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H.B. 78

             1     

SALES AND USE TAX - SALES RELATING

             2     
TO SCHOOLS

             3     
2001 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Sponsor: Bradley T. Johnson

             6      This act modifies the Sales and Use Tax Act to expand the exemption for sales relating to
             7      schools to include amounts paid or charged for admission to certain school-related events
             8      or school-related activities. This act defines terms and makes technical changes. This act
             9      takes effect on July 1, 2001.
             10      This act affects sections of Utah Code Annotated 1953 as follows:
             11      AMENDS:
             12          59-12-102 (Effective 07/01/01), as last amended by Chapter 253, Laws of Utah 2000
             13          59-12-103 (Effective 07/01/01), as last amended by Chapters 147, 253 and 325, Laws of
             14      Utah 2000
             15      Be it enacted by the Legislature of the state of Utah:
             16          Section 1. Section 59-12-102 (Effective 07/01/01) is amended to read:
             17           59-12-102 (Effective 07/01/01). Definitions.
             18          As used in this chapter:
             19          (1) (a) "Admission or user fees" includes season passes.
             20          (b) "Admission or user fees" does not include annual membership dues to private
             21      organizations.
             22          (2) "Area agency on aging" is as defined in Section 62A-3-101 .
             23          (3) "Authorized carrier" means:
             24          (a) in the case of vehicles operated over public highways, the holder of credentials
             25      indicating that the vehicle is or will be operated pursuant to both the International Registration
             26      Plan (IRP) and the International Fuel Tax Agreement (IFTA);
             27          (b) in the case of aircraft, the holder of a Federal Aviation Administration (FAA) operating


             28      certificate or air carrier's operating certificate; or
             29          (c) in the case of locomotives, freight cars, railroad work equipment, or other rolling stock,
             30      the holder of a certificate issued by the United States Interstate Commerce Commission.
             31          (4) (a) For purposes of Subsection 59-12-104 (43), "coin-operated amusement device"
             32      means:
             33          (i) a coin-operated amusement, skill, or ride device;
             34          (ii) that is not controlled through vendor-assisted, over-the-counter, sales of tokens; and
             35          (iii) includes a music machine, pinball machine, billiard machine, video game machine,
             36      arcade machine, and a mechanical or electronic skill game or ride.
             37          (b) For purposes of Subsection 59-12-104 (43), "coin-operated amusement device" does
             38      not mean a coin-operated amusement device possessing a coinage mechanism that:
             39          (i) accepts and registers multiple denominations of coins; and
             40          (ii) allows the vendor to collect the sales and use tax at the time an amusement device is
             41      activated and operated by a person inserting coins into the device.
             42          (5) "Commercial use" means the use of gas, electricity, heat, coal, fuel oil, or other fuels
             43      that does not constitute industrial use under Subsection (13) or residential use under Subsection
             44      (21).
             45          (6) (a) "Common carrier" means a person engaged in or transacting the business of
             46      transporting passengers, freight, merchandise, or other property for hire within this state.
             47          (b) (i) "Common carrier" does not include a person who, at the time the person is traveling
             48      to or from that person's place of employment, transports a passenger to or from the passenger's
             49      place of employment.
             50          (ii) For purposes of Subsection (6)(b)(i), in accordance with Title 63, Chapter 46a, Utah
             51      Administrative Rulemaking Act, the commission may make rules defining what constitutes a
             52      person's place of employment.
             53          (7) "Component part" includes:
             54          (a) poultry, dairy, and other livestock feed, and their components;
             55          (b) baling ties and twine used in the baling of hay and straw;
             56          (c) fuel used for providing temperature control of orchards and commercial greenhouses
             57      doing a majority of their business in wholesale sales, and for providing power for off-highway type
             58      farm machinery; and


             59          (d) feed, seeds, and seedlings.
             60          (8) "Construction materials" means any tangible personal property that will be converted
             61      into real property.
             62          (9) (a) "Fundraising sales" means sales:
             63          (i) (A) made by a [public or private elementary or secondary] school; or
             64          (B) made by a [public or private elementary or secondary] school student[, grades
             65      kindergarten through 12];
             66          (ii) that are for the purpose of raising funds for the school to purchase equipment,
             67      materials, or provide transportation; and
             68          (iii) that are part of an officially sanctioned school activity.
             69          (b) For purposes of Subsection (9)(a)(iii), "officially sanctioned school activity" means a
             70      school activity:
             71          (i) that is conducted in accordance with a formal policy adopted by the school or school
             72      district governing the authorization and supervision of fundraising activities;
             73          (ii) that does not directly or indirectly compensate an individual teacher or other
             74      educational personnel by direct payment, commissions, or payment in kind; and
             75          (iii) the net or gross revenues from which are deposited in a dedicated account controlled
             76      by the school or school district.
             77          (10) (a) "Hearing aid" means:
             78          (i) an instrument or device having an electronic component that is designed to:
             79          (A) (I) improve impaired human hearing; or
             80          (II) correct impaired human hearing; and
             81          (B) (I) be worn in the human ear; or
             82          (II) affixed behind the human ear;
             83          (ii) an instrument or device that is surgically implanted into the cochlea; or
             84          (iii) a telephone amplifying device.
             85          (b) "Hearing aid" does not include:
             86          (i) except as provided in Subsection (10)(a)(i)(B) or (10)(a)(ii), an instrument or device
             87      having an electronic component that is designed to be worn on the body;
             88          (ii) except as provided in Subsection (10)(a)(iii), an assistive listening device or system
             89      designed to be used by one individual, including:


