paid.
             167          (iii) For purposes of this Subsection (4), a payment of estimated tax shall be credited
             168      against unpaid required installments in the order in which the installments are required to be
             169      paid.
             170          (5) (a) Notwithstanding Subsection (2) and except as provided in Subsection (6), a
             171      person allowed by law an extension of time for filing a corporate franchise or income tax return
             172      under Chapter 7, Corporate Franchise and Income Taxes, or an individual income tax return
             173      under Chapter 10, Individual Income Tax Act, is subject to a penalty in the amount described in
             174      Subsection (5)(b) if, on or before the day on which the return is due as provided by law, not
             175      including the extension of time, the person fails to pay:
             176          (i) for a person filing a corporate franchise or income tax return under Chapter 7,
             177      Corporate Franchise and Income Taxes, the payment required by Subsection 59-7-507 (1)(b); or
             178          (ii) for a person filing an individual income tax return under Chapter 10, Individual
             179      Income Tax Act, the payment required by Subsection 59-10-516 (2).
             180          (b) For purposes of Subsection (5)(a), the penalty per month during the period of the
             181      extension of time for filing the return is an amount equal to 2% of the tax due on the return,
             182      unpaid as of the day on which the return is due as provided by law.


             183          (6) If a person does not file a return within an extension of time allowed by Section
             184      59-7-505 or 59-10-516 , the person:
             185          (a) is not subject to a penalty in the amount described in Subsection (5)(b); and
             186          (b) is subject to a penalty in an amount equal to the sum of:
             187          (i) a late file penalty in an amount equal to the greater of:
             188          (A) $20; or
             189          (B) 10% of the tax due on the return, unpaid as of the day on which the return is due as
             190      provided by law, not including the extension of time; and
             191          (ii) a late pay penalty in an amount equal to the greater of:
             192          (A) $20; or
             193          (B) 10% of the unpaid tax due on the return, unpaid as of the day on which the return is
             194      due as provided by law, not including the extension of time.
             195          (7) (a) Additional penalties for an underpayment of a tax, fee, or charge are as provided
             196      in this Subsection (7)(a).
             197          (i) Except as provided in Subsection (7)(c), if any portion of an underpayment of a tax,
             198      fee, or charge is due to negligence, the penalty is 10% of the portion of the underpayment that
             199      is due to negligence.
             200          (ii) Except as provided in Subsection (7)(d), if any portion of an underpayment of a
             201      tax, fee, or charge is due to intentional disregard of law or rule, the penalty is 15% of the entire
             202      underpayment.
             203          (iii) If any portion of an underpayment is due to an intent to evade a tax, fee, or charge,
             204      the penalty is the greater of $500 per period or 50% of the entire underpayment.
             205          (iv) If any portion of an underpayment is due to fraud with intent to evade a tax, fee, or
             206      charge, the penalty is the greater of $500 per period or 100% of the entire underpayment.
             207          (b) If the commission determines that a person is liable for a penalty imposed under
             208      Subsection (7)(a)(ii), (iii), or (iv), the commission shall notify the person of the proposed
             209      penalty.
             210          (i) The notice of proposed penalty shall:
             211          (A) set forth the basis of the assessment; and
             212          (B) be mailed by certified mail, postage prepaid, to the person's last-known address.
             213          (ii) Upon receipt of the notice of proposed penalty, the person against whom the


             214      penalty is proposed may:
             215          (A) pay the amount of the proposed penalty at the place and time stated in the notice;
             216      or
             217          (B) proceed in accordance with the review procedures of Subsection (7)(b)(iii).
             218          (iii) A person against whom a penalty is proposed in accordance with this Subsection
             219      (7) may contest the proposed penalty by filing a petition for an adjudicative proceeding with
             220      the commission.
             221          (iv) (A) If the commission determines that a person is liable for a penalty under this
             222      Subsection (7), the commission shall assess the penalty and give notice and demand for
             223      payment.
             224          (B) The commission shall mail the notice and demand for payment described in
             225      Subsection (7)(b)(iv)(A):
             226          (I) to the person's last-known address; and
             227          (II) in accordance with Section 59-1-1404 .
             228          (c) A seller that voluntarily collects a tax under Subsection 59-12-107 [(1)(b)](2)(d) is
             229      not subject to the penalty under Subsection (7)(a)(i) if on or after July 1, 2001:
             230          (i) a court of competent jurisdiction issues a final unappealable judgment or order
             231      determining that:
             232          (A) the seller meets one or more of the criteria described in Subsection
             233      59-12-107 [(1)](2)(a) or is a seller required to pay or collect and remit sales and use taxes under
             234      Subsection (2)(b) or (c); and
             235          (B) the commission or a county, city, or town may require the seller to collect a tax
             236      under Subsections 59-12-103 (2)(a) through (d); or
             237          (ii) the commission issues a final unappealable administrative order determining that:
             238          (A) the seller meets one or more of the criteria described in Subsection
             239      59-12-107 [(1)](2)(a) or is a seller required to pay or collect and remit sales and use taxes under
             240      Subsection (2)(b) or (c); and
             241          (B) the commission or a county, city, or town may require the seller to collect a tax
             242      under Subsections 59-12-103 (2)(a) through (d).
             243          (d) A seller that voluntarily collects a tax under Subsection 59-12-107 [(1)(b)](2)(d) is
             244      not subject to the penalty under Subsection (7)(a)(ii) if:


             245          (i) (A) a court of competent jurisdiction issues a final unappealable judgment or order
             246      determining that:
             247          (I) the seller meets one or more of the criteria described in Subsection
             248      59-12-107 [(1)](2)(a) or is a seller required to pay or collect and remit sales and use taxes under
             249      Subsection (2)(b) or (c); and
             250          (II) the commission or a county, city, or town may require the seller to collect a tax
             251      under Subsections 59-12-103 (2)(a) through (d); or
             252          (B) the commission issues a final unappealable administrative order determining that:
             253          (I) the seller meets one or more of the criteria described in Subsection
             254      59-12-107 [(1)](2)(a) or is a seller required to pay or collect and remit sales and use taxes under
             255      Subsection (2)(b) or (c); and
             256          (II) the commission or a county, city, or town may require the seller to collect a tax
             257      under Subsections 59-12-103 (2)(a) through (d); and
             258          (ii) the seller's intentional disregard of law or rule is warranted by existing law or by a
             259      nonfrivolous argument for the extension, modification, or reversal of existing law or the
             260      establishment of new law.
             261          (8) The penalty for failure to file an information return, information report, or a
             262      complete supporting schedule is $50 for each information return, information report, or
             263      supporting schedule up to a maximum of $1,000.
             264          (9) If a person, in furtherance of a frivolous position, has a prima facie intent to delay
             265      or impede administration of a law relating to a tax, fee, or charge and files a purported return
             266      that fails to contain information from which the correctness of reported tax, fee, or charge
             267      liability can be determined or that clearly indicates that the tax, fee, or charge liability shown is
             268      substantially incorrect, the penalty is $500.
             269          (10) (a) A seller that fails to remit a tax, fee, or charge monthly as required by
             270      Subsection 59-12-108 (1)(a):
             271          (i) is subject to a penalty described in Subsection (2); and
             272          (ii) may not retain the percentage of sales and use taxes that would otherwise be
             273      allowable under Subsection 59-12-108 (2).
             274          (b) A seller that fails to remit a tax, fee, or charge by electronic funds transfer as
             275      required by Subsection 59-12-108 (1)(a)(ii)(B):


             276          (i) is subject to a penalty described in Subsection (2); and
             277          (ii) may not retain the percentage of sales and use taxes that would otherwise be
             278      allowable under Subsection 59-12-108 (2).
             279          (11) (a) A person is subject to the penalty provided in Subsection (11)(c) if that person:
             280          (i) commits an act described in Subsection (11)(b) with respect to one or more of the
             281      following documents:
             282          (A) a return;
             283          (B) an affidavit;
             284          (C) a claim; or
             285          (D) a document similar to Subsections (11)(a)(i)(A) through (C);
             286          (ii) knows or has reason to believe that the document described in Subsection (11)(a)(i)
             287      will be used in connection with any material matter administered by the commission; and
             288          (iii) knows that the document described in Subsection (11)(a)(i), if used in connection
             289      with any material matter administered by the commission, would result in an understatement of
             290      another person's liability for a tax, fee, or charge.
             291          (b) The following acts apply to Subsection (11)(a)(i):
             292          (i) preparing any portion of a document described in Subsection (11)(a)(i);
             293          (ii) presenting any portion of a document described in Subsection (11)(a)(i);
             294          (iii) procuring any portion of a document described in Subsection (11)(a)(i);
             295          (iv) advising in the preparation or presentation of any portion of a document described
             296      in Subsection (11)(a)(i);
             297          (v) aiding in the preparation or presentation of any portion of a document described in
             298      Subsection (11)(a)(i);
             299          (vi) assisting in the preparation or presentation of any portion of a document described
             300      in Subsection (11)(a)(i); or
             301          (vii) counseling in the preparation or presentation of any portion of a document
             302      described in Subsection (11)(a)(i).
             303          (c) For purposes of Subsection (11)(a), the penalty:
             304          (i) shall be imposed by the commission;
             305          (ii) is $500 for each document described in Subsection (11)(a)(i) with respect to which
             306      the person described in Subsection (11)(a) meets the requirements of Subsection (11)(a); and


             307          (iii) is in addition to any other penalty provided by law.
             308          (d) The commission may seek a court order to enjoin a person from engaging in
             309      conduct that is subject to a penalty under this Subsection (11).
             310          (e) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             311      commission may make rules prescribing the documents that are similar to Subsections
             312      (11)(a)(i)(A) through (C).
             313          (12) (a) As provided in Section 76-8-1101 , criminal offenses and penalties are as
             314      provided in Subsections (12)(b) through (e).
             315          (b) (i) A person who is required by this title or any laws the commission administers or
             316      regulates to register with or obtain a license or permit from the commission, who operates
             317      without having registered or secured a license or permit, or who operates when the registration,
             318      license, or permit is expired or not current, is guilty of a class B misdemeanor.
             319          (ii) Notwithstanding Section 76-3-301 , for purposes of Subsection (12)(b)(i), the
             320      penalty may not:
             321          (A) be less than $500; or
             322          (B) exceed $1,000.
             323          (c) (i) A person who, with intent to evade a tax, fee, or charge or requirement of this
             324      title or any lawful requirement of the commission, fails to make, render, sign, or verify a return
             325      or to supply information within the time required by law, or who makes, renders, signs, or
             326      verifies a false or fraudulent return or statement, or who supplies false or fraudulent
             327      information, is guilty of a third degree felony.
             328          (ii) Notwithstanding Section 76-3-301 , for purposes of Subsection (12)(c)(i), the
             329      penalty may not:
             330          (A) be less than $1,000; or
             331          (B) exceed $5,000.
             332          (d) (i) A person who intentionally or willfully attempts to evade or defeat a tax, fee, or
             333      charge or the payment of a tax, fee, or charge is, in addition to other penalties provided by law,
             334      guilty of a second degree felony.
             335          (ii) Notwithstanding Section 76-3-301 , for purposes of Subsection (12)(d)(i), the
             336      penalty may not:
             337          (A) be less than $1,500; or


             338          (B) exceed $25,000.
             339          (e) (i) A person is guilty of a second degree felony if that person commits an act:
             340          (A) described in Subsection (12)(e)(ii) with respect to one or more of the following
             341      documents:
             342          (I) a return;
             343          (II) an affidavit;
             344          (III) a claim; or
             345          (IV) a document similar to Subsections (12)(e)(i)(A)(I) through (III); and
             346          (B) subject to Subsection (12)(e)(iii), with knowledge that the document described in
             347      Subsection (12)(e)(i)(A):
             348          (I) is false or fraudulent as to any material matter; and
             349          (II) could be used in connection with any material matter administered by the
             350      commission.
             351          (ii) The following acts apply to Subsection (12)(e)(i):
             352          (A) preparing any portion of a document described in Subsection (12)(e)(i)(A);
             353          (B) presenting any portion of a document described in Subsection (12)(e)(i)(A);
             354          (C) procuring any portion of a document described in Subsection (12)(e)(i)(A);
             355          (D) advising in the preparation or presentation of any portion of a document described
             356      in Subsection (12)(e)(i)(A);
             357          (E) aiding in the preparation or presentation of any portion of a document described in
             358      Subsection (12)(e)(i)(A);
             359          (F) assisting in the preparation or presentation of any portion of a document described
             360      in Subsection (12)(e)(i)(A); or
             361          (G) counseling in the preparation or presentation of any portion of a document
             362      described in Subsection (12)(e)(i)(A).
             363          (iii) This Subsection (12)(e) applies:
             364          (A) regardless of whether the person for which the document described in Subsection
             365      (12)(e)(i)(A) is prepared or presented:
             366          (I) knew of the falsity of the document described in Subsection (12)(e)(i)(A); or
             367          (II) consented to the falsity of the document described in Subsection (12)(e)(i)(A); and
             368          (B) in addition to any other penalty provided by law.


             369          (iv) Notwithstanding Section 76-3-301 , for purposes of this Subsection (12)(e), the
             370      penalty may not:
             371          (A) be less than $1,500; or
             372          (B) exceed $25,000.
             373          (v) The commission may seek a court order to enjoin a person from engaging in
             374      conduct that is subject to a penalty under this Subsection (12)(e).
             375          (vi) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
             376      the commission may make rules prescribing the documents that are similar to Subsections
             377      (12)(e)(i)(A)(I) through (III).
             378          (f) The statute of limitations for prosecution for a violation of this Subsection (12) is
             379      the later of six years:
             380          (i) from the date the tax should have been remitted; or
             381          (ii) after the day on which the person commits the criminal offense.
             382          (13) Upon making a record of its actions, and upon reasonable cause shown, the
             383      commission may waive, reduce, or compromise any of the penalties or interest imposed under
             384      this part.
             385          Section 2. Section 59-12-102 is amended to read:
             386           59-12-102. Definitions.
             387          As used in this chapter:
             388          (1) "800 service" means a telecommunications service that:
             389          (a) allows a caller to dial a toll-free number without incurring a charge for the call; and
             390          (b) is typically marketed:
             391          (i) under the name 800 toll-free calling;
             392          (ii) under the name 855 toll-free calling;
             393          (iii) under the name 866 toll-free calling;
             394          (iv) under the name 877 toll-free calling;
             395          (v) under the name 888 toll-free calling; or
             396          (vi) under a name similar to Subsections (1)(b)(i) through (v) as designated by the
             397      Federal Communications Commission.
             398          (2) (a) "900 service" means an inbound toll telecommunications service that:
             399          (i) a subscriber purchases;


             400          (ii) allows a customer of the subscriber described in Subsection (2)(a)(i) to call in to
             401      the subscriber's:
             402          (A) prerecorded announcement; or
             403          (B) live service; and
             404          (iii) is typically marketed:
             405          (A) under the name 900 service; or
             406          (B) under a name similar to Subsection (2)(a)(iii)(A) as designated by the Federal
             407      Communications Commission.
             408          (b) "900 service" does not include a charge for:
             409          (i) a collection service a seller of a telecommunications service provides to a
             410      subscriber; or
             411          (ii) the following a subscriber sells to the subscriber's customer:
             412          (A) a product; or
             413          (B) a service.
             414          (3) (a) "Admission or user fees" includes season passes.
             415          (b) "Admission or user fees" does not include annual membership dues to private
             416      organizations.
             417          (4) "Agreement" means the Streamlined Sales and Use Tax Agreement adopted on
             418      November 12, 2002, including amendments made to the Streamlined Sales and Use Tax
             419      Agreement after November 12, 2002.
             420          (5) "Agreement combined tax rate" means the sum of the tax rates:
             421          (a) listed under Subsection (6); and
             422          (b) that are imposed within a local taxing jurisdiction.
             423          (6) "Agreement sales and use tax" means a tax imposed under:
             424          (a) Subsection 59-12-103 (2)(a)(i)(A);
             425          (b) Subsection 59-12-103 (2)(b)(i);
             426          (c) Subsection 59-12-103 (2)(c)(i);
             427          (d) Subsection 59-12-103 (2)(d)(i)(A)(I);
             428          (e) Section 59-12-204 ;
             429          (f) Section 59-12-401 ;
             430          (g) Section 59-12-402 ;


