H.B. 430

             1     

REVISIONS TO TAX

             2     
2014 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Ryan D. Wilcox

             5     
Senate Sponsor: ____________

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill amends provisions related to taxation.
             10      Highlighted Provisions:
             11          This bill:
             12          .    amends the allocation of sales and use tax revenue based on certain increases in the
             13      tax rate that is imposed on motor fuels and special fuels, including:
             14              .    requiring a reduction of the amount of sales and use tax revenue deposited into
             15      the Transportation Investment Fund of 2005 under certain circumstances;
             16              .    requiring a deposit of sales and use tax revenue into the Education Fund under
             17      certain circumstances; and
             18              .    requiring a deposit of sales and use tax revenue into the Income Tax Rate
             19      Reduction Restricted Account;
             20          .    enacts the Income Tax Rate Reduction Restricted Account; and
             21          .    makes technical and conforming changes.
             22      Money Appropriated in this Bill:
             23          None
             24      Other Special Clauses:
             25          This bill takes effect on July 1, 2014.
             26      Utah Code Sections Affected:
             27      AMENDS:


             28           59-12-103 (Effective 07/01/14), as last amended by Laws of Utah 2013, Chapters 150
             29      and 227
             30           59-12-1201 , as last amended by Laws of Utah 2012, Chapter 121
             31      ENACTS:
             32           59-12-103.3 , Utah Code Annotated 1953
             33     
             34      Be it enacted by the Legislature of the state of Utah:
             35          Section 1. Section 59-12-103 (Effective 07/01/14) is amended to read:
             36           59-12-103 (Effective 07/01/14). Sales and use tax base -- Rates -- Effective dates --
             37      Use of sales and use tax revenues.
             38          (1) A tax is imposed on the purchaser as provided in this part for amounts paid or
             39      charged for the following transactions:
             40          (a) retail sales of tangible personal property made within the state;
             41          (b) amounts paid for:
             42          (i) telecommunications service, other than mobile telecommunications service, that
             43      originates and terminates within the boundaries of this state;
             44          (ii) mobile telecommunications service that originates and terminates within the
             45      boundaries of one state only to the extent permitted by the Mobile Telecommunications
             46      Sourcing Act, 4 U.S.C. Sec. 116 et seq.; or
             47          (iii) an ancillary service associated with a:
             48          (A) telecommunications service described in Subsection (1)(b)(i); or
             49          (B) mobile telecommunications service described in Subsection (1)(b)(ii);
             50          (c) sales of the following for commercial use:
             51          (i) gas;
             52          (ii) electricity;
             53          (iii) heat;
             54          (iv) coal;
             55          (v) fuel oil; or
             56          (vi) other fuels;
             57          (d) sales of the following for residential use:
             58          (i) gas;


             59          (ii) electricity;
             60          (iii) heat;
             61          (iv) coal;
             62          (v) fuel oil; or
             63          (vi) other fuels;
             64          (e) sales of prepared food;
             65          (f) except as provided in Section 59-12-104 , amounts paid or charged as admission or
             66      user fees for theaters, movies, operas, museums, planetariums, shows of any type or nature,
             67      exhibitions, concerts, carnivals, amusement parks, amusement rides, circuses, menageries,
             68      fairs, races, contests, sporting events, dances, boxing matches, wrestling matches, closed circuit
             69      television broadcasts, billiard parlors, pool parlors, bowling lanes, golf, miniature golf, golf
             70      driving ranges, batting cages, skating rinks, ski lifts, ski runs, ski trails, snowmobile trails,
             71      tennis courts, swimming pools, water slides, river runs, jeep tours, boat tours, scenic cruises,
             72      horseback rides, sports activities, or any other amusement, entertainment, recreation,
             73      exhibition, cultural, or athletic activity;
             74          (g) amounts paid or charged for services for repairs or renovations of tangible personal
             75      property, unless Section 59-12-104 provides for an exemption from sales and use tax for:
             76          (i) the tangible personal property; and
             77          (ii) parts used in the repairs or renovations of the tangible personal property described
             78      in Subsection (1)(g)(i), whether or not any parts are actually used in the repairs or renovations
             79      of that tangible personal property;
             80          (h) except as provided in Subsection 59-12-104 (7), amounts paid or charged for
             81      assisted cleaning or washing of tangible personal property;
             82          (i) amounts paid or charged for tourist home, hotel, motel, or trailer court
             83      accommodations and services that are regularly rented for less than 30 consecutive days;
             84          (j) amounts paid or charged for laundry or dry cleaning services;
             85          (k) amounts paid or charged for leases or rentals of tangible personal property if within
             86      this state the tangible personal property is:
             87          (i) stored;
             88          (ii) used; or
             89          (iii) otherwise consumed;


