S.B. 147 Enrolled

STREAMLINED SALES TAX PROJECT
AMENDMENTS
2003 GENERAL SESSION
STATE OF UTAH
Sponsor: Lyle W. Hillyard
This act modifies the Municipal Energy Sales and Use Tax Act and the Revenue and
Taxation Code. The act provides income tax credits for certain hand tools used in a
farming operation. The act provides and amends definitions relating to sales and use
taxes. This act authorizes the State Tax Commission to enter into an agreement with one
or more states relating to certain sales and use taxes. The act provides the purposes of
the agreement and prescribes the scope of the agreement. The act grants the State Tax
Commission rulemaking authority. The act provides that the agreement may require
each state that is a member of the agreement to abide by certain requirements and
establishes those requirements. The act modifies state and local sales and use tax rates
for taxes collected by certain sellers. The act provides and modifies effective dates for
state and local sales and use taxes. The act modifies requirements for enacting, repealing,
or changing the tax rate of a local sales and use tax. The act repeals obsolete language.
The act provides that revenues in the Remote Sales Restricted Account shall be deposited
into the General Fund on a certain date. The act modifies transactions that are subject to
sales and use taxes. The act provides, modifies, and repeals sales and use tax exemptions.
The act modifies requirements to report certain sales and use tax information to or file
certain returns with the State Tax Commission. The act modifies requirements
pertaining to exemption certificates. The act amends provisions relating to the voluntary
collection of sales and use taxes by a seller. The act addresses for certain sellers
registered under the agreement the due dates for paying certain sales and use tax
obligations and the requirements for calculating certain sales and use tax obligations.
The act repeals provisions relating to credits for certain taxes paid. The act permits a
seller or a seller's certified service provider to deduct or file a refund claim for bad debt
under certain circumstances. The act addresses the recovery of bad debt. The act

authorizes the commission to issue a direct payment permit to certain sellers to be used for
certain types of transactions. This act provides procedures and requirements for the State
Tax Commission to issue or revoke a direct payment permit and for sellers to use direct
payment permits. The act addresses the procedures for apportioning and remitting to the
State Tax Commission certain sales and use taxes on transactions involving certain goods
or services that will be concurrently available for use in more than one location. The act
addresses the collection, remittance, and payment of certain sales and use taxes on direct
mail. The act modifies provisions relating to filing sales and use tax returns and retaining a
portion of sales and use taxes collected. The act provides procedures and requirements for
a seller to obtain a refund or credit for taxes overpaid by a purchaser. The act requires the
State Tax Commission to grant a seller amnesty under certain circumstances and provides
procedures and requirements for granting amnesty. The act modifies the procedures and
requirements for determining the location of a transaction or where a transaction is
consummated for certain sales and use taxes imposed by a county, city, or town. The act
provides that a county, city, or town may impose a sales or use tax on transactions located
within the county, city, or town. The act modifies the time period for notifying the
commission of the enactment, repeal, or change in the rate of a tax. The act limits a seller's
sales and use tax liability for failing to collect certain sales and use taxes if the seller relies
on a database created by the State Tax Commission. The act addresses the collection and
distribution of local sales and use taxes. The act addresses the State Tax Commission
authority to retain an administrative fee for certain taxes the State Tax Commission
collects. The act modifies the transactions that are subject to taxation by certain counties,
cities, or towns. The act modifies the transactions for which a qualified emergency food
agency may claim a tax refund. The act makes technical changes. The act requires the
Revenue and Taxation Interim Committee to conduct a study and prescribes the scope of
that study. The act provides an effective date.
This act affects sections of Utah Code Annotated 1953 as follows:
AMENDS:

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10-1-304, as last amended by Chapter 138, Laws of Utah 2002
10-1-307, as last amended by Chapter 305, Laws of Utah 1997
17A-2-1064, as last amended by Chapter 253, Laws of Utah 2000
59-1-403, as last amended by Chapters 52 and 175, Laws of Utah 2002
59-12-102, as last amended by Chapters 77, 117, 192, and 320, Laws of Utah 2002
59-12-103, as last amended by Chapter 2, Laws of Utah 2002, Sixth Special Session
59-12-103.1, as enacted by Chapter 253, Laws of Utah 2000
59-12-103.2, as last amended by Chapter 104, Laws of Utah 2001
59-12-104, as last amended by Chapters 117, 138, 217, and 286, Laws of Utah 2002
59-12-104.1, as last amended by Chapter 291, Laws of Utah 1998
59-12-104.2, as enacted by Chapter 243, Laws of Utah 2001
59-12-105, as last amended by Chapter 262, Laws of Utah 2001
59-12-106, as last amended by Chapter 253, Laws of Utah 2000
59-12-107, as last amended by Chapter 104, Laws of Utah 2001
59-12-108, as last amended by Chapter 289, Laws of Utah 1998
59-12-110, as last amended by Chapter 253, Laws of Utah 2000
59-12-113, as renumbered and amended by Chapter 5, Laws of Utah 1987
59-12-115, as renumbered and amended by Chapter 5, Laws of Utah 1987
59-12-117, as last amended by Chapter 9, Laws of Utah 2001
59-12-204, as last amended by Chapters 2 and 253, Laws of Utah 2000
59-12-205, as last amended by Chapters 2, 253, and 318, Laws of Utah 2000
59-12-208.1, as enacted by Chapter 319, Laws of Utah 2000
59-12-210, as enacted by Chapter 259, Laws of Utah 1994
59-12-301, as last amended by Chapter 207, Laws of Utah 2002
59-12-302, as last amended by Chapter 305, Laws of Utah 1997
59-12-354, as last amended by Chapter 319, Laws of Utah 2000
59-12-355, as enacted by Chapter 319, Laws of Utah 2000
59-12-401, as last amended by Chapter 253, Laws of Utah 2000

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59-12-402, as last amended by Chapters 253 and 319, Laws of Utah 2000
59-12-403, as enacted by Chapter 319, Laws of Utah 2000
59-12-501, as last amended by Chapter 253, Laws of Utah 2000
59-12-502, as last amended by Chapter 217, Laws of Utah 2001
59-12-504, as enacted by Chapter 319, Laws of Utah 2000
59-12-603, as last amended by Chapter 11, Laws of Utah 2001, First Special Session
59-12-703, as last amended by Chapter 192, Laws of Utah 2001
59-12-802, as last amended by Chapters 104 and 226, Laws of Utah 2001
59-12-804, as last amended by Chapter 104, Laws of Utah 2001
59-12-806, as enacted by Chapter 319, Laws of Utah 2000
59-12-901, as last amended by Chapter 162, Laws of Utah 2001
59-12-902, as last amended by Chapters 104 and 162, Laws of Utah 2001
59-12-1001, as last amended by Chapter 101, Laws of Utah 2002
59-12-1102, as last amended by Chapters 253 and 319, Laws of Utah 2000
59-12-1302, as last amended by Chapters 253 and 319, Laws of Utah 2000
59-12-1402, as enacted by Chapter 192, Laws of Utah 2001
ENACTS:
59-7-614.1, Utah Code Annotated 1953
59-10-134.1, Utah Code Annotated 1953
59-12-102.1, Utah Code Annotated 1953
59-12-107.1, Utah Code Annotated 1953
59-12-107.2, Utah Code Annotated 1953
59-12-107.3, Utah Code Annotated 1953
59-12-110.1, Utah Code Annotated 1953
59-12-121, Utah Code Annotated 1953
59-12-207.1, Utah Code Annotated 1953
59-12-207.2, Utah Code Annotated 1953
59-12-207.3, Utah Code Annotated 1953

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59-12-207.4, Utah Code Annotated 1953
59-12-207.5, Utah Code Annotated 1953
59-12-356, Utah Code Annotated 1953
59-12-404, Utah Code Annotated 1953
59-12-505, Utah Code Annotated 1953
59-12-604, Utah Code Annotated 1953
59-12-706, Utah Code Annotated 1953
59-12-807, Utah Code Annotated 1953
59-12-1003, Utah Code Annotated 1953
59-12-1103, Utah Code Annotated 1953
59-12-1303, Utah Code Annotated 1953
59-12-1404, Utah Code Annotated 1953
REPEALS:
59-12-207, as last amended by Chapters 157 and 320, Laws of Utah 2002
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 10-1-304 is amended to read:
10-1-304. Municipality may levy tax -- Rate -- Imposition or repeal of tax -- Tax
rate change -- Effective date -- Notice requirements -- Exemptions.
(1) Except as provided in Subsection (4), a municipality may levy a municipal energy
sales and use tax on the sale or use of taxable energy within the municipality:
(a) by ordinance as provided in Section 10-1-305 ; and
(b) of up to 6% of the delivered value of the taxable energy.
(2) A municipal energy sales and use tax imposed under this part may be in addition to
any [local option] sales and use tax imposed by the municipality [as provided in] under Title 59,
Chapter 12, [Part 2, Local Sales and Use Tax Act] Sales and Use Tax Act.
(3) (a) For purposes of this Subsection (3):
(i) "Annexation" means an annexation to a city or town under Title 10, Chapter 2, Part 4,
Annexation.

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(ii) "Annexing area" means an area that is annexed into a city or town.
(b) (i) If, on or after May 1, 2000, a city or town enacts or repeals a tax or changes the
rate of a tax under this part, the enactment, repeal, or change shall take effect:
(A) on the first day of a calendar quarter; and
(B) after a [75-day] 90-day period beginning on the date the commission receives notice
meeting the requirements of Subsection (3)(b)(ii) from the city or town.
(ii) The notice described in Subsection (3)(b)(i)(B) shall state:
(A) that the city or town will enact or repeal a tax or change the rate of a tax under this
part;
(B) the statutory authority for the tax described in Subsection (3)(b)(ii)(A);
(C) the effective date of the tax described in Subsection (3)(b)(ii)(A); and
(D) if the city or town enacts the tax or changes the rate of the tax described in
Subsection (3)(b)(ii)(A), the new rate of the tax.
(c) (i) If, for an annexation that occurs on or after May 1, 2000, the annexation will result
in a change in the rate of a tax under this part for an annexing area, the change shall take effect:
(A) on the first day of a calendar quarter; and
(B) after a [75-day] 90-day period beginning on the date the commission receives notice
meeting the requirements of Subsection (3)(c)(ii) from the city or town that annexes the annexing
area.
(ii) The notice described in Subsection (3)(c)(i)(B) shall state:
(A) that the annexation described in Subsection (3)(c)(i) will result in a change in the rate
of a tax under this part for the annexing area;
(B) the statutory authority for the tax described in Subsection (3)(c)(ii)(A);
(C) the effective date of the tax described in Subsection (3)(c)(ii)(A); and
(D) the new rate of the tax described in Subsection (3)(c)(ii)(A).
(4) Notwithstanding Subsection (1), a sale or use of electricity within a municipality is
exempt from the tax authorized by this section if the sale or use is:
(a) made under a tariff adopted by the Public Service Commission of Utah only for

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purchase of electricity produced from a new wind, geothermal, biomass, or solar power energy
source, as designated in the tariff by the Public Service Commission of Utah; and
(b) for an amount of electricity that is:
(i) unrelated to the amount of electricity used by the person purchasing the electricity
under the tariff described in Subsection (4)(a); and
(ii) equivalent to the number of kilowatthours specified in the tariff described in
Subsection (4)(a) that may be purchased under the tariff described in Subsection (4)(a).
Section 2. Section 10-1-307 is amended to read:
10-1-307. Collection of taxes by commission -- Distribution of revenues -- Charge
for services -- Collection of taxes by municipality.
(1) Except for the direct payment provisions provided in Subsection (3), the commission
shall collect, enforce, and administer the municipal energy sales and use tax from energy
suppliers according to the procedures established in Title 59, Chapter 12, Part 1, Tax Collection.
(2) (a) Except as provided in Subsections 10-1-203 (3)(d), 10-1-305 (5), and 10-1-310 (2),
the commission shall pay a municipality the difference between:
(i) the entire amount collected by the commission from the municipal energy sales and
use tax authorized by this part based on:
(A) the point of sale of the taxable energy if a taxable sale occurs in a municipality that
imposes a municipal energy sales and use tax as provided in this part; or
(B) the point of use of the taxable energy if the use occurs in a municipality that imposes
a municipal energy sales and use tax as provided in this part; and
(ii) [minus] the administration fee charged in accordance with Subsection (2)(c).
(b) In accordance with Subsection (2)(a), the commission shall transfer to the
municipality monthly by electronic transfer the revenues generated by the municipal energy sales
and use tax levied by the municipality and collected by the commission.
(c) (i) The commission shall charge a municipality imposing a municipal energy sales
and use tax a fee for administering the tax at the percentage provided in Section 59-12-206 ,
except that the commission may not charge a fee for taxes collected by a municipality under

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Subsection (3).
(ii) The fee charged under Subsection (2)(c)(i) shall be:
(A) deposited in the Sales and Use Tax Administrative Fees Account; and
(B) used for sales tax administration as provided in Subsection 59-12-206 (2).
(3) An energy supplier shall pay the municipal energy sales and use tax revenues it
collects from its customers under this part directly to each municipality in which the energy
supplier has sales of taxable energy if:
(a) the municipality is the energy supplier; or
(b) (i) the energy supplier estimates that the municipal energy sales and use tax collected
annually by the energy supplier from its Utah customers equals $1,000,000 or more; and
(ii) the energy supplier collects the tax imposed by this part.
(4) An energy supplier paying a tax under this part directly to a municipality may retain
the percentage of the tax authorized under Subsection 59-12-108 [(3)] (2) for the energy
supplier's costs of collecting and remitting the tax.
(5) An energy supplier paying the tax under this part directly to a municipality shall file
an information return with the commission, at least annually, on a form prescribed by the
commission.
Section 3. Section 17A-2-1064 is amended to read:
17A-2-1064. Airport to University of Utah Light Rail Restricted Account --
Creation -- Use of revenues.
(1) There is created within the General Fund a restricted account known as the "Airport
to University of Utah Light Rail Restricted Account."
(2) The account shall be funded from the portion of the sales and use tax under
[Sections] Section 59-12-204 [and 59-12-205 ] that is:
(a) generated by a city or town that will have constructed within its boundaries the
Airport to University of Utah Light Rail described in the Transportation Equity Act for the 21st
Century, Pub. L. No. 105-178, Sec. 3030(c)(2)(B)(i)(II), 112 Stat. 107; and
(b) equal to the revenues generated by a 1/64% tax rate on the taxable transactions under