             90          (A) a personal amplifying system;
             91          (B) a personal FM system;
             92          (C) a television listening system; or
             93          (D) a device or system similar to a device or system described in Subsections
             94      (10)(b)(ii)(A) through (C); or
             95          (iii) an assistive listening device or system designed to be used by more than one
             96      individual, including:
             97          (A) a device or system installed in:
             98          (I) an auditorium;
             99          (II) a church;
             100          (III) a conference room;
             101          (IV) a synagogue; or
             102          (V) a theater; or
             103          (B) a device or system similar to a device or system described in Subsections
             104      (10)(b)(iii)(A)(I) through (V).
             105          (11) (a) "Hearing aid accessory" means a hearing aid:
             106          (i) component;
             107          (ii) attachment; or
             108          (iii) accessory.
             109          (b) "Hearing aid accessory" includes:
             110          (i) a hearing aid neck loop;
             111          (ii) a hearing aid cord;
             112          (iii) a hearing aid ear mold;
             113          (iv) hearing aid tubing;
             114          (v) a hearing aid ear hook; or
             115          (vi) a hearing aid remote control.
             116          (c) "Hearing aid accessory" does not include:
             117          (i) a component, attachment, or accessory designed to be used only with an:
             118          (A) instrument or device described in Subsection (10)(b)(i); or
             119          (B) assistive listening device or system described in Subsection (10)(b)(ii) or (iii); or
             120          (ii) a hearing aid battery.


             121          (12) (a) "Home medical equipment and supplies" means equipment and supplies that:
             122          (i) a licensed physician prescribes or authorizes in writing as necessary for the treatment
             123      of a medical illness or injury or as necessary to mitigate an impairment resulting from illness or
             124      injury;
             125          (ii) are used exclusively by the person for whom they are prescribed to serve a medical
             126      purpose; and
             127          (iii) are listed as eligible for payment under Title 18 of the federal Social Security Act or
             128      under the state plan for medical assistance under Title 19 of the federal Social Security Act.
             129          (b) "Home medical equipment and supplies" does not include:
             130          (i) equipment and supplies purchased by, for, or on behalf of any health care facility, as
             131      defined in Subsection (12)(c), doctor, nurse, or other health care provider for use in their
             132      professional practice;
             133          (ii) eyeglasses, contact lenses, or equipment to correct impaired vision; or
             134          (iii) hearing aids or hearing aid accessories.
             135          (c) For purposes of Subsection (12)(b)(i), "health care facility" includes:
             136          (i) a clinic;
             137          (ii) a doctor's office; and
             138          (iii) a health care facility as defined in Section 26-21-2 .
             139          (13) "Industrial use" means the use of natural gas, electricity, heat, coal, fuel oil, or other
             140      fuels in:
             141          (a) mining or extraction of minerals;
             142          (b) agricultural operations to produce an agricultural product up to the time of harvest or
             143      placing the agricultural product into a storage facility, including:
             144          (i) commercial greenhouses;
             145          (ii) irrigation pumps;
             146          (iii) farm machinery;
             147          (iv) implements of husbandry as defined in Subsection 41-1a-102 (23) that are not
             148      registered under Title 41, Chapter 1a, Part 2, Registration; and
             149          (v) other farming activities; and
             150          (c) manufacturing tangible personal property at an establishment described in SIC Codes
             151      2000 to 3999 of the 1987 Standard Industrial Classification Manual of the federal Executive Office


             152      of the President, Office of Management and Budget.
             153          (14) "Manufactured home" means any manufactured home or mobile home as defined in
             154      Title 58, Chapter 56, Utah Uniform Building Standards Act.
             155          (15) For purposes of Subsection 59-12-104 (14), "manufacturing facility" means:
             156          (a) an establishment described in SIC Codes 2000 to 3999 of the 1987 Standard Industrial
             157      Classification Manual of the federal Executive Office of the President, Office of Management and
             158      Budget; or
             159          (b) a scrap recycler if:
             160          (i) from a fixed location, the scrap recycler utilizes machinery or equipment to process one
             161      or more of the following items into prepared grades of processed materials for use in new products:
             162          (A) iron;
             163          (B) steel;
             164          (C) nonferrous metal;
             165          (D) paper;
             166          (E) glass;
             167          (F) plastic;
             168          (G) textile; or
             169          (H) rubber; and
             170          (ii) the new products under Subsection (15)(b)(i) would otherwise be made with
             171      nonrecycled materials.
             172          (16) (a) "Medicine" means:
             173          (i) insulin, syringes, and any medicine prescribed for the treatment of human ailments by
             174      a person authorized to prescribe treatments and dispensed on prescription filled by a registered
             175      pharmacist, or supplied to patients by a physician, surgeon, or podiatric physician;
             176          (ii) any medicine dispensed to patients in a county or other licensed hospital if prescribed
             177      for that patient and dispensed by a registered pharmacist or administered under the direction of a
             178      physician; and
             179          (iii) any oxygen or stoma supplies prescribed by a physician or administered under the
             180      direction of a physician or paramedic.
             181          (b) "Medicine" does not include:
             182          (i) any auditory, prosthetic, ophthalmic, or ocular device or appliance; or