             90          (l) amounts paid or charged for tangible personal property if within this state the
             91      tangible personal property is:
             92          (i) stored;
             93          (ii) used; or
             94          (iii) consumed; and
             95          (m) amounts paid or charged for a sale:
             96          (i) (A) of a product transferred electronically; or
             97          (B) of a repair or renovation of a product transferred electronically; and
             98          (ii) regardless of whether the sale provides:
             99          (A) a right of permanent use of the product; or
             100          (B) a right to use the product that is less than a permanent use, including a right:
             101          (I) for a definite or specified length of time; and
             102          (II) that terminates upon the occurrence of a condition.
             103          (2) (a) Except as provided in Subsections (2)(b) through (e), a state tax and a local tax
             104      is imposed on a transaction described in Subsection (1) equal to the sum of:
             105          (i) a state tax imposed on the transaction at a tax rate equal to the sum of:
             106          (A) 4.70%; and
             107          (B) (I) the tax rate the state imposes in accordance with Part 18, Additional State Sales
             108      and Use Tax Act, if the location of the transaction as determined under Sections 59-12-211
             109      through 59-12-215 is in a county in which the state imposes the tax under Part 18, Additional
             110      State Sales and Use Tax Act; and
             111          (II) the tax rate the state imposes in accordance with Part 20, Supplemental State Sales
             112      and Use Tax Act, if the location of the transaction as determined under Sections 59-12-211
             113      through 59-12-215 is in a city, town, or the unincorporated area of a county in which the state
             114      imposes the tax under Part 20, Supplemental State Sales and Use Tax Act; and
             115          (ii) a local tax equal to the sum of the tax rates a county, city, or town imposes on the
             116      transaction under this chapter other than this part.
             117          (b) Except as provided in Subsection (2)(d) or (e), a state tax and a local tax is imposed
             118      on a transaction described in Subsection (1)(d) equal to the sum of:
             119          (i) a state tax imposed on the transaction at a tax rate of 2%; and
             120          (ii) a local tax equal to the sum of the tax rates a county, city, or town imposes on the


             121      transaction under this chapter other than this part.
             122          (c) Except as provided in Subsection (2)(d) or (e), a state tax and a local tax is imposed
             123      on amounts paid or charged for food and food ingredients equal to the sum of:
             124          (i) a state tax imposed on the amounts paid or charged for food and food ingredients at
             125      a tax rate of 1.75%; and
             126          (ii) a local tax equal to the sum of the tax rates a county, city, or town imposes on the
             127      amounts paid or charged for food and food ingredients under this chapter other than this part.
             128          (d) (i) For a bundled transaction that is attributable to food and food ingredients and
             129      tangible personal property other than food and food ingredients, a state tax and a local tax is
             130      imposed on the entire bundled transaction equal to the sum of:
             131          (A) a state tax imposed on the entire bundled transaction equal to the sum of:
             132          (I) the tax rate described in Subsection (2)(a)(i)(A); and
             133          (II) (Aa) the tax rate the state imposes in accordance with Part 18, Additional State
             134      Sales and Use Tax Act, if the location of the transaction as determined under Sections
             135      59-12-211 through 59-12-215 is in a county in which the state imposes the tax under Part 18,
             136      Additional State Sales and Use Tax Act; and
             137          (Bb) the tax rate the state imposes in accordance with Part 20, Supplemental State
             138      Sales and Use Tax Act, if the location of the transaction as determined under Sections
             139      59-12-211 through 59-12-215 is in a city, town, or the unincorporated area of a county in which
             140      the state imposes the tax under Part 20, Supplemental State Sales and Use Tax Act; and
             141          (B) a local tax imposed on the entire bundled transaction at the sum of the tax rates
             142      described in Subsection (2)(a)(ii).
             143          (ii) If an optional computer software maintenance contract is a bundled transaction that
             144      consists of taxable and nontaxable products that are not separately itemized on an invoice or
             145      similar billing document, the purchase of the optional computer software maintenance contract
             146      is 40% taxable under this chapter and 60% nontaxable under this chapter.
             147          (iii) Subject to Subsection (2)(d)(iv), for a bundled transaction other than a bundled
             148      transaction described in Subsection (2)(d)(i) or (ii):
             149          (A) if the sales price of the bundled transaction is attributable to tangible personal
             150      property, a product, or a service that is subject to taxation under this chapter and tangible
             151      personal property, a product, or service that is not subject to taxation under this chapter, the