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Subsection 59-12-103 (1).
(3) The Utah State Tax Commission shall deposit the revenues described in Subsection
(2) into the account.
(4) The account shall earn interest which shall be deposited into the account.
(5) (a) A district may use the revenues in the account for a purpose described in
Subsection (5)(b) if:
(i) more than 200,000 people reside within the district boundaries; and
(ii) the district receives a grant or a loan under 49 U.S.C. Sec. 5309:
(A) for the Airport to University of Utah Light Rail project described in the
Transportation Equity Act for the 21st Century, Pub. L. No. 105-178, Sec. 3030(c)(2)(B)(i)(II),
112 Stat. 107; and
(B) before the construction of the Airport to University of Utah Light Rail project
described in Subsection (5)(a)(ii)(A) is completed.
(b) Subsection (5)(a) applies to:
(i) maintaining the Airport to University of Utah Light Rail described in Subsection
(5)(a)(ii)(A); or
(ii) operating the Airport to University of Utah Light Rail described in Subsection
(5)(a)(ii)(A).
Section 4. Section 59-1-403 is amended to read:
59-1-403. Confidentiality -- Exceptions -- Penalty -- Application to property tax.
(1) (a) Except as provided in this section, any of the following may not divulge or make
known in any manner any information gained by that person from any return filed with the
commission:
(i) a tax commissioner;
(ii) an agent, clerk, or other officer or employee of the commission; or
(iii) a representative, agent, clerk, or other officer or employee of any county, city, or
town.
(b) Except as provided in Subsection (1)(c), an official charged with the custody of a

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return filed with the commission is not required to produce the return or evidence of anything
contained in the return in any action or proceeding in any court, except:
(i) in accordance with judicial order;
(ii) on behalf of the commission in any action or proceeding under:
(A) this title; or
(B) other law under which persons are required to file returns with the commission;
(iii) on behalf of the commission in any action or proceeding to which the commission is
a party; or
(iv) on behalf of any party to any action or proceeding under this title if the report or
facts shown by the return are directly involved in the action or proceeding.
(c) Notwithstanding Subsection (1)(b), a court may require the production of, and may
admit in evidence, any portion of a return or of the facts shown by the return, as are specifically
pertinent to the action or proceeding.
(2) This section does not prohibit:
(a) a person or that person's duly authorized representative from receiving a copy of any
return or report filed in connection with that person's own tax;
(b) the publication of statistics as long as the statistics are classified to prevent the
identification of particular reports or returns; and
(c) the inspection by the attorney general or other legal representative of the state of the
report or return of any taxpayer:
(i) who brings action to set aside or review a tax based on the report or return;
(ii) against whom an action or proceeding is contemplated or has been instituted under
this title; or
(iii) against whom the state has an unsatisfied money judgment.
(3) (a) Notwithstanding Subsection (1) and for purposes of administration, the
commission may by rule, made in accordance with Title 63, Chapter 46a, Utah Administrative
Rulemaking Act, provide for a reciprocal exchange of information with:
(i) the United States Internal Revenue Service; or

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(ii) the revenue service of any other state.
(b) Notwithstanding Subsection (1) and for all taxes except individual income tax and
corporate franchise tax, the commission may by rule, made in accordance with Title 63, Chapter
46a, Utah Administrative Rulemaking Act, share information gathered from returns and other
written statements with the federal government, any other state, any of the political subdivisions
of another state, or any political subdivision of this state, except as limited by Sections 59-12-209
and 59-12-210 , if these political subdivisions or the federal government grant substantially
similar privileges to this state.
(c) Notwithstanding Subsection (1) and for all taxes except individual income tax and
corporate franchise tax, the commission may by rule, in accordance with Title 63, Chapter 46a,
Utah Administrative Rulemaking Act, provide for the issuance of information concerning the
identity and other information of taxpayers who have failed to file tax returns or to pay any tax
due.
(d) Notwithstanding Subsection (1), the commission shall provide to the Solid and
Hazardous Waste Control Board executive secretary, as defined in Section 19-6-102 , as
requested by the executive secretary, any records, returns, or other information filed with the
commission under Chapter 13, Motor and Special Fuel Tax Act, or Section 19-6-410.5 regarding
the environmental assurance program participation fee.
(e) Notwithstanding Subsection (1), at the request of any person the commission shall
provide that person sales and purchase volume data reported to the commission on a report,
return, or other information filed with the commission under:
(i) Chapter 13, Part 2, Motor Fuel; or
(ii) Chapter 13, Part 4, Aviation Fuel.
(f) Notwithstanding Subsection (1), upon request from a tobacco product manufacturer,
as defined in Section 59-22-202 , the commission shall report to the manufacturer:
(i) the quantity of cigarettes, as defined in Section 59-22-202 , produced by the
manufacturer and reported to the commission for the previous calendar year under Section
59-14-407 ; and

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(ii) the quantity of cigarettes, as defined in Section 59-22-202 , produced by the
manufacturer for which a tax refund was granted during the previous calendar year under Section
59-14-401 and reported to the commission under Subsection 59-14-401 (1)(a)(v).
(g) Notwithstanding Subsection (1), the commission shall notify manufacturers,
distributors, wholesalers, and retail dealers of a tobacco product manufacturer that is prohibited
from selling cigarettes to consumers within the state under Subsection 59-14-210 (2).
(h) Notwithstanding Subsection (1), the commission may:
(i) provide to the Division of Consumer Protection within the Department of Commerce
and the attorney general data:
(A) reported to the commission under Section 59-14-212 ; or
(B) related to a violation under Section 59-14-211 ; and
(ii) upon request provide to any person data reported to the commission under
Subsections 59-14-212 (1)(a) through(c) and Subsection 59-14-212 (1)(g).
(i) Notwithstanding Subsection (1), the commission shall, at the request of a committee
of the Legislature, Office of the Legislative Fiscal Analyst, or Governor's Office of Planning and
Budget, provide to the committee or office the total amount of revenues collected by the
commission under Chapter 24, Radioactive Waste Tax Act, for the time period specified by the
committee or office.
(j) Notwithstanding Subsection (1), the commission shall at the request of the Legislature
provide to the Legislature the total amount of sales or uses exempt under Subsection
59-12-104 [(52)] (51) reported to the commission in accordance with Section 59-12-105 .
(k) Notwithstanding Subsection (1), the commission shall make the list required by
Subsection 59-14-408 (3) available for public inspection.
(4) (a) Reports and returns shall be preserved for at least three years.
(b) After the three-year period provided in Subsection (4)(a) the commission may destroy
a report or return.
(5) (a) Any person who violates this section is guilty of a class A misdemeanor.
(b) If the person described in Subsection (5)(a) is an officer or employee of the state, the

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person shall be dismissed from office and be disqualified from holding public office in this state
for a period of five years thereafter.
(6) This part does not apply to the property tax.
Section 5. Section 59-7-614.1 is enacted to read:
59-7-614.1. Refundable tax credit for hand tools used in farming operations --
Procedures for refund -- Transfers from General Fund to Uniform School Fund --
Rulemaking authority.
(1) For taxable years beginning on or after January 1, 2004, a taxpayer may claim a
refundable tax credit:
(a) as provided in this section;
(b) against taxes otherwise due under this chapter; and
(c) in an amount equal to the amount of tax the taxpayer pays:
(i) on a purchase of a hand tool:
(A) if the purchase is made on or after July 1, 2004;
(B) if the hand tool is used or consumed primarily and directly in a farming operation in
the state; and
(C) if the unit purchase price of the hand tool is more than $250; and
(ii) under Chapter 12, Sales and Use Tax Act, on the purchase described in Subsection
(1)(c)(i).
(2) A taxpayer:
(a) shall retain the following to establish the amount of tax the resident or nonresident
individual paid under Chapter 12, Sales and Use Tax Act, on the purchase described in
Subsection (1)(c)(i):
(i) a receipt;
(ii) an invoice; or
(iii) a document similar to a document described in Subsection (2)(a)(i) or (ii); and
(b) may not carry forward or carry back a tax credit under this section.
(3) (a) In accordance with any rules prescribed by the commission under Subsection

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(3)(b), the commission shall:
(i) make a refund to a taxpayer that claims a tax credit under this section if the amount of
the tax credit exceeds the taxpayer's tax liability under this chapter; and
(ii) transfer at least annually from the General Fund into the Uniform School Fund an
amount equal to the amount of tax credit claimed under this section.
(b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
commission may make rules providing procedures for making:
(i) a refund to a taxpayer as required by Subsection (3)(a)(i); or
(ii) transfers from the General Fund into the Uniform School Fund as required by
Subsection (3)(a)(ii).
Section 6. Section 59-10-134.1 is enacted to read:
59-10-134.1. Refundable tax credit for hand tools used in farming operations --
Procedures for refund -- Transfers from General Fund to Uniform School Fund --
Rulemaking authority.
(1) For taxable years beginning on or after January 1, 2004, a resident or nonresident
individual may claim a refundable tax credit:
(a) as provided in this section;
(b) against taxes otherwise due under this chapter; and
(c) in an amount equal to the amount of tax the resident or nonresident individual pays:
(i) on a purchase of a hand tool:
(A) if the purchase is made on or after July 1, 2004;
(B) if the hand tool is used or consumed primarily and directly in a farming operation in
the state; and
(C) if the unit purchase price of the hand tool is more than $250; and
(ii) under Chapter 12, Sales and Use Tax Act, on the purchase described in Subsection
(1)(c)(i).
(2) A resident or nonresident individual:
(a) shall retain the following to establish the amount of tax the resident or nonresident

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individual paid under Chapter 12, Sales and Use Tax Act, on the purchase described in
Subsection (1)(c)(i):
(i) a receipt;
(ii) an invoice; or
(iii) a document similar to a document described in Subsection (2)(a)(i) or (ii); and
(b) may not carry forward or carry back a tax credit under this section.
(3) (a) In accordance with any rules prescribed by the commission under Subsection
(3)(b), the commission shall:
(i) make a refund to a resident or nonresident individual who claims a tax credit under
this section if the amount of the tax credit exceeds the resident or nonresident individual's tax
liability under this chapter; and
(ii) transfer at least annually from the General Fund into the Uniform School Fund an
amount equal to the amount of tax credit claimed under this section.
(b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
commission may make rules providing procedures for making:
(i) a refund to a resident or nonresident individual as required by Subsection (3)(a)(i); or
(ii) transfers from the General Fund into the Uniform School Fund as required by
Subsection (3)(a)(ii).
Section 7. Section 59-12-102 is amended to read:
59-12-102. Definitions.
As used in this chapter:
(1) (a) "Admission or user fees" includes season passes.
(b) "Admission or user fees" does not include annual membership dues to private
organizations.
(2) "Agreement" means the Streamlined Sales and Use Tax Agreement described in
Section 59-12-102.1 .
(3) "Agreement combined tax rate" means the sum of the tax rates:
(a) listed under Subsection (4); and

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(b) that are imposed within a local taxing jurisdiction.
(4) "Agreement sales and use tax" means a tax imposed under:
(a) Subsection 59-12-103 (2)(a)(i);
(b) Section 59-12-204 ;
(c) Section 59-12-401 ;
(d) Section 59-12-402 ;
(e) Section 59-12-501 ;
(f) Section 59-12-502 ;
(g) Section 59-12-703 ;
(h) Section 59-12-802 ;
(i) Section 59-12-804 ;
(j) Section 59-12-1001 ;
(k) Section 59-12-1102 ;
(l) Section 59-12-1302 ; or
(m) Section 59-12-1402 .
(5) "Alcoholic beverage" means a beverage that:
(a) is suitable for human consumption; and
(b) contains .5% or more alcohol by volume.
[(2)] (6) "Area agency on aging" is as defined in Section 62A-3-101 .
[(3)] (7) "Authorized carrier" means:
(a) in the case of vehicles operated over public highways, the holder of credentials
indicating that the vehicle is or will be operated pursuant to both the International Registration
Plan and the International Fuel Tax Agreement;
(b) in the case of aircraft, the holder of a Federal Aviation Administration operating
certificate or air carrier's operating certificate; or
(c) in the case of locomotives, freight cars, railroad work equipment, or other rolling
stock, the holder of a certificate issued by the United States Surface Transportation Board.
(8) "Certified automated system" means software certified by the governing board of the

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agreement in accordance with Section 59-12-102.1 that:
(a) calculates the agreement sales and use tax imposed within a local taxing jurisdiction:
(i) on a transaction; and
(ii) in the states that are members of the agreement;
(b) determines the amount of agreement sales and use tax to remit to a state that is a
member of the agreement; and
(c) maintains a record of the transaction described in Subsection (8)(a)(i).
(9) "Certified service provider" means an agent certified:
(a) by the governing board of the agreement in accordance with Section 59-12-102.1 ; and
(b) to perform all of a seller's sales and use tax functions for an agreement sales and use
tax.
(10) (a) Subject to Subsection (10)(b), "clothing" means all human wearing apparel
suitable for general use.
(b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
commission shall make rules:
(i) listing the items that constitute "clothing"; and
(ii) that are consistent with the list of items that constitute "clothing" under the
agreement.
[(4)] (11) (a) For purposes of Subsection 59-12-104 [(43)] (42), "coin-operated
amusement device" means:
(i) a coin-operated amusement, skill, or ride device;
(ii) that is not controlled through [vendor-assisted] seller-assisted, over-the-counter, sales
of tokens; and
(iii) includes a music machine, pinball machine, billiard machine, video game machine,
arcade machine, and a mechanical or electronic skill game or ride.
(b) For purposes of Subsection 59-12-104 [(43)] (42), "coin-operated amusement device"
does not mean a coin-operated amusement device possessing a coinage mechanism that:
(i) accepts and registers multiple denominations of coins; and