             431          (h) Section 59-12-703 ;
             432          (i) Section 59-12-802 ;
             433          (j) Section 59-12-804 ;
             434          (k) Section 59-12-1102 ;
             435          (l) Section 59-12-1302 ;
             436          (m) Section 59-12-1402 ;
             437          (n) Section 59-12-1802 ;
             438          (o) Section 59-12-2003 ;
             439          (p) Section 59-12-2103 ;
             440          (q) Section 59-12-2213 ;
             441          (r) Section 59-12-2214 ;
             442          (s) Section 59-12-2215 ;
             443          (t) Section 59-12-2216 ;
             444          (u) Section 59-12-2217 ; or
             445          (v) Section 59-12-2218 .
             446          (7) "Aircraft" is as defined in Section 72-10-102 .
             447          (8) "Aircraft maintenance, repair, and overhaul provider" means a business entity:
             448          (a) except for:
             449          (i) an airline as defined in Section 59-2-102 ; or
             450          (ii) an affiliated group, as defined in [Subsection 59-12-107 (1)(f)] Section 59-7-101 ,
             451      except that "affiliated group" includes a corporation that is qualified to do business but is not
             452      otherwise doing business in the state, of an airline; and
             453          (b) that has the workers, expertise, and facilities to perform the following, regardless of
             454      whether the business entity performs the following in this state:
             455          (i) check, diagnose, overhaul, and repair:
             456          (A) an onboard system of a fixed wing turbine powered aircraft; and
             457          (B) the parts that comprise an onboard system of a fixed wing turbine powered aircraft;
             458          (ii) assemble, change, dismantle, inspect, and test a fixed wing turbine powered aircraft
             459      engine;
             460          (iii) perform at least the following maintenance on a fixed wing turbine powered
             461      aircraft:


             462          (A) an inspection;
             463          (B) a repair, including a structural repair or modification;
             464          (C) changing landing gear; and
             465          (D) addressing issues related to an aging fixed wing turbine powered aircraft;
             466          (iv) completely remove the existing paint of a fixed wing turbine powered aircraft and
             467      completely apply new paint to the fixed wing turbine powered aircraft; and
             468          (v) refurbish the interior of a fixed wing turbine powered aircraft in a manner that
             469      results in a change in the fixed wing turbine powered aircraft's certification requirements by the
             470      authority that certifies the fixed wing turbine powered aircraft.
             471          (9) "Alcoholic beverage" means a beverage that:
             472          (a) is suitable for human consumption; and
             473          (b) contains .5% or more alcohol by volume.
             474          (10) (a) "Ancillary service" means a service associated with, or incidental to, the
             475      provision of telecommunications service.
             476          (b) "Ancillary service" includes:
             477          (i) a conference bridging service;
             478          (ii) a detailed communications billing service;
             479          (iii) directory assistance;
             480          (iv) a vertical service; or
             481          (v) a voice mail service.
             482          (11) "Area agency on aging" is as defined in Section 62A-3-101 .
             483          (12) "Assisted amusement device" means an amusement device, skill device, or ride
             484      device that is started and stopped by an individual:
             485          (a) who is not the purchaser or renter of the right to use or operate the amusement
             486      device, skill device, or ride device; and
             487          (b) at the direction of the seller of the right to use the amusement device, skill device,
             488      or ride device.
             489          (13) "Assisted cleaning or washing of tangible personal property" means cleaning or
             490      washing of tangible personal property if the cleaning or washing labor is primarily performed
             491      by an individual:
             492          (a) who is not the purchaser of the cleaning or washing of the tangible personal


             493      property; and
             494          (b) at the direction of the seller of the cleaning or washing of the tangible personal
             495      property.
             496          (14) "Authorized carrier" means:
             497          (a) in the case of vehicles operated over public highways, the holder of credentials
             498      indicating that the vehicle is or will be operated pursuant to both the International Registration
             499      Plan and the International Fuel Tax Agreement;
             500          (b) in the case of aircraft, the holder of a Federal Aviation Administration operating
             501      certificate or air carrier's operating certificate; or
             502          (c) in the case of locomotives, freight cars, railroad work equipment, or other rolling
             503      stock, the holder of a certificate issued by the United States Surface Transportation Board.
             504          (15) (a) Except as provided in Subsection (15)(b), "biomass energy" means any of the
             505      following that is used as the primary source of energy to produce fuel or electricity:
             506          (i) material from a plant or tree; or
             507          (ii) other organic matter that is available on a renewable basis, including:
             508          (A) slash and brush from forests and woodlands;
             509          (B) animal waste;
             510          (C) methane produced:
             511          (I) at landfills; or
             512          (II) as a byproduct of the treatment of wastewater residuals;
             513          (D) aquatic plants; and
             514          (E) agricultural products.
             515          (b) "Biomass energy" does not include:
             516          (i) black liquor;
             517          (ii) treated woods; or
             518          (iii) biomass from municipal solid waste other than methane produced:
             519          (A) at landfills; or
             520          (B) as a byproduct of the treatment of wastewater residuals.
             521          (16) (a) "Bundled transaction" means the sale of two or more items of tangible personal
             522      property, products, or services if the tangible personal property, products, or services are:
             523          (i) distinct and identifiable; and


             524          (ii) sold for one nonitemized price.
             525          (b) "Bundled transaction" does not include:
             526          (i) the sale of tangible personal property if the sales price varies, or is negotiable, on
             527      the basis of the selection by the purchaser of the items of tangible personal property included in
             528      the transaction;
             529          (ii) the sale of real property;
             530          (iii) the sale of services to real property;
             531          (iv) the retail sale of tangible personal property and a service if:
             532          (A) the tangible personal property:
             533          (I) is essential to the use of the service; and
             534          (II) is provided exclusively in connection with the service; and
             535          (B) the service is the true object of the transaction;
             536          (v) the retail sale of two services if:
             537          (A) one service is provided that is essential to the use or receipt of a second service;
             538          (B) the first service is provided exclusively in connection with the second service; and
             539          (C) the second service is the true object of the transaction;
             540          (vi) a transaction that includes tangible personal property or a product subject to
             541      taxation under this chapter and tangible personal property or a product that is not subject to
             542      taxation under this chapter if the:
             543          (A) seller's purchase price of the tangible personal property or product subject to
             544      taxation under this chapter is de minimis; or
             545          (B) seller's sales price of the tangible personal property or product subject to taxation
             546      under this chapter is de minimis; and
             547          (vii) the retail sale of tangible personal property that is not subject to taxation under
             548      this chapter and tangible personal property that is subject to taxation under this chapter if:
             549          (A) that retail sale includes:
             550          (I) food and food ingredients;
             551          (II) a drug;
             552          (III) durable medical equipment;
             553          (IV) mobility enhancing equipment;
             554          (V) an over-the-counter drug;


             555          (VI) a prosthetic device; or
             556          (VII) a medical supply; and
             557          (B) subject to Subsection (16)(f):
             558          (I) the seller's purchase price of the tangible personal property subject to taxation under
             559      this chapter is 50% or less of the seller's total purchase price of that retail sale; or
             560          (II) the seller's sales price of the tangible personal property subject to taxation under
             561      this chapter is 50% or less of the seller's total sales price of that retail sale.
             562          (c) (i) For purposes of Subsection (16)(a)(i), tangible personal property, a product, or a
             563      service that is distinct and identifiable does not include:
             564          (A) packaging that:
             565          (I) accompanies the sale of the tangible personal property, product, or service; and
             566          (II) is incidental or immaterial to the sale of the tangible personal property, product, or
             567      service;
             568          (B) tangible personal property, a product, or a service provided free of charge with the
             569      purchase of another item of tangible personal property, a product, or a service; or
             570          (C) an item of tangible personal property, a product, or a service included in the
             571      definition of "purchase price."
             572          (ii) For purposes of Subsection (16)(c)(i)(B), an item of tangible personal property, a
             573      product, or a service is provided free of charge with the purchase of another item of tangible
             574      personal property, a product, or a service if the sales price of the purchased item of tangible
             575      personal property, product, or service does not vary depending on the inclusion of the tangible
             576      personal property, product, or service provided free of charge.
             577          (d) (i) For purposes of Subsection (16)(a)(ii), property sold for one nonitemized price
             578      does not include a price that is separately identified by tangible personal property, product, or
             579      service on the following, regardless of whether the following is in paper format or electronic
             580      format:
             581          (A) a binding sales document; or
             582          (B) another supporting sales-related document that is available to a purchaser.
             583          (ii) For purposes of Subsection (16)(d)(i), a binding sales document or another
             584      supporting sales-related document that is available to a purchaser includes:
             585          (A) a bill of sale;


             586          (B) a contract;
             587          (C) an invoice;
             588          (D) a lease agreement;
             589          (E) a periodic notice of rates and services;
             590          (F) a price list;
             591          (G) a rate card;
             592          (H) a receipt; or
             593          (I) a service agreement.
             594          (e) (i) For purposes of Subsection (16)(b)(vi), the sales price of tangible personal
             595      property or a product subject to taxation under this chapter is de minimis if:
             596          (A) the seller's purchase price of the tangible personal property or product is 10% or
             597      less of the seller's total purchase price of the bundled transaction; or
             598          (B) the seller's sales price of the tangible personal property or product is 10% or less of
             599      the seller's total sales price of the bundled transaction.
             600          (ii) For purposes of Subsection (16)(b)(vi), a seller:
             601          (A) shall use the seller's purchase price or the seller's sales price to determine if the
             602      purchase price or sales price of the tangible personal property or product subject to taxation
             603      under this chapter is de minimis; and
             604          (B) may not use a combination of the seller's purchase price and the seller's sales price
             605      to determine if the purchase price or sales price of the tangible personal property or product
             606      subject to taxation under this chapter is de minimis.
             607          (iii) For purposes of Subsection (16)(b)(vi), a seller shall use the full term of a service
             608      contract to determine if the sales price of tangible personal property or a product is de minimis.
             609          (f) For purposes of Subsection (16)(b)(vii)(B), a seller may not use a combination of
             610      the seller's purchase price and the seller's sales price to determine if tangible personal property
             611      subject to taxation under this chapter is 50% or less of the seller's total purchase price or sales
             612      price of that retail sale.
             613          (17) "Certified automated system" means software certified by the governing board of
             614      the agreement that:
             615          (a) calculates the agreement sales and use tax imposed within a local taxing
             616      jurisdiction:


             617          (i) on a transaction; and
             618          (ii) in the states that are members of the agreement;
             619          (b) determines the amount of agreement sales and use tax to remit to a state that is a
             620      member of the agreement; and
             621          (c) maintains a record of the transaction described in Subsection (17)(a)(i).
             622          (18) "Certified service provider" means an agent certified:
             623          (a) by the governing board of the agreement; and
             624          (b) to perform all of a seller's sales and use tax functions for an agreement sales and
             625      use tax other than the seller's obligation under Section 59-12-124 to remit a tax on the seller's
             626      own purchases.
             627          (19) (a) Subject to Subsection (19)(b), "clothing" means all human wearing apparel
             628      suitable for general use.
             629          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             630      commission shall make rules:
             631          (i) listing the items that constitute "clothing"; and
             632          (ii) that are consistent with the list of items that constitute "clothing" under the
             633      agreement.
             634          (20) "Coal-to-liquid" means the process of converting coal into a liquid synthetic fuel.
             635          (21) "Commercial use" means the use of gas, electricity, heat, coal, fuel oil, or other
             636      fuels that does not constitute industrial use under Subsection (48) or residential use under
             637      Subsection (96).
             638          (22) (a) "Common carrier" means a person engaged in or transacting the business of
             639      transporting passengers, freight, merchandise, or other property for hire within this state.
             640          (b) (i) "Common carrier" does not include a person who, at the time the person is
             641      traveling to or from that person's place of employment, transports a passenger to or from the
             642      passenger's place of employment.
             643          (ii) For purposes of Subsection (22)(b)(i), in accordance with Title 63G, Chapter 3,
             644      Utah Administrative Rulemaking Act, the commission may make rules defining what
             645      constitutes a person's place of employment.
             646          (23) "Component part" includes:
             647          (a) poultry, dairy, and other livestock feed, and their components;


             648          (b) baling ties and twine used in the baling of hay and straw;
             649          (c) fuel used for providing temperature control of orchards and commercial
             650      greenhouses doing a majority of their business in wholesale sales, and for providing power for
             651      off-highway type farm machinery; and
             652          (d) feed, seeds, and seedlings.
             653          (24) "Computer" means an electronic device that accepts information:
             654          (a) (i) in digital form; or
             655          (ii) in a form similar to digital form; and
             656          (b) manipulates that information for a result based on a sequence of instructions.
             657          (25) "Computer software" means a set of coded instructions designed to cause:
             658          (a) a computer to perform a task; or
             659          (b) automatic data processing equipment to perform a task.
             660          (26) (a) "Conference bridging service" means an ancillary service that links two or
             661      more participants of an audio conference call or video conference call.
             662          (b) "Conference bridging service" may include providing a telephone number as part of
             663      the ancillary service described in Subsection (26)(a).
             664          (c) "Conference bridging service" does not include a telecommunications service used
             665      to reach the ancillary service described in Subsection (26)(a).
             666          (27) "Construction materials" means any tangible personal property that will be
             667      converted into real property.
             668          (28) "Delivered electronically" means delivered to a purchaser by means other than
             669      tangible storage media.
             670          (29) (a) "Delivery charge" means a charge:
             671          (i) by a seller of:
             672          (A) tangible personal property;
             673          (B) a product transferred electronically; or
             674          (C) services; and
             675          (ii) for preparation and delivery of the tangible personal property, product transferred
             676      electronically, or services described in Subsection (29)(a)(i) to a location designated by the
             677      purchaser.
             678          (b) "Delivery charge" includes a charge for the following:


             679          (i) transportation;
             680          (ii) shipping;
             681          (iii) postage;
             682          (iv) handling;
             683          (v) crating; or
             684          (vi) packing.
             685          (30) "Detailed telecommunications billing service" means an ancillary service of
             686      separately stating information pertaining to individual calls on a customer's billing statement.
             687          (31) "Dietary supplement" means a product, other than tobacco, that:
             688          (a) is intended to supplement the diet;
             689          (b) contains one or more of the following dietary ingredients:
             690          (i) a vitamin;
             691          (ii) a mineral;
             692          (iii) an herb or other botanical;
             693          (iv) an amino acid;
             694          (v) a dietary substance for use by humans to supplement the diet by increasing the total
             695      dietary intake; or
             696          (vi) a concentrate, metabolite, constituent, extract, or combination of any ingredient
             697      described in Subsections (31)(b)(i) through (v);
             698          (c) (i) except as provided in Subsection (31)(c)(ii), is intended for ingestion in:
             699          (A) tablet form;
             700          (B) capsule form;
             701          (C) powder form;
             702          (D) softgel form;
             703          (E) gelcap form; or
             704          (F) liquid form; or
             705          (ii) notwithstanding Subsection (31)(c)(i), if the product is not intended for ingestion in
             706      a form described in Subsections (31)(c)(i)(A) through (F), is not represented:
             707          (A) as conventional food; and
             708          (B) for use as a sole item of:
             709          (I) a meal; or


             710          (II) the diet; and
             711          (d) is required to be labeled as a dietary supplement:
             712          (i) identifiable by the "Supplemental Facts" box found on the label; and
             713          (ii) as required by 21 C.F.R. Sec. 101.36.
             714          (32) (a) "Direct mail" means printed material delivered or distributed by United States
             715      mail or other delivery service:
             716          (i) to:
             717          (A) a mass audience; or
             718          (B) addressees on a mailing list provided:
             719          (I) by a purchaser of the mailing list; or
             720          (II) at the discretion of the purchaser of the mailing list; and
             721          (ii) if the cost of the printed material is not billed directly to the recipients.
             722          (b) "Direct mail" includes tangible personal property supplied directly or indirectly by a
             723      purchaser to a seller of direct mail for inclusion in a package containing the printed material.
             724          (c) "Direct mail" does not include multiple items of printed material delivered to a
             725      single address.
             726          (33) "Directory assistance" means an ancillary service of providing:
             727          (a) address information; or
             728          (b) telephone number information.
             729          (34) (a) "Disposable home medical equipment or supplies" means medical equipment
             730      or supplies that:
             731          (i) cannot withstand repeated use; and
             732          (ii) are purchased by, for, or on behalf of a person other than:
             733          (A) a health care facility as defined in Section 26-21-2 ;
             734          (B) a health care provider as defined in Section 78B-3-403 ;
             735          (C) an office of a health care provider described in Subsection (34)(a)(ii)(B); or
             736          (D) a person similar to a person described in Subsections (34)(a)(ii)(A) through (C).
             737          (b) "Disposable home medical equipment or supplies" does not include:
             738          (i) a drug;
             739          (ii) durable medical equipment;
             740          (iii) a hearing aid;