             152      entire bundled transaction is subject to taxation under this chapter unless:
             153          (I) the seller is able to identify by reasonable and verifiable standards the tangible
             154      personal property, product, or service that is not subject to taxation under this chapter from the
             155      books and records the seller keeps in the seller's regular course of business; or
             156          (II) state or federal law provides otherwise; or
             157          (B) if the sales price of a bundled transaction is attributable to two or more items of
             158      tangible personal property, products, or services that are subject to taxation under this chapter
             159      at different rates, the entire bundled transaction is subject to taxation under this chapter at the
             160      higher tax rate unless:
             161          (I) the seller is able to identify by reasonable and verifiable standards the tangible
             162      personal property, product, or service that is subject to taxation under this chapter at the lower
             163      tax rate from the books and records the seller keeps in the seller's regular course of business; or
             164          (II) state or federal law provides otherwise.
             165          (iv) For purposes of Subsection (2)(d)(iii), books and records that a seller keeps in the
             166      seller's regular course of business includes books and records the seller keeps in the regular
             167      course of business for nontax purposes.
             168          (e) (i) Except as otherwise provided in this chapter and subject to Subsections (2)(e)(ii)
             169      and (iii), if a transaction consists of the sale, lease, or rental of tangible personal property, a
             170      product, or a service that is subject to taxation under this chapter, and the sale, lease, or rental
             171      of tangible personal property, other property, a product, or a service that is not subject to
             172      taxation under this chapter, the entire transaction is subject to taxation under this chapter unless
             173      the seller, at the time of the transaction:
             174          (A) separately states the portion of the transaction that is not subject to taxation under
             175      this chapter on an invoice, bill of sale, or similar document provided to the purchaser; or
             176          (B) is able to identify by reasonable and verifiable standards, from the books and
             177      records the seller keeps in the seller's regular course of business, the portion of the transaction
             178      that is not subject to taxation under this chapter.
             179          (ii) A purchaser and a seller may correct the taxability of a transaction if:
             180          (A) after the transaction occurs, the purchaser and the seller discover that the portion of
             181      the transaction that is not subject to taxation under this chapter was not separately stated on an
             182      invoice, bill of sale, or similar document provided to the purchaser because of an error or


             183      ignorance of the law; and
             184          (B) the seller is able to identify by reasonable and verifiable standards, from the books
             185      and records the seller keeps in the seller's regular course of business, the portion of the
             186      transaction that is not subject to taxation under this chapter.
             187          (iii) For purposes of Subsections (2)(e)(i) and (ii), books and records that a seller keeps
             188      in the seller's regular course of business includes books and records the seller keeps in the
             189      regular course of business for nontax purposes.
             190          (f) (i) If the sales price of a transaction is attributable to two or more items of tangible
             191      personal property, products, or services that are subject to taxation under this chapter at
             192      different rates, the entire purchase is subject to taxation under this chapter at the higher tax rate
             193      unless the seller, at the time of the transaction:
             194          (A) separately states the items subject to taxation under this chapter at each of the
             195      different rates on an invoice, bill of sale, or similar document provided to the purchaser; or
             196          (B) is able to identify by reasonable and verifiable standards the tangible personal
             197      property, product, or service that is subject to taxation under this chapter at the lower tax rate
             198      from the books and records the seller keeps in the seller's regular course of business.
             199          (ii) For purposes of Subsection (2)(f)(i), books and records that a seller keeps in the
             200      seller's regular course of business includes books and records the seller keeps in the regular
             201      course of business for nontax purposes.
             202          (g) Subject to Subsections (2)(h) and (i), a tax rate repeal or tax rate change for a tax
             203      rate imposed under the following shall take effect on the first day of a calendar quarter:
             204          (i) Subsection (2)(a)(i)(A);
             205          (ii) Subsection (2)(b)(i);
             206          (iii) Subsection (2)(c)(i); or
             207          (iv) Subsection (2)(d)(i)(A)(I).
             208          (h) (i) A tax rate increase takes effect on the first day of the first billing period that
             209      begins on or after the effective date of the tax rate increase if the billing period for the
             210      transaction begins before the effective date of a tax rate increase imposed under:
             211          (A) Subsection (2)(a)(i)(A);
             212          (B) Subsection (2)(b)(i);
             213          (C) Subsection (2)(c)(i); or