- 17 -

(ii) allows the [vendor] seller to collect the sales and use tax at the time an amusement
device is activated and operated by a person inserting coins into the device.
[(5)] (12) "Commercial use" means the use of gas, electricity, heat, coal, fuel oil, or other
fuels that does not constitute industrial use under Subsection [(13)] (30) or residential use under
Subsection [(23)] (52).
[(6)] (13) (a) "Common carrier" means a person engaged in or transacting the business of
transporting passengers, freight, merchandise, or other property for hire within this state.
(b) (i) "Common carrier" does not include a person who, at the time the person is
traveling to or from that person's place of employment, transports a passenger to or from the
passenger's place of employment.
(ii) For purposes of Subsection [(6)] (13)(b)(i), in accordance with Title 63, Chapter 46a,
Utah Administrative Rulemaking Act, the commission may make rules defining what constitutes
a person's place of employment.
[(7)] (14) "Component part" includes:
(a) poultry, dairy, and other livestock feed, and their components;
(b) baling ties and twine used in the baling of hay and straw;
(c) fuel used for providing temperature control of orchards and commercial greenhouses
doing a majority of their business in wholesale sales, and for providing power for off-highway
type farm machinery; and
(d) feed, seeds, and seedlings.
(15) "Computer" means an electronic device that accepts information:
(a) (i) in digital form; or
(ii) in a form similar to digital form; and
(b) manipulates that information for a result based on a sequence of instructions.
(16) "Computer software" means a set of coded instructions designed to cause:
(a) a computer to perform a task; or
(b) automatic data processing equipment to perform a task.
[(8)] (17) "Construction materials" means any tangible personal property that will be

- 18 -

converted into real property.
(18) "Delivered electronically" means delivered to a purchaser by means other than
tangible storage media.
(19) (a) "Delivery charge" means a charge:
(i) by a seller of:
(A) tangible personal property; or
(B) services; and
(ii) for preparation and delivery of the tangible personal property or services described in
Subsection (19)(a)(i) to a location designated by the purchaser.
(b) "Delivery charge" includes a charge for the following:
(i) transportation;
(ii) shipping;
(iii) postage;
(iv) handling;
(v) crating; or
(vi) packing.
(20) "Dietary supplement" means a product, other than tobacco, that:
(a) is intended to supplement the diet;
(b) contains one or more of the following dietary ingredients:
(i) a vitamin;
(ii) a mineral;
(iii) an herb or other botanical;
(iv) an amino acid;
(v) a dietary substance for use by humans to supplement the diet by increasing the total
dietary intake; or
(vi) a concentrate, metabolite, constituent, extract, or combination of any ingredient
described in Subsections (20)(b)(i) through (v);
(c) (i) except as provided in Subsection (20)(c)(ii), is intended for ingestion in:

- 19 -

(A) tablet form;
(B) capsule form;
(C) powder form;
(D) softgel form;
(E) gelcap form; or
(F) liquid form; or
(ii) notwithstanding Subsection (20)(c)(i), if the product is not intended for ingestion in a
form described in Subsections (20)(c)(i)(A) through (F), is not represented:
(A) as conventional food; and
(B) for use as a sole item of:
(I) a meal; or
(II) the diet; and
(d) is required to be labeled as a dietary supplement:
(i) identifiable by the "Supplemental Facts" box found on the label; and
(ii) as required by 21 C.F.R. Sec. 101.36.
(21) (a) "Direct mail" means printed material delivered or distributed by United States
mail or other delivery service:
(i) to:
(A) a mass audience; or
(B) addressees on a mailing list provided by a purchaser of the mailing list; and
(ii) if the cost of the printed material is not billed directly to the recipients.
(b) "Direct mail" includes tangible personal property supplied directly or indirectly by a
purchaser to a seller of direct mail for inclusion in a package containing the printed material.
(c) "Direct mail" does not include multiple items of printed material delivered to a single
address.
(22) (a) "Drug" means a compound, substance, or preparation, or a component of a
compound, substance, or preparation that is:
(i) recognized in:

- 20 -

(A) the official United States Pharmacopoeia;
(B) the official Homeopathic Pharmacopoeia of the United States;
(C) the official National Formulary; or
(D) a supplement to a publication listed in Subsections (22)(a)(i)(A) through (C);
(ii) intended for use in the:
(A) diagnosis of disease;
(B) cure of disease;
(C) mitigation of disease;
(D) treatment of disease; or
(E) prevention of disease; or
(iii) intended to affect:
(A) the structure of the body; or
(B) any function of the body.
(b) "Drug" does not include:
(i) food and food ingredients;
(ii) a dietary supplement;
(iii) an alcoholic beverage; or
(iv) a prosthetic device.
(23) (a) Except as provided in Subsection (23)(c), "durable medical equipment" means
equipment that:
(i) can withstand repeated use;
(ii) is primarily and customarily used to serve a medical purpose;
(iii) generally is not useful to a person in the absence of illness or injury;
(iv) is not worn in or on the body; and
(v) is listed as eligible for payment under:
(A) Title XVIII of the federal Social Security Act; or
(B) the state plan for medical assistance under Title XIX of the federal Social Security
Act.

- 21 -

(b) "Durable medical equipment" includes parts used in the repair or replacement of the
equipment described in Subsection (23)(a).
(c) Notwithstanding Subsection (23)(a), "durable medical equipment" does not include
mobility enhancing equipment.
(24) "Electronic" means:
(a) relating to technology; and
(b) having:
(i) electrical capabilities;
(ii) digital capabilities;
(iii) magnetic capabilities;
(iv) wireless capabilities;
(v) optical capabilities;
(vi) electromagnetic capabilities; or
(vii) capabilities similar to Subsections (24)(b)(i) through (vi).
(25) (a) "Food and food ingredients" means substances:
(i) regardless of whether the substances are in:
(A) liquid form;
(B) concentrated form;
(C) solid form;
(D) frozen form;
(E) dried form; or
(F) dehydrated form; and
(ii) that are:
(A) sold for:
(I) ingestion by humans; or
(II) chewing by humans; and
(B) consumed for the substance's:
(I) taste; or

- 22 -

(II) nutritional value.
(b) "Food and food ingredients" does not include:
(i) an alcoholic beverage;
(ii) tobacco; or
(iii) prepared food.
[(9)] (26) (a) "Fundraising sales" means sales:
(i) (A) made by a school; or
(B) made by a school student;
(ii) that are for the purpose of raising funds for the school to purchase equipment,
materials, or provide transportation; and
(iii) that are part of an officially sanctioned school activity.
(b) For purposes of Subsection [(9)] (26)(a)(iii), "officially sanctioned school activity"
means a school activity:
(i) that is conducted in accordance with a formal policy adopted by the school or school
district governing the authorization and supervision of fundraising activities;
(ii) that does not directly or indirectly compensate an individual teacher or other
educational personnel by direct payment, commissions, or payment in kind; and
(iii) the net or gross revenues from which are deposited in a dedicated account controlled
by the school or school district.
(27) "Governing board of the agreement" means the governing board of the agreement
that is:
(a) authorized to administer the agreement; and
(b) established in accordance with the agreement.
[(10)] (28) (a) "Hearing aid" means:
(i) an instrument or device having an electronic component that is designed to:
(A) (I) improve impaired human hearing; or
(II) correct impaired human hearing; and
(B) (I) be worn in the human ear; or

- 23 -

(II) affixed behind the human ear;
(ii) an instrument or device that is surgically implanted into the cochlea; or
(iii) a telephone amplifying device.
(b) "Hearing aid" does not include:
(i) except as provided in Subsection [(10)] (28)(a)(i)(B) or [(10)] (28)(a)(ii), an
instrument or device having an electronic component that is designed to be worn on the body;
(ii) except as provided in Subsection [(10)] (28)(a)(iii), an assistive listening device or
system designed to be used by one individual, including:
(A) a personal amplifying system;
(B) a personal FM system;
(C) a television listening system; or
(D) a device or system similar to a device or system described in Subsections [(10)]
(28)(b)(ii)(A) through (C); or
(iii) an assistive listening device or system designed to be used by more than one
individual, including:
(A) a device or system installed in:
(I) an auditorium;
(II) a church;
(III) a conference room;
(IV) a synagogue; or
(V) a theater; or
(B) a device or system similar to a device or system described in Subsections [(10)]
(28)(b)(iii)(A)(I) through (V).
[(11)] (29) (a) "Hearing aid accessory" means a hearing aid:
(i) component;
(ii) attachment; or
(iii) accessory.
(b) "Hearing aid accessory" includes:

- 24 -

(i) a hearing aid neck loop;
(ii) a hearing aid cord;
(iii) a hearing aid ear mold;
(iv) hearing aid tubing;
(v) a hearing aid ear hook; or
(vi) a hearing aid remote control.
(c) "Hearing aid accessory" does not include:
(i) a component, attachment, or accessory designed to be used only with an:
(A) instrument or device described in Subsection [(10)] (28)(b)(i); or
(B) assistive listening device or system described in Subsection [(10)] (28)(b)(ii) or (iii);
or
(ii) a hearing aid battery.
[(12) (a) Except as provided in Subsection (12)(c), "home medical equipment or supplies"
means equipment or supplies that:]
[(i) a licensed physician prescribes or authorizes in writing as necessary:]
[(A) for the treatment of a medical illness or injury; or]
[(B) to mitigate an impairment resulting from illness or injury;]
[(ii) are used exclusively by the person for whom they are prescribed to serve a medical
purpose; and]
[(iii) are listed as eligible for payment under:]
[(A) Title XVIII of the federal Social Security Act; or]
[(B) the state plan for medical assistance under Title XIX of the federal Social Security
Act.]
[(b) "Home medical equipment or supplies" includes parts used in the repairs or
renovations of equipment or supplies described in Subsection (12)(a).]
[(c) Notwithstanding Subsection (12)(a), "home medical equipment or supplies" does not
include:]
[(i) equipment or supplies purchased by, for, or on behalf of any:]

- 25 -

[(A) health care facility, as defined in Subsection (12)(d); or]
[(B) one or more of the following for use in a professional practice:]
[(I) a doctor;]
[(II) a nurse; or]
[(III) another health care provider;]
[(ii) eyeglasses, contact lenses, or equipment to correct impaired vision; or]
[(iii) hearing aids or hearing aid accessories.]
[(d) For purposes of Subsection (12)(c)(i)(A), "health care facility" includes:]
[(i) a clinic;]
[(ii) a doctor's office; or]
[(iii) a health care facility as defined in Section 26-21-2 .]
[(13)] (30) "Industrial use" means the use of natural gas, electricity, heat, coal, fuel oil, or
other fuels:
(a) in mining or extraction of minerals;
(b) in agricultural operations to produce an agricultural product up to the time of harvest
or placing the agricultural product into a storage facility, including:
(i) commercial greenhouses;
(ii) irrigation pumps;
(iii) farm machinery;
(iv) implements of husbandry as defined in Subsection 41-1a-102 (23) that are not
registered under Title 41, Chapter 1a, Part 2, Registration; and
(v) other farming activities;
(c) in manufacturing tangible personal property at an establishment described in SIC
Codes 2000 to 3999 of the 1987 Standard Industrial Classification Manual of the federal
Executive Office of the President, Office of Management and Budget; or
(d) by a scrap recycler if:
(i) from a fixed location, the scrap recycler utilizes machinery or equipment to process
one or more of the following items into prepared grades of processed materials for use in new

- 26 -

products:
(A) iron;
(B) steel;
(C) nonferrous metal;
(D) paper;
(E) glass;
(F) plastic;
(G) textile; or
(H) rubber; and
(ii) the new products under Subsection [(13)] (30)(d)(i) would otherwise be made with
nonrecycled materials.
(31) (a) "Lease" or "rental" means a transfer of possession or control of tangible personal
property for:
(i) (A) a fixed term; or
(B) an indeterminate term; and
(ii) consideration.
(b) "Lease" or "rental" includes an agreement covering a motor vehicle and trailer if the
amount of consideration may be increased or decreased by reference to the amount realized upon
sale or disposition of the property as defined in Section 7701(h)(1), Internal Revenue Code.
(c) "Lease" or "rental" does not include:
(i) a transfer of possession or control of property under a security agreement or deferred
payment plan that requires the transfer of title upon completion of the required payments;
(ii) a transfer of possession or control of property under an agreement:
(A) that requires the transfer of title upon completion of required payments; and
(B) in which the payment of an option price does not exceed the greater of:
(I) $100; or
(II) 1% of the total required payments; or
(iii) providing tangible personal property along with an operator for a fixed period of

- 27 -

time or an indeterminate period of time if the operator is necessary for equipment to perform as
designed.
(d) For purposes of Subsection (31)(c)(iii), an operator is necessary for equipment to
perform as designed if the operator's duties exceed the:
(i) set-up of tangible personal property;
(ii) maintenance of tangible personal property; or
(iii) inspection of tangible personal property.
(32) "Local taxing jurisdiction" means a:
(a) county that is authorized to impose an agreement sales and use tax;
(b) city that is authorized to impose an agreement sales and use tax; or
(c) town that is authorized to impose an agreement sales and use tax.
[(14)] (33) "Manufactured home" means any manufactured home or mobile home as
defined in Title 58, Chapter 56, Utah Uniform Building Standards Act.
[(15)] (34) For purposes of Subsection 59-12-104 (14), "manufacturing facility" means:
(a) an establishment described in SIC Codes 2000 to 3999 of the 1987 Standard
Industrial Classification Manual of the federal Executive Office of the President, Office of
Management and Budget; or
(b) a scrap recycler if:
(i) from a fixed location, the scrap recycler utilizes machinery or equipment to process
one or more of the following items into prepared grades of processed materials for use in new
products:
(A) iron;
(B) steel;
(C) nonferrous metal;
(D) paper;
(E) glass;
(F) plastic;
(G) textile; or