             741          (iv) a hearing aid accessory;
             742          (v) mobility enhancing equipment; or
             743          (vi) tangible personal property used to correct impaired vision, including:
             744          (A) eyeglasses; or
             745          (B) contact lenses.
             746          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             747      commission may by rule define what constitutes medical equipment or supplies.
             748          (35) (a) "Drug" means a compound, substance, or preparation, or a component of a
             749      compound, substance, or preparation that is:
             750          (i) recognized in:
             751          (A) the official United States Pharmacopoeia;
             752          (B) the official Homeopathic Pharmacopoeia of the United States;
             753          (C) the official National Formulary; or
             754          (D) a supplement to a publication listed in Subsections (35)(a)(i)(A) through (C);
             755          (ii) intended for use in the:
             756          (A) diagnosis of disease;
             757          (B) cure of disease;
             758          (C) mitigation of disease;
             759          (D) treatment of disease; or
             760          (E) prevention of disease; or
             761          (iii) intended to affect:
             762          (A) the structure of the body; or
             763          (B) any function of the body.
             764          (b) "Drug" does not include:
             765          (i) food and food ingredients;
             766          (ii) a dietary supplement;
             767          (iii) an alcoholic beverage; or
             768          (iv) a prosthetic device.
             769          (36) (a) Except as provided in Subsection (36)(c), "durable medical equipment" means
             770      equipment that:
             771          (i) can withstand repeated use;


             772          (ii) is primarily and customarily used to serve a medical purpose;
             773          (iii) generally is not useful to a person in the absence of illness or injury; and
             774          (iv) is not worn in or on the body.
             775          (b) "Durable medical equipment" includes parts used in the repair or replacement of the
             776      equipment described in Subsection (36)(a).
             777          (c) Notwithstanding Subsection (36)(a), "durable medical equipment" does not include
             778      mobility enhancing equipment.
             779          (37) "Electronic" means:
             780          (a) relating to technology; and
             781          (b) having:
             782          (i) electrical capabilities;
             783          (ii) digital capabilities;
             784          (iii) magnetic capabilities;
             785          (iv) wireless capabilities;
             786          (v) optical capabilities;
             787          (vi) electromagnetic capabilities; or
             788          (vii) capabilities similar to Subsections (37)(b)(i) through (vi).
             789          (38) "Employee" is as defined in Section 59-10-401 .
             790          (39) "Fixed guideway" means a public transit facility that uses and occupies:
             791          (a) rail for the use of public transit; or
             792          (b) a separate right-of-way for the use of public transit.
             793          (40) "Fixed wing turbine powered aircraft" means an aircraft that:
             794          (a) is powered by turbine engines;
             795          (b) operates on jet fuel; and
             796          (c) has wings that are permanently attached to the fuselage of the aircraft.
             797          (41) "Fixed wireless service" means a telecommunications service that provides radio
             798      communication between fixed points.
             799          (42) (a) "Food and food ingredients" means substances:
             800          (i) regardless of whether the substances are in:
             801          (A) liquid form;
             802          (B) concentrated form;


             803          (C) solid form;
             804          (D) frozen form;
             805          (E) dried form; or
             806          (F) dehydrated form; and
             807          (ii) that are:
             808          (A) sold for:
             809          (I) ingestion by humans; or
             810          (II) chewing by humans; and
             811          (B) consumed for the substance's:
             812          (I) taste; or
             813          (II) nutritional value.
             814          (b) "Food and food ingredients" includes an item described in Subsection (79)(b)(iii).
             815          (c) "Food and food ingredients" does not include:
             816          (i) an alcoholic beverage;
             817          (ii) tobacco; or
             818          (iii) prepared food.
             819          (43) (a) "Fundraising sales" means sales:
             820          (i) (A) made by a school; or
             821          (B) made by a school student;
             822          (ii) that are for the purpose of raising funds for the school to purchase equipment,
             823      materials, or provide transportation; and
             824          (iii) that are part of an officially sanctioned school activity.
             825          (b) For purposes of Subsection (43)(a)(iii), "officially sanctioned school activity"
             826      means a school activity:
             827          (i) that is conducted in accordance with a formal policy adopted by the school or school
             828      district governing the authorization and supervision of fundraising activities;
             829          (ii) that does not directly or indirectly compensate an individual teacher or other
             830      educational personnel by direct payment, commissions, or payment in kind; and
             831          (iii) the net or gross revenues from which are deposited in a dedicated account
             832      controlled by the school or school district.
             833          (44) "Geothermal energy" means energy contained in heat that continuously flows


             834      outward from the earth that is used as the sole source of energy to produce electricity.
             835          (45) "Governing board of the agreement" means the governing board of the agreement
             836      that is:
             837          (a) authorized to administer the agreement; and
             838          (b) established in accordance with the agreement.
             839          (46) (a) For purposes of Subsection 59-12-104 (41), "governmental entity" means:
             840          (i) the executive branch of the state, including all departments, institutions, boards,
             841      divisions, bureaus, offices, commissions, and committees;
             842          (ii) the judicial branch of the state, including the courts, the Judicial Council, the
             843      Office of the Court Administrator, and similar administrative units in the judicial branch;
             844          (iii) the legislative branch of the state, including the House of Representatives, the
             845      Senate, the Legislative Printing Office, the Office of Legislative Research and General
             846      Counsel, the Office of the Legislative Auditor General, and the Office of the Legislative Fiscal
             847      Analyst;
             848          (iv) the National Guard;
             849          (v) an independent entity as defined in Section 63E-1-102 ; or
             850          (vi) a political subdivision as defined in Section 17B-1-102 .
             851          (b) "Governmental entity" does not include the state systems of public and higher
             852      education, including:
             853          (i) a college campus of the Utah College of Applied Technology;
             854          (ii) a school;
             855          (iii) the State Board of Education;
             856          (iv) the State Board of Regents; or
             857          (v) an institution of higher education.
             858          (47) "Hydroelectric energy" means water used as the sole source of energy to produce
             859      electricity.
             860          (48) "Industrial use" means the use of natural gas, electricity, heat, coal, fuel oil, or
             861      other fuels:
             862          (a) in mining or extraction of minerals;
             863          (b) in agricultural operations to produce an agricultural product up to the time of
             864      harvest or placing the agricultural product into a storage facility, including:


             865          (i) commercial greenhouses;
             866          (ii) irrigation pumps;
             867          (iii) farm machinery;
             868          (iv) implements of husbandry as defined in Subsection 41-1a-102 (23) that are not
             869      registered under Title 41, Chapter 1a, Part 2, Registration; and
             870          (v) other farming activities;
             871          (c) in manufacturing tangible personal property at an establishment described in SIC
             872      Codes 2000 to 3999 of the 1987 Standard Industrial Classification Manual of the federal
             873      Executive Office of the President, Office of Management and Budget;
             874          (d) by a scrap recycler if:
             875          (i) from a fixed location, the scrap recycler utilizes machinery or equipment to process
             876      one or more of the following items into prepared grades of processed materials for use in new
             877      products:
             878          (A) iron;
             879          (B) steel;
             880          (C) nonferrous metal;
             881          (D) paper;
             882          (E) glass;
             883          (F) plastic;
             884          (G) textile; or
             885          (H) rubber; and
             886          (ii) the new products under Subsection (48)(d)(i) would otherwise be made with
             887      nonrecycled materials; or
             888          (e) in producing a form of energy or steam described in Subsection 54-2-1 (2)(a) by a
             889      cogeneration facility as defined in Section 54-2-1 .
             890          (49) (a) Except as provided in Subsection (49)(b), "installation charge" means a charge
             891      for installing:
             892          (i) tangible personal property; or
             893          (ii) a product transferred electronically.
             894          (b) "Installation charge" does not include a charge for:
             895          (i) repairs or renovations of:


             896          (A) tangible personal property; or
             897          (B) a product transferred electronically; or
             898          (ii) attaching tangible personal property or a product transferred electronically:
             899          (A) to other tangible personal property; and
             900          (B) as part of a manufacturing or fabrication process.
             901          (50) "Institution of higher education" means an institution of higher education listed in
             902      Section 53B-2-101 .
             903          (51) (a) "Lease" or "rental" means a transfer of possession or control of tangible
             904      personal property or a product transferred electronically for:
             905          (i) (A) a fixed term; or
             906          (B) an indeterminate term; and
             907          (ii) consideration.
             908          (b) "Lease" or "rental" includes an agreement covering a motor vehicle and trailer if the
             909      amount of consideration may be increased or decreased by reference to the amount realized
             910      upon sale or disposition of the property as defined in Section 7701(h)(1), Internal Revenue
             911      Code.
             912          (c) "Lease" or "rental" does not include:
             913          (i) a transfer of possession or control of property under a security agreement or
             914      deferred payment plan that requires the transfer of title upon completion of the required
             915      payments;
             916          (ii) a transfer of possession or control of property under an agreement that requires the
             917      transfer of title:
             918          (A) upon completion of required payments; and
             919          (B) if the payment of an option price does not exceed the greater of:
             920          (I) $100; or
             921          (II) 1% of the total required payments; or
             922          (iii) providing tangible personal property along with an operator for a fixed period of
             923      time or an indeterminate period of time if the operator is necessary for equipment to perform as
             924      designed.
             925          (d) For purposes of Subsection(51)(c)(iii), an operator is necessary for equipment to
             926      perform as designed if the operator's duties exceed the:


             927          (i) set-up of tangible personal property;
             928          (ii) maintenance of tangible personal property; or
             929          (iii) inspection of tangible personal property.
             930          (52) "Load and leave" means delivery to a purchaser by use of a tangible storage media
             931      if the tangible storage media is not physically transferred to the purchaser.
             932          (53) "Local taxing jurisdiction" means a:
             933          (a) county that is authorized to impose an agreement sales and use tax;
             934          (b) city that is authorized to impose an agreement sales and use tax; or
             935          (c) town that is authorized to impose an agreement sales and use tax.
             936          (54) "Manufactured home" is as defined in Section 15A-1-302 .
             937          (55) For purposes of Section 59-12-104 , "manufacturing facility" means:
             938          (a) an establishment described in SIC Codes 2000 to 3999 of the 1987 Standard
             939      Industrial Classification Manual of the federal Executive Office of the President, Office of
             940      Management and Budget;
             941          (b) a scrap recycler if:
             942          (i) from a fixed location, the scrap recycler utilizes machinery or equipment to process
             943      one or more of the following items into prepared grades of processed materials for use in new
             944      products:
             945          (A) iron;
             946          (B) steel;
             947          (C) nonferrous metal;
             948          (D) paper;
             949          (E) glass;
             950          (F) plastic;
             951          (G) textile; or
             952          (H) rubber; and
             953          (ii) the new products under Subsection (55)(b)(i) would otherwise be made with
             954      nonrecycled materials; or
             955          (c) a cogeneration facility as defined in Section 54-2-1 .
             956          (56) "Member of the immediate family of the producer" means a person who is related
             957      to a producer described in Subsection 59-12-104 (20)(a) as a:


             958          (a) child or stepchild, regardless of whether the child or stepchild is:
             959          (i) an adopted child or adopted stepchild; or
             960          (ii) a foster child or foster stepchild;
             961          (b) grandchild or stepgrandchild;
             962          (c) grandparent or stepgrandparent;
             963          (d) nephew or stepnephew;
             964          (e) niece or stepniece;
             965          (f) parent or stepparent;
             966          (g) sibling or stepsibling;
             967          (h) spouse;
             968          (i) person who is the spouse of a person described in Subsections (56)(a) through (g);
             969      or
             970          (j) person similar to a person described in Subsections (56)(a) through (i) as
             971      determined by the commission by rule made in accordance with Title 63G, Chapter 3, Utah
             972      Administrative Rulemaking Act.
             973          (57) "Mobile home" is as defined in Section 15A-1-302 .
             974          (58) "Mobile telecommunications service" is as defined in the Mobile
             975      Telecommunications Sourcing Act, 4 U.S.C. Sec. 124.
             976          (59) (a) "Mobile wireless service" means a telecommunications service, regardless of
             977      the technology used, if:
             978          (i) the origination point of the conveyance, routing, or transmission is not fixed;
             979          (ii) the termination point of the conveyance, routing, or transmission is not fixed; or
             980          (iii) the origination point described in Subsection (59)(a)(i) and the termination point
             981      described in Subsection (59)(a)(ii) are not fixed.
             982          (b) "Mobile wireless service" includes a telecommunications service that is provided
             983      by a commercial mobile radio service provider.
             984          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             985      commission may by rule define "commercial mobile radio service provider."
             986          (60) (a) Except as provided in Subsection (60)(c), "mobility enhancing equipment"
             987      means equipment that is:
             988          (i) primarily and customarily used to provide or increase the ability to move from one


             989      place to another;
             990          (ii) appropriate for use in a:
             991          (A) home; or
             992          (B) motor vehicle; and
             993          (iii) not generally used by persons with normal mobility.
             994          (b) "Mobility enhancing equipment" includes parts used in the repair or replacement of
             995      the equipment described in Subsection (60)(a).
             996          (c) Notwithstanding Subsection (60)(a), "mobility enhancing equipment" does not
             997      include:
             998          (i) a motor vehicle;
             999          (ii) equipment on a motor vehicle if that equipment is normally provided by the motor
             1000      vehicle manufacturer;
             1001          (iii) durable medical equipment; or
             1002          (iv) a prosthetic device.
             1003          (61) "Model 1 seller" means a seller registered under the agreement that has selected a
             1004      certified service provider as the seller's agent to perform all of the seller's sales and use tax
             1005      functions for agreement sales and use taxes other than the seller's obligation under Section
             1006      59-12-124 to remit a tax on the seller's own purchases.
             1007          (62) "Model 2 seller" means a seller registered under the agreement that:
             1008          (a) except as provided in Subsection (62)(b), has selected a certified automated system
             1009      to perform the seller's sales tax functions for agreement sales and use taxes; and
             1010          (b) notwithstanding Subsection (62)(a), retains responsibility for remitting all of the
             1011      sales tax:
             1012          (i) collected by the seller; and
             1013          (ii) to the appropriate local taxing jurisdiction.
             1014          (63) (a) Subject to Subsection (63)(b), "model 3 seller" means a seller registered under
             1015      the agreement that has:
             1016          (i) sales in at least five states that are members of the agreement;
             1017          (ii) total annual sales revenues of at least $500,000,000;
             1018          (iii) a proprietary system that calculates the amount of tax:
             1019          (A) for an agreement sales and use tax; and


             1020          (B) due to each local taxing jurisdiction; and
             1021          (iv) entered into a performance agreement with the governing board of the agreement.
             1022          (b) For purposes of Subsection (63)(a), "model 3 seller" includes an affiliated group of
             1023      sellers using the same proprietary system.
             1024          (64) "Model 4 seller" means a seller that is registered under the agreement and is not a
             1025      model 1 seller, model 2 seller, or model 3 seller.
             1026          (65) "Modular home" means a modular unit as defined in Section 15A-1-302 .
             1027          (66) "Motor vehicle" is as defined in Section 41-1a-102 .
             1028          (67) "Oil shale" means a group of fine black to dark brown shales containing
             1029      bituminous material that yields petroleum upon distillation.
             1030          (68) (a) "Other fuels" means products that burn independently to produce heat or
             1031      energy.
             1032          (b) "Other fuels" includes oxygen when it is used in the manufacturing of tangible
             1033      personal property.
             1034          (69) (a) "Paging service" means a telecommunications service that provides
             1035      transmission of a coded radio signal for the purpose of activating a specific pager.
             1036          (b) For purposes of Subsection (69)(a), the transmission of a coded radio signal
             1037      includes a transmission by message or sound.
             1038          (70) "Pawnbroker" is as defined in Section 13-32a-102 .
             1039          (71) "Pawn transaction" is as defined in Section 13-32a-102 .
             1040          (72) (a) "Permanently attached to real property" means that for tangible personal
             1041      property attached to real property:
             1042          (i) the attachment of the tangible personal property to the real property:
             1043          (A) is essential to the use of the tangible personal property; and
             1044          (B) suggests that the tangible personal property will remain attached to the real
             1045      property in the same place over the useful life of the tangible personal property; or
             1046          (ii) if the tangible personal property is detached from the real property, the detachment
             1047      would:
             1048          (A) cause substantial damage to the tangible personal property; or
             1049          (B) require substantial alteration or repair of the real property to which the tangible
             1050      personal property is attached.