             214          (D) Subsection (2)(d)(i)(A)(I).
             215          (ii) The repeal of a tax or a tax rate decrease applies to a billing period if the billing
             216      statement for the billing period is rendered on or after the effective date of the repeal of the tax
             217      or the tax rate decrease imposed under:
             218          (A) Subsection (2)(a)(i)(A);
             219          (B) Subsection (2)(b)(i);
             220          (C) Subsection (2)(c)(i); or
             221          (D) Subsection (2)(d)(i)(A)(I).
             222          (i) (i) For a tax rate described in Subsection (2)(i)(ii), if a tax due on a catalogue sale is
             223      computed on the basis of sales and use tax rates published in the catalogue, a tax rate repeal or
             224      change in a tax rate takes effect:
             225          (A) on the first day of a calendar quarter; and
             226          (B) beginning 60 days after the effective date of the tax rate repeal or tax rate change.
             227          (ii) Subsection (2)(i)(i) applies to the tax rates described in the following:
             228          (A) Subsection (2)(a)(i)(A);
             229          (B) Subsection (2)(b)(i);
             230          (C) Subsection (2)(c)(i); or
             231          (D) Subsection (2)(d)(i)(A)(I).
             232          (iii) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
             233      the commission may by rule define the term "catalogue sale."
             234          (3) (a) The following state taxes shall be deposited into the General Fund:
             235          (i) the tax imposed by Subsection (2)(a)(i)(A);
             236          (ii) the tax imposed by Subsection (2)(b)(i);
             237          (iii) the tax imposed by Subsection (2)(c)(i); or
             238          (iv) the tax imposed by Subsection (2)(d)(i)(A)(I).
             239          (b) The following local taxes shall be distributed to a county, city, or town as provided
             240      in this chapter:
             241          (i) the tax imposed by Subsection (2)(a)(ii);
             242          (ii) the tax imposed by Subsection (2)(b)(ii);
             243          (iii) the tax imposed by Subsection (2)(c)(ii); and
             244          (iv) the tax imposed by Subsection (2)(d)(i)(B).


             245          (4) (a) Notwithstanding Subsection (3)(a), for a fiscal year beginning on or after July 1,
             246      2003, the lesser of the following amounts shall be expended as provided in Subsections (4)(b)
             247      through (g):
             248          (i) for taxes listed under Subsection (3)(a), the amount of tax revenue generated:
             249          (A) by a 1/16% tax rate on the transactions described in Subsection (1); and
             250          (B) for the fiscal year; or
             251          (ii) $17,500,000.
             252          (b) (i) For a fiscal year beginning on or after July 1, 2003, 14% of the amount
             253      described in Subsection (4)(a) shall be transferred each year as dedicated credits to the
             254      Department of Natural Resources to:
             255          (A) implement the measures described in Subsections 79-2-303 (3)(a) through (d) to
             256      protect sensitive plant and animal species; or
             257          (B) award grants, up to the amount authorized by the Legislature in an appropriations
             258      act, to political subdivisions of the state to implement the measures described in Subsections
             259      79-2-303 (3)(a) through (d) to protect sensitive plant and animal species.
             260          (ii) Money transferred to the Department of Natural Resources under Subsection
             261      (4)(b)(i) may not be used to assist the United States Fish and Wildlife Service or any other
             262      person to list or attempt to have listed a species as threatened or endangered under the
             263      Endangered Species Act of 1973, 16 U.S.C. Sec. 1531 et seq.
             264          (iii) At the end of each fiscal year:
             265          (A) 50% of any unexpended dedicated credits shall lapse to the Water Resources
             266      Conservation and Development Fund created in Section 73-10-24 ;
             267          (B) 25% of any unexpended dedicated credits shall lapse to the Utah Wastewater Loan
             268      Program Subaccount created in Section 73-10c-5 ; and
             269          (C) 25% of any unexpended dedicated credits shall lapse to the Drinking Water Loan
             270      Program Subaccount created in Section 73-10c-5 .
             271          (c) For a fiscal year beginning on or after July 1, 2003, 3% of the amount described in
             272      Subsection (4)(a) shall be deposited each year in the Agriculture Resource Development Fund
             273      created in Section 4-18-106 .
             274          (d) (i) For a fiscal year beginning on or after July 1, 2003, 1% of the amount described
             275      in Subsection (4)(a) shall be transferred each year as dedicated credits to the Division of Water