- 28 -

(H) rubber; and
(ii) the new products under Subsection [(15)] (34)(b)(i) would otherwise be made with
nonrecycled materials.
[(16) (a) "Medicine" means:]
[(i) insulin, syringes, and any medicine prescribed for the treatment of human ailments
by a person authorized to prescribe treatments and dispensed on prescription filled by a registered
pharmacist, or supplied to patients by a physician, surgeon, or podiatric physician;]
[(ii) any medicine dispensed to patients in a county or other licensed hospital if
prescribed for that patient and dispensed by a registered pharmacist or administered under the
direction of a physician; and]
[(iii) any oxygen or stoma supplies prescribed by a physician or administered under the
direction of a physician or paramedic.]
[(b) "Medicine" does not include:]
[(i) any auditory, prosthetic, ophthalmic, or ocular device or appliance; or]
[(ii) any alcoholic beverage.]
[(17)] (35) "Mobile telecommunications service" is as defined in the Mobile
Telecommunications Sourcing Act, 4 U.S.C. Sec. 124.
(36) (a) Except as provided in Subsection (36)(c), "mobility enhancing equipment"
means equipment that is:
(i) primarily and customarily used to provide or increase the ability to move from one
place to another;
(ii) appropriate for use in a:
(A) home; or
(B) motor vehicle;
(iii) not generally used by persons with normal mobility; and
(iv) listed as eligible for payment under:
(A) Title XVIII of the federal Social Security Act; or
(B) the state plan for medical assistance under Title XIX of the federal Social Security

- 29 -

Act.
(b) "Mobility enhancing equipment" includes parts used in the repair or replacement of
the equipment described in Subsection (36)(a).
(c) Notwithstanding Subsection (36)(a), "mobility enhancing equipment" does not
include:
(i) a motor vehicle;
(ii) equipment on a motor vehicle if that equipment is normally provided by the motor
vehicle manufacturer;
(iii) durable medical equipment; or
(iv) a prosthetic device.
(37) "Model 1 seller" means a seller that has selected a certified service provider as the
seller's agent to perform all of the seller's sales tax functions for agreement sales and use taxes.
(38) "Model 2 seller" means a seller that:
(a) except as provided in Subsection (38)(b), has selected a certified automated system to
perform the seller's sales tax functions for agreement sales and use taxes; and
(b) notwithstanding Subsection (38)(a), retains responsibility for remitting all of the sales
tax:
(i) collected by the seller; and
(ii) to the appropriate local taxing jurisdiction.
(39) (a) Subject to Subsection (39)(b), "model 3 seller" means a seller that has:
(i) sales in at least five states that are members of the agreement;
(ii) total annual sales revenues of at least $500,000,000;
(iii) a proprietary system that calculates the amount of tax:
(A) for an agreement sales and use tax; and
(B) due to each local taxing jurisdiction; and
(iv) entered into a performance agreement with the governing board of the agreement.
(b) For purposes of Subsection (39)(a), "model 3 seller" includes an affiliated group of
sellers using the same proprietary system.

- 30 -

[(18)] (40) "Olympic merchandise" means tangible personal property bearing an Olympic
designation, emblem, insignia, mark, logo, service mark, symbol, terminology, trademark, or
other copyrighted or protected material, including:
(a) one or more of the following terms:
(i) "Olympic";
(ii) "Olympiad"; or
(iii) "Citius Altius Fortius";
(b) the symbol of the International Olympic Committee, consisting of five interlocking
rings;
(c) the emblem of the International Olympic Committee Corporation;
(d) a United States Olympic Committee designation, emblem, insignia, mark, logo,
service mark, symbol, terminology, trademark, or other copyrighted or protected material;
(e) any emblem of the Olympic Winter Games of 2002 that is officially designated by the
Salt Lake Organizing Committee of the Olympic Winter Games of 2002; or
(f) the mascot of the Olympic Winter Games of 2002.
[(19)] (41) (a) "Other fuels" means products that burn independently to produce heat or
energy.
(b) "Other fuels" includes oxygen when it is used in the manufacturing of tangible
personal property.
[(20)] (42) "Person" includes any individual, firm, partnership, joint venture, association,
corporation, estate, trust, business trust, receiver, syndicate, this state, any county, city,
municipality, district, or other local governmental entity of the state, or any group or combination
acting as a unit.
[(21) "Purchase price" means the amount paid or charged for tangible personal property
or any other taxable transaction under Subsection 59-12-103 (1), excluding only cash discounts
taken or any excise tax imposed on the purchase price by the federal government.]
(43) (a) "Prepared food" means:
(i) food:

- 31 -

(A) sold in a heated state; or
(B) heated by a seller;
(ii) two or more food ingredients mixed or combined by the seller for sale as a single
item; or
(iii) except as provided in Subsection (43)(c), food sold with an eating utensil provided
by the seller, including a:
(A) plate;
(B) knife;
(C) fork;
(D) spoon;
(E) glass;
(F) cup;
(G) napkin; or
(H) straw.
(b) "Prepared food" does not include:
(i) food that a seller only:
(A) cuts;
(B) repackages; or
(C) pasteurizes; or
(ii) (A) the following:
(I) raw egg;
(II) raw fish;
(III) raw meat;
(IV) raw poultry; or
(V) a food containing an item described in Subsections (43)(b)(ii)(A)(I) through (IV);
and
(B) if the Food and Drug Administration recommends in Chapter 3, Part 401.11 of the
Food and Drug Administration's Food Code that a consumer cook the items described in

- 32 -

Subsection (43)(b)(ii)(A) to prevent food borne illness.
(c) Notwithstanding Subsection (43)(a)(iii), an eating utensil provided by the seller does
not include the following used to transport the food:
(i) a container; or
(ii) packaging.
(44) "Prescription" means an order, formula, or recipe that is issued:
(a) (i) orally;
(ii) in writing;
(iii) electronically; or
(iv) by any other manner of transmission; and
(b) by a licensed practitioner authorized by the laws of a state.
(45) (a) Except as provided in Subsection (45)(b)(ii) or (iii), "prewritten computer
software" means computer software that is not designed and developed:
(i) by the author or other creator of the computer software; and
(ii) to the specifications of a specific purchaser.
(b) "Prewritten computer software" includes:
(i) a prewritten upgrade to computer software if the prewritten upgrade to the computer
software is not designed and developed:
(A) by the author or other creator of the computer software; and
(B) to the specifications of a specific purchaser;
(ii) notwithstanding Subsection (45)(a), computer software designed and developed by
the author or other creator of the computer software to the specifications of a specific purchaser if
the computer software is sold to a person other than the purchaser; or
(iii) notwithstanding Subsection (45)(a) and except as provided in Subsection (45)(c),
prewritten computer software or a prewritten portion of prewritten computer software:
(A) that is modified or enhanced to any degree; and
(B) if the modification or enhancement described in Subsection (45)(b)(iii)(A) is
designed and developed to the specifications of a specific purchaser.

- 33 -

(c) Notwithstanding Subsection (45)(b)(iii), "prewritten computer software" does not
include a modification or enhancement described in Subsection (45)(b)(iii) if the charges for the
modification or enhancement are:
(i) reasonable; and
(ii) separately stated on the invoice or other statement of price provided to the purchaser.
(46) (a) "Prosthetic device" means a device that is:
(i) worn on or in the body to:
(A) artificially replace a missing portion of the body;
(B) prevent or correct a physical deformity or physical malfunction; or
(C) support a weak or deformed portion of the body; and
(ii) listed as eligible for payment under:
(A) Title XVIII of the federal Social Security Act; or
(B) the state plan for medical assistance under Title XIX of the federal Social Security
Act.
(b) "Prosthetic device" includes:
(i) parts used in the repairs or renovation of a prosthetic device; or
(ii) replacement parts for a prosthetic device.
(c) "Prosthetic device" does not include:
(i) corrective eyeglasses;
(ii) contact lenses;
(iii) hearing aids; or
(iv) dental prostheses.
(47) (a) "Protective equipment" means an item:
(i) for human wear; and
(ii) that is:
(A) designed as protection:
(I) to the wearer against injury or disease; or
(II) against damage or injury of other persons or property; and

- 34 -

(B) not suitable for general use.
(b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
commission shall make rules:
(i) listing the items that constitute "protective equipment"; and
(ii) that are consistent with the list of items that constitute "protective equipment" under
the agreement.
(48) (a) "Purchase price" and "sales price" mean the total amount of consideration:
(i) valued in money; and
(ii) for which tangible personal property or services are:
(A) sold;
(B) leased; or
(C) rented.
(b) "Purchase price" and "sales price" include:
(i) the seller's cost of the tangible personal property or services sold;
(ii) expenses of the seller, including:
(A) the cost of materials used;
(B) a labor cost;
(C) a service cost;
(D) interest;
(E) a loss;
(F) the cost of transportation to the seller; or
(G) a tax imposed on the seller;
(iii) a charge by the seller for any service necessary to complete the sale;
(iv) a delivery charge; or
(v) an installation charge.
(c) "Purchase price" and "sales price" do not include:
(i) a discount:
(A) in a form including:

- 35 -

(I) cash;
(II) term; or
(III) coupon;
(B) that is allowed by a seller;
(C) taken by a purchaser on a sale; and
(D) that is not reimbursed by a third party; or
(ii) the following if separately stated on an invoice, bill of sale, or similar document
provided to the purchaser:
(A) the amount of a trade-in;
(B) the following from credit extended on the sale of tangible personal property or
services:
(I) interest charges;
(II) financing charges; or
(III) carrying charges; or
(C) a tax or fee legally imposed directly on the consumer.
(49) "Purchaser" means a person to whom:
(a) a sale of tangible personal property is made; or
(b) a service is furnished.
[(22)] (50) "Regularly rented" means:
(a) rented to a guest for value three or more times during a calendar year; or
(b) advertised or held out to the public as a place that is regularly rented to guests for
value.
(51) "Rental" is as defined in Subsection (31).
[(23)] (52) "Residential use" means the use in or around a home, apartment building,
sleeping quarters, and similar facilities or accommodations.
[(24) (a) "Retail sale" means any sale within the state of tangible personal property or any
other taxable transaction under Subsection 59-12-103 (1), other than resale of such property, item,
or service by a retailer or wholesaler to a user or consumer.]

- 36 -

[(b) "Retail sale" includes sales by any farmer or other agricultural producer of poultry,
eggs, or dairy products to consumers if the sales have an average monthly sales value of $125 or
more.]
[(c) "Retail sale" does not include, and no additional sales or use tax shall be assessed
against, those transactions where a purchaser of tangible personal property pays applicable sales
or use taxes on its initial nonexempt purchases of property and then enters into a sale-leaseback
transaction by which title to such property is transferred by the purchaser-lessee to a lessor for
consideration, provided:]
[(i) the transaction is intended as a form of financing for the property to the
purchaser-lessee; and]
[(ii) pursuant to generally accepted accounting principles, the purchaser-lessee is
required to capitalize the subject property for financial reporting purposes, and account for the
lease payments as payments made under a financing arrangement.]
(53) "Retail sale" or "sale at retail" means a sale, lease, or rental for a purpose other than:
(a) resale;
(b) sublease; or
(c) subrent.
[(25)] (54) (a) "Retailer" means any person engaged in a regularly organized [retail]
business in tangible personal property or any other taxable transaction under Subsection
59-12-103 (1), and who is selling to the user or consumer and not for resale.
(b) "Retailer" includes commission merchants, auctioneers, and any person regularly
engaged in the business of selling to users or consumers within the state.
[(c) "Retailer" does not include farmers, gardeners, stockmen, poultrymen, or other
growers or agricultural producers producing and doing business on their own premises, except
those who are regularly engaged in the business of buying or selling for a profit.]
[(d) For purposes of this chapter the commission may regard as retailers the following if
they determine it is necessary for the efficient administration of this chapter: salesmen,
representatives, peddlers, or canvassers as the agents of the dealers, distributors, supervisors, or

- 37 -

employers under whom they operate or from whom they obtain the tangible personal property
sold by them, irrespective of whether they are making sales on their own behalf or on behalf of
these dealers, distributors, supervisors, or employers, except that:]
[(i) a printer's facility with which a retailer has contracted for printing shall not be
considered to be a salesman, representative, peddler, canvasser, or agent of the retailer; and]
[(ii) the ownership of property that is located at the premises of a printer's facility with
which the retailer has contracted for printing and that consists of the final printed product,
property that becomes a part of the final printed product, or copy from which the printed product
is produced, shall not result in the retailer being deemed to have or maintain an office,
distribution house, sales house, warehouse, service enterprise, or other place of business, or to
maintain a stock of goods, within this state.]
[(26)] (55) (a) "Sale" means any transfer of title, exchange, or barter, conditional or
otherwise, in any manner, of tangible personal property or any other taxable transaction under
Subsection 59-12-103 (1), for consideration. [It]
(b) "Sale" includes:
[(a)] (i) installment and credit sales;
[(b)] (ii) any closed transaction constituting a sale;
[(c)] (iii) any sale of electrical energy, gas, services, or entertainment taxable under this
chapter;
[(d)] (iv) any transaction if the possession of property is transferred but the seller retains
the title as security for the payment of the price; and
[(e)] (v) any transaction under which right to possession, operation, or use of any article
of tangible personal property is granted under a lease or contract and the transfer of possession
would be taxable if an outright sale were made.
(56) "Sale at retail" is as defined in Subsection (53).
(57) "Sale-leaseback transaction" means a transaction by which title to tangible personal
property that is subject to a tax under this chapter is transferred:
(a) by a purchaser-lessee;

- 38 -

(b) to a lessor;
(c) for consideration; and
(d) if:
(i) the purchaser-lessee paid sales and use tax on the purchaser-lessee's initial purchase of
the tangible personal property;
(ii) the sale of the tangible personal property to the lessor is intended as a form of
financing:
(A) for the property; and
(B) to the purchaser-lessee; and
(iii) in accordance with generally accepted accounting principles, the purchaser-lessee is
required to:
(A) capitalize the property for financial reporting purposes; and
(B) account for the lease payments as payments made under a financing arrangement.
(58) "Sales price" is as defined in Subsection (48).
[(27)] (59) (a) "Sales relating to schools" means the following sales by, amounts paid to,
or amounts charged by a school:
(i) sales that are directly related to the school's educational functions or activities
including:
(A) the sale of:
(I) textbooks;
(II) textbook fees;
(III) laboratory fees;
(IV) laboratory supplies; or
(V) safety equipment;
(B) the sale of [clothing] a uniform, protective equipment, or sports or recreational
equipment that:
(I) a student is specifically required to wear as a condition of participation in a
school-related event or school-related activity; and