             183          (ii) any alcoholic beverage.
             184          (17) "Olympic merchandise" means tangible personal property bearing an Olympic
             185      designation, emblem, insignia, mark, logo, service mark, symbol, terminology, trademark, or other
             186      copyrighted or protected material, including:
             187          (a) one or more of the following terms:
             188          (i) "Olympic";
             189          (ii) "Olympiad"; or
             190          (iii) "Citius Altius Fortius";
             191          (b) the symbol of the International Olympic Committee, consisting of five interlocking
             192      rings;
             193          (c) the emblem of the International Olympic Committee Corporation;
             194          (d) a United States Olympic Committee designation, emblem, insignia, mark, logo, service
             195      mark, symbol, terminology, trademark, or other copyrighted or protected material;
             196          (e) any emblem of the Olympic Winter Games of 2002 that is officially designated by the
             197      Salt Lake Organizing Committee of the Olympic Winter Games of 2002; or
             198          (f) the mascot of the Olympic Winter Games of 2002.
             199          (18) (a) "Other fuels" means products that burn independently to produce heat or energy.
             200          (b) "Other fuels" includes oxygen when it is used in the manufacturing of tangible personal
             201      property.
             202          (19) "Person" includes any individual, firm, partnership, joint venture, association,
             203      corporation, estate, trust, business trust, receiver, syndicate, this state, any county, city,
             204      municipality, district, or other local governmental entity of the state, or any group or combination
             205      acting as a unit.
             206          (20) "Purchase price" means the amount paid or charged for tangible personal property or
             207      any other taxable transaction under Subsection 59-12-103 (1), excluding only cash discounts taken
             208      or any excise tax imposed on the purchase price by the federal government.
             209          (21) "Residential use" means the use in or around a home, apartment building, sleeping
             210      quarters, and similar facilities or accommodations.
             211          (22) (a) "Retail sale" means any sale within the state of tangible personal property or any
             212      other taxable transaction under Subsection 59-12-103 (1), other than resale of such property, item,
             213      or service by a retailer or wholesaler to a user or consumer.


             214          (b) "Retail sale" includes sales by any farmer or other agricultural producer of poultry,
             215      eggs, or dairy products to consumers if the sales have an average monthly sales value of $125 or
             216      more.
             217          (c) "Retail sale" does not include, and no additional sales or use tax shall be assessed
             218      against, those transactions where a purchaser of tangible personal property pays applicable sales
             219      or use taxes on its initial nonexempt purchases of property and then enters into a sale-leaseback
             220      transaction by which title to such property is transferred by the purchaser-lessee to a lessor for
             221      consideration, provided:
             222          (i) the transaction is intended as a form of financing for the property to the
             223      purchaser-lessee; and
             224          (ii) pursuant to generally accepted accounting principles, the purchaser-lessee is required
             225      to capitalize the subject property for financial reporting purposes, and account for the lease
             226      payments as payments made under a financing arrangement.
             227          (23) (a) "Retailer" means any person engaged in a regularly organized retail business in
             228      tangible personal property or any other taxable transaction under Subsection 59-12-103 (1), and
             229      who is selling to the user or consumer and not for resale.
             230          (b) "Retailer" includes commission merchants, auctioneers, and any person regularly
             231      engaged in the business of selling to users or consumers within the state.
             232          (c) "Retailer" does not include farmers, gardeners, stockmen, poultrymen, or other growers
             233      or agricultural producers producing and doing business on their own premises, except those who
             234      are regularly engaged in the business of buying or selling for a profit.
             235          (d) For purposes of this chapter the commission may regard as retailers the following if
             236      they determine it is necessary for the efficient administration of this chapter: salesmen,
             237      representatives, peddlers, or canvassers as the agents of the dealers, distributors, supervisors, or
             238      employers under whom they operate or from whom they obtain the tangible personal property sold
             239      by them, irrespective of whether they are making sales on their own behalf or on behalf of these
             240      dealers, distributors, supervisors, or employers, except that:
             241          (i) a printer's facility with which a retailer has contracted for printing shall not be
             242      considered to be a salesman, representative, peddler, canvasser, or agent of the retailer; and
             243          (ii) the ownership of property that is located at the premises of a printer's facility with
             244      which the retailer has contracted for printing and that consists of the final printed product, property