             1051          (b) "Permanently attached to real property" includes:
             1052          (i) the attachment of an accessory to the tangible personal property if the accessory is:
             1053          (A) essential to the operation of the tangible personal property; and
             1054          (B) attached only to facilitate the operation of the tangible personal property;
             1055          (ii) a temporary detachment of tangible personal property from real property for a
             1056      repair or renovation if the repair or renovation is performed where the tangible personal
             1057      property and real property are located; or
             1058          (iii) property attached to oil, gas, or water pipelines, except for the property listed in
             1059      Subsection (72)(c)(iii) or (iv).
             1060          (c) "Permanently attached to real property" does not include:
             1061          (i) the attachment of portable or movable tangible personal property to real property if
             1062      that portable or movable tangible personal property is attached to real property only for:
             1063          (A) convenience;
             1064          (B) stability; or
             1065          (C) for an obvious temporary purpose;
             1066          (ii) the detachment of tangible personal property from real property except for the
             1067      detachment described in Subsection (72)(b)(ii);
             1068          (iii) an attachment of the following tangible personal property to real property if the
             1069      attachment to real property is only through a line that supplies water, electricity, gas,
             1070      telecommunications, cable, or supplies a similar item as determined by the commission by rule
             1071      made in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act:
             1072          (A) a computer;
             1073          (B) a telephone;
             1074          (C) a television; or
             1075          (D) tangible personal property similar to Subsections (72)(c)(iii)(A) through (C) as
             1076      determined by the commission by rule made in accordance with Title 63G, Chapter 3, Utah
             1077      Administrative Rulemaking Act; or
             1078          (iv) an item listed in Subsection (113)(c).
             1079          (73) "Person" includes any individual, firm, partnership, joint venture, association,
             1080      corporation, estate, trust, business trust, receiver, syndicate, this state, any county, city,
             1081      municipality, district, or other local governmental entity of the state, or any group or


             1082      combination acting as a unit.
             1083          (74) "Place of primary use":
             1084          (a) for telecommunications service other than mobile telecommunications service,
             1085      means the street address representative of where the customer's use of the telecommunications
             1086      service primarily occurs, which shall be:
             1087          (i) the residential street address of the customer; or
             1088          (ii) the primary business street address of the customer; or
             1089          (b) for mobile telecommunications service, is as defined in the Mobile
             1090      Telecommunications Sourcing Act, 4 U.S.C. Sec. 124.
             1091          (75) (a) "Postpaid calling service" means a telecommunications service a person
             1092      obtains by making a payment on a call-by-call basis:
             1093          (i) through the use of a:
             1094          (A) bank card;
             1095          (B) credit card;
             1096          (C) debit card; or
             1097          (D) travel card; or
             1098          (ii) by a charge made to a telephone number that is not associated with the origination
             1099      or termination of the telecommunications service.
             1100          (b) "Postpaid calling service" includes a service, except for a prepaid wireless calling
             1101      service, that would be a prepaid wireless calling service if the service were exclusively a
             1102      telecommunications service.
             1103          (76) "Postproduction" means an activity related to the finishing or duplication of a
             1104      medium described in Subsection 59-12-104 (54)(a).
             1105          (77) "Prepaid calling service" means a telecommunications service:
             1106          (a) that allows a purchaser access to telecommunications service that is exclusively
             1107      telecommunications service;
             1108          (b) that:
             1109          (i) is paid for in advance; and
             1110          (ii) enables the origination of a call using an:
             1111          (A) access number; or
             1112          (B) authorization code;


             1113          (c) that is dialed:
             1114          (i) manually; or
             1115          (ii) electronically; and
             1116          (d) sold in predetermined units or dollars that decline:
             1117          (i) by a known amount; and
             1118          (ii) with use.
             1119          (78) "Prepaid wireless calling service" means a telecommunications service:
             1120          (a) that provides the right to utilize:
             1121          (i) mobile wireless service; and
             1122          (ii) other service that is not a telecommunications service, including:
             1123          (A) the download of a product transferred electronically;
             1124          (B) a content service; or
             1125          (C) an ancillary service;
             1126          (b) that:
             1127          (i) is paid for in advance; and
             1128          (ii) enables the origination of a call using an:
             1129          (A) access number; or
             1130          (B) authorization code;
             1131          (c) that is dialed:
             1132          (i) manually; or
             1133          (ii) electronically; and
             1134          (d) sold in predetermined units or dollars that decline:
             1135          (i) by a known amount; and
             1136          (ii) with use.
             1137          (79) (a) "Prepared food" means:
             1138          (i) food:
             1139          (A) sold in a heated state; or
             1140          (B) heated by a seller;
             1141          (ii) two or more food ingredients mixed or combined by the seller for sale as a single
             1142      item; or
             1143          (iii) except as provided in Subsection (79)(c), food sold with an eating utensil provided


             1144      by the seller, including a:
             1145          (A) plate;
             1146          (B) knife;
             1147          (C) fork;
             1148          (D) spoon;
             1149          (E) glass;
             1150          (F) cup;
             1151          (G) napkin; or
             1152          (H) straw.
             1153          (b) "Prepared food" does not include:
             1154          (i) food that a seller only:
             1155          (A) cuts;
             1156          (B) repackages; or
             1157          (C) pasteurizes; or
             1158          (ii) (A) the following:
             1159          (I) raw egg;
             1160          (II) raw fish;
             1161          (III) raw meat;
             1162          (IV) raw poultry; or
             1163          (V) a food containing an item described in Subsections (79)(b)(ii)(A)(I) through (IV);
             1164      and
             1165          (B) if the Food and Drug Administration recommends in Chapter 3, Part 401.11 of the
             1166      Food and Drug Administration's Food Code that a consumer cook the items described in
             1167      Subsection (79)(b)(ii)(A) to prevent food borne illness; or
             1168          (iii) the following if sold without eating utensils provided by the seller:
             1169          (A) food and food ingredients sold by a seller if the seller's proper primary
             1170      classification under the 2002 North American Industry Classification System of the federal
             1171      Executive Office of the President, Office of Management and Budget, is manufacturing in
             1172      Sector 311, Food Manufacturing, except for Subsector 3118, Bakeries and Tortilla
             1173      Manufacturing;
             1174          (B) food and food ingredients sold in an unheated state:


             1175          (I) by weight or volume; and
             1176          (II) as a single item; or
             1177          (C) a bakery item, including:
             1178          (I) a bagel;
             1179          (II) a bar;
             1180          (III) a biscuit;
             1181          (IV) bread;
             1182          (V) a bun;
             1183          (VI) a cake;
             1184          (VII) a cookie;
             1185          (VIII) a croissant;
             1186          (IX) a danish;
             1187          (X) a donut;
             1188          (XI) a muffin;
             1189          (XII) a pastry;
             1190          (XIII) a pie;
             1191          (XIV) a roll;
             1192          (XV) a tart;
             1193          (XVI) a torte; or
             1194          (XVII) a tortilla.
             1195          (c) Notwithstanding Subsection (79)(a)(iii), an eating utensil provided by the seller
             1196      does not include the following used to transport the food:
             1197          (i) a container; or
             1198          (ii) packaging.
             1199          (80) "Prescription" means an order, formula, or recipe that is issued:
             1200          (a) (i) orally;
             1201          (ii) in writing;
             1202          (iii) electronically; or
             1203          (iv) by any other manner of transmission; and
             1204          (b) by a licensed practitioner authorized by the laws of a state.
             1205          (81) (a) Except as provided in Subsection (81)(b)(ii) or (iii), "prewritten computer


             1206      software" means computer software that is not designed and developed:
             1207          (i) by the author or other creator of the computer software; and
             1208          (ii) to the specifications of a specific purchaser.
             1209          (b) "Prewritten computer software" includes:
             1210          (i) a prewritten upgrade to computer software if the prewritten upgrade to the computer
             1211      software is not designed and developed:
             1212          (A) by the author or other creator of the computer software; and
             1213          (B) to the specifications of a specific purchaser;
             1214          (ii) notwithstanding Subsection (81)(a), computer software designed and developed by
             1215      the author or other creator of the computer software to the specifications of a specific purchaser
             1216      if the computer software is sold to a person other than the purchaser; or
             1217          (iii) notwithstanding Subsection (81)(a) and except as provided in Subsection (81)(c),
             1218      prewritten computer software or a prewritten portion of prewritten computer software:
             1219          (A) that is modified or enhanced to any degree; and
             1220          (B) if the modification or enhancement described in Subsection (81)(b)(iii)(A) is
             1221      designed and developed to the specifications of a specific purchaser.
             1222          (c) Notwithstanding Subsection (81)(b)(iii), "prewritten computer software" does not
             1223      include a modification or enhancement described in Subsection (81)(b)(iii) if the charges for
             1224      the modification or enhancement are:
             1225          (i) reasonable; and
             1226          (ii) separately stated on the invoice or other statement of price provided to the
             1227      purchaser.
             1228          (82) (a) "Private communication service" means a telecommunications service:
             1229          (i) that entitles a customer to exclusive or priority use of one or more communications
             1230      channels between or among termination points; and
             1231          (ii) regardless of the manner in which the one or more communications channels are
             1232      connected.
             1233          (b) "Private communications service" includes the following provided in connection
             1234      with the use of one or more communications channels:
             1235          (i) an extension line;
             1236          (ii) a station;


             1237          (iii) switching capacity; or
             1238          (iv) another associated service that is provided in connection with the use of one or
             1239      more communications channels as defined in Section 59-12-215 .
             1240          (83) (a) Except as provided in Subsection (83)(b), "product transferred electronically"
             1241      means a product transferred electronically that would be subject to a tax under this chapter if
             1242      that product was transferred in a manner other than electronically.
             1243          (b) "Product transferred electronically" does not include:
             1244          (i) an ancillary service;
             1245          (ii) computer software; or
             1246          (iii) a telecommunications service.
             1247          (84) (a) "Prosthetic device" means a device that is worn on or in the body to:
             1248          (i) artificially replace a missing portion of the body;
             1249          (ii) prevent or correct a physical deformity or physical malfunction; or
             1250          (iii) support a weak or deformed portion of the body.
             1251          (b) "Prosthetic device" includes:
             1252          (i) parts used in the repairs or renovation of a prosthetic device;
             1253          (ii) replacement parts for a prosthetic device;
             1254          (iii) a dental prosthesis; or
             1255          (iv) a hearing aid.
             1256          (c) "Prosthetic device" does not include:
             1257          (i) corrective eyeglasses; or
             1258          (ii) contact lenses.
             1259          (85) (a) "Protective equipment" means an item:
             1260          (i) for human wear; and
             1261          (ii) that is:
             1262          (A) designed as protection:
             1263          (I) to the wearer against injury or disease; or
             1264          (II) against damage or injury of other persons or property; and
             1265          (B) not suitable for general use.
             1266          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1267      commission shall make rules:


             1268          (i) listing the items that constitute "protective equipment"; and
             1269          (ii) that are consistent with the list of items that constitute "protective equipment"
             1270      under the agreement.
             1271          (86) (a) For purposes of Subsection 59-12-104 (41), "publication" means any written or
             1272      printed matter, other than a photocopy:
             1273          (i) regardless of:
             1274          (A) characteristics;
             1275          (B) copyright;
             1276          (C) form;
             1277          (D) format;
             1278          (E) method of reproduction; or
             1279          (F) source; and
             1280          (ii) made available in printed or electronic format.
             1281          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1282      commission may by rule define the term "photocopy."
             1283          (87) (a) "Purchase price" and "sales price" mean the total amount of consideration:
             1284          (i) valued in money; and
             1285          (ii) for which tangible personal property, a product transferred electronically, or
             1286      services are:
             1287          (A) sold;
             1288          (B) leased; or
             1289          (C) rented.
             1290          (b) "Purchase price" and "sales price" include:
             1291          (i) the seller's cost of the tangible personal property, a product transferred
             1292      electronically, or services sold;
             1293          (ii) expenses of the seller, including:
             1294          (A) the cost of materials used;
             1295          (B) a labor cost;
             1296          (C) a service cost;
             1297          (D) interest;
             1298          (E) a loss;


             1299          (F) the cost of transportation to the seller; or
             1300          (G) a tax imposed on the seller;
             1301          (iii) a charge by the seller for any service necessary to complete the sale; or
             1302          (iv) consideration a seller receives from a person other than the purchaser if:
             1303          (A) (I) the seller actually receives consideration from a person other than the purchaser;
             1304      and
             1305          (II) the consideration described in Subsection (87)(b)(iv)(A)(I) is directly related to a
             1306      price reduction or discount on the sale;
             1307          (B) the seller has an obligation to pass the price reduction or discount through to the
             1308      purchaser;
             1309          (C) the amount of the consideration attributable to the sale is fixed and determinable by
             1310      the seller at the time of the sale to the purchaser; and
             1311          (D) (I) (Aa) the purchaser presents a certificate, coupon, or other documentation to the
             1312      seller to claim a price reduction or discount; and
             1313          (Bb) a person other than the seller authorizes, distributes, or grants the certificate,
             1314      coupon, or other documentation with the understanding that the person other than the seller
             1315      will reimburse any seller to whom the certificate, coupon, or other documentation is presented;
             1316          (II) the purchaser identifies that purchaser to the seller as a member of a group or
             1317      organization allowed a price reduction or discount, except that a preferred customer card that is
             1318      available to any patron of a seller does not constitute membership in a group or organization
             1319      allowed a price reduction or discount; or
             1320          (III) the price reduction or discount is identified as a third party price reduction or
             1321      discount on the:
             1322          (Aa) invoice the purchaser receives; or
             1323          (Bb) certificate, coupon, or other documentation the purchaser presents.
             1324          (c) "Purchase price" and "sales price" do not include:
             1325          (i) a discount:
             1326          (A) in a form including:
             1327          (I) cash;
             1328          (II) term; or
             1329          (III) coupon;


             1330          (B) that is allowed by a seller;
             1331          (C) taken by a purchaser on a sale; and
             1332          (D) that is not reimbursed by a third party; or
             1333          (ii) the following if separately stated on an invoice, bill of sale, or similar document
             1334      provided to the purchaser:
             1335          (A) the following from credit extended on the sale of tangible personal property or
             1336      services:
             1337          (I) a carrying charge;
             1338          (II) a financing charge; or
             1339          (III) an interest charge;
             1340          (B) a delivery charge;
             1341          (C) an installation charge;
             1342          (D) a manufacturer rebate on a motor vehicle; or
             1343          (E) a tax or fee legally imposed directly on the consumer.
             1344          (88) "Purchaser" means a person to whom:
             1345          (a) a sale of tangible personal property is made;
             1346          (b) a product is transferred electronically; or
             1347          (c) a service is furnished.
             1348          (89) "Regularly rented" means:
             1349          (a) rented to a guest for value three or more times during a calendar year; or
             1350          (b) advertised or held out to the public as a place that is regularly rented to guests for
             1351      value.
             1352          (90) "Renewable energy" means:
             1353          (a) biomass energy;
             1354          (b) hydroelectric energy;
             1355          (c) geothermal energy;
             1356          (d) solar energy; or
             1357          (e) wind energy.
             1358          (91) (a) "Renewable energy production facility" means a facility that:
             1359          (i) uses renewable energy to produce electricity; and
             1360          (ii) has a production capacity of 20 kilowatts or greater.