- 39 -

(II) is not readily adaptable to general or continued usage to the extent that it takes the
place of ordinary clothing;
(C) sales of [food] the following if the net or gross revenues generated by the [food] sales
are deposited into a school district fund or school fund dedicated to school meals[; or]:
(I) food and food ingredients; or
(II) prepared food; or
(D) transportation charges for official school activities; or
(ii) amounts paid to or amounts charged by a school for admission to a school-related
event or school-related activity.
(b) "Sales relating to schools" does not include:
(i) bookstore sales of items that are not educational materials or supplies;
(ii) except as provided in Subsection [(27)] (59)(a)(i)(B)[, clothing; or]:
(A) clothing;
(B) clothing accessories or equipment;
(C) protective equipment; or
(D) sports or recreational equipment; or
(iii) amounts paid to or amounts charged by a school for admission to a school-related
event or school-related activity if the amounts paid or charged are passed through to a person:
(A) other than a:
(I) school;
(II) nonprofit organization authorized by a school board or a governing body of a private
school to organize and direct a competitive secondary school activity; or
(III) nonprofit association authorized by a school board or a governing body of a private
school to organize and direct a competitive secondary school activity; and
(B) that is required to collect sales and use taxes under this chapter.
(c) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
commission may make rules defining the term "passed through."
[(28)] (60) For purposes of this section and Section 59-12-104 , "school" means:

- 40 -

(a) an elementary school or a secondary school that:
(i) is a:
(A) public school; or
(B) private school; and
(ii) provides instruction for one or more grades kindergarten through 12; or
(b) a public school district.
(61) "Seller" means a person that makes a sale, lease, or rental of:
(a) tangible personal property; or
(b) a service.
[(29)] (62) (a) "Semiconductor fabricating or processing materials" means tangible
personal property:
(i) used primarily in the process of:
(A) (I) manufacturing a semiconductor; or
(II) fabricating a semiconductor; or
(B) maintaining an environment suitable for a semiconductor; or
(ii) consumed primarily in the process of:
(A) (I) manufacturing a semiconductor; or
(II) fabricating a semiconductor; or
(B) maintaining an environment suitable for a semiconductor.
(b) "Semiconductor fabricating or processing materials" includes:
(i) parts used in the repairs or renovations of tangible personal property described in
Subsection [(29)] (62)(a); or
(ii) a chemical, catalyst, or other material used to:
(A) produce or induce in a semiconductor a:
(I) chemical change; or
(II) physical change;
(B) remove impurities from a semiconductor; or
(C) improve the marketable condition of a semiconductor.

- 41 -

[(30)] (63) "Senior citizen center" means a facility having the primary purpose of
providing services to the aged as defined in Section 62A-3-101 .
(64) (a) "Sports or recreational equipment" means an item:
(i) designed for human use; and
(ii) that is:
(A) worn in conjunction with:
(I) an athletic activity; or
(II) a recreational activity; and
(B) not suitable for general use.
(b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
commission shall make rules:
(i) listing the items that constitute "sports or recreational equipment"; and
(ii) that are consistent with the list of items that constitute "sports or recreational
equipment" under the agreement.
[(31)] (65) "State" means the state of Utah, its departments, and agencies.
[(32)] (66) "Storage" means any keeping or retention of tangible personal property or any
other taxable transaction under Subsection 59-12-103 (1), in this state for any purpose except sale
in the regular course of business.
[(33)] (67) (a) "Tangible personal property" means[:] personal property that:
(i) may be:
(A) seen;
(B) weighed;
(C) measured;
(D) felt; or
(E) touched; or
(ii) is in any manner perceptible to the senses.
(b) "Tangible personal property" includes:
(i) electricity;

- 42 -

(ii) water;
(iii) gas;
(iv) steam; or
(v) prewritten computer software.
[(i) all goods, wares, merchandise, produce, and commodities;]
[(ii) all tangible or corporeal things and substances which are dealt in or capable of being
possessed or exchanged;]
[(iii) water in bottles, tanks, or other containers; and]
[(iv) all other physically existing articles or things, including property severed from real
estate.]
[(b) "Tangible personal property" does not include:]
[(i) real estate or any interest or improvements in real estate;]
[(ii) bank accounts, stocks, bonds, mortgages, notes, and other evidence of debt;]
[(iii) insurance certificates or policies;]
[(iv) personal or governmental licenses;]
[(v) water in pipes, conduits, ditches, or reservoirs;]
[(vi) currency and coinage constituting legal tender of the United States or of a foreign
nation; and]
[(vii) all gold, silver, or platinum ingots, bars, medallions, or decorative coins, not
constituting legal tender of any nation, with a gold, silver, or platinum content of not less than
80%.]
[(34)] (68) (a) For purposes of Subsection [(35)] (69) and Section 59-12-103 , "telephone
service" means a two-way transmission:
(i) by:
(A) wire;
(B) radio;
(C) lightwave; or
(D) other electromagnetic means; and

- 43 -

(ii) of one or more of the following:
(A) a sign;
(B) a signal;
(C) writing;
(D) an image;
(E) sound;
(F) a message;
(G) data; or
(H) other information of any nature.
(b) "Telephone service" includes:
(i) [cellular telephone] mobile telecommunications service;
(ii) private communications service; or
(iii) automated digital telephone answering service.
(c) "Telephone service" does not include a service or a transaction that a state or a
political subdivision of a state is prohibited from taxing as of July 1, 2001, under the Internet Tax
Freedom Act, Pub. L. No. 105-277.
[(35)] (69) (a) "Telephone service provider" means a person that:
(i) owns, controls, operates, or manages a telephone service; and
(ii) engages in an activity described in Subsection [(35)] (69)(a)(i) for the shared use with
or resale to any person of the telephone service.
(b) A person described in Subsection [(35)] (69)(a) is a telephone service provider
whether or not the Public Service Commission of Utah regulates:
(i) that person; or
(ii) the telephone service that the person owns, controls, operates, or manages.
(70) "Tobacco" means:
(a) a cigarette;
(b) a cigar;
(c) chewing tobacco;

- 44 -

(d) pipe tobacco; or
(e) any other item that contains tobacco.
[(36)] (71) (a) "Use" means the exercise of any right or power over tangible personal
property under Subsection 59-12-103 (1), incident to the ownership or the leasing of that
property, item, or service.
(b) "Use" does not include the sale, display, demonstration, or trial of that property in the
regular course of business and held for resale.
[(37)] (72) "Vehicle" means any aircraft, as defined in Section 72-10-102 ; any vehicle, as
defined in Section 41-1a-102 ; any off-highway vehicle, as defined in Section 41-22-2 ; and any
vessel, as defined in Section 41-1a-102 ; that is required to be titled, registered, or both.
"Vehicle," for purposes of Subsection 59-12-104 [(36)] (35) only, also includes any locomotive,
freight car, railroad work equipment, or other railroad rolling stock.
[(38)] (73) "Vehicle dealer" means a person engaged in the business of buying, selling, or
exchanging vehicles as defined in Subsection [(37)] (72).
[(39) (a) "Vendor" means any person receiving any payment or consideration upon a sale
of tangible personal property or any other taxable transaction under Subsection 59-12-103 (1), or
to whom the payment or consideration is payable.]
[(b) "Vendor" does not mean a printer's facility described in Subsection (25)(d).]
Section 8. Section 59-12-102.1 is enacted to read:
59-12-102.1. Authority to enter into agreement -- Purpose and scope of agreement
-- Rulemaking authority -- Agreement may require a state that is a member of the
agreement to abide by certain requirements.
(1) The commission may:
(a) enter into the agreement described in Subsection (2) with one or more states to:
(i) simplify and modernize agreement sales and use tax administration in order to
substantially reduce the burden of sales and use tax compliance for all sellers and for all types of
commerce;
(ii) establish standards for certification of a:

- 45 -

(A) certified service provider; and
(B) certified automated system; and
(iii) act jointly with other states that are members of the agreement to establish
performance standards for multistate sellers ; and
(b) take other actions reasonably required to implement the provisions of the agreement:
(i) if those actions are not in conflict with statute; and
(ii) subject to Subsection (1)(b)(i), including:
(A) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
adopting administrative rules; and
(B) in furtherance of the agreement, jointly procuring goods or services with other states
that are members of the agreement.
(2) The agreement the commission may enter into under Subsection (1), may require
each state that is a member of the agreement to abide by the following requirements:
(a) establish restrictions to achieve over time more uniform state sales and use tax rates
by:
(i) limiting the number of sales and use tax rates within the state;
(ii) limiting the application of maximums on the amount of sales and use tax that is due
on a transaction; and
(iii) limiting the application of thresholds on the application of sales and use taxes;
(b) establish uniform standards for:
(i) the sourcing of transactions to local taxing jurisdictions;
(ii) the administration of exempt sales;
(iii) the allowance a seller may take for bad debts; and
(iv) agreement sales and use tax:
(A) returns; and
(B) remittances;
(c) develop and adopt uniform definitions:
(i) of sales and use tax terms; and

- 46 -

(ii) that enable each state to preserve the state's ability to make policy choices consistent
with the uniform definitions;
(d) provide a central, electronic registration system that allows a seller to register to
collect and remit agreement sales and use tax for all states that are members of the agreement;
(e) require that the following may not be used as a factor in determining whether a seller
has sufficient contacts with a state to be required to collect a sales or use tax:
(i) registration with a central registration system; or
(ii) the collection of sales or use taxes in the states that are members of the agreement;
(f) reduce the burdens of collecting and remitting local sales and use taxes by:
(i) restricting variances between transactions that are subject to state sales and use tax
and transactions that are subject to local sales and use taxes;
(ii) requiring states to administer any agreement sales and use tax imposed by a local
taxing jurisdiction within the state so that a seller that collects or remits the agreement sales and
use tax will not have to:
(A) register with the local taxing jurisdiction;
(B) file a return with the local taxing jurisdiction;
(C) remit funds to the local taxing jurisdiction; or
(D) be subject to an independent audit by a local taxing jurisdiction;
(iii) restricting the frequency of changes in sales and use tax rates for an agreement sales
and use tax imposed by a local taxing jurisdiction;
(iv) establishing effective dates for the application of a change in a local taxing
jurisdiction boundary to an agreement sales and use tax imposed by the local taxing jurisdiction;
and
(v) providing notice of a change in:
(A) a sales and use tax rate for an agreement sales and use tax imposed by a local taxing
jurisdiction; and
(B) a boundary of a local taxing jurisdiction;
(g) provide a monetary allowance to a seller or certified service provider;

- 47 -

(h) (i) certify compliance with the terms of the agreement prior to entering into the
agreement; and
(ii) maintain compliance with all of the provisions of the agreement:
(A) during the time period that the state is a member of the agreement; and
(B) under the laws of the state entering into the agreement;
(i) adopt a uniform policy for certified service providers that:
(i) protects the privacy of consumers; and
(ii) maintains the confidentiality of tax information;
(j) appoint the following advisory councils:
(i) a council consisting of private sector representatives to consult with in the
administration of the agreement; and
(ii) a council consisting of state government representatives to consult with in the
administration of the agreement;
(k) (i) require that a certified service provider is the agent of a seller with whom the
certified service provider has contracted for the collection and remittance of agreement sales and
use tax; and
(ii) except as provided in Subsection (2)(l), require that the certified service provider that
is the seller's agent is liable for agreement sales and use tax due:
(A) to each state that is a member of the agreement; and
(B) on all agreement sales and use tax transactions that the certified service provider
processes for the seller;
(l) notwithstanding Subsection (2)(k), require that:
(i) a seller that contracts with a certified service provider is not liable to the state for
agreement sales and use tax due on a transaction processed by the certified service provider or
subject to audit on a transaction processed by the certified service provider unless the seller:
(A) misrepresented the type of items the seller sells; or
(B) committed fraud;
(ii) a seller is subject to audit for transactions not processed by the certified service

- 48 -

provider; and
(iii) the states that are members of the agreement acting jointly may perform a system
check of a seller or review a seller's procedures to determine:
(A) if a certified service provider's system is functioning properly; or
(B) the extent to which a seller's transactions are being processed by a certified service
provider;
(m) require that:
(i) a person that provides a certified automated system is:
(A) responsible for the proper functioning of that certified automated system; and
(B) liable to the state for underpayments of agreement sales and use tax attributable to
errors in the functioning of the certified automated system; and
(ii) a seller that uses a certified automated system remains responsible for and is liable to
the state for reporting, collecting, and remitting agreement sales and use tax; and
(n) require that a seller that has a proprietary system for determining the amount of
agreement sales and use tax due on a transaction and has signed an agreement with the
commission establishing a performance standard for that proprietary system is liable for the
failure of the proprietary system to meet the performance standard.
(3) The agreement described in this section:
(a) is an accord among individual cooperating sovereigns in furtherance of the
cooperating sovereigns' governmental functions; and
(b) provides a mechanism among the states that are members of the agreement to
establish and maintain a cooperative, simplified system for the application and administration of
sales and use tax under laws adopted by each state that is a member of the agreement.
(4) (a) The agreement described in this section may bind and inure only to the benefit of
this state and other states that are members of the agreement.
(b) A person, other than a state that is a member of the agreement, is not an intended
beneficiary of the agreement.
(c) Any benefit of the agreement to a person other than a state is established by the law of

- 49 -

this state and the laws of other states that are members of the agreement and not by the terms of
the agreement.
(5) (a) Subject to Subsection (4), a person may not have a cause of action or defense:
(i) under the agreement; or
(ii) as a result of this state's approval of the agreement.
(b) A person may not challenge, in any action brought under any provision of law, an
action or inaction:
(i) by:
(A) a department;
(B) an agency;
(C) a commission;
(D) an entity of the state other than an entity described in Subsections (5)(b)(i)(A)
through (C); or
(E) a political subdivision of the state; and
(ii) on the ground that the action or inaction is inconsistent with the agreement.
(c) A law of this state, or the application of a law of this state, may not be declared
invalid as to any person or circumstance on the ground that the law or application is inconsistent
with the agreement.
Section 9. Section 59-12-103 is amended to read:
59-12-103. Sales and use tax base -- Rates -- Effective dates -- Use of sales and use
tax revenues.
(1) A tax is imposed on the purchaser as provided in this part for amounts paid or
charged for the following transactions:
(a) retail sales of tangible personal property made within the state;
(b) amounts paid:
(i) (A) to a common carrier; or
(B) whether the following are municipally or privately owned, to a:
(I) telephone service provider; or