             245      that becomes a part of the final printed product, or copy from which the printed product is
             246      produced, shall not result in the retailer being deemed to have or maintain an office, distribution
             247      house, sales house, warehouse, service enterprise, or other place of business, or to maintain a stock
             248      of goods, within this state.
             249          (24) "Sale" means any transfer of title, exchange, or barter, conditional or otherwise, in any
             250      manner, of tangible personal property or any other taxable transaction under Subsection
             251      59-12-103 (1), for consideration. It includes:
             252          (a) installment and credit sales;
             253          (b) any closed transaction constituting a sale;
             254          (c) any sale of electrical energy, gas, services, or entertainment taxable under this chapter;
             255          (d) any transaction if the possession of property is transferred but the seller retains the title
             256      as security for the payment of the price; and
             257          (e) any transaction under which right to possession, operation, or use of any article of
             258      tangible personal property is granted under a lease or contract and the transfer of possession would
             259      be taxable if an outright sale were made.
             260          (25) (a) "Sales relating to schools" means the following sales by, amounts paid to, or
             261      amounts charged by a [public] school [district or public or private elementary or secondary school,
             262      grades kindergarten through 12,]:
             263          (i) sales that are directly related to the school's [or school district's] educational functions
             264      or activities [and include] including:
             265          [(i)] (A) the sale of:
             266          (I) textbooks[,];
             267          (II) textbook fees[,];
             268          (III) laboratory fees[,];
             269          (IV) laboratory supplies[, and]; or
             270          (V) safety equipment;
             271          [(ii)] (B) the sale of clothing that:
             272          [(A)] (I) a student is specifically required to wear as a condition of participation in a
             273      school-related event or school-related activity; and
             274          [(B)] (II) is not readily adaptable to general or continued usage to the extent that it takes
             275      the place of ordinary clothing;


             276          [(iii)] (C) sales of food if the net or gross revenues generated by the food sales are
             277      deposited into a school district fund or school fund dedicated to school meals; [and] or
             278          [(iv)] (D) transportation charges for official school activities[.]; or
             279          (ii) amounts paid to or amounts charged by a school for admission to a school-related
             280      event or school-related activity.
             281          (b) "Sales relating to schools" does not include:
             282          [(i) gate receipts;]
             283          [(ii) special event admission fees;]
             284          [(iii)] (i) bookstore sales of items that are not educational materials or supplies; [and]
             285          [(iv)] (ii) except as provided in Subsection (25)(a)[(ii)](i)(B), clothing[.]; or
             286          (iii) amounts paid to or amounts charged by a school for admission to a school-related
             287      event or school-related activity if the amounts paid or charged are passed through to a person:
             288          (A) other than a:
             289          (I) school;
             290          (II) nonprofit organization authorized by a school board or a governing body of a private
             291      school to organize and direct a competitive secondary school activity; or
             292          (III) nonprofit association authorized by a school board or a governing body of a private
             293      school to organize and direct a competitive secondary school activity; and
             294          (B) that is required to collect sales and use taxes under this chapter.
             295          (c) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             296      commission may make rules defining the term "passed through."
             297          (26) For purposes of this section and Section 59-12-104 , "school" means:
             298          (a) an elementary school or a secondary school that:
             299          (i) is a:
             300          (A) public school; or
             301          (B) private school; and
             302          (ii) provides instruction for one or more grades kindergarten through 12; or
             303          (b) a public school district.
             304          [(26)] (27) "Senior citizen center" means a facility having the primary purpose of
             305      providing services to the aged as defined in Section 62A-3-101 .
             306          [(27)] (28) "State" means the state of Utah, its departments, and agencies.


             307          [(28)] (29) "Storage" means any keeping or retention of tangible personal property or any
             308      other taxable transaction under Subsection 59-12-103 (1), in this state for any purpose except sale
             309      in the regular course of business.
             310          [(29)] (30) (a) "Tangible personal property" means:
             311          (i) all goods, wares, merchandise, produce, and commodities;
             312          (ii) all tangible or corporeal things and substances which are dealt in or capable of being
             313      possessed or exchanged;
             314          (iii) water in bottles, tanks, or other containers; and
             315          (iv) all other physically existing articles or things, including property severed from real
             316      estate.
             317          (b) "Tangible personal property" does not include:
             318          (i) real estate or any interest or improvements in real estate;
             319          (ii) bank accounts, stocks, bonds, mortgages, notes, and other evidence of debt;
             320          (iii) insurance certificates or policies;
             321          (iv) personal or governmental licenses;
             322          (v) water in pipes, conduits, ditches, or reservoirs;
             323          (vi) currency and coinage constituting legal tender of the United States or of a foreign
             324      nation; and
             325          (vii) all gold, silver, or platinum ingots, bars, medallions, or decorative coins, not
             326      constituting legal tender of any nation, with a gold, silver, or platinum content of not less than
             327      80%.
             328          [(30)] (31) (a) "Use" means the exercise of any right or power over tangible personal
             329      property under Subsection 59-12-103 (1), incident to the ownership or the leasing of that property,
             330      item, or service.
             331          (b) "Use" does not include the sale, display, demonstration, or trial of that property in the
             332      regular course of business and held for resale.
             333          [(31)] (32) "Vehicle" means any aircraft, as defined in Section 72-10-102 ; any vehicle, as
             334      defined in Section 41-1a-102 ; any off-highway vehicle, as defined in Section 41-22-2 ; and any
             335      vessel, as defined in Section 41-1a-102 ; that is required to be titled, registered, or both. "Vehicle"
             336      for purposes of Subsection 59-12-104 (36) only, also includes any locomotive, freight car, railroad
             337      work equipment, or other railroad rolling stock.