             1361          (b) A facility is a renewable energy production facility regardless of whether the
             1362      facility is:
             1363          (i) connected to an electric grid; or
             1364          (ii) located on the premises of an electricity consumer.
             1365          (92) "Rental" is as defined in Subsection (51).
             1366          (93) (a) Except as provided in Subsection (93)(b), "repairs or renovations of tangible
             1367      personal property" means:
             1368          (i) a repair or renovation of tangible personal property that is not permanently attached
             1369      to real property; or
             1370          (ii) attaching tangible personal property or a product transferred electronically to other
             1371      tangible personal property if:
             1372          (A) the other tangible personal property to which the tangible personal property or
             1373      product transferred electronically is attached is not permanently attached to real property; and
             1374          (B) the attachment of tangible personal property or a product transferred electronically
             1375      to other tangible personal property is made in conjunction with a repair or replacement of
             1376      tangible personal property or a product transferred electronically.
             1377          (b) "Repairs or renovations of tangible personal property" does not include attaching
             1378      prewritten computer software to other tangible personal property if the other tangible personal
             1379      property to which the prewritten computer software is attached is not permanently attached to
             1380      real property.
             1381          (94) "Research and development" means the process of inquiry or experimentation
             1382      aimed at the discovery of facts, devices, technologies, or applications and the process of
             1383      preparing those devices, technologies, or applications for marketing.
             1384          (95) (a) "Residential telecommunications services" means a telecommunications
             1385      service or an ancillary service that is provided to an individual for personal use:
             1386          (i) at a residential address; or
             1387          (ii) at an institution, including a nursing home or a school, if the telecommunications
             1388      service or ancillary service is provided to and paid for by the individual residing at the
             1389      institution rather than the institution.
             1390          (b) For purposes of Subsection (95)(a)(i), a residential address includes an:
             1391          (i) apartment; or


             1392          (ii) other individual dwelling unit.
             1393          (96) "Residential use" means the use in or around a home, apartment building, sleeping
             1394      quarters, and similar facilities or accommodations.
             1395          (97) "Retail sale" or "sale at retail" means a sale, lease, or rental for a purpose other
             1396      than:
             1397          (a) resale;
             1398          (b) sublease; or
             1399          (c) subrent.
             1400          (98) (a) "Retailer" means any person engaged in a regularly organized business in
             1401      tangible personal property or any other taxable transaction under Subsection 59-12-103 (1), and
             1402      who is selling to the user or consumer and not for resale.
             1403          (b) "Retailer" includes commission merchants, auctioneers, and any person regularly
             1404      engaged in the business of selling to users or consumers within the state.
             1405          (99) (a) "Sale" means any transfer of title, exchange, or barter, conditional or
             1406      otherwise, in any manner, of tangible personal property or any other taxable transaction under
             1407      Subsection 59-12-103 (1), for consideration.
             1408          (b) "Sale" includes:
             1409          (i) installment and credit sales;
             1410          (ii) any closed transaction constituting a sale;
             1411          (iii) any sale of electrical energy, gas, services, or entertainment taxable under this
             1412      chapter;
             1413          (iv) any transaction if the possession of property is transferred but the seller retains the
             1414      title as security for the payment of the price; and
             1415          (v) any transaction under which right to possession, operation, or use of any article of
             1416      tangible personal property is granted under a lease or contract and the transfer of possession
             1417      would be taxable if an outright sale were made.
             1418          (100) "Sale at retail" is as defined in Subsection (97).
             1419          (101) "Sale-leaseback transaction" means a transaction by which title to tangible
             1420      personal property or a product transferred electronically that is subject to a tax under this
             1421      chapter is transferred:
             1422          (a) by a purchaser-lessee;


             1423          (b) to a lessor;
             1424          (c) for consideration; and
             1425          (d) if:
             1426          (i) the purchaser-lessee paid sales and use tax on the purchaser-lessee's initial purchase
             1427      of the tangible personal property or product transferred electronically;
             1428          (ii) the sale of the tangible personal property or product transferred electronically to the
             1429      lessor is intended as a form of financing:
             1430          (A) for the tangible personal property or product transferred electronically; and
             1431          (B) to the purchaser-lessee; and
             1432          (iii) in accordance with generally accepted accounting principles, the purchaser-lessee
             1433      is required to:
             1434          (A) capitalize the tangible personal property or product transferred electronically for
             1435      financial reporting purposes; and
             1436          (B) account for the lease payments as payments made under a financing arrangement.
             1437          (102) "Sales price" is as defined in Subsection (87).
             1438          (103) (a) "Sales relating to schools" means the following sales by, amounts paid to, or
             1439      amounts charged by a school:
             1440          (i) sales that are directly related to the school's educational functions or activities
             1441      including:
             1442          (A) the sale of:
             1443          (I) textbooks;
             1444          (II) textbook fees;
             1445          (III) laboratory fees;
             1446          (IV) laboratory supplies; or
             1447          (V) safety equipment;
             1448          (B) the sale of a uniform, protective equipment, or sports or recreational equipment
             1449      that:
             1450          (I) a student is specifically required to wear as a condition of participation in a
             1451      school-related event or school-related activity; and
             1452          (II) is not readily adaptable to general or continued usage to the extent that it takes the
             1453      place of ordinary clothing;


             1454          (C) sales of the following if the net or gross revenues generated by the sales are
             1455      deposited into a school district fund or school fund dedicated to school meals:
             1456          (I) food and food ingredients; or
             1457          (II) prepared food; or
             1458          (D) transportation charges for official school activities; or
             1459          (ii) amounts paid to or amounts charged by a school for admission to a school-related
             1460      event or school-related activity.
             1461          (b) "Sales relating to schools" does not include:
             1462          (i) bookstore sales of items that are not educational materials or supplies;
             1463          (ii) except as provided in Subsection (103)(a)(i)(B):
             1464          (A) clothing;
             1465          (B) clothing accessories or equipment;
             1466          (C) protective equipment; or
             1467          (D) sports or recreational equipment; or
             1468          (iii) amounts paid to or amounts charged by a school for admission to a school-related
             1469      event or school-related activity if the amounts paid or charged are passed through to a person:
             1470          (A) other than a:
             1471          (I) school;
             1472          (II) nonprofit organization authorized by a school board or a governing body of a
             1473      private school to organize and direct a competitive secondary school activity; or
             1474          (III) nonprofit association authorized by a school board or a governing body of a
             1475      private school to organize and direct a competitive secondary school activity; and
             1476          (B) that is required to collect sales and use taxes under this chapter.
             1477          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1478      commission may make rules defining the term "passed through."
             1479          (104) For purposes of this section and Section 59-12-104 , "school":
             1480          (a) means:
             1481          (i) an elementary school or a secondary school that:
             1482          (A) is a:
             1483          (I) public school; or
             1484          (II) private school; and


             1485          (B) provides instruction for one or more grades kindergarten through 12; or
             1486          (ii) a public school district; and
             1487          (b) includes the Electronic High School as defined in Section 53A-15-1002 .
             1488          (105) "Seller" means a person that makes a sale, lease, or rental of:
             1489          (a) tangible personal property;
             1490          (b) a product transferred electronically; or
             1491          (c) a service.
             1492          (106) (a) "Semiconductor fabricating, processing, research, or development materials"
             1493      means tangible personal property or a product transferred electronically if the tangible personal
             1494      property or product transferred electronically is:
             1495          (i) used primarily in the process of:
             1496          (A) (I) manufacturing a semiconductor;
             1497          (II) fabricating a semiconductor; or
             1498          (III) research or development of a:
             1499          (Aa) semiconductor; or
             1500          (Bb) semiconductor manufacturing process; or
             1501          (B) maintaining an environment suitable for a semiconductor; or
             1502          (ii) consumed primarily in the process of:
             1503          (A) (I) manufacturing a semiconductor;
             1504          (II) fabricating a semiconductor; or
             1505          (III) research or development of a:
             1506          (Aa) semiconductor; or
             1507          (Bb) semiconductor manufacturing process; or
             1508          (B) maintaining an environment suitable for a semiconductor.
             1509          (b) "Semiconductor fabricating, processing, research, or development materials"
             1510      includes:
             1511          (i) parts used in the repairs or renovations of tangible personal property or a product
             1512      transferred electronically described in Subsection (106)(a); or
             1513          (ii) a chemical, catalyst, or other material used to:
             1514          (A) produce or induce in a semiconductor a:
             1515          (I) chemical change; or


             1516          (II) physical change;
             1517          (B) remove impurities from a semiconductor; or
             1518          (C) improve the marketable condition of a semiconductor.
             1519          (107) "Senior citizen center" means a facility having the primary purpose of providing
             1520      services to the aged as defined in Section 62A-3-101 .
             1521          (108) "Simplified electronic return" means the electronic return:
             1522          (a) described in Section 318(C) of the agreement; and
             1523          (b) approved by the governing board of the agreement.
             1524          (109) "Solar energy" means the sun used as the sole source of energy for producing
             1525      electricity.
             1526          (110) (a) "Sports or recreational equipment" means an item:
             1527          (i) designed for human use; and
             1528          (ii) that is:
             1529          (A) worn in conjunction with:
             1530          (I) an athletic activity; or
             1531          (II) a recreational activity; and
             1532          (B) not suitable for general use.
             1533          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1534      commission shall make rules:
             1535          (i) listing the items that constitute "sports or recreational equipment"; and
             1536          (ii) that are consistent with the list of items that constitute "sports or recreational
             1537      equipment" under the agreement.
             1538          (111) "State" means the state of Utah, its departments, and agencies.
             1539          (112) "Storage" means any keeping or retention of tangible personal property or any
             1540      other taxable transaction under Subsection 59-12-103 (1), in this state for any purpose except
             1541      sale in the regular course of business.
             1542          (113) (a) Except as provided in Subsection (113)(d) or (e), "tangible personal property"
             1543      means personal property that:
             1544          (i) may be:
             1545          (A) seen;
             1546          (B) weighed;


             1547          (C) measured;
             1548          (D) felt; or
             1549          (E) touched; or
             1550          (ii) is in any manner perceptible to the senses.
             1551          (b) "Tangible personal property" includes:
             1552          (i) electricity;
             1553          (ii) water;
             1554          (iii) gas;
             1555          (iv) steam; or
             1556          (v) prewritten computer software, regardless of the manner in which the prewritten
             1557      computer software is transferred.
             1558          (c) "Tangible personal property" includes the following regardless of whether the item
             1559      is attached to real property:
             1560          (i) a dishwasher;
             1561          (ii) a dryer;
             1562          (iii) a freezer;
             1563          (iv) a microwave;
             1564          (v) a refrigerator;
             1565          (vi) a stove;
             1566          (vii) a washer; or
             1567          (viii) an item similar to Subsections (113)(c)(i) through (vii) as determined by the
             1568      commission by rule made in accordance with Title 63G, Chapter 3, Utah Administrative
             1569      Rulemaking Act.
             1570          (d) "Tangible personal property" does not include a product that is transferred
             1571      electronically.
             1572          (e) "Tangible personal property" does not include the following if attached to real
             1573      property, regardless of whether the attachment to real property is only through a line that
             1574      supplies water, electricity, gas, telephone, cable, or supplies a similar item as determined by the
             1575      commission by rule made in accordance with Title 63G, Chapter 3, Utah Administrative
             1576      Rulemaking Act:
             1577          (i) a hot water heater;


             1578          (ii) a water filtration system; or
             1579          (iii) a water softener system.
             1580          (114) "Tar sands" means impregnated sands that yield mixtures of liquid hydrocarbon
             1581      and require further processing other than mechanical blending before becoming finished
             1582      petroleum products.
             1583          (115) (a) "Telecommunications enabling or facilitating equipment, machinery, or
             1584      software" means an item listed in Subsection (115)(b) if that item is purchased or leased
             1585      primarily to enable or facilitate one or more of the following to function:
             1586          (i) telecommunications switching or routing equipment, machinery, or software; or
             1587          (ii) telecommunications transmission equipment, machinery, or software.
             1588          (b) The following apply to Subsection (115)(a):
             1589          (i) a pole;
             1590          (ii) software;
             1591          (iii) a supplementary power supply;
             1592          (iv) temperature or environmental equipment or machinery;
             1593          (v) test equipment;
             1594          (vi) a tower; or
             1595          (vii) equipment, machinery, or software that functions similarly to an item listed in
             1596      Subsections (115)(b)(i) through (vi) as determined by the commission by rule made in
             1597      accordance with Subsection (115)(c).
             1598          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1599      commission may by rule define what constitutes equipment, machinery, or software that
             1600      functions similarly to an item listed in Subsections (115)(b)(i) through (vi).
             1601          (116) "Telecommunications equipment, machinery, or software required for 911
             1602      service" means equipment, machinery, or software that is required to comply with 47 C.F.R.
             1603      Sec. 20.18.
             1604          (117) "Telecommunications maintenance or repair equipment, machinery, or software"
             1605      means equipment, machinery, or software purchased or leased primarily to maintain or repair
             1606      one or more of the following, regardless of whether the equipment, machinery, or software is
             1607      purchased or leased as a spare part or as an upgrade or modification to one or more of the
             1608      following:


             1609          (a) telecommunications enabling or facilitating equipment, machinery, or software;
             1610          (b) telecommunications switching or routing equipment, machinery, or software; or
             1611          (c) telecommunications transmission equipment, machinery, or software.
             1612          (118) (a) "Telecommunications service" means the electronic conveyance, routing, or
             1613      transmission of audio, data, video, voice, or any other information or signal to a point, or
             1614      among or between points.
             1615          (b) "Telecommunications service" includes:
             1616          (i) an electronic conveyance, routing, or transmission with respect to which a computer
             1617      processing application is used to act:
             1618          (A) on the code, form, or protocol of the content;
             1619          (B) for the purpose of electronic conveyance, routing, or transmission; and
             1620          (C) regardless of whether the service:
             1621          (I) is referred to as voice over Internet protocol service; or
             1622          (II) is classified by the Federal Communications Commission as enhanced or value
             1623      added;
             1624          (ii) an 800 service;
             1625          (iii) a 900 service;
             1626          (iv) a fixed wireless service;
             1627          (v) a mobile wireless service;
             1628          (vi) a postpaid calling service;
             1629          (vii) a prepaid calling service;
             1630          (viii) a prepaid wireless calling service; or
             1631          (ix) a private communications service.
             1632          (c) "Telecommunications service" does not include:
             1633          (i) advertising, including directory advertising;
             1634          (ii) an ancillary service;
             1635          (iii) a billing and collection service provided to a third party;
             1636          (iv) a data processing and information service if:
             1637          (A) the data processing and information service allows data to be:
             1638          (I) (Aa) acquired;
             1639          (Bb) generated;


             1640          (Cc) processed;
             1641          (Dd) retrieved; or
             1642          (Ee) stored; and
             1643          (II) delivered by an electronic transmission to a purchaser; and
             1644          (B) the purchaser's primary purpose for the underlying transaction is the processed data
             1645      or information;
             1646          (v) installation or maintenance of the following on a customer's premises:
             1647          (A) equipment; or
             1648          (B) wiring;
             1649          (vi) Internet access service;
             1650          (vii) a paging service;
             1651          (viii) a product transferred electronically, including:
             1652          (A) music;
             1653          (B) reading material;
             1654          (C) a ring tone;
             1655          (D) software; or
             1656          (E) video;
             1657          (ix) a radio and television audio and video programming service:
             1658          (A) regardless of the medium; and
             1659          (B) including:
             1660          (I) furnishing conveyance, routing, or transmission of a television audio and video
             1661      programming service by a programming service provider;
             1662          (II) cable service as defined in 47 U.S.C. Sec. 522(6); or
             1663          (III) audio and video programming services delivered by a commercial mobile radio
             1664      service provider as defined in 47 C.F.R. Sec. 20.3;
             1665          (x) a value-added nonvoice data service; or
             1666          (xi) tangible personal property.
             1667          (119) (a) "Telecommunications service provider" means a person that:
             1668          (i) owns, controls, operates, or manages a telecommunications service; and
             1669          (ii) engages in an activity described in Subsection (119)(a)(i) for the shared use with or
             1670      resale to any person of the telecommunications service.