- 50 -

(II) telegraph corporation as defined in Section 54-2-1 ; and
(ii) for:
(A) all transportation;
(B) telephone service, other than mobile telecommunications service, that originates and
terminates within the boundaries of this state;
(C) mobile telecommunications service that originates and terminates within the
boundaries of one state only to the extent permitted by the Mobile Telecommunications Sourcing
Act, 4 U.S.C. Sec. 116 et seq.; or
(D) telegraph service;
(c) sales of the following for commercial use:
(i) gas;
(ii) electricity;
(iii) heat;
(iv) coal;
(v) fuel oil; or
(vi) other fuels;
(d) sales of the following for residential use:
(i) gas;
(ii) electricity;
(iii) heat;
(iv) coal;
(v) fuel oil; or
(vi) other fuels;
(e) sales of [meals] prepared food;
(f) except as provided in Section 59-12-104 , amounts paid or charged as admission or
user fees for theaters, movies, operas, museums, planetariums, shows of any type or nature,
exhibitions, concerts, carnivals, amusement parks, amusement rides, circuses, menageries, fairs,
races, contests, sporting events, dances, boxing matches, wrestling matches, closed circuit

- 51 -

television broadcasts, billiard parlors, pool parlors, bowling lanes, golf, miniature golf, golf
driving ranges, batting cages, skating rinks, ski lifts, ski runs, ski trails, snowmobile trails, tennis
courts, swimming pools, water slides, river runs, jeep tours, boat tours, scenic cruises, horseback
rides, sports activities, or any other amusement, entertainment, recreation, exhibition, cultural, or
athletic activity;
(g) amounts paid or charged for services:
(i) for repairs or renovations of tangible personal property, unless Section 59-12-104
provides for an exemption from sales and use tax for:
(A) the tangible personal property; and
(B) parts used in the repairs or renovations of the tangible personal property described in
Subsection (1)(g)(i)(A), whether or not any parts are actually used in the repairs or renovations of
that tangible personal property; or
(ii) to install tangible personal property in connection with other tangible personal
property, unless the tangible personal property being installed is exempt from sales and use tax
under Section 59-12-104 ;
(h) except as provided in Subsection 59-12-104 (7), amounts paid or charged for cleaning
or washing of tangible personal property;
(i) amounts paid or charged for tourist home, hotel, motel, or trailer court
accommodations and services that are regularly rented for less than 30 consecutive days;
(j) amounts paid or charged for laundry or dry cleaning services;
(k) amounts paid or charged for leases or rentals of tangible personal property if:
(i) the tangible personal property's situs is in this state;
(ii) the lessee took possession of the tangible personal property in this state; or
(iii) within this state the tangible personal property is:
(A) stored;
(B) used; or
(C) otherwise consumed;
(l) amounts paid or charged for tangible personal property if within this state the tangible

- 52 -

personal property is:
(i) stored;
(ii) used; or
(iii) consumed; and
(m) amounts paid or charged for prepaid telephone calling cards.
(2) (a) Except as provided in [Subsections] Subsection (2)(b) [and (c)], beginning on July
1, 2001, a state tax and a local tax is imposed on a transaction described in Subsection (1) equal
to the sum of:
(i) a state tax imposed on the transaction at a rate of 4.75%; and
(ii) a local tax equal to the sum of the tax rates a county, city, or town imposes on the
transaction under this chapter other than this part.
(b) Notwithstanding Subsection (2)(a), beginning on July 1, 2001, a state tax and a local
tax is imposed on a transaction described in Subsection (1)(d) equal to the sum of:
(i) a state tax imposed on the transaction at a rate of 2%; and
(ii) a local tax equal to the sum of the tax rates a county, city, or town imposes on the
transaction under this chapter other than this part.
[(c) Notwithstanding Subsections (2)(a) and (b), beginning on July 1, 2001, if a vendor
collects a tax under Subsection 59-12-107 (1)(b) on a transaction described in Subsection (1), a
state tax and a local tax is imposed on the transaction equal to the sum of:]
[(i) a state tax imposed on the transaction at a rate of:]
[(A) 4.75% for a transaction other than a transaction described in Subsection (1)(d); or]
[(B) 2% for a transaction described in Subsection (1)(d); and]
[(ii) except as provided in Subsection (2)(d), a local tax imposed on the transaction at a
rate equal to the sum of the following tax rates:]
[(A) (I) the lowest tax rate imposed by a county, city, or town under Section 59-12-204 ,
but only if all of the counties, cities, and towns in the state impose the tax under Section
59-12-204 ; or]
[(II) the lowest tax rate imposed by a county, city, or town under Section 59-12-205 , but

- 53 -

only if all of the counties, cities, and towns in the state impose the tax under Section 59-12-205 ;
and]
[(B) the tax rate authorized by Section 59-12-1102 , but only if all of the counties in the
state impose the tax under Section 59-12-1102 .]
[(d) Tax rates authorized under the following do not apply to Subsection (2)(c)(ii):]
[(i) Subsection (2)(a)(i);]
[(ii) Subsection (2)(b)(i);]
[(iii) Subsection (2)(c)(i);]
[(iv) Section 59-12-301 ;]
[(v) Section 59-12-352 ;]
[(vi) Section 59-12-353 ;]
[(vii) Section 59-12-401 ;]
[(viii) Section 59-12-402 ;]
[(ix) Section 59-12-501 ;]
[(x) Section 59-12-502 ;]
[(xi) Section 59-12-603 ;]
[(xii) Section 59-12-703 ;]
[(xiii) Section 59-12-802 ;]
[(xiv) Section 59-12-804 ;]
[(xv) Section 59-12-1001 ;]
[(xvi) Section 59-12-1201 ; or]
[(xvii) Section 59-12-1302 .]
(c) Subject to Subsections (2)(d) and (e), a tax rate change for a tax rate imposed under
the following shall take effect on the first day of a calendar quarter:
(i) Subsection (2)(a)(i); or
(ii) Subsection (2)(b)(i).
(d) (i) For a transaction described in Subsection (2)(d)(iii), a tax rate increase shall take
effect on the first day of the first billing period:

- 54 -

(A) that begins after the effective date of the tax rate increase; and
(B) if the billing period for the transaction begins before the effective date of a tax rate
increase imposed under:
(I) Subsection (2)(a)(i); or
(II) Subsection (2)(b)(i).
(ii) For a transaction described in Subsection (2)(d)(iii), a tax rate decrease shall take
effect on the first day of the last billing period:
(A) that began before the effective date of the tax rate decrease; and
(B) if the billing period for the transaction begins before the effective date of a tax rate
decrease imposed under:
(I) Subsection (2)(a)(i); or
(II) Subsection (2)(b)(i).
(iii) Subsections (2)(d)(i) and (ii) apply to transactions subject to a tax under:
(A) Subsection (1)(b);
(B) Subsection (1)(c);
(C) Subsection (1)(d);
(D) Subsection (1)(e);
(E) Subsection (1)(f);
(F) Subsection (1)(g);
(G) Subsection (1)(h);
(H) Subsection (1)(i);
(I) Subsection (1)(j); or
(J) Subsection (1)(k).
(e) (i) If a tax due under Subsection (2)(a)(i) on a catalogue sale is computed on the basis
of sales and use tax rates published in the catalogue, a change in a tax rate imposed under
Subsection (2)(a)(i) takes effect:
(A) on the first day of a calendar quarter; and
(B) beginning 60 days after the effective date of the tax rate change under Subsection

- 55 -

(2)(a)(i).
(ii) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
commission may by rule define the term "catalogue sale."
(3) (a) Except as provided in Subsections (4) through (7) and (9), the following state
taxes shall be deposited into the General Fund:
(i) the tax imposed by Subsection (2)(a)(i); or
(ii) the tax imposed by Subsection (2)(b)(i)[; and].
[(iii) the tax imposed by Subsection (2)(c)(i).]
(b) The local taxes described in Subsections (2)(a)(ii) and (2)(b)(ii) shall be distributed to
a county, city, or town as provided in this chapter.
[(c) (i) Notwithstanding any provision of this chapter, each county, city, or town in the
state shall receive the county's, city's, or town's proportionate share of the revenues generated by
the local tax described in Subsection (2)(c)(ii) as provided in Subsection (3)(c)(ii).]
[(ii) The commission shall determine a county's, city's, or town's proportionate share of
the revenues under Subsection (3)(c)(i) by:]
[(A) calculating an amount equal to:]
[(I) the population of the county, city, or town; divided by]
[(II) the total population of the state; and]
[(B) multiplying the amount determined under Subsection (3)(c)(ii)(A) by the total
amount of revenues generated by the local tax under Subsection (2)(c)(ii) for all counties, cities,
and towns.]
[(iii) (A) Except as provided in Subsection (3)(c)(iii)(B), population figures for purposes
of this section shall be derived from the most recent official census or census estimate of the
United States Census Bureau.]
[(B) Notwithstanding Subsection (3)(c)(iii)(A), if a needed population estimate is not
available from the United States Census Bureau, population figures shall be derived from the
estimate from the Utah Population Estimates Committee created by executive order of the
governor.]

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[(C) For purposes of this section, the population of a county may only include the
population of the unincorporated areas of the county.]
[(4) (a) Notwithstanding Subsection (3)(a), there shall be deposited in an Olympics
special revenue fund or funds as determined by the Division of Finance under Section 51-5-4 , for
the use of the Utah Sports Authority created under Title 63A, Chapter 7, Utah Sports Authority
Act:]
[(i) from January 1, 1990, through December 31, 1999, the amount of sales and use tax
generated by a 1/64% tax rate on the taxable transactions under Subsection (1);]
[(ii) from January 1, 1990, through June 30, 1999, the amount of revenue generated by a
1/64% tax rate under Section 59-12-204 or Section 59-12-205 on the taxable transactions under
Subsection (1); and]
[(iii) interest earned on the amounts under Subsections (4)(a)(i) and (ii).]
[(b) These funds shall be used:]
[(i) by the Utah Sports Authority as follows:]
[(A) to the extent funds are available, to transfer directly to a debt service fund or to
otherwise reimburse to the state any amount expended on debt service or any other cost of any
bonds issued by the state to construct any public sports facility as defined in Section 63A-7-103 ;]
[(B) to pay for the actual and necessary operating, administrative, legal, and other
expenses of the Utah Sports Authority, but not including protocol expenses for seeking and
obtaining the right to host the Winter Olympic Games;]
[(C) as otherwise appropriated by the Legislature; and]
[(D) unless the Legislature appropriates additional funds from the Olympics Special
Revenue Fund to the Utah Sports Authority, the Utah Sports Authority may not expend, loan, or
pledge in the aggregate more than:]
[(I) $59,000,000 of sales and use tax deposited into the Olympics Special Revenue Fund
under Subsection (4)(a);]
[(II) the interest earned on the amount described in Subsection (4)(b)(i)(D)(I); and]
[(III) the revenues deposited into the Olympics Special Revenue Fund that are not sales

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and use taxes deposited under Subsection (4)(a) or interest on the sales and use taxes;]
[(ii) to pay salary, benefits, or administrative costs associated with the State Olympic
Officer under Subsection 63A-10-103 (3), except that the salary, benefits, or administrative costs
may not be paid from the sales and use tax revenues generated by municipalities or counties and
deposited under Subsection (4)(a)(ii).]
[(c) A payment of salary, benefits, or administrative costs under Subsection
63A-10-103 (3) is not considered an expenditure of the Utah Sports Authority.]
[(d) If the Legislature appropriates additional funds under Subsection (4)(b)(i)(D), the
authority may not expend, loan, pledge, or enter into any agreement to expend, loan, or pledge
the appropriated funds unless the authority:]
[(i) contracts in writing for the full reimbursement of the monies to the Olympics Special
Revenue Fund by a public sports entity or other person benefitting from the expenditure; and]
[(ii) obtains a security interest that secures payment or performance of the obligation to
reimburse.]
[(e) A contract or agreement entered into in violation of Subsection (4)(d) is void.]
[(5)] (4) (a) (i) Notwithstanding Subsection (3)(a) and except as provided in Subsection
[(11)] (9), for fiscal year 2002-03 only, the lesser of the following amounts shall be transferred or
deposited as provided in Subsections [(5)] (4)(a)(ii) through (vii):
(A) for taxes listed under Subsection (3)(a), the amount of tax revenue generated:
(I) by a 1/16% tax rate on the transactions described in Subsection (1); and
(II) for fiscal year 2002-03; or
(B) $18,743,000.
(ii) (A) For fiscal year 2002-03 only, $2,300,000 of the amount described in Subsection
[(5)] (4)(a)(i) shall be transferred as dedicated credits to the Department of Natural Resources to:
(I) implement the measures described in Subsections 63-34-14 (4)(a) through (d) to
protect sensitive plant and animal species; or
(II) award grants, up to the amount authorized by the Legislature in an appropriations act,
to political subdivisions of the state to implement the measures described in Subsections

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63-34-14 (4)(a) through (d) to protect sensitive plant and animal species.
(B) Money transferred to the Department of Natural Resources under Subsection [(5)]
(4)(a)(ii)(A) may not be used to assist the United States Fish and Wildlife Service or any other
person to list or attempt to have listed a species as threatened or endangered under the
Endangered Species Act of 1973, 16 U.S.C. Sec. 1531 et seq.
(C) At the end of fiscal year 2002-03:
(I) 50% of any unexpended dedicated credits shall lapse to the Water Resources
Conservation and Development Fund created in Section 73-10-24 ;
(II) 25% of any unexpended dedicated credits shall lapse to the Utah Wastewater Loan
Program Subaccount created in Section 73-10c-5 ; and
(III) 25% of any unexpended dedicated credits shall lapse to the Drinking Water Loan
Program Subaccount created in Section 73-10c-5 .
(iii) For fiscal year 2002-03 only, $500,000 of the amount described in Subsection [(5)]
(4)(a)(i) shall be deposited in the Agriculture Resource Development Fund created in Section
4-18-6 .
(iv) (A) For fiscal year 2002-03 only, $100,000 of the amount described in Subsection
[(5)] (4)(a)(i) shall be transferred as dedicated credits to the Division of Water Rights to cover
the costs incurred in hiring legal and technical staff for the adjudication of water rights.
(B) At the end of fiscal year 2002-03:
(I) 50% of any unexpended dedicated credits shall lapse to the Water Resources
Conservation and Development Fund created in Section 73-10-24 ;
(II) 25% of any unexpended dedicated credits shall lapse to the Utah Wastewater Loan
Program Subaccount created in Section 73-10c-5 ; and
(III) 25% of any unexpended dedicated credits shall lapse to the Drinking Water Loan
Program Subaccount created in Section 73-10c-5 .
(v) (A) For fiscal year 2002-03 only, 50% of the amount described in Subsection [(5)]
(4)(a)(i) that remains after making the transfers and deposits required by Subsections [(5)]
(4)(a)(ii) through (iv) shall be deposited in the Water Resources Conservation and Development