             338          [(32)] (33) "Vehicle dealer" means a person engaged in the business of buying, selling, or
             339      exchanging vehicles as defined in Subsection [(31)] (32).
             340          [(33)] (34) (a) "Vendor" means any person receiving any payment or consideration upon
             341      a sale of tangible personal property or any other taxable transaction under Subsection
             342      59-12-103 (1), or to whom the payment or consideration is payable.
             343          (b) "Vendor" does not mean a printer's facility described in Subsection (23)(d).
             344          Section 2. Section 59-12-103 (Effective 07/01/01) is amended to read:
             345           59-12-103 (Effective 07/01/01). Sales and use tax base -- Rate -- Use of sales and use
             346      tax revenues.
             347          (1) A tax is imposed on the purchaser as provided in this part for amounts paid or charged
             348      for the following transactions:
             349          (a) retail sales of tangible personal property made within the state;
             350          (b) amounts paid to common carriers or to telephone or telegraph corporations, whether
             351      the corporations are municipally or privately owned, for:
             352          (i) all transportation;
             353          (ii) intrastate telephone service; or
             354          (iii) telegraph service;
             355          (c) sales of the following for commercial use:
             356          (i) gas;
             357          (ii) electricity;
             358          (iii) heat;
             359          (iv) coal;
             360          (v) fuel oil; or
             361          (vi) other fuels;
             362          (d) sales of the following for residential use:
             363          (i) gas;
             364          (ii) electricity;
             365          (iii) heat;
             366          (iv) coal;
             367          (v) fuel oil; or
             368          (vi) other fuels;


             369          (e) sales of meals;
             370          (f) except as provided in Section 59-12-104 , amounts paid or charged as admission or user
             371      fees for theaters, movies, operas, museums, planetariums, shows of any type or nature, exhibitions,
             372      concerts, carnivals, amusement parks, amusement rides, circuses, menageries, fairs, races, contests,
             373      sporting events, dances, boxing matches, wrestling matches, closed circuit television broadcasts,
             374      billiard parlors, pool parlors, bowling lanes, golf, miniature golf, golf driving ranges, batting cages,
             375      skating rinks, ski lifts, ski runs, ski trails, snowmobile trails, tennis courts, swimming pools, water
             376      slides, river runs, jeep tours, boat tours, scenic cruises, horseback rides, sports activities, or any
             377      other amusement, entertainment, recreation, exhibition, cultural, or athletic activity;
             378          (g) amounts paid or charged for services:
             379          (i) for repairs or renovations of tangible personal property; or
             380          (ii) to install tangible personal property in connection with other tangible personal
             381      property;
             382          (h) except as provided in Subsection 59-12-104 (7), amounts paid or charged for cleaning
             383      or washing of tangible personal property;
             384          (i) amounts paid or charged for tourist home, hotel, motel, or trailer court accommodations
             385      and services for less than 30 consecutive days;
             386          (j) amounts paid or charged for laundry or dry cleaning services;
             387          (k) amounts paid or charged for leases or rentals of tangible personal property if:
             388          (i) the tangible personal property's situs is in this state;
             389          (ii) the lessee took possession of the tangible personal property in this state; or
             390          (iii) within this state the tangible personal property is:
             391          (A) stored;
             392          (B) used; or
             393          (C) otherwise consumed;
             394          (l) amounts paid or charged for tangible personal property if within this state the tangible
             395      personal property is:
             396          (i) stored;
             397          (ii) used; or
             398          (iii) consumed; and
             399          (m) amounts paid or charged for prepaid telephone calling cards.