             1671          (b) A person described in Subsection (119)(a) is a telecommunications service provider
             1672      whether or not the Public Service Commission of Utah regulates:
             1673          (i) that person; or
             1674          (ii) the telecommunications service that the person owns, controls, operates, or
             1675      manages.
             1676          (120) (a) "Telecommunications switching or routing equipment, machinery, or
             1677      software" means an item listed in Subsection (120)(b) if that item is purchased or leased
             1678      primarily for switching or routing:
             1679          (i) an ancillary service;
             1680          (ii) data communications;
             1681          (iii) voice communications; or
             1682          (iv) telecommunications service.
             1683          (b) The following apply to Subsection (120)(a):
             1684          (i) a bridge;
             1685          (ii) a computer;
             1686          (iii) a cross connect;
             1687          (iv) a modem;
             1688          (v) a multiplexer;
             1689          (vi) plug in circuitry;
             1690          (vii) a router;
             1691          (viii) software;
             1692          (ix) a switch; or
             1693          (x) equipment, machinery, or software that functions similarly to an item listed in
             1694      Subsections (120)(b)(i) through (ix) as determined by the commission by rule made in
             1695      accordance with Subsection (120)(c).
             1696          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1697      commission may by rule define what constitutes equipment, machinery, or software that
             1698      functions similarly to an item listed in Subsections (120)(b)(i) through (ix).
             1699          (121) (a) "Telecommunications transmission equipment, machinery, or software"
             1700      means an item listed in Subsection (121)(b) if that item is purchased or leased primarily for
             1701      sending, receiving, or transporting:


             1702          (i) an ancillary service;
             1703          (ii) data communications;
             1704          (iii) voice communications; or
             1705          (iv) telecommunications service.
             1706          (b) The following apply to Subsection (121)(a):
             1707          (i) an amplifier;
             1708          (ii) a cable;
             1709          (iii) a closure;
             1710          (iv) a conduit;
             1711          (v) a controller;
             1712          (vi) a duplexer;
             1713          (vii) a filter;
             1714          (viii) an input device;
             1715          (ix) an input/output device;
             1716          (x) an insulator;
             1717          (xi) microwave machinery or equipment;
             1718          (xii) an oscillator;
             1719          (xiii) an output device;
             1720          (xiv) a pedestal;
             1721          (xv) a power converter;
             1722          (xvi) a power supply;
             1723          (xvii) a radio channel;
             1724          (xviii) a radio receiver;
             1725          (xix) a radio transmitter;
             1726          (xx) a repeater;
             1727          (xxi) software;
             1728          (xxii) a terminal;
             1729          (xxiii) a timing unit;
             1730          (xxiv) a transformer;
             1731          (xxv) a wire; or
             1732          (xxvi) equipment, machinery, or software that functions similarly to an item listed in


             1733      Subsections (121)(b)(i) through (xxv) as determined by the commission by rule made in
             1734      accordance with Subsection (121)(c).
             1735          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1736      commission may by rule define what constitutes equipment, machinery, or software that
             1737      functions similarly to an item listed in Subsections (121)(b)(i) through (xxv).
             1738          (122) (a) "Textbook for a higher education course" means a textbook or other printed
             1739      material that is required for a course:
             1740          (i) offered by an institution of higher education; and
             1741          (ii) that the purchaser of the textbook or other printed material attends or will attend.
             1742          (b) "Textbook for a higher education course" includes a textbook in electronic format.
             1743          (123) "Tobacco" means:
             1744          (a) a cigarette;
             1745          (b) a cigar;
             1746          (c) chewing tobacco;
             1747          (d) pipe tobacco; or
             1748          (e) any other item that contains tobacco.
             1749          (124) "Unassisted amusement device" means an amusement device, skill device, or
             1750      ride device that is started and stopped by the purchaser or renter of the right to use or operate
             1751      the amusement device, skill device, or ride device.
             1752          (125) (a) "Use" means the exercise of any right or power over tangible personal
             1753      property, a product transferred electronically, or a service under Subsection 59-12-103 (1),
             1754      incident to the ownership or the leasing of that tangible personal property, product transferred
             1755      electronically, or service.
             1756          (b) "Use" does not include the sale, display, demonstration, or trial of tangible personal
             1757      property, a product transferred electronically, or a service in the regular course of business and
             1758      held for resale.
             1759          (126) "Value-added nonvoice data service" means a service:
             1760          (a) that otherwise meets the definition of a telecommunications service except that a
             1761      computer processing application is used to act primarily for a purpose other than conveyance,
             1762      routing, or transmission; and
             1763          (b) with respect to which a computer processing application is used to act on data or


             1764      information:
             1765          (i) code;
             1766          (ii) content;
             1767          (iii) form; or
             1768          (iv) protocol.
             1769          (127) (a) Subject to Subsection (127)(b), "vehicle" means the following that are
             1770      required to be titled, registered, or titled and registered:
             1771          (i) an aircraft as defined in Section 72-10-102 ;
             1772          (ii) a vehicle as defined in Section 41-1a-102 ;
             1773          (iii) an off-highway vehicle as defined in Section 41-22-2 ; or
             1774          (iv) a vessel as defined in Section 41-1a-102 .
             1775          (b) For purposes of Subsection 59-12-104 (33) only, "vehicle" includes:
             1776          (i) a vehicle described in Subsection (127)(a); or
             1777          (ii) (A) a locomotive;
             1778          (B) a freight car;
             1779          (C) railroad work equipment; or
             1780          (D) other railroad rolling stock.
             1781          (128) "Vehicle dealer" means a person engaged in the business of buying, selling, or
             1782      exchanging a vehicle as defined in Subsection (127).
             1783          (129) (a) "Vertical service" means an ancillary service that:
             1784          (i) is offered in connection with one or more telecommunications services; and
             1785          (ii) offers an advanced calling feature that allows a customer to:
             1786          (A) identify a caller; and
             1787          (B) manage multiple calls and call connections.
             1788          (b) "Vertical service" includes an ancillary service that allows a customer to manage a
             1789      conference bridging service.
             1790          (130) (a) "Voice mail service" means an ancillary service that enables a customer to
             1791      receive, send, or store a recorded message.
             1792          (b) "Voice mail service" does not include a vertical service that a customer is required
             1793      to have in order to utilize a voice mail service.
             1794          (131) (a) Except as provided in Subsection (131)(b), "waste energy facility" means a


             1795      facility that generates electricity:
             1796          (i) using as the primary source of energy waste materials that would be placed in a
             1797      landfill or refuse pit if it were not used to generate electricity, including:
             1798          (A) tires;
             1799          (B) waste coal; or
             1800          (C) oil shale; and
             1801          (ii) in amounts greater than actually required for the operation of the facility.
             1802          (b) "Waste energy facility" does not include a facility that incinerates:
             1803          (i) municipal solid waste;
             1804          (ii) hospital waste as defined in 40 C.F.R. 60.51c; or
             1805          (iii) medical/infectious waste as defined in 40 C.F.R. 60.51c.
             1806          (132) "Watercraft" means a vessel as defined in Section 73-18-2 .
             1807          (133) "Wind energy" means wind used as the sole source of energy to produce
             1808      electricity.
             1809          (134) "ZIP Code" means a Zoning Improvement Plan Code assigned to a geographic
             1810      location by the United States Postal Service.
             1811          Section 3. Section 59-12-103.1 is amended to read:
             1812           59-12-103.1. Action by Supreme Court of the United States authorizing or action
             1813      by Congress permitting a state to require certain sellers to collect a sales or use tax --
             1814      Collection of tax by commission -- Commission report to Revenue and Taxation Interim
             1815      Committee -- Revenue and Taxation Interim Committee study.
             1816          (1) Except as provided in Section 59-12-107.1 , a seller shall remit a tax to the
             1817      commission as provided in Section 59-12-107 if:
             1818          (a) the Supreme Court of the United States issues a decision authorizing a state to
             1819      require the following sellers to collect a sales or use tax:
             1820          (i) a seller that does not meet one or more of the criteria described in Subsection
             1821      59-12-107 [(1)](2)(a) [to collect a sales or use tax]; or
             1822          (ii) a seller that is not a seller required to pay or collect and remit sales and use taxes
             1823      under Subsection 59-12-107 (2)(b) or (c); or
             1824          (b) Congress permits the state to require the following sellers to collect a sales or use
             1825      tax:


             1826          (i) a seller that does not meet one or more of the criteria described in Subsection
             1827      59-12-107 [(1)](2)(a) [to collect a sales or use tax.]; or
             1828          (ii) a seller that is not a seller required to pay or collect and remit sales and use taxes
             1829      under Subsection 59-12-107 (2)(b) or (c).
             1830          (2) The commission shall:
             1831          (a) collect the tax described in Subsection (1) from the seller:
             1832          (i) to the extent:
             1833          (A) authorized by the Supreme Court of the United States; or
             1834          (B) permitted by Congress; and
             1835          (ii) beginning on the first day of a calendar quarter as prescribed by the Revenue and
             1836      Taxation Interim Committee; and
             1837          (b) make a report to the Revenue and Taxation Interim Committee:
             1838          (i) regarding the actions taken by:
             1839          (A) the Supreme Court of the United States; or
             1840          (B) Congress; and
             1841          (ii) at the Revenue and Taxation Interim Committee meeting immediately following
             1842      the day on which the Supreme Court of the United States' or Congress' actions become
             1843      effective.
             1844          (3) The Revenue and Taxation Interim Committee shall after hearing the commission's
             1845      report under Subsection (2)(b):
             1846          (a) review the actions taken by:
             1847          (i) the Supreme Court of the United States; or
             1848          (ii) Congress;
             1849          (b) direct the commission regarding the day on which the commission is required to
             1850      collect the tax described in Subsection (1); and
             1851          (c) make recommendations to the Legislative Management Committee:
             1852          (i) regarding whether as a result of the Supreme Court of the United States' or
             1853      Congress' actions any provisions of this chapter should be amended or repealed; and
             1854          (ii) within a one-year period after the day on which the commission makes a report
             1855      under Subsection (2)(b).
             1856          Section 4. Section 59-12-107 is amended to read:


             1857           59-12-107. Definitions -- Collection, remittance, and payment of tax by sellers or
             1858      other persons -- Returns -- Reports -- Direct payment by purchaser of vehicle -- Other
             1859      liability for collection -- Rulemaking authority -- Credits -- Treatment of bad debt --
             1860      Penalties.
             1861          (1) As used in this section:
             1862          (a) "Ownership" means direct ownership or indirect ownership through a parent,
             1863      subsidiary, or affiliate.
             1864          (b) "Related seller" means a seller that:
             1865          (i) meets one or more of the criteria described in Subsection (2)(a)(i); and
             1866          (ii) delivers tangible personal property, a service, or a product transferred electronically
             1867      that is sold:
             1868          (A) by a seller that does not meet one or more of the criteria described in Subsection
             1869      (2)(a)(i); and
             1870          (B) to a purchaser in the state.
             1871          (c) "Substantial ownership interest" means an ownership interest in a business entity if
             1872      that ownership interest is greater than the degree of ownership of equity interest specified in 15
             1873      U.S.C. Sec. 78p, with respect to a person other than a director or an officer.
             1874          [(1)] (2) (a) Except as provided in Subsection [(1)(d)] (2)(f) or Section 59-12-107.1 or
             1875      59-12-123 and subject to Subsection [(1)(e)] (2)(g), each seller shall pay or collect and remit
             1876      the sales and use taxes imposed by this chapter if within this state the seller:
             1877          (i) has or utilizes:
             1878          (A) an office;
             1879          (B) a distribution house;
             1880          (C) a sales house;
             1881          (D) a warehouse;
             1882          (E) a service enterprise; or
             1883          (F) a place of business similar to Subsections [(1)] (2)(a)(i)(A) through (E);
             1884          (ii) maintains a stock of goods;
             1885          (iii) regularly solicits orders, regardless of whether or not the orders are accepted in the
             1886      state, unless the seller's only activity in the state is:
             1887          (A) advertising; or


             1888          (B) solicitation by:
             1889          (I) direct mail;
             1890          (II) electronic mail;
             1891          (III) the Internet;
             1892          (IV) telecommunications service; or
             1893          (V) a means similar to Subsection [(1)] (2)(a)(iii)(A) or (B);
             1894          (iv) regularly engages in the delivery of property in the state other than by:
             1895          (A) common carrier; or
             1896          (B) United States mail; or
             1897          (v) regularly engages in an activity directly related to the leasing or servicing of
             1898      property located within the state.
             1899          (b) A seller is considered to be engaged in the business of selling tangible personal
             1900      property, a service, or a product transferred electronically for use in the state, and shall pay or
             1901      collect and remit the sales and use taxes imposed by this chapter if:
             1902          (i) the seller holds a substantial ownership interest in, or is owned in whole or in
             1903      substantial part by, a related seller; and
             1904          (ii) (A) the seller sells the same or a substantially similar line of products as the related
             1905      seller and does so under the same or a substantially similar business name; or
             1906          (B) the place of business described in Subsection (2)(a)(i) of the related seller or an
             1907      in-state employee of the related seller is used to advertise, promote, or facilitate sales by the
             1908      seller to a purchaser.
             1909           H. [ (c) A seller is considered to be engaged in the business of selling tangible personal
             1910      property, a service, or a product transferred electronically for use in the state and shall pay or
             1911      collect and remit the sales and use taxes imposed by this chapter if the seller:
             1912          (i) makes sales of tangible personal property to a purchaser in the state by mail,
             1913      telephone, the Internet, or other media; and
             1914          (ii) has a contractual relationship:
             1915          (A) with a seller that meets one or more of the criteria described in Subsection
             1916      (2)(a)(i); and
             1917          (B) for the seller described in Subsection (2)(c)(ii)(A) to provide and perform
             1918      installation, maintenance, or repair services for the other seller's purchasers within the state.
] .H


             1919          [(b)] (d) A seller that does not meet one or more of the criteria provided for in
             1920      Subsection [(1)] (2)(a) or is not a seller required to pay or collect and remit sales and use taxes
             1921      under Subsection (2)(b) or (c):
             1922          (i) except as provided in Subsection [(1)(b)(ii)] (2)(d)(ii), may voluntarily:
             1923          (A) collect a tax on a transaction described in Subsection 59-12-103 (1); and
             1924          (B) remit the tax to the commission as provided in this part; or
             1925          (ii) notwithstanding Subsection [(1)(b)(i)] (2)(d)(i), shall collect a tax on a transaction
             1926      described in Subsection 59-12-103 (1) if Section 59-12-103.1 requires the seller to collect the
             1927      tax.
             1928          [(c)] (e) The collection and remittance of a tax under this chapter by a seller that is
             1929      registered under the agreement may not be used as a factor in determining whether that seller is
             1930      required by Subsection [(1)(a)] (2) to:
             1931          (i) pay a tax, fee, or charge under:
             1932          (A) Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;
             1933          (B) Title 10, Chapter 1, Part 4, Municipal Telecommunications License Tax Act;
             1934          (C) Section 19-6-714 ;
             1935          (D) Section 19-6-805 ;
             1936          (E) Section 69-2-5 ;
             1937          (F) Section 69-2-5.5 ;
             1938          (G) Section 69-2-5.6 ; or
             1939          (H) this title; or
             1940          (ii) collect and remit a tax, fee, or charge under:
             1941          (A) Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;
             1942          (B) Title 10, Chapter 1, Part 4, Municipal Telecommunications License Tax Act;
             1943          (C) Section 19-6-714 ;
             1944          (D) Section 19-6-805 ;
             1945          (E) Section 69-2-5 ;
             1946          (F) Section 69-2-5.5 ;
             1947          (G) Section 69-2-5.6 ; or
             1948          (H) this title.
             1949          [(d)] (f) A person shall pay a use tax imposed by this chapter on a transaction described


             1950      in Subsection 59-12-103 (1) if:
             1951          (i) the seller did not collect a tax imposed by this chapter on the transaction; and
             1952          (ii) the person:
             1953          (A) stores the tangible personal property or product transferred electronically in the
             1954      state;
             1955          (B) uses the tangible personal property or product transferred electronically in the state;
             1956      or
             1957          (C) consumes the tangible personal property or product transferred electronically in the
             1958      state.
             1959          [(e)] (g) The ownership of property that is located at the premises of a printer's facility
             1960      with which the retailer has contracted for printing and that consists of the final printed product,
             1961      property that becomes a part of the final printed product, or copy from which the printed
             1962      product is produced, shall not result in the retailer being considered to have or maintain an
             1963      office, distribution house, sales house, warehouse, service enterprise, or other place of
             1964      business, or to maintain a stock of goods, within this state.
             1965          [(f) (i) As used in this Subsection (1)(f):]
             1966          [(A) "Affiliated group" is as defined in Section 59-7-101 , except that "affiliated group"
             1967      includes a corporation that is qualified to do business but is not otherwise doing business in
             1968      this state.]
             1969          [(B) "Common ownership" is as defined in Section 59-7-101 .]
             1970          [(C) "Related seller" means a seller that:]
             1971          [(I) is not required to pay or collect and remit sales and use taxes under Subsection
             1972      (1)(a) or Section 59-12-103.1 ;]
             1973          [(II) is:]
             1974          [(Aa) related to a seller that is required to pay or collect and remit sales and use taxes
             1975      under Subsection (1)(a) as part of an affiliated group or because of common ownership; or]
             1976          [(Bb) a limited liability company owned by the parent corporation of an affiliated
             1977      group if that parent corporation of the affiliated group is required to pay or collect and remit
             1978      sales and use taxes under Subsection (1)(a); and]
             1979          [(III) does not voluntarily collect and remit a tax under Subsection (1)(b)(i).]
             1980          [(ii) A seller is not required to pay or collect and remit sales and use taxes under