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Fund created in Section 73-10-24 for use by the Division of Water Resources.
(B) In addition to the uses allowed of the Water Resources Conservation and
Development Fund under Section 73-10-24 , the Water Resources Conservation and
Development Fund may also be used to:
(I) provide a portion of the local cost share, not to exceed in fiscal year 2002-03 50% of
the funds made available to the Division of Water Resources under this section, of potential
project features of the Central Utah Project;
(II) conduct hydrologic and geotechnical investigations by the Department of Natural
Resources in a cooperative effort with other state, federal, or local entities, for the purpose of
quantifying surface and ground water resources and describing the hydrologic systems of an area
in sufficient detail so as to enable local and state resource managers to plan for and accommodate
growth in water use without jeopardizing the resource;
(III) fund state required dam safety improvements; and
(IV) protect the state's interest in interstate water compact allocations, including the
hiring of technical and legal staff.
(vi) For fiscal year 2002-03 only, 25% of the amount described in Subsection [(5)]
(4)(a)(i) that remains after making the transfers and deposits required by Subsections [(5)]
(4)(a)(ii) through (iv) shall be deposited in the Utah Wastewater Loan Program Subaccount
created in Section 73-10c-5 for use by the Water Quality Board to fund wastewater projects.
(vii) For fiscal year 2002-03 only, 25% of the amount described in Subsection [(5)]
(4)(a)(i) that remains after making the transfers and deposits required by Subsections [(5)]
(4)(a)(ii) through (iv) shall be deposited in the Drinking Water Loan Program Subaccount created
in Section 73-10c-5 for use by the Division of Drinking Water to:
(A) provide for the installation and repair of collection, treatment, storage, and
distribution facilities for any public water system, as defined in Section 19-4-102 ;
(B) develop underground sources of water, including springs and wells; and
(C) develop surface water sources.
(b) (i) Notwithstanding Subsection (3)(a), for a fiscal year beginning on or after July 1,

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2003, the lesser of the following amounts shall be used as provided in Subsections [(5)] (4)(b)(ii)
through (vii):
(A) for taxes listed under Subsection (3)(a), the amount of tax revenue generated:
(I) by a 1/16% tax rate on the transactions described in Subsection (1); and
(II) for the fiscal year; or
(B) $17,500,000.
(ii) (A) For a fiscal year beginning on or after July 1, 2003, 14% of the amount described
in Subsection [(5)] (4)(b)(i) shall be transferred each year as dedicated credits to the Department
of Natural Resources to:
(I) implement the measures described in Subsections 63-34-14 (4)(a) through (d) to
protect sensitive plant and animal species; or
(II) award grants, up to the amount authorized by the Legislature in an appropriations act,
to political subdivisions of the state to implement the measures described in Subsections
63-34-14 (4)(a) through (d) to protect sensitive plant and animal species.
(B) Money transferred to the Department of Natural Resources under Subsection [(5)]
(4)(b)(ii)(A) may not be used to assist the United States Fish and Wildlife Service or any other
person to list or attempt to have listed a species as threatened or endangered under the
Endangered Species Act of 1973, 16 U.S.C. Sec. 1531 et seq.
(C) At the end of each fiscal year:
(I) 50% of any unexpended dedicated credits shall lapse to the Water Resources
Conservation and Development Fund created in Section 73-10-24 ;
(II) 25% of any unexpended dedicated credits shall lapse to the Utah Wastewater Loan
Program Subaccount created in Section 73-10c-5 ; and
(III) 25% of any unexpended dedicated credits shall lapse to the Drinking Water Loan
Program Subaccount created in Section 73-10c-5 .
(iii) For a fiscal year beginning on or after July 1, 2003, 3% of the amount described in
Subsection [(5)] (4)(b)(i) shall be deposited each year in the Agriculture Resource Development
Fund created in Section 4-18-6 .

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(iv) (A) For a fiscal year beginning on or after July 1, 2003, 1% of the amount described
in Subsection [(5)] (4)(b)(i) shall be transferred each year as dedicated credits to the Division of
Water Rights to cover the costs incurred in hiring legal and technical staff for the adjudication of
water rights.
(B) At the end of each fiscal year:
(I) 50% of any unexpended dedicated credits shall lapse to the Water Resources
Conservation and Development Fund created in Section 73-10-24 ;
(II) 25% of any unexpended dedicated credits shall lapse to the Utah Wastewater Loan
Program Subaccount created in Section 73-10c-5 ; and
(III) 25% of any unexpended dedicated credits shall lapse to the Drinking Water Loan
Program Subaccount created in Section 73-10c-5 .
(v) (A) For a fiscal year beginning on or after July 1, 2003, 41% of the amount described
in Subsection [(5)] (4)(b)(i) shall be deposited in the Water Resources Conservation and
Development Fund created in Section 73-10-24 for use by the Division of Water Resources.
(B) In addition to the uses allowed of the Water Resources Conservation and
Development Fund under Section 73-10-24 , the Water Resources Conservation and
Development Fund may also be used to:
(I) provide a portion of the local cost share, not to exceed in any fiscal year 50% of the
funds made available to the Division of Water Resources under this section, of potential project
features of the Central Utah Project;
(II) conduct hydrologic and geotechnical investigations by the Department of Natural
Resources in a cooperative effort with other state, federal, or local entities, for the purpose of
quantifying surface and ground water resources and describing the hydrologic systems of an area
in sufficient detail so as to enable local and state resource managers to plan for and accommodate
growth in water use without jeopardizing the resource;
(III) fund state required dam safety improvements; and
(IV) protect the state's interest in interstate water compact allocations, including the
hiring of technical and legal staff.

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(vi) For a fiscal year beginning on or after July 1, 2003, 20.5% of the amount described
in Subsection [(5)] (4)(b)(i) shall be deposited in the Utah Wastewater Loan Program Subaccount
created in Section 73-10c-5 for use by the Water Quality Board to fund wastewater projects.
(vii) For a fiscal year beginning on or after July 1, 2003, 20.5% of the amount described
in Subsection [(5)] (4)(b)(i) shall be deposited in the Drinking Water Loan Program Subaccount
created in Section 73-10c-5 for use by the Division of Drinking Water to:
(A) provide for the installation and repair of collection, treatment, storage, and
distribution facilities for any public water system, as defined in Section 19-4-102 ;
(B) develop underground sources of water, including springs and wells; and
(C) develop surface water sources.
[(6)] (5) (a) (i) Notwithstanding Subsection (3)(a), for fiscal year 2002-03 only, the lesser
of the following amounts shall be transferred or deposited as provided in Subsections [(6)]
(5)(a)(ii) through (iv):
(A) for taxes listed under Subsection (3)(a), the amount of tax revenue generated:
(I) by a 1/16% tax rate on the transactions described in Subsection (1); and
(II) for the fiscal year; or
(B) $18,743,000.
(ii) (A) For fiscal year 2002-03 only, $500,000 of the amount described in Subsection
[(6)] (5)(a)(i) shall be deposited in the Transportation Corridor Preservation Revolving Loan
Fund created in Section 72-2-117 .
(B) At least 50% of the money deposited in the Transportation Corridor Preservation
Revolving Loan Fund under Subsection [(6)] (5)(a)(ii)(A) shall be used to fund loan applications
made by the Department of Transportation at the request of local governments.
(iii) For fiscal year 2002-03 only, $500,000 of the amount described in Subsection [(6)]
(5)(a)(i) shall be transferred as nonlapsing dedicated credits to the Department of Transportation
for the State Park Access Highways Improvement Program created in Section 72-3-207 .
(iv) For fiscal year 2002-03 only, the amount described in Subsection [(6)] (5)(a)(i) that
remains after making the transfers and deposits required by Subsections [(6)] (5)(a)(ii) and (iii)

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shall be deposited in the class B and class C roads account to be expended as provided in Title
72, Chapter 2, Transportation Finances Act, for the use of class B and C roads.
(b) (i) Notwithstanding Subsection (3)(a), for a fiscal year beginning on or after July 1,
2003, the lesser of the following amounts shall be used as provided in Subsections [(6)] (5)(b)(ii)
through (iv):
(A) for taxes listed under Subsection (3)(a), the amount of tax revenue generated:
(I) by a 1/16% tax rate on the transactions described in Subsection (1); and
(II) for the fiscal year; or
(B) $18,743,000.
(ii) (A) For a fiscal year beginning on or after July 1, 2003, 3% of the amount described
in Subsection [(6)] (5)(b)(i) shall be deposited each year in the Transportation Corridor
Preservation Revolving Loan Fund created in Section 72-2-117 .
(B) At least 50% of the money deposited in the Transportation Corridor Preservation
Revolving Loan Fund under Subsection [(6)] (5)(b)(ii)(A) shall be used to fund loan applications
made by the Department of Transportation at the request of local governments.
(iii) For a fiscal year beginning on or after July 1, 2003, 3% of the amount described in
Subsection [(6)] (5)(b)(i) shall be transferred each year as nonlapsing dedicated credits to the
Department of Transportation for the State Park Access Highways Improvement Program created
in Section 72-3-207 .
(iv) For a fiscal year beginning on or after July 1, 2003, 94% of the amount described in
Subsection [(6)] (5)(b)(i) shall be deposited in the class B and class C roads account to be
expended as provided in Title 72, Chapter 2, Transportation Finances Act, for the use of class B
and C roads.
[(7) (a)] (6) Notwithstanding Subsection (3)(a), beginning on January 1, 2000, the
Division of Finance shall deposit into the Centennial Highway Fund created in Section 72-2-118
a portion of the taxes listed under Subsection (3)(a) equal to the revenues generated by a 1/64%
tax rate on the taxable transactions under Subsection (1).
[(b) Except for sales and use taxes deposited under Subsection (8), beginning on July 1,

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1999, the revenues generated by the 1/64% tax rate:]
[(i) retained under Subsection 59-12-204 (7)(a) shall be retained by the counties, cities, or
towns as provided in Section 59-12-204 ; and]
[(ii) retained under Subsection 59-12-205 (4)(a) shall be distributed to each county, city,
and town as provided in Section 59-12-205 .]
[(8)] (7) Notwithstanding Subsection (3)(a), beginning on July 1, 1999, the commission
shall deposit into the Airport to University of Utah Light Rail Restricted Account created in
Section 17A-2-1064 the portion of the sales and use tax under [Sections] Section 59-12-204 [and
59-12-205 ] that is:
(a) generated by a city or town that will have constructed within its boundaries the
Airport to University of Utah Light Rail described in the Transportation Equity Act for the 21st
Century, Pub. L. No. 105-178, Sec. 3030(c)(2)(B)(i)(II), 112 Stat. 107; and
(b) equal to the revenues generated by a 1/64% tax rate on the taxable items and services
under Subsection (1).
[(9) (a) Notwithstanding Subsection (3)(a), for fiscal years beginning on or after fiscal
year 2002-03, the commission shall on or before September 30 of each year deposit the
difference described in Subsection (9)(b) into the Remote Sales Restricted Account created in
Section 59-12-103.2 if that difference is greater than $0.]
[(b) The difference described in Subsection (9)(a) is equal to the difference between:]
[(i) the total amount of revenues under Subsection (2)(c)(i) the commission received
from vendors collecting a tax under Subsection 59-12-107 (1)(b) for the fiscal year immediately
preceding the September 30 described in Subsection (9)(a); and]
[(ii) the total amount of revenues under Subsection (2)(c)(i) the commission estimates
that the commission received from vendors described in Subsection 59-12-107 (1)(b) for fiscal
year 2000-01.]
[(10)] (8) (a) For purposes of amounts paid or charged as admission or user fees relating
to the Olympic Winter Games of 2002, the amounts are considered to be paid or charged on the
day on which the Salt Lake Organizing Committee for the Olympic Winter Games of 2002 or a

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person designated by the Salt Lake Organizing Committee for the Olympic Winter Games of
2002 sends a purchaser confirmation of the purchase of an admission or user fee described in
Subsection (1)(f).
(b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
commission shall make rules defining what constitutes sending a purchaser confirmation under
Subsection [(10)] (8)(a).
[(11)] (9) (a) For fiscal year 2002-03 only, the following amounts shall be subtracted
from the total amount required to be deposited or transferred in accordance with Subsection [(5)]
(4):
(i) $25,000 shall be subtracted from the total amount required to be transferred to the
Division of Water Rights in accordance with Subsection [(5)] (4)(a)(iv);
(ii) $385,000 shall be subtracted from the total amount required to be deposited into the
Agriculture Resource Development Fund in accordance with Subsection [(5)] (4)(a)(iii);
(iii) $350,000 shall be subtracted from the total amount required to be transferred to the
Department of Natural Resources in accordance with Subsection [(5)] (4)(a)(ii);
(iv) $3,012,500 shall be subtracted from the total amount required to be deposited into
the Drinking Water Loan Program Subaccount in accordance with Subsection [(5)] (4)(a)(vii);
(v) $3,012,500 shall be subtracted from the total amount required to be deposited into the
Utah Wastewater Loan Program Subaccount in accordance with Subsection [(5)] (4)(a)(vi); and
(vi) $5,715,000 shall be subtracted from the total amount required to be deposited into
the Water Resources Conservation and Development Fund in accordance with Subsection [(5)]
(4)(a)(v).
(b) The amounts subtracted under Subsection [(11)] (9)(a) shall be deposited into the
General Fund.
Section 10. Section 59-12-103.1 is amended to read:
59-12-103.1. Action by Supreme Court of the United States authorizing or action
by Congress permitting a state to require certain sellers to collect a sales or use tax --
Collection of tax by commission -- Commission report to Utah Tax Review Commission --