             400          (2) (a) Except as provided in Subsections (2)(b) and (c), beginning on July 1, 2001, a state
             401      tax and a local tax is imposed on a transaction described in Subsection (1) equal to the sum of:
             402          (i) a state tax imposed on the transaction at a rate of 4.75%; and
             403          (ii) a local tax equal to the sum of the tax rates a county, city, or town imposes on the
             404      transaction under this chapter other than this part.
             405          (b) Notwithstanding Subsection (2)(a), beginning on July 1, 2001, a state tax and a local
             406      tax is imposed on a transaction described in Subsection (1)(d) equal to the sum of:
             407          (i) a state tax imposed on the transaction at a rate of 2%; and
             408          (ii) a local tax equal to the sum of the tax rates a county, city, or town imposes on the
             409      transaction under this chapter other than this part.
             410          (c) Notwithstanding Subsections (2)(a) and (b), beginning on July 1, 2001, if a vendor
             411      collects a tax under Subsection 59-12-107 (1)(b) on a transaction described in Subsection (1), a
             412      state tax and a local tax is imposed on the transaction equal to the sum of:
             413          (i) a state tax imposed on the transaction at a rate of:
             414          (A) 4.75% for a transaction other than a transaction described in Subsection (1)(d); or
             415          (B) 2% for a transaction described in Subsection (1)(d); and
             416          (ii) except as provided in Subsection (2)(d), a local tax imposed on the transaction at a rate
             417      equal to the sum of the following tax rates:
             418          (A) the lowest tax rate imposed by a county, city, or town under Section 59-12-204 , but
             419      only if all of the counties, cities, and towns in the state impose the tax under Section 59-12-204 ;
             420          (B) the lowest tax rate imposed by a county, city, or town under Section 59-12-205 , but
             421      only if all of the counties, cities, and towns in the state impose the tax under Section 59-12-205 ;
             422      and
             423          (C) the tax rate authorized by Section 59-12-1102 , but only if all of the counties in the
             424      state impose the tax under Section 59-12-1102 .
             425          (d) Tax rates authorized under the following do not apply to Subsection (2)(c)(ii):
             426          (i) Subsection (2)(a)(i);
             427          (ii) Subsection (2)(b)(i);
             428          (iii) Subsection (2)(c)(i);
             429          (iv) Section 59-12-301 ;
             430          (v) Section 59-12-352 ;


             431          (vi) Section 59-12-353 ;
             432          (vii) Section 59-12-401 ;
             433          (viii) Section 59-12-402 ;
             434          (ix) Section 59-12-501 ;
             435          (x) Section 59-12-502 ;
             436          (xi) Section 59-12-603 ;
             437          (xii) Section 59-12-703 ;
             438          (xiii) Section 59-12-802 ;
             439          (xiv) Section 59-12-804 ;
             440          (xv) Section 59-12-1001 ;
             441          (xvi) Section 59-12-1201 ; or
             442          (xvii) Section 59-12-1302 .
             443          (3) (a) Except as provided in Subsections (4) through (9), the state taxes described in
             444      Subsections (2)(a)(i), (2)(b)(i), and (2)(c)(i) shall be deposited into the General Fund.
             445          (b) The local taxes described in Subsections (2)(a)(ii) and (2)(b)(ii) shall be distributed to
             446      a county, city, or town as provided in this chapter.
             447          (c) (i) Notwithstanding any provision of this chapter, each county, city, or town in the state
             448      shall receive the county's, city's, or town's proportionate share of the revenues generated by the
             449      local tax described in Subsection (2)(c)(ii) as provided in Subsection (3)(c)(ii).
             450          (ii) The commission shall determine a county's, city's, or town's proportionate share of the
             451      revenues under Subsection (3)(c)(i) by:
             452          (A) dividing the population of the county, city, or town by the total population of the state;
             453      and
             454          (B) multiplying the percentage determined under Subsection (3)(c)(ii)(A) by the total
             455      amount of revenues generated by the local tax under Subsection (2)(c)(ii) for all counties, cities,
             456      and towns.
             457          (iii) (A) Except as provided in Subsection (3)(c)(iii)(B), population figures for purposes
             458      of this section shall be derived from the most recent official census or census estimate of the
             459      United States Census Bureau.
             460          (B) Notwithstanding Subsection (3)(c)(iii)(A), if a needed population estimate is not
             461      available from the United States Census Bureau, population figures shall be derived from the


             462      estimate from the Utah Population Estimates Committee created by executive order of the
             463      governor.
             464          (C) For purposes of this section, the population of a county may only include the
             465      population of the unincorporated areas of the county.
             466          (4) (a)Notwithstanding Subsection (3)(a), there shall be deposited in an Olympics special
             467      revenue fund or funds as determined by the Division of Finance under Section 51-5-4 , for the use
             468      of the Utah Sports Authority created under Title 63A, Chapter 7, Utah Sports Authority Act:
             469          (i) from January 1, 1990, through December 31, 1999, the amount of sales and use tax
             470      generated by a 1/64% tax rate on the taxable transactions under Subsection (1);
             471          (ii) from January 1, 1990, through June 30, 1999, the amount of revenue generated by a
             472      1/64% tax rate under Section 59-12-204 or Section 59-12-205 on the taxable transactions under
             473      Subsection (1); and
             474          (iii) interest earned on the amounts under Subsections (4)(a)(i) and (ii).
             475          (b) These funds shall be used:
             476          (i) by the Utah Sports Authority as follows:
             477          (A) to the extent funds are available, to transfer directly to a debt service fund or to
             478      otherwise reimburse to the state any amount expended on debt service or any other cost of any
             479      bonds issued by the state to construct any public sports facility as defined in Section 63A-7-103 ;
             480          (B) to pay for the actual and necessary operating, administrative, legal, and other expenses
             481      of the Utah Sports Authority, but not including protocol expenses for seeking and obtaining the
             482      right to host the Winter Olympic Games;
             483          (C) as otherwise appropriated by the Legislature; and
             484          (D) unless the Legislature appropriates additional funds from the Olympics Special
             485      Revenue Fund to the Utah Sports Authority, the Utah Sports Authority may not expend, loan, or
             486      pledge in the aggregate more than:
             487          (I) $59,000,000 of sales and use tax deposited into the Olympics Special Revenue Fund
             488      under Subsection (4)(a);
             489          (II) the interest earned on the amount described in Subsection (4)(b)(i)(D)(I); and
             490          (III) the revenues deposited into the Olympics Special Revenue Fund that are not sales and
             491      use taxes deposited under Subsection (4)(a) or interest on the sales and use taxes;
             492          (ii) to pay salary, benefits, or administrative costs associated with the State Olympic