             1981      Subsection (1)(a):]
             1982          [(A) if the seller is a related seller;]
             1983          [(B) if the seller to which the related seller is related does not engage in any of the
             1984      following activities on behalf of the related seller:]
             1985          [(I) advertising;]
             1986          [(II) marketing;]
             1987          [(III) sales; or]
             1988          [(IV) other services; and]
             1989          [(C) if the seller to which the related seller is related accepts the return of an item sold
             1990      by the related seller, the seller to which the related seller is related accepts the return of that
             1991      item:]
             1992          [(I) sold by a seller that is not a related seller; and]
             1993          [(II) on the same terms as the return of an item sold by that seller to which the related
             1994      seller is related.]
             1995          [(2)] (3) (a) Except as provided in Section 59-12-107.1 , a tax under this chapter shall
             1996      be collected from a purchaser.
             1997          (b) A seller may not collect as tax an amount, without regard to fractional parts of one
             1998      cent, in excess of the tax computed at the rates prescribed by this chapter.
             1999          (c) (i) Each seller shall:
             2000          (A) give the purchaser a receipt for the tax collected; or
             2001          (B) bill the tax as a separate item and declare the name of this state and the seller's
             2002      sales and use tax license number on the invoice for the sale.
             2003          (ii) The receipt or invoice is prima facie evidence that the seller has collected the tax
             2004      and relieves the purchaser of the liability for reporting the tax to the commission as a
             2005      consumer.
             2006          (d) A seller is not required to maintain a separate account for the tax collected, but is
             2007      considered to be a person charged with receipt, safekeeping, and transfer of public money.
             2008          (e) Taxes collected by a seller pursuant to this chapter shall be held in trust for the
             2009      benefit of the state and for payment to the commission in the manner and at the time provided
             2010      for in this chapter.
             2011          (f) If any seller, during any reporting period, collects as a tax an amount in excess of


             2012      the lawful state and local percentage of total taxable sales allowed under this chapter, the seller
             2013      shall remit to the commission the full amount of the tax imposed under this chapter, plus any
             2014      excess.
             2015          (g) If the accounting methods regularly employed by the seller in the transaction of the
             2016      seller's business are such that reports of sales made during a calendar month or quarterly period
             2017      will impose unnecessary hardships, the commission may accept reports at intervals that will, in
             2018      the commission's opinion, better suit the convenience of the taxpayer or seller and will not
             2019      jeopardize collection of the tax.
             2020          [(3)] (4) (a) Except as provided in Subsections [(4)] (5) through [(6)] (7) and Section
             2021      59-12-108 , the sales or use tax imposed by this chapter is due and payable to the commission
             2022      quarterly on or before the last day of the month next succeeding each calendar quarterly period.
             2023          (b) (i) Each seller shall, on or before the last day of the month next succeeding each
             2024      calendar quarterly period, file with the commission a return for the preceding quarterly period.
             2025          (ii) The seller shall remit with the return under Subsection [(3)] (4)(b)(i) the amount of
             2026      the tax required under this chapter to be collected or paid for the period covered by the return.
             2027          (c) Except as provided in Subsection [(4)] (5)(c), a return shall contain information and
             2028      be in a form the commission prescribes by rule.
             2029          (d) The sales tax as computed in the return shall be based upon the total nonexempt
             2030      sales made during the period, including both cash and charge sales.
             2031          (e) The use tax as computed in the return shall be based upon the total amount of
             2032      purchases for storage, use, or other consumption in this state made during the period, including
             2033      both by cash and by charge.
             2034          (f) (i) Subject to Subsection [(3)] (4)(f)(ii) and in accordance with Title 63G, Chapter
             2035      3, Utah Administrative Rulemaking Act, the commission may by rule extend the time for
             2036      making returns and paying the taxes.
             2037          (ii) An extension under Subsection [(3)] (4)(f)(i) may not be for more than 90 days.
             2038          (g) The commission may require returns and payment of the tax to be made for other
             2039      than quarterly periods if the commission considers it necessary in order to ensure the payment
             2040      of the tax imposed by this chapter.
             2041          (h) (i) The commission may require a seller that files a simplified electronic return with
             2042      the commission to file an additional electronic report with the commission.


             2043          (ii) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             2044      commission may make rules providing:
             2045          (A) the information required to be included in the additional electronic report described
             2046      in Subsection [(3)] (4)(h)(i); and
             2047          (B) one or more due dates for filing the additional electronic report described in
             2048      Subsection [(3)] (4)(h)(i).
             2049          [(4)] (5) (a) As used in this Subsection [(4)] (5) and Subsection [(5)] (6)(b), "remote
             2050      seller" means a seller that is:
             2051          (i) registered under the agreement;
             2052          (ii) described in Subsection [(1)(b)] (2)(d); and
             2053          (iii) not a:
             2054          (A) model 1 seller;
             2055          (B) model 2 seller; or
             2056          (C) model 3 seller.
             2057          (b) (i) Except as provided in Subsection [(4)] (5)(b)(ii), a tax a remote seller collects in
             2058      accordance with Subsection [(1)(b)] (2)(d) is due and payable:
             2059          (A) to the commission;
             2060          (B) annually; and
             2061          (C) on or before the last day of the month immediately following the last day of each
             2062      calendar year.
             2063          (ii) The commission may require that a tax a remote seller collects in accordance with
             2064      Subsection [(1)(b)] (2)(d) be due and payable:
             2065          (A) to the commission; and
             2066          (B) on the last day of the month immediately following any month in which the seller
             2067      accumulates a total of at least $1,000 in agreement sales and use tax.
             2068          (c) (i) If a remote seller remits a tax to the commission in accordance with Subsection
             2069      [(4)] (5)(b), the remote seller shall file a return:
             2070          (A) with the commission;
             2071          (B) with respect to the tax;
             2072          (C) containing information prescribed by the commission; and
             2073          (D) on a form prescribed by the commission.


             2074          (ii) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             2075      commission shall make rules prescribing:
             2076          (A) the information required to be contained in a return described in Subsection [(4)]
             2077      (5)(a)(i); and
             2078          (B) the form described in Subsection [(4)] (5)(c)(i)(D).
             2079          (d) A tax a remote seller collects in accordance with this Subsection [(4)] (5) shall be
             2080      calculated on the basis of the total amount of taxable transactions under Subsection
             2081      59-12-103 (1) the remote seller completes, including:
             2082          (i) a cash transaction; and
             2083          (ii) a charge transaction.
             2084          [(5)] (6) (a) Except as provided in Subsection [(5)] (6)(b), a tax a seller that files a
             2085      simplified electronic return collects in accordance with this chapter is due and payable:
             2086          (i) monthly on or before the last day of the month immediately following the month for
             2087      which the seller collects a tax under this chapter; and
             2088          (ii) for the month for which the seller collects a tax under this chapter.
             2089          (b) A tax a remote seller that files a simplified electronic return collects in accordance
             2090      with this chapter is due and payable as provided in Subsection [(4)] (5).
             2091          [(6)] (7) (a) On each vehicle sale made by other than a regular licensed vehicle dealer,
             2092      the purchaser shall pay the sales or use tax directly to the commission if the vehicle is subject
             2093      to titling or registration under the laws of this state.
             2094          (b) The commission shall collect the tax described in Subsection [(6)] (7)(a) when the
             2095      vehicle is titled or registered.
             2096          [(7)] (8) If any sale of tangible personal property or any other taxable transaction under
             2097      Subsection 59-12-103 (1), is made by a wholesaler to a retailer, the wholesaler is not
             2098      responsible for the collection or payment of the tax imposed on the sale and the retailer is
             2099      responsible for the collection or payment of the tax imposed on the sale if:
             2100          (a) the retailer represents that the personal property is purchased by the retailer for
             2101      resale; and
             2102          (b) the personal property is not subsequently resold.
             2103          [(8)] (9) If any sale of property or service subject to the tax is made to a person
             2104      prepaying sales or use tax in accordance with Title 63M, Chapter 5, Resource Development


             2105      Act, or to a contractor or subcontractor of that person, the person to whom such payment or
             2106      consideration is payable is not responsible for the collection or payment of the sales or use tax
             2107      and the person prepaying the sales or use tax is responsible for the collection or payment of the
             2108      sales or use tax if the person prepaying the sales or use tax represents that the amount prepaid
             2109      as sales or use tax has not been fully credited against sales or use tax due and payable under the
             2110      rules promulgated by the commission.
             2111          [(9)] (10) (a) For purposes of this Subsection [(9)] (10):
             2112          (i) Except as provided in Subsection [(9)] (10)(a)(ii), "bad debt" is as defined in
             2113      Section 166, Internal Revenue Code.
             2114          (ii) Notwithstanding Subsection [(9)] (10)(a)(i), "bad debt" does not include:
             2115          (A) an amount included in the purchase price of tangible personal property, a product
             2116      transferred electronically, or a service that is:
             2117          (I) not a transaction described in Subsection 59-12-103 (1); or
             2118          (II) exempt under Section 59-12-104 ;
             2119          (B) a financing charge;
             2120          (C) interest;
             2121          (D) a tax imposed under this chapter on the purchase price of tangible personal
             2122      property, a product transferred electronically, or a service;
             2123          (E) an uncollectible amount on tangible personal property or a product transferred
             2124      electronically that:
             2125          (I) is subject to a tax under this chapter; and
             2126          (II) remains in the possession of a seller until the full purchase price is paid;
             2127          (F) an expense incurred in attempting to collect any debt; or
             2128          (G) an amount that a seller does not collect on repossessed property.
             2129          (b) A seller may deduct bad debt from the total amount from which a tax under this
             2130      chapter is calculated on a return.
             2131          (c) A seller may file a refund claim with the commission if:
             2132          (i) the amount of bad debt for the time period described in Subsection [(9)] (10)(e)
             2133      exceeds the amount of the seller's sales that are subject to a tax under this chapter for that same
             2134      time period; and
             2135          (ii) as provided in Section 59-1-1410 .


             2136          (d) A bad debt deduction under this section may not include interest.
             2137          (e) A bad debt may be deducted under this Subsection [(9)] (10) on a return for the
             2138      time period during which the bad debt:
             2139          (i) is written off as uncollectible in the seller's books and records; and
             2140          (ii) would be eligible for a bad debt deduction:
             2141          (A) for federal income tax purposes; and
             2142          (B) if the seller were required to file a federal income tax return.
             2143          (f) If a seller recovers any portion of bad debt for which the seller makes a deduction or
             2144      claims a refund under this Subsection [(9)] (10), the seller shall report and remit a tax under
             2145      this chapter:
             2146          (i) on the portion of the bad debt the seller recovers; and
             2147          (ii) on a return filed for the time period for which the portion of the bad debt is
             2148      recovered.
             2149          (g) For purposes of reporting a recovery of a portion of bad debt under Subsection [(9)]
             2150      (10)(f), a seller shall apply amounts received on the bad debt in the following order:
             2151          (i) in a proportional amount:
             2152          (A) to the purchase price of the tangible personal property, product transferred
             2153      electronically, or service; and
             2154          (B) to the tax due under this chapter on the tangible personal property, product
             2155      transferred electronically, or service; and
             2156          (ii) to:
             2157          (A) interest charges;
             2158          (B) service charges; and
             2159          (C) other charges.
             2160          (h) A seller's certified service provider may make a deduction or claim a refund for bad
             2161      debt on behalf of the seller:
             2162          (i) in accordance with this Subsection [(9)] (10); and
             2163          (ii) if the certified service provider credits or refunds the entire amount of the bad debt
             2164      deduction or refund to the seller.
             2165          (i) A seller may allocate bad debt among the states that are members of the agreement
             2166      if the seller's books and records support that allocation.


             2167          [(10)] (11) (a) A seller may not, with intent to evade any tax, fail to timely remit the
             2168      full amount of tax required by this chapter.
             2169          (b) A violation of this section is punishable as provided in Section 59-1-401 .
             2170          (c) Each person who fails to pay any tax to the state or any amount of tax required to be
             2171      paid to the state, except amounts determined to be due by the commission under Chapter 1,
             2172      Part 14, Assessment, Collections, and Refunds Act, or Section 59-12-111 , within the time
             2173      required by this chapter, or who fails to file any return as required by this chapter, shall pay, in
             2174      addition to the tax, penalties and interest as provided in Section 59-1-401 .
             2175          (d) For purposes of prosecution under this section, each quarterly tax period in which a
             2176      seller, with intent to evade any tax, collects a tax and fails to timely remit the full amount of the
             2177      tax required to be remitted, constitutes a separate offense.
             2178          Section 5. Section 59-12-108 is amended to read:
             2179           59-12-108. Monthly payment -- Amount of tax a seller may retain -- Penalty --
             2180      Certain amounts allocated to local taxing jurisdictions.
             2181          (1) (a) Notwithstanding Section 59-12-107 , a seller that has a tax liability under this
             2182      chapter of $50,000 or more for the previous calendar year shall:
             2183          (i) file a return with the commission:
             2184          (A) monthly on or before the last day of the month immediately following the month
             2185      for which the seller collects a tax under this chapter; and
             2186          (B) for the month for which the seller collects a tax under this chapter; and
             2187          (ii) except as provided in Subsection (1)(b), remit with the return required by
             2188      Subsection (1)(a)(i) the amount the person is required to remit to the commission for each tax,
             2189      fee, or charge described in Subsection (1)(c):
             2190          (A) if that seller's tax liability under this chapter for the previous calendar year is less
             2191      than $96,000, by any method permitted by the commission; or
             2192          (B) if that seller's tax liability under this chapter for the previous calendar year is
             2193      $96,000 or more, by electronic funds transfer.
             2194          (b) A seller shall remit electronically with the return required by Subsection (1)(a)(i)
             2195      the amount the seller is required to remit to the commission for each tax, fee, or charge
             2196      described in Subsection (1)(c) if that seller:
             2197          (i) is required by Section 59-12-107 to file the return electronically; or


             2198          (ii) (A) is required to collect and remit a tax under [Subsection] Section
             2199      59-12-107 [(1)(a)]; and
             2200          (B) files a simplified electronic return.
             2201          (c) Subsections (1)(a) and (b) apply to the following taxes, fees, or charges:
             2202          (i) a tax under Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;
             2203          (ii) a fee under Section 19-6-714 ;
             2204          (iii) a fee under Section 19-6-805 ;
             2205          (iv) a charge under Section 69-2-5 ;
             2206          (v) a charge under Section 69-2-5.5 ;
             2207          (vi) a charge under Section 69-2-5.6 ; or
             2208          (vii) a tax under this chapter.
             2209          (d) Notwithstanding Subsection (1)(a)(ii) and in accordance with Title 63G, Chapter 3,
             2210      Utah Administrative Rulemaking Act, the commission shall make rules providing for a method
             2211      for making same-day payments other than by electronic funds transfer if making payments by
             2212      electronic funds transfer fails.
             2213          (e) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             2214      commission shall establish by rule procedures and requirements for determining the amount a
             2215      seller is required to remit to the commission under this Subsection (1).
             2216          (2) (a) Except as provided in Subsection (3), a seller subject to Subsection (1) or a
             2217      seller described in Subsection (4) may retain each month the amount allowed by this
             2218      Subsection (2).
             2219          (b) A seller subject to Subsection (1) or a seller described in Subsection (4) may retain
             2220      each month 1.31% of any amounts the seller is required to remit to the commission:
             2221          (i) for a transaction described in Subsection 59-12-103 (1) that is subject to a state tax
             2222      and a local tax imposed in accordance with the following, for the month for which the seller is
             2223      filing a return in accordance with Subsection (1):
             2224          (A) Subsection 59-12-103 (2)(a);
             2225          (B) Subsection 59-12-103 (2)(b); and
             2226          (C) Subsection 59-12-103 (2)(d); and
             2227          (ii) for an agreement sales and use tax.
             2228          (c) (i) A seller subject to Subsection (1) or a seller described in Subsection (4) may


             2229      retain each month the amount calculated under Subsection (2)(c)(ii) for a transaction described
             2230      in Subsection 59-12-103 (1) that is subject to the state tax and the local tax imposed in
             2231      accordance with Subsection 59-12-103 (2)(c).
             2232          (ii) For purposes of Subsection (2)(c)(i), the amount a seller may retain is an amount
             2233      equal to the sum of:
             2234          (A) 1.31% of any amounts the seller is required to remit to the commission for:
             2235          (I) the state tax and the local tax imposed in accordance with Subsection
             2236      59-12-103 (2)(c);
             2237          (II) the month for which the seller is filing a return in accordance with Subsection (1);
             2238      and
             2239          (III) an agreement sales and use tax; and
             2240          (B) 1.31% of the difference between:
             2241          (I) the amounts the seller would have been required to remit to the commission:
             2242          (Aa) in accordance with Subsection 59-12-103 (2)(a) if the transaction had been subject
             2243      to the state tax and the local tax imposed in accordance with Subsection 59-12-103 (2)(a);
             2244          (Bb) for the month for which the seller is filing a return in accordance with Subsection
             2245      (1); and
             2246          (Cc) for an agreement sales and use tax; and
             2247          (II) the amounts the seller is required to remit to the commission for:
             2248          (Aa) the state tax and the local tax imposed in accordance with Subsection
             2249      59-12-103 (2)(c);
             2250          (Bb) the month for which the seller is filing a return in accordance with Subsection (1);
             2251      and
             2252          (Cc) an agreement sales and use tax.
             2253          (d) A seller subject to Subsection (1) or a seller described in Subsection (4) may retain
             2254      each month 1% of any amounts the seller is required to remit to the commission:
             2255          (i) for the month for which the seller is filing a return in accordance with Subsection
             2256      (1); and
             2257          (ii) under:
             2258          (A) Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;
             2259          (B) Subsection 59-12-603 (1)(a)(i)(A); or