             276      Rights to cover the costs incurred in hiring legal and technical staff for the adjudication of
             277      water rights.
             278          (ii) At the end of each fiscal year:
             279          (A) 50% of any unexpended dedicated credits shall lapse to the Water Resources
             280      Conservation and Development Fund created in Section 73-10-24 ;
             281          (B) 25% of any unexpended dedicated credits shall lapse to the Utah Wastewater Loan
             282      Program Subaccount created in Section 73-10c-5 ; and
             283          (C) 25% of any unexpended dedicated credits shall lapse to the Drinking Water Loan
             284      Program Subaccount created in Section 73-10c-5 .
             285          (e) (i) For a fiscal year beginning on or after July 1, 2003, 41% of the amount described
             286      in Subsection (4)(a) shall be deposited in the Water Resources Conservation and Development
             287      Fund created in Section 73-10-24 for use by the Division of Water Resources.
             288          (ii) In addition to the uses allowed of the Water Resources Conservation and
             289      Development Fund under Section 73-10-24 , the Water Resources Conservation and
             290      Development Fund may also be used to:
             291          (A) conduct hydrologic and geotechnical investigations by the Division of Water
             292      Resources in a cooperative effort with other state, federal, or local entities, for the purpose of
             293      quantifying surface and ground water resources and describing the hydrologic systems of an
             294      area in sufficient detail so as to enable local and state resource managers to plan for and
             295      accommodate growth in water use without jeopardizing the resource;
             296          (B) fund state required dam safety improvements; and
             297          (C) protect the state's interest in interstate water compact allocations, including the
             298      hiring of technical and legal staff.
             299          (f) For a fiscal year beginning on or after July 1, 2003, 20.5% of the amount described
             300      in Subsection (4)(a) shall be deposited in the Utah Wastewater Loan Program Subaccount
             301      created in Section 73-10c-5 for use by the Water Quality Board to fund wastewater projects.
             302          (g) For a fiscal year beginning on or after July 1, 2003, 20.5% of the amount described
             303      in Subsection (4)(a) shall be deposited in the Drinking Water Loan Program Subaccount
             304      created in Section 73-10c-5 for use by the Division of Drinking Water to:
             305          (i) provide for the installation and repair of collection, treatment, storage, and
             306      distribution facilities for any public water system, as defined in Section 19-4-102 ;


             307          (ii) develop underground sources of water, including springs and wells; and
             308          (iii) develop surface water sources.
             309          (5) (a) Notwithstanding Subsection (3)(a), for a fiscal year beginning on or after July 1,
             310      2006, the difference between the following amounts shall be expended as provided in this
             311      Subsection (5), if that difference is greater than $1:
             312          (i) for taxes listed under Subsection (3)(a), the amount of tax revenue generated for the
             313      fiscal year by a 1/16% tax rate on the transactions described in Subsection (1); and
             314          (ii) $17,500,000.
             315          (b) (i) The first $500,000 of the difference described in Subsection (5)(a) shall be:
             316          (A) transferred each fiscal year to the Department of Natural Resources as dedicated
             317      credits; and
             318          (B) expended by the Department of Natural Resources for watershed rehabilitation or
             319      restoration.
             320          (ii) At the end of each fiscal year, 100% of any unexpended dedicated credits described
             321      in Subsection (5)(b)(i) shall lapse to the Water Resources Conservation and Development Fund
             322      created in Section 73-10-24 .
             323          (c) (i) After making the transfer required by Subsection (5)(b)(i), $150,000 of the
             324      remaining difference described in Subsection (5)(a) shall be:
             325          (A) transferred each fiscal year to the Division of Water Resources as dedicated
             326      credits; and
             327          (B) expended by the Division of Water Resources for cloud-seeding projects
             328      authorized by Title 73, Chapter 15, Modification of Weather.
             329          (ii) At the end of each fiscal year, 100% of any unexpended dedicated credits described
             330      in Subsection (5)(c)(i) shall lapse to the Water Resources Conservation and Development Fund
             331      created in Section 73-10-24 .
             332          (d) After making the transfers required by Subsections (5)(b) and (c), 94% of the
             333      remaining difference described in Subsection (5)(a) shall be deposited into the Water
             334      Resources Conservation and Development Fund created in Section 73-10-24 for use by the
             335      Division of Water Resources for:
             336          (i) preconstruction costs:
             337          (A) as defined in Subsection 73-26-103 (6) for projects authorized by Title 73, Chapter