             493      Officer under Subsection 63A-10-103 (3), except that the salary, benefits, or administrative costs
             494      may not be paid from the sales and use tax revenues generated by municipalities or counties and
             495      deposited under Subsection (4)(a)(ii).
             496          (c) A payment of salary, benefits, or administrative costs under Subsection 63A-10-103 (3)
             497      is not considered an expenditure of the Utah Sports Authority.
             498          (d) If the Legislature appropriates additional funds under Subsection (4)(b)(i)(D), the
             499      authority may not expend, loan, pledge, or enter into any agreement to expend, loan, or pledge the
             500      appropriated funds unless the authority:
             501          (i) contracts in writing for the full reimbursement of the monies to the Olympics Special
             502      Revenue Fund by a public sports entity or other person benefitting from the expenditure; and
             503          (ii) obtains a security interest that secures payment or performance of the obligation to
             504      reimburse.
             505          (e) A contract or agreement entered into in violation of Subsection (4)(d) is void.
             506          (5) (a)Notwithstanding Subsection (3)(a), beginning on July 1, 2001, the amount of sales
             507      and use tax generated annually by a 1/16% tax rate on the taxable transactions under Subsection
             508      (1) shall be used as provided in Subsections (5)(b) through (g).
             509          (b) (i) Beginning on July 1, 2001, $2,300,000 each year shall be transferred as dedicated
             510      credits to the Department of Natural Resources to:
             511          (A) implement the measures described in Subsections 63-34-14 (4)(a) through (d) to protect
             512      sensitive plant and animal species; or
             513          (B) award grants, up to the amount authorized by the Legislature in an appropriations act,
             514      to political subdivisions of the state to implement the measures described in Subsections
             515      63-34-14 (4)(a) through (d) to protect sensitive plant and animal species.
             516          (ii) Money transferred to the Department of Natural Resources under Subsection (5)(b)(i)
             517      may not be used to assist the United States Fish and Wildlife Service or any other person to list or
             518      attempt to have listed a species as threatened or endangered under the Endangered Species Act of
             519      1973, 16 U.S.C. Sec. 1531 et seq.
             520          (iii) At the end of each fiscal year:
             521          (A) 50% of any unexpended dedicated credits shall lapse to the Water Resources
             522      Conservation and Development Fund created in Section 73-10-24 ;
             523          (B) 25% of any unexpended dedicated credits shall lapse to the Utah Wastewater Loan


             524      Program subaccount created in Section 73-10c-5 ; and
             525          (C) 25% of any unexpended dedicated credits shall lapse to the Drinking Water Loan
             526      Program subaccount created in Section 73-10c-5 .
             527          (c) Five hundred thousand dollars each year shall be deposited in the Agriculture Resource
             528      Development Fund created in Section 4-18-6 .
             529          (d) (i) One hundred thousand dollars each year shall be transferred as dedicated credits to
             530      the Division of Water Rights to cover the costs incurred in hiring legal and technical staff for the
             531      adjudication of water rights.
             532          (ii) At the end of each fiscal year:
             533          (A) 50% of any unexpended dedicated credits shall lapse to the Water Resources
             534      Conservation and Development Fund created in Section 73-10-24 ;
             535          (B) 25% of any unexpended dedicated credits shall lapse to the Utah Wastewater Loan
             536      Program subaccount created in Section 73-10c-5 ; and
             537          (C) 25% of any unexpended dedicated credits shall lapse to the Drinking Water Loan
             538      Program subaccount created in Section 73-10c-5 .
             539          (e) Fifty percent of the remaining amount generated by the 1/16% tax rate shall be
             540      deposited in the Water Resources Conservation and Development Fund created in Section
             541      73-10-24 for use by the Division of Water Resources. In addition to the uses allowed of the fund
             542      under Section 73-10-24 , the fund may also be used to:
             543          (i) provide a portion of the local cost share, not to exceed in any fiscal year 50% of the
             544      funds made available to the Division of Water Resources under this section, of potential project
             545      features of the Central Utah Project;
             546          (ii) conduct hydrologic and geotechnical investigations by the Department of Natural
             547      Resources in a cooperative effort with other state, federal, or local entities, for the purpose of
             548      quantifying surface and ground water resources and describing the hydrologic systems of an area
             549      in sufficient detail so as to enable local and state resource managers to plan for and accommodate
             550      growth in water use without jeopardizing the resource;
             551          (iii) fund state required dam safety improvements; and
             552          (iv) protect the state's interest in interstate water compact allocations, including the hiring
             553      of technical and legal staff.
             554          (f) Twenty-five percent of the remaining amount generated by the 1/16% tax rate shall be