             2260          (C) Subsection 59-12-603 (1)(a)(i)(B).
             2261          (3) A state government entity that is required to remit taxes monthly in accordance
             2262      with Subsection (1) may not retain any amount under Subsection (2).
             2263          (4) A seller that has a tax liability under this chapter for the previous calendar year of
             2264      less than $50,000 may:
             2265          (a) voluntarily meet the requirements of Subsection (1); and
             2266          (b) if the seller voluntarily meets the requirements of Subsection (1), retain the
             2267      amounts allowed by Subsection (2).
             2268          (5) Penalties for late payment shall be as provided in Section 59-1-401 .
             2269          (6) (a) Except as provided in Subsection (6)(c), for any amounts required to be remitted
             2270      to the commission under this part, the commission shall each month calculate an amount equal
             2271      to the difference between:
             2272          (i) the total amount retained for that month by all sellers had the percentages listed
             2273      under Subsections (2)(b) and (2)(c)(ii) been 1.5%; and
             2274          (ii) the total amount retained for that month by all sellers at the percentages listed
             2275      under Subsections (2)(b) and (2)(c)(ii).
             2276          (b) The commission shall each month allocate the amount calculated under Subsection
             2277      (6)(a) to each county, city, and town on the basis of the proportion of agreement sales and use
             2278      tax that the commission distributes to each county, city, and town for that month compared to
             2279      the total agreement sales and use tax that the commission distributes for that month to all
             2280      counties, cities, and towns.
             2281          (c) The amount the commission calculates under Subsection (6)(a) may not include an
             2282      amount collected from a tax that:
             2283          (i) the state imposes within a county, city, or town, including the unincorporated area
             2284      of a county; and
             2285          (ii) is not imposed within the entire state.
             2286          Section 6. Section 59-12-211 is amended to read:
             2287           59-12-211. Definitions -- Location of certain transactions -- Reports to
             2288      commission -- Direct payment provision for a seller making certain purchases --
             2289      Exceptions.
             2290          (1) As used in this section:


             2291          (a) (i) "Receipt" and "receive" mean:
             2292          (A) taking possession of tangible personal property;
             2293          (B) making first use of a service; or
             2294          (C) for a product transferred electronically, the earlier of:
             2295          (I) taking possession of the product transferred electronically; or
             2296          (II) making first use of the product transferred electronically.
             2297          (ii) "Receipt" and "receive" do not include possession by a shipping company on behalf
             2298      of a purchaser.
             2299          (b) "Transportation equipment" means:
             2300          (i) a locomotive or rail car that is used to carry a person or property in interstate
             2301      commerce;
             2302          (ii) a truck or truck-tractor:
             2303          (A) with a gross vehicle weight rating of 10,001 pounds or more;
             2304          (B) registered under Section 41-1a-301 ; and
             2305          (C) operated under the authority of a carrier authorized and certificated:
             2306          (I) by the United States Department of Transportation or another federal authority; and
             2307          (II) to engage in carrying a person or property in interstate commerce;
             2308          (iii) a trailer, semitrailer, or passenger bus that is:
             2309          (A) registered under Section 41-1a-301 ; and
             2310          (B) operated under the authority of a carrier authorized and certificated:
             2311          (I) by the United States Department of Transportation or another federal authority; and
             2312          (II) to engage in carrying a person or property in interstate commerce;
             2313          (iv) an aircraft that is operated by an air carrier authorized and certificated:
             2314          (A) by the United States Department of Transportation or another federal or foreign
             2315      authority; and
             2316          (B) to engage in carrying a person or property in interstate commerce; or
             2317          (v) a container designed for use on, or a component part attached or secured on, an
             2318      item of equipment listed in Subsections (1)(b)(i) through (iv).
             2319          (2) Except as provided in Subsections (8) and (14), if tangible personal property, a
             2320      product transferred electronically, or a service that is subject to taxation under this chapter is
             2321      received by a purchaser at a business location of a seller, the location of the transaction is the


             2322      business location of the seller.
             2323          (3) Subject to Subsection (10), and except as provided in Subsections (7), (8), (9), (11),
             2324      and (14), if tangible personal property, a product transferred electronically, or a service that is
             2325      subject to taxation under this chapter is not received by a purchaser at a business location of a
             2326      seller, the location of the transaction is the location where the purchaser takes receipt of the
             2327      tangible personal property or service.
             2328          (4) Subject to Subsection (10), and except as provided in Subsections (7), (8), (9), (11),
             2329      and (14), if Subsection (2) or (3) does not apply, the location of the transaction is the location
             2330      indicated by an address for or other information on the purchaser if:
             2331          (a) the address or other information is available from the seller's business records; and
             2332          (b) use of the address or other information from the seller's records does not constitute
             2333      bad faith.
             2334          (5) (a) Subject to Subsection (10), and except as provided in Subsections (7), (8), (9),
             2335      (11), and (14), if Subsection (2), (3), or (4) does not apply, the location of the transaction is the
             2336      location indicated by an address for the purchaser if:
             2337          (i) the address is obtained during the consummation of the transaction; and
             2338          (ii) use of the address described in Subsection (5)(a)(i) does not constitute bad faith.
             2339          (b) An address used under Subsection (5)(a) includes the address of a purchaser's
             2340      payment instrument if no other address is available.
             2341          (6) Subject to Subsection (10), and except as provided in Subsections (7), (8), (9), (11),
             2342      and (14), if Subsection (2), (3), (4), or (5) does not apply or if a seller does not have sufficient
             2343      information to apply Subsection (2), (3), (4), or (5), the location of the transaction is the
             2344      location:
             2345          (a) indicated by the address from which:
             2346          (i) except as provided in Subsection (6)(a)(ii), for tangible personal property that is
             2347      subject to taxation under this chapter, the tangible personal property is shipped;
             2348          (ii) for computer software delivered electronically or for a product transferred
             2349      electronically that is subject to taxation under this chapter, the computer software or product
             2350      transferred electronically is first available for transmission by the seller; or
             2351          (iii) for a service that is subject to taxation under this chapter, the service is provided;
             2352      or


             2353          (b) as determined by the seller with respect to a prepaid wireless calling service:
             2354          (i) provided in Subsection (6)(a)(iii); or
             2355          (ii) associated with the mobile telephone number.
             2356          (7) (a) For purposes of this Subsection (7), "shared ZIP Code" means a nine-digit ZIP
             2357      Code that is located within two or more local taxing jurisdictions.
             2358          (b) If the location of a transaction determined under Subsections (3) through (6) is in a
             2359      shared ZIP Code, the location of the transaction is:
             2360          (i) if there is only one local taxing jurisdiction that imposes the lowest agreement
             2361      combined tax rate for the shared ZIP Code, the local taxing jurisdiction that imposes the lowest
             2362      agreement combined tax rate; or
             2363          (ii) if two or more local taxing jurisdictions impose the lowest agreement combined tax
             2364      rate for the shared ZIP Code, the local taxing jurisdiction that:
             2365          (A) imposes the lowest agreement combined tax rate for the shared ZIP Code; and
             2366          (B) has located within the local taxing jurisdiction the largest number of street
             2367      addresses within the shared ZIP Code.
             2368          (c) Notwithstanding any provision under this chapter authorizing or requiring the
             2369      imposition of a sales and use tax, for purposes of Subsection (7)(b), a seller shall collect a sales
             2370      and use tax imposed under this chapter at the lowest agreement combined tax rate imposed
             2371      within the local taxing jurisdiction in which the transaction is located under Subsection (7)(b).
             2372          (d) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             2373      commission may make rules:
             2374          (i) providing for the circumstances under which a seller has exercised due diligence in
             2375      determining the nine-digit ZIP Code for an address; or
             2376          (ii) notwithstanding Subsection (7)(b), for determining the local taxing jurisdiction
             2377      within which a transaction is located if a seller is unable to determine the local taxing
             2378      jurisdiction within which the transaction is located under Subsection (7)(b).
             2379          (8) The location of a transaction made with a direct payment permit described in
             2380      Section 59-12-107.1 is the location where receipt of the tangible personal property, product, or
             2381      service by the purchaser occurs.
             2382          (9) The location of a purchase of direct mail is the location determined in accordance
             2383      with Section 59-12-123 .


             2384          (10) (a) Except as provided in Subsection (10)(b), the location of a transaction
             2385      determined under Subsections (3) through (6), (8), or (9), is the local taxing jurisdiction within
             2386      which:
             2387          (i) the nine-digit ZIP Code assigned to the location determined under Subsections (3)
             2388      through (6), (8), or (9) is located; or
             2389          (ii) the five-digit ZIP Code assigned to the location determined under Subsections (3)
             2390      through (6), (8), or (9) is located if:
             2391          (A) a nine-digit ZIP Code is not available for the location determined under
             2392      Subsections (3) through (6), (8), or (9); or
             2393          (B) after exercising due diligence, a seller or certified service provider is unable to
             2394      determine a nine-digit ZIP Code for the location determined under Subsections (3) through (6),
             2395      (8), or (9).
             2396          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             2397      commission may make rules for determining the local taxing jurisdiction within which a
             2398      transaction is located if a seller or certified service provider is unable to determine the local
             2399      taxing jurisdiction within which the transaction is located under Subsection (10)(a).
             2400          (11) (a) As used in this Subsection (11), "florist delivery transaction" means a
             2401      transaction commenced by a florist that transmits an order:
             2402          (i) by:
             2403          (A) telegraph;
             2404          (B) telephone; or
             2405          (C) a means of communication similar to Subsection (11)(a)(i)(A) or (B); and
             2406          (ii) for delivery to another place:
             2407          (A) in this state; or
             2408          (B) outside this state.
             2409          (b) Notwithstanding Subsections (3) through (6), beginning on January 1, 2009, and
             2410      ending on December 31, 2009, the location of a florist delivery transaction is the business
             2411      location of the florist that commences the florist delivery transaction.
             2412          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             2413      commission may by rule:
             2414          (i) define:


             2415          (A) "business location"; and
             2416          (B) "florist";
             2417          (ii) define what constitutes a means of communication similar to Subsection
             2418      (11)(a)(i)(A) or (B); and
             2419          (iii) provide procedures for determining when a transaction is commenced.
             2420          (12) (a) Notwithstanding any other provision of this section and except as provided in
             2421      Subsection (12)(b), if a purchaser uses computer software and there is not a transfer of a copy
             2422      of that software to the purchaser, the location of the transaction is determined in accordance
             2423      with Subsections (4) and (5).
             2424          (b) If a purchaser uses computer software described in Subsection (12)(a) at more than
             2425      one location, the location of the transaction shall be determined in accordance with rules made
             2426      by the commission in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking
             2427      Act.
             2428          (13) (a) A tax collected under this chapter shall be reported to the commission on a
             2429      form that identifies the location of each transaction that occurs during the return filing period.
             2430          (b) The form described in Subsection (13)(a) shall be filed with the commission as
             2431      required under this chapter.
             2432          (14) This section does not apply to:
             2433          (a) amounts charged by a seller for:
             2434          (i) telecommunications service except for a prepaid calling service or a prepaid
             2435      wireless calling service as provided in Subsection (6)(b) or Section 59-12-215 ; or
             2436          (ii) the retail sale or transfer of:
             2437          (A) a motor vehicle other than a motor vehicle that is transportation equipment;
             2438          (B) an aircraft other than an aircraft that is transportation equipment;
             2439          (C) a watercraft;
             2440          (D) a modular home;
             2441          (E) a manufactured home; or
             2442          (F) a mobile home; or
             2443          (iii) except as provided in Section 59-12-214 , the lease or rental of tangible personal
             2444      property other than tangible personal property that is transportation equipment;
             2445          (b) a tax a person pays in accordance with Subsection 59-12-107 [(1)(d)](2)(f); or


             2446          (c) a retail sale of tangible personal property or a product transferred electronically if:
             2447          (i) the seller receives the order for the tangible personal property or product transferred
             2448      electronically in this state;
             2449          (ii) receipt of the tangible personal property or product transferred electronically by the
             2450      purchaser or the purchaser's donee occurs in this state;
             2451          (iii) the location where receipt of the tangible personal property or product transferred
             2452      electronically by the purchaser occurs is determined in accordance with Subsections (3)
             2453      through (5); and
             2454          (iv) at the time the seller receives the order, the record keeping system that the seller
             2455      uses to calculate the proper amount of tax imposed under this chapter captures the location
             2456      where the order is received.
             2457          Section 7. Section 59-12-211.1 is amended to read:
             2458           59-12-211.1. Location of a transaction that is subject to a use tax.
             2459          (1) Subject to Subsection (2), a person that is required by Subsection
             2460      59-12-107 [(1)(d)](2)(f) to pay a use tax on a transaction shall report the location of that
             2461      transaction at the person's location.
             2462          (2) For purposes of Subsection (1), if a person has more than one location in this state,
             2463      the person shall report the location of the transaction at the location at which tangible personal
             2464      property, a product transferred electronically, or a service is received.
             2465          Section 8. Effective date.
             2466          This bill takes effect on July 1, 2012.




Legislative Review Note
    as of 2-17-12 5:34 PM


As required by legislative rules and practice, the Office of Legislative Research and General
Counsel provides the following legislative review note to assist the Legislature in making its
own determination as to the constitutionality of the bill. The note is based on an analysis of
relevant state and federal constitutional law as applied to the bill. The note is not written for
the purpose of influencing whether the bill should become law, but is written to provide
information relevant to legislators' consideration of this bill. The note is not a substitute for the
judgment of the judiciary, which has authority to determine the constitutionality of a law in the
context of a specific case.


This bill expands sales and use tax payment, collection, and remittance obligations to include
out of state sellers who have a certain ownership or other relationship with an in state seller.
These relationships include an out of state seller who has a substantial ownership interest in an
in state business, or a seller who makes sales to in state purchasers by mail, telephone, the
Internet, or other media, and has a contractual relationship with an in state seller to perform
installation, maintenance, or repair services for those in state purchasers.

Because this bill imposes obligations on out of state sellers, the bill raises issues under the
Commerce Clause of the United States Constitution. The Constitution of the Unites States
grants Congress the authority to "regulate Commerce with foreign Nations, and among the
several States." U.S. Const. art. I, § 8. Case law has interpreted the Commerce Clause as
having a dormant aspect, which "prohibits certain state actions that interfere with interstate
commerce." Quill Corp. v. North Dakota By and Through Heitkamp, 504 U.S. 298, 309 (1992)
(quoting South Caroling State Highway Dept. v. Barnwell Brothers, Inc., 303 U.S. 177, 185
(1938)).

In evaluating a state statute under a dormant Commerce Clause challenge, the Supreme Court
of the United States has held that a state may not require an out-of state seller to collect and
remit a use tax unless the seller has "substantial nexus" with the taxing state. Quill, 504 U.S. at
311. The Court has found that "a vendor whose only contacts with the taxing State are by mail
or common carrier lacks the 'substantial nexus' required by the Commerce Clause." The Quill
case thus established a bright-line rule that some physical presence is required in a state before
the state may impose sales and use tax collection obligations on a seller. Quill, 504 U.S. at 315
("[w]hether or not a State may compel a vendor to collect a sales or use tax may turn on the
presence in the taxing State of a small sales force, plant, or office.") In Scripto v. Carson, the
Supreme Court of the United States found that independent contractors soliciting business
within a state was sufficient presence for the state to impose use tax collection duties. Scripto
v. Carson,
362 U.S. 207, 211 (1960).

This bill raises the issue of the application of the Quill case and its "substantial nexus" standard
to an area of rapidly changing, evolving technology. Cases are currently moving through the
courts that provide the courts with an opportunity to more clearly define and articulate the legal
contours of what constitutes "substantial nexus" with a taxing state. It is impossible to predict
the outcome of these cases and what changes, if any, they might have on the standards set forth
in Quill. In addition, the Court in Quill noted that this issue is "one that Congress may be
better qualified to resolve" and also "has the ultimate power to resolve." Quill, 504 U.S. at
318. Thus, it is also possible that Congress may act on this interstate commerce issue.

However, because current dormant Commerce Clause case law under Quill requires physical
presence to satisfy "substantial nexus," there is a high probability that if challenged, a court
would hold that this bill, which establishes nexus on the basis of an ownership or other
relationship between an out of state seller and an in state seller, violates the dormant
Commerce Clause.

Office of Legislative Research and General Counsel


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