             338      26, Bear River Development Act; and
             339          (B) as defined in Subsection 73-28-103 (8) for the Lake Powell Pipeline project
             340      authorized by Title 73, Chapter 28, Lake Powell Pipeline Development Act;
             341          (ii) the cost of employing a civil engineer to oversee any project authorized by Title 73,
             342      Chapter 26, Bear River Development Act;
             343          (iii) the cost of employing a civil engineer to oversee the Lake Powell Pipeline project
             344      authorized by Title 73, Chapter 28, Lake Powell Pipeline Development Act; and
             345          (iv) other uses authorized under Sections 73-10-24 , 73-10-25.1 , 73-10-30 , and
             346      Subsection (4)(e)(ii) after funding the uses specified in Subsections (5)(d)(i) through (iii).
             347          (e) After making the transfers required by Subsections (5)(b) and (c) and subject to
             348      Subsection (5)(f), 6% of the remaining difference described in Subsection (5)(a) shall be
             349      transferred each year as dedicated credits to the Division of Water Rights to cover the costs
             350      incurred for employing additional technical staff for the administration of water rights.
             351          (f) At the end of each fiscal year, any unexpended dedicated credits described in
             352      Subsection (5)(e) over $150,000 lapse to the Water Resources Conservation and Development
             353      Fund created in Section 73-10-24 .
             354          (6) Notwithstanding Subsection (3)(a), for a fiscal year beginning on or after July 1,
             355      2003, and for taxes listed under Subsection (3)(a), the amount of revenue generated by a 1/16%
             356      tax rate on the transactions described in Subsection (1) for the fiscal year shall be deposited in
             357      the Transportation Fund created by Section 72-2-102 .
             358          (7) Notwithstanding Subsection (3)(a), beginning on July 1, 2012, the Division of
             359      Finance shall deposit into the Transportation Investment Fund of 2005 created in Section
             360      72-2-124 a portion of the taxes listed under Subsection (3)(a) equal to the revenues generated
             361      by a 1/64% tax rate on the taxable transactions under Subsection (1).
             362          (8) (a) Notwithstanding Subsection (3)(a), in addition to the amounts deposited in
             363      Subsection (7), and subject to Subsection (8)(b), for a fiscal year beginning on or after July 1,
             364      2012, the Division of Finance shall deposit into the Transportation Investment Fund of 2005
             365      created by Section 72-2-124 :
             366          (i) a portion of the taxes listed under Subsection (3)(a) in an amount equal to 8.3% of
             367      the revenues collected from the following taxes, which represents a portion of the
             368      approximately 17% of sales and use tax revenues generated annually by the sales and use tax


             369      on vehicles and vehicle-related products:
             370          (A) the tax imposed by Subsection (2)(a)(i)(A);
             371          (B) the tax imposed by Subsection (2)(b)(i);
             372          (C) the tax imposed by Subsection (2)(c)(i); and
             373          (D) the tax imposed by Subsection (2)(d)(i)(A)(I); plus
             374          (ii) an amount equal to 30% of the growth in the amount of revenues collected in the
             375      current fiscal year from the sales and use taxes described in Subsections (8)(a)(i)(A) through
             376      (D) that exceeds the amount collected from the sales and use taxes described in Subsections
             377      (8)(a)(i)(A) through (D) in the 2010-11 fiscal year.
             378          (b) (i) Subject to Subsections (8)(b)(ii) and (iii), in any fiscal year that the portion of
             379      the sales and use taxes deposited under Subsection (8)(a) represents an amount that is a total
             380      lower percentage of the sales and use taxes described in Subsections (8)(a)(i)(A) through (D)
             381      generated in the current fiscal year than the total percentage of sales and use taxes deposited in
             382      the previous fiscal year, the Division of Finance shall deposit an amount under Subsection
             383      (8)(a) equal to the product of:
             384          (A) the total percentage of sales and use taxes deposited under Subsection (8)(a) in the
             385      previous fiscal year; and
             386          (B) the total sales and use tax revenue generated by the taxes described in Subsections
             387      (8)(a)(i)(A) through (D) in the current fiscal year.
             388          (ii) In any fiscal year in which the portion of the sales and use taxes deposited under
             389      Subsection (8)(a) would exceed 17% of the revenues collected from the sales and use taxes
             390      described in Subsections (8)(a)(i)(A) through (D) in the current fiscal year, the Division of
             391      Finance shall deposit 17% of the revenues collected from the sales and use taxes described in
             392      Subsections (8)(a)(i)(A) through (D) for the current fiscal year under Subsection (8)(a).
             393          (iii) In all subsequent fiscal years after a year in which 17% of the revenues collected
             394      from the sales and use taxes described in Subsections (8)(a)(i)(A) through (D) was deposited
             395      under Subsection (8)(a), the Division of Finance shall annually deposit 17% of the revenues
             396      collected from the sales and use taxes described in Subsections (8)(a)(i)(A) through (D) in the
             397      current fiscal year under Subsection (8)(a).
             398          (9) Notwithstanding Subsection (3)(a) and subject to Subsection (14), and in addition
             399      to the amounts deposited under Subsections (7) and (8), for a fiscal year beginning on or after