             555      deposited in the Utah Wastewater Loan Program subaccount created in Section 73-10c-5 for use
             556      by the Water Quality Board to fund wastewater projects as defined in Section 73-10b-2 .
             557          (g) Twenty-five percent of the remaining amount generated by the 1/16% tax rate shall be
             558      deposited in the Drinking Water Loan Program subaccount created in Section 73-10c-5 for use by
             559      the Division of Drinking Water to:
             560          (i) provide for the installation and repair of collection, treatment, storage, and distribution
             561      facilities for any public water system, as defined in Section 19-4-102 ;
             562          (ii) develop underground sources of water, including springs and wells; and
             563          (iii) develop surface water sources.
             564          (6) (a) Notwithstanding Subsection (3)(a), beginning on July 1, 2001, the amount of sales
             565      and use tax generated annually by a 1/16% tax rate on the taxable transactions under Subsection
             566      (1) shall be used as provided in Subsections (6)(b) through (d).
             567          (b) (i) Five hundred thousand dollars each year shall be deposited in the Transportation
             568      Corridor Preservation Revolving Loan Fund created in Section 72-2-117 .
             569          (ii) At least 50% of the money deposited in the Transportation Corridor Preservation
             570      Revolving Loan Fund under Subsection (6)(b)(i) shall be used to fund loan applications made by
             571      the Department of Transportation at the request of local governments.
             572          (c) From July 1, 1997, through June 30, 2006, $500,000 each year shall be transferred as
             573      nonlapsing dedicated credits to the Department of Transportation for the State Park Access
             574      Highways Improvement Program created in Section 72-3-207 .
             575          (d) The remaining amount generated by the 1/16% tax rate shall be deposited in the class
             576      B and class C roads account to be expended as provided in Title 72, Chapter 2, Transportation
             577      Finances Act, for the use of class B and C roads.
             578          (7) (a) Notwithstanding Subsection (3)(a), beginning on January 1, 2000, the Division of
             579      Finance shall deposit into the Centennial Highway Fund created in Section 72-2-118 a portion of
             580      the state sales and use tax under Subsection (2) equal to the revenues generated by a 1/64% tax rate
             581      on the taxable transactions under Subsection (1).
             582          (b) Except for sales and use taxes deposited under Subsection (8), beginning on July 1,
             583      1999, the revenues generated by the 1/64% tax rate:
             584          (i) retained under Subsection 59-12-204 (7)(a) shall be retained by the counties, cities, or
             585      towns as provided in Section 59-12-204 ; and


             586          (ii) retained under Subsection 59-12-205 (4)(a) shall be distributed to each county, city, and
             587      town as provided in Section 59-12-205 .
             588          (8) Notwithstanding Subsection (3)(a), beginning on July 1, 1999, the commission shall
             589      deposit into the Airport to University of Utah Light Rail Restricted Account created in Section
             590      17A-2-1064 the portion of the sales and use tax under Sections 59-12-204 and 59-12-205 that is:
             591          (a) generated by a city or town that will have constructed within its boundaries the Airport
             592      to University of Utah Light Rail described in the Transportation Equity Act for the 21st Century,
             593      Pub. L. No. 105-178, Sec. 3030(c)(2)(B)(i)(II), 112 Stat. 107; and
             594          (b) equal to the revenues generated by a 1/64% tax rate on the taxable items and services
             595      under Subsection (1).
             596          (9) (a) Notwithstanding Subsection (3)(a), for fiscal years beginning on or after fiscal year
             597      2002-03, the commission shall on or before September 30 of each year deposit the difference
             598      described in Subsection (9)(b) into the Remote Sales Restricted Account created in Section
             599      59-12-103.2 if that difference is greater than $0.
             600          (b) The difference described in Subsection (9)(a) is equal to the difference between:
             601          (i) the total amount of revenues the commission received from vendors collecting a tax
             602      under Subsection 59-12-107 (1)(b) for the previous fiscal year; and
             603          (ii) the total amount of revenues the commission received from vendors collecting a tax
             604      under Subsection 59-12-107 (1)(b) for fiscal year 2000-01.
             605          (10) (a) For purposes of amounts paid or charged as admission or user fees relating to the
             606      Olympic Winter Games of 2002, the amounts are considered to be paid or charged on the day on
             607      which the Salt Lake Organizing Committee for the Olympic Winter Games of 2002 or a person
             608      designated by the Salt Lake Organizing Committee for the Olympic Winter Games of 2002 sends
             609      a purchaser confirmation of the purchase of an admission or user fee described in Subsection
             610      (1)(f).
             611          (b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             612      commission shall make rules defining what constitutes sending a purchaser confirmation under
             613      Subsection (10)(a).
             614          Section 3. Effective date.
             615          This act takes effect on July 1, 2001.





Legislative Review Note
    as of 12-28-00 8:31 AM


A limited legal review of this legislation raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel


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