             400      July 1, 2012, the Division of Finance shall annually deposit $90,000,000 of the revenues
             401      generated by the taxes listed under Subsection (3)(a) into the Transportation Investment Fund
             402      of 2005 created by Section 72-2-124 .
             403          (10) Notwithstanding Subsection (3)(a), for each fiscal year beginning with fiscal year
             404      2009-10, $533,750 shall be deposited into the Qualified Emergency Food Agencies Fund
             405      created by Section 35A-8-1009 and expended as provided in Section 35A-8-1009 .
             406          (11) (a) Notwithstanding Subsection (3)(a), except as provided in Subsection (11)(b),
             407      and in addition to any amounts deposited under Subsections (7), (8), and (9), beginning on July
             408      1, 2012, the Division of Finance shall deposit into the Transportation Investment Fund of 2005
             409      created by Section 72-2-124 the amount of tax revenue generated by a .025% tax rate on the
             410      transactions described in Subsection (1).
             411          (b) For purposes of Subsection (11)(a), the Division of Finance may not deposit into
             412      the Transportation Investment Fund of 2005 any tax revenue generated by amounts paid or
             413      charged for food and food ingredients, except for tax revenue generated by a bundled
             414      transaction attributable to food and food ingredients and tangible personal property other than
             415      food and food ingredients described in Subsection (2)(d).
             416          (12) (a) Notwithstanding Subsection (3)(a), and except as provided in Subsection
             417      (12)(b), beginning on January 1, 2009, the Division of Finance shall deposit into the
             418      Transportation Fund created by Section 72-2-102 the amount of tax revenue generated by a
             419      .025% tax rate on the transactions described in Subsection (1) to be expended to address
             420      chokepoints in construction management.
             421          (b) For purposes of Subsection (12)(a), the Division of Finance may not deposit into
             422      the Transportation Fund any tax revenue generated by amounts paid or charged for food and
             423      food ingredients, except for tax revenue generated by a bundled transaction attributable to food
             424      and food ingredients and tangible personal property other than food and food ingredients
             425      described in Subsection (2)(d).
             426          [(13) Notwithstanding Subsections (4) through (12), an amount required to be
             427      expended or deposited in accordance with Subsections (4) through (12) may not include an
             428      amount the Division of Finance deposits in accordance with Section 59-12-103.2 .]
             429          (13) (a) As used in this Subsection (13):
             430          (i) "Base fiscal year" means the most recent fiscal year in which the commission


             431      collects a tax imposed under Subsections 59-13-201 (1)(a) and 59-13-301 (1)(a) at a rate of
             432      24-1/2 cents per gallon for the entire fiscal year.
             433          (ii) "Base fiscal year revenue" means the total revenue the commission collects in the
             434      base fiscal year for a tax imposed under Subsections 59-13-201 (1)(a) and 59-13-301 (1)(a).
             435          (iii) "Reduction fiscal year" means the most recently completed fiscal year in which the
             436      commission collects a tax imposed under Subsections 59-13-201 (1)(a) and 59-13-301 (1)(a) at a
             437      rate greater than 24-1/2 cents per gallon.
             438          (iv) "Reduction fiscal year revenue" means the total revenue the commission collects in
             439      a reduction fiscal year for a tax imposed under Subsections 59-13-201 (1)(a) and
             440      59-13-301 (1)(a).
             441          (b) For a fiscal year immediately following a reduction fiscal year, the Division of
             442      Finance shall reduce the deposit described in Subsection (9) by an amount equal to the lesser
             443      of:
             444          (i) the product of five-sixths and the difference between:
             445          (A) the reduction fiscal year revenue; and
             446          (B) the base fiscal year revenue; or
             447          (ii) $90,000,000.
             448          (14) For a fiscal year that the Division of Finance reduces the deposit described in
             449      Subsection (9) as provided in Subsection (13)(b), the Division of Finance shall deposit an
             450      amount of revenue generated by the taxes listed under Subsection (3)(a) equal to one-fifth of
             451      the reduction described in Subsection (13)(b) into the Education Fund.
             452          (15) Notwithstanding Subsections (4) through (14), an amount required to be expended
             453      or deposited in accordance with Subsections (4) through (14) may not include an amount the
             454      Division of Finance deposits in accordance with Section 59-12-103.2 .
             455          Section 2. Section 59-12-103.3 is enacted to read:
             456          59-12-103.3. Income Tax Rate Reduction Restricted Account -- Creation --
             457      Funding for account -- Interest.
             458          (1) There is created within the General Fund a restricted account known as the "Income
             459      Tax Rate Reduction Restricted Account."
             460          (2) The account shall be funded annually by an amount of revenue generated by the
             461      taxes listed under Subsection 59-12-103 (3)(a) equal to four-fifths of the reduction calculated in


             462      Subsection 59-12-103 (13)(b).
             463          (3) (a) The account shall earn interest.
             464          (b) The interest described in Subsection (3)(a) shall be deposited into the account.
             465          (4) The Division of Finance shall deposit the revenue described in Subsection (2) into
             466      the account.
             467          (5) Each year the Legislature shall:
             468          (a) review the amount of money in the account; and
             469          (b) by statute, use the money in the account to lower a tax rate imposed under:
             470          (i) Chapter 7, Corporate Franchise and Income Taxes;
             471          (ii) Chapter 8, Gross Receipts Tax on Certain Corporations Not Required to Pay
             472      Corporate Franchise or Income Tax Act; or
             473          (iii) Chapter 10, Individual Income Tax Act.
             474          Section 3. Section 59-12-1201 is amended to read:
             475           59-12-1201. Motor vehicle rental tax -- Rate -- Exemptions -- Administration,
             476      collection, and enforcement of tax -- Administrative charge -- Deposits.
             477          (1) (a) Except as provided in Subsection (3), there is imposed a tax of 2.5% on all
             478      short-term leases and rentals of motor vehicles not exceeding 30 days.
             479          (b) The tax imposed in this section is in addition to all other state, county, or municipal
             480      fees and taxes imposed on rentals of motor vehicles.
             481          (2) (a) Subject to Subsection (2)(b), a tax rate repeal or tax rate change for the tax
             482      imposed under Subsection (1) shall take effect on the first day of a calendar quarter.
             483          (b) (i) For a transaction subject to a tax under Subsection (1), a tax rate increase shall
             484      take effect on the first day of the first billing period:
             485          (A) that begins after the effective date of the tax rate increase; and
             486          (B) if the billing period for the transaction begins before the effective date of a tax rate
             487      increase imposed under Subsection (1).
             488          (ii) For a transaction subject to a tax under Subsection (1), the repeal of a tax or a tax
             489      rate decrease shall take effect on the first day of the last billing period:
             490          (A) that began before the effective date of the repeal of the tax or the tax rate decrease;
             491      and
             492          (B) if the billing period for the transaction begins before the effective date of the repeal


             493      of the tax or the tax rate decrease imposed under Subsection (1).
             494          (3) A motor vehicle is exempt from the tax imposed under Subsection (1) if:
             495          (a) the motor vehicle is registered for a gross laden weight of 12,001 or more pounds;
             496          (b) the motor vehicle is rented as a personal household goods moving van; or
             497          (c) the lease or rental of the motor vehicle is made for the purpose of temporarily
             498      replacing a person's motor vehicle that is being repaired pursuant to a repair agreement or an
             499      insurance agreement.
             500          (4) (a) (i) The tax authorized under this section shall be administered, collected, and
             501      enforced in accordance with:
             502          (A) the same procedures used to administer, collect, and enforce the tax under Part 1,
             503      Tax Collection; and
             504          (B) Chapter 1, General Taxation Policies.
             505          (ii) Notwithstanding Subsection (4)(a)(i), a tax under this part is not subject to
             506      Subsections 59-12-103 (4) through [(12)] (14) or Section 59-12-107.1 or 59-12-123 .
             507          (b) The commission shall retain and deposit an administrative charge in accordance
             508      with Section 59-1-306 from the revenues the commission collects from a tax under this part.
             509          (c) Except as provided under Subsection (4)(b), all revenue received by the
             510      commission under this section shall be deposited daily with the state treasurer and credited
             511      monthly to the Marda Dillree Corridor Preservation Fund under Section 72-2-117 .
             512          Section 4. Effective date.
             513          This bill takes effect on July 1, 2014.




Legislative Review Note
    as of 2-26-14 12:04 PM


Office of Legislative Research and General Counsel


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