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Utah Tax Review Commission study.
(1) [A vendor] Except as provided in Sections 59-12-107.1 through 59-12-107.3 , a seller
shall remit to the commission a tax as provided in [Subsection 59-12-103 (2)(c) and] Section
59-12-107 if:
(a) the Supreme Court of the United States issues a decision authorizing a state to require
a [vendor] seller that does not meet one or more of the criteria described in Subsection
59-12-107 (1)(a) to collect a sales or use tax; or
(b) Congress permits the state to require a [vendor] seller that does not meet one or more
of the criteria described in Subsection 59-12-107 (1)(a) to collect a sales or use tax.
(2) The commission shall:
(a) collect the tax described in Subsection (1) from the [vendor] seller:
(i) to the extent:
(A) authorized by the Supreme Court of the United States; or
(B) permitted by Congress;
(ii) beginning on the first day of a calendar quarter as prescribed by the Utah Tax Review
Commission; and
(b) make a report to the Utah Tax Review Commission:
(i) regarding the actions taken by:
(A) the Supreme Court of the United States; or
(B) Congress; and
(ii) at the Utah Tax Review Commission meeting immediately following the day on
which the Supreme Court of the United States' or Congress' actions become effective.
(3) The Utah Tax Review Commission shall after hearing the commission's report under
Subsection (2)(b):
(a) review the actions taken by:
(i) the Supreme Court of the United States; or
(ii) Congress;
(b) direct the commission regarding the day on which the commission is required to

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collect the tax described in Subsection (1); and
(c) make recommendations to the Revenue and Taxation Interim Committee:
(i) regarding whether as a result of the Supreme Court of the United States' or Congress'
actions any provisions of this chapter should be amended or repealed; and
(ii) within a one-year period after the day on which the commission makes a report under
Subsection (2)(b).
Section 11. Section 59-12-103.2 is amended to read:
59-12-103.2. Remote Sales Restricted Account -- Creation.
(1) There is created within the General Fund a restricted account known as the "Remote
Sales Restricted Account."
[(2) The account shall be funded from the portion of the sales and use tax deposited by
the commission as provided in Subsection 59-12-103 (9).]
(2) On or before December 1, 2004, the Division of Finance shall deposit any revenues in
the Remote Sales Restricted Account into the General Fund.
Section 12. Section 59-12-104 is amended to read:
59-12-104. Exemptions.
The following sales and uses are exempt from the taxes imposed by this chapter:
(1) sales of aviation fuel, motor fuel, and special fuel subject to a Utah state excise tax
under Chapter 13, Motor and Special Fuel Tax Act;
(2) sales to the state, its institutions, and its political subdivisions; however, this
exemption does not apply to sales of:
(a) construction materials except:
(i) construction materials purchased by or on behalf of institutions of the public
education system as defined in Utah Constitution Article X, Section 2, provided the construction
materials are clearly identified and segregated and installed or converted to real property which is
owned by institutions of the public education system; and
(ii) construction materials purchased by the state, its institutions, or its political
subdivisions which are installed or converted to real property by employees of the state, its

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institutions, or its political subdivisions; or
(b) tangible personal property in connection with the construction, operation,
maintenance, repair, or replacement of a project, as defined in Section 11-13-103 , or facilities
providing additional project capacity, as defined in Section 11-13-103 ;
(3) (a) sales of [food, beverage, and dairy products] an item described in Subsection
(3)(b) from a vending [machines in which] machine if:
(i) the proceeds of each sale do not exceed $1 [if]; and
(ii) the [vendor] seller or operator of the vending machine reports an amount equal to
150% of the cost of [items] the item described in Subsection (3)(a) as goods consumed; and
(b) Subsection (3)(a) applies to:
(i) food and food ingredients; or
(ii) prepared food;
(4) sales of [food, beverage, dairy products, similar confections, and related services] the
following to a commercial airline [carriers] carrier for in-flight consumption[;]:
(a) food and food ingredients;
(b) prepared food; or
(c) services related to Subsection (4)(a) or (b);
(5) sales of parts and equipment for installation in aircraft operated by common carriers
in interstate or foreign commerce;
(6) sales of commercials, motion picture films, prerecorded audio program tapes or
records, and prerecorded video tapes by a producer, distributor, or studio to a motion picture
exhibitor, distributor, or commercial television or radio broadcaster;
(7) sales of cleaning or washing of tangible personal property by a coin-operated laundry
or dry cleaning machine;
(8) (a) except as provided in Subsection (8)(b), sales made to or by religious or charitable
institutions in the conduct of their regular religious or charitable functions and activities, if the
requirements of Section 59-12-104.1 are fulfilled;
(b) the exemption provided for in Subsection (8)(a) does not apply to the following sales,

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uses, leases, or rentals relating to the Olympic Winter Games of 2002 made to or by an
organization exempt from federal income taxation under Section 501(c)(3), Internal Revenue
Code:
(i) retail sales of Olympic merchandise;
(ii) except as provided in Subsection [(51)] (50), admissions or user fees described in
Subsection 59-12-103 (1)(f);
(iii) sales of accommodations and services as provided in Subsection 59-12-103 (1)(i),
except for accommodations and services:
(A) paid for in full by the Salt Lake Organizing Committee for the Olympic Winter
Games of 2002;
(B) exclusively used by:
(I) an officer, a trustee, or an employee of the Salt Lake Organizing Committee for the
Olympic Winter Games of 2002; or
(II) a volunteer supervised by the Salt Lake Organizing Committee for the Olympic
Winter Games of 2002; and
(C) for which the Salt Lake Organizing Committee for the Olympic Winter Games of
2002 does not receive reimbursement; or
(iv) a lease or rental of a vehicle as defined in Section 41-1a-102 , except for a lease or
rental of a vehicle:
(A) paid for in full by the Salt Lake Organizing Committee for the Olympic Winter
Games of 2002;
(B) exclusively used by:
(I) an officer, a trustee, or an employee of the Salt Lake Organizing Committee for the
Olympic Winter Games of 2002; or
(II) a volunteer supervised by the Salt Lake Organizing Committee for the Olympic
Winter Games of 2002; and
(C) for which the Salt Lake Organizing Committee for the Olympic Winter Games of
2002 does not receive reimbursement;

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(9) sales of vehicles of a type required to be registered under the motor vehicle laws of
this state which are made to bona fide nonresidents of this state and are not afterwards registered
or used in this state except as necessary to transport them to the borders of this state;
[(10) sales of medicine;]
(10) (a) amounts paid for an item described in Subsection (10)(b) if:
(i) the item is intended for human use; and
(ii) the purchaser presents a prescription for the item; and
(b) (i) Subsection (10)(a) applies to:
(A) a drug;
(B) a syringe; or
(C) a stoma supply; and
(ii) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
commission may by rule define the terms:
(A) "syringe"; or
(B) "stoma supply";
(11) sales or use of property, materials, or services used in the construction of or
incorporated in pollution control facilities allowed by Sections 19-2-123 through 19-2-127 ;
(12) (a) sales of [meals] an item described in Subsection (12)(c) served by:
(i) the following if the [meals are] item described in Subsection (12)(c) is not available to
the general public:
(A) a church; or
(B) a charitable institution;
(ii) an institution of higher education if:
(A) the [meals are] item described in Subsection (12)(c) is not available to the general
public; or
(B) the [meals are] item described in Subsection (12)(c) is prepaid as part of a student
meal plan offered by the institution of higher education; or
(b) [inpatient meals] sales of an item described in Subsection (12)(c) provided at:

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(i) a medical facility; or
(ii) a nursing facility; and
(c) Subsections (12)(a) and (b) apply to:
(i) food and food ingredients;
(ii) prepared food; or
(iii) alcoholic beverages;
(13) isolated or occasional sales by persons not regularly engaged in business, except the
sale of vehicles or vessels required to be titled or registered under the laws of this state in which
case the tax is based upon:
(a) the bill of sale or other written evidence of value of the vehicle or vessel being sold;
or
(b) in the absence of a bill of sale or other written evidence of value, the then existing
fair market value of the vehicle or vessel being sold as determined by the commission;
(14) (a) the following purchases or leases by a manufacturer on or after July 1, 1995:
(i) machinery and equipment:
(A) used in the manufacturing process;
(B) having an economic life of three or more years; and
(C) used:
(I) to manufacture an item sold as tangible personal property; and
(II) in new or expanding operations in a manufacturing facility in the state; and
(ii) subject to the provisions of Subsection (14)(b), normal operating replacements that:
(A) have an economic life of three or more years;
(B) are used in the manufacturing process in a manufacturing facility in the state;
(C) are used to replace or adapt an existing machine to extend the normal estimated
useful life of the machine; and
(D) do not include repairs and maintenance;
(b) the rates for the exemption under Subsection (14)(a)(ii) are as follows:
(i) beginning July 1, 1996, through June 30, 1997, 30% of the sale or lease described in

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Subsection (14)(a)(ii) is exempt;
(ii) beginning July 1, 1997, through June 30, 1998, 60% of the sale or lease described in
Subsection (14)(a)(ii) is exempt; and
(iii) beginning July 1, 1998, 100% of the sale or lease described in Subsection (14)(a)(ii)
is exempt;
(c) for purposes of this Subsection (14), the commission shall by rule define the terms
"new or expanding operations" and "establishment"; and
(d) on or before October 1, 1991, and every five years after October 1, 1991, the
commission shall:
(i) review the exemptions described in Subsection (14)(a) and make recommendations to
the Revenue and Taxation Interim Committee concerning whether the exemptions should be
continued, modified, or repealed; and
(ii) include in its report:
(A) the cost of the exemptions;
(B) the purpose and effectiveness of the exemptions; and
(C) the benefits of the exemptions to the state;
(15) (a) sales of the following if the requirements of Subsection (15)(b) are met:
(i) tooling;
(ii) special tooling;
(iii) support equipment;
(iv) special test equipment; or
(v) parts used in the repairs or renovations of tooling or equipment described in
Subsections (15)(a)(i) through (iv); and
(b) sales of tooling, equipment, or parts described in Subsection (15)(a) are exempt if:
(i) the tooling, equipment, or parts are used or consumed exclusively in the performance
of any aerospace or electronics industry contract with the United States government or any
subcontract under that contract; and
(ii) under the terms of the contract or subcontract described in Subsection (15)(b)(i), title

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to the tooling, equipment, or parts is vested in the United States government as evidenced by:
(A) a government identification tag placed on the tooling, equipment, or parts; or
(B) listing on a government-approved property record if placing a government
identification tag on the tooling, equipment, or parts is impractical;
(16) intrastate movements of:
(a) freight by common carriers; or
(b) passengers:
(i) by taxicabs as described in SIC Code 4121 of the 1987 Standard Industrial
Classification Manual of the federal Executive Office of the President, Office of Management
and Budget;
(ii) transported by an establishment described in SIC Code 4111 of the 1987 Standard
Industrial Classification Manual of the federal Executive Office of the President, Office of
Management and Budget, if the transportation originates and terminates within a county of the
first, second, or third class; or
(iii) transported by the following described in SIC Code 4789 of the 1987 Standard
Industrial Classification Manual of the federal Executive Office of the President, Office of
Management and Budget:
(A) a horse-drawn cab; or
(B) a horse-drawn carriage[.];
(17) sales of newspapers or newspaper subscriptions;
(18) (a) except as provided in Subsection (18)(b), tangible personal property[, other than
money,] traded in as full or part payment of the purchase price, except that for purposes of
calculating sales or use tax upon vehicles not sold by a vehicle dealer, trade-ins are limited to
other vehicles only, and the tax is based upon:
[(a)] (i) the bill of sale or other written evidence of value of the vehicle being sold and
the vehicle being traded in; or
[(b)] (ii) in the absence of a bill of sale or other written evidence of value, the then
existing fair market value of the vehicle being sold and the vehicle being traded in, as determined

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by the commission; and
(b) notwithstanding Subsection (18)(a), Subsection (18)(a) does not apply to the
following items of tangible personal property traded in as full or part payment of the purchase
price:
(i) money;
(ii) electricity;
(iii) water;
(iv) gas; or
(v) steam;
(19) sprays and insecticides used to control insects, diseases, and weeds for commercial
production of fruits, vegetables, feeds, seeds, and animal products, but not those sprays and
insecticides used in the processing of the products;
(20) (a) (i) sales of tangible personal property used or consumed primarily and directly in
farming operations, including sales of irrigation equipment and supplies used for agricultural
production purposes, whether or not they become part of real estate and whether or not installed
by farmer, contractor, or subcontractor, but not sales of:
(A) machinery, equipment, materials, and supplies used in a manner that is incidental to
farming, such as hand tools [with a unit purchase price not in excess of $250,] and maintenance
and janitorial equipment and supplies;
(B) tangible personal property used in any activities other than farming, such as office
equipment and supplies, equipment and supplies used in sales or distribution of farm products, in
research, or in transportation; or
(C) any vehicle required to be registered by the laws of this state, without regard to the
use to which the vehicle is put; or
(ii) sales of parts used in the repairs or renovations of tangible personal property if the
tangible personal property is exempt under Subsection (20)(a); or
(b) sales of hay;
(21) exclusive sale of locally grown seasonal crops, seedling plants, or garden, farm, or

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other agricultural produce if sold by a producer during the harvest season;
(22) purchases [of food as defined in 7 U.S.C. Sec. 2012(g)] made using a coupon as
defined in 7 U.S.C. Sec. 2012 that is issued under the Food Stamp Program, 7 U.S.C. Sec. 2011
et seq.;
(23) sales of nonreturnable containers, nonreturnable labels, nonreturnable bags,
nonreturnable shipping cases, and nonreturnable casings to a manufacturer, processor,
wholesaler, or retailer for use in packaging tangible personal property to be sold by that
manufacturer, processor, wholesaler, or retailer;
(24) property stored in the state for resale;
(25) property brought into the state by a nonresident for his or her own personal use or
enjoyment while within the state, except property purchased for use in Utah by a nonresident
living and working in Utah at the time of purchase;
(26) property purchased for resale in this state, in the regular course of business, either in
its original form or as an ingredient or component part of a manufactured or compounded
product;
(27) property upon which a sales or use tax was paid to some other state, or one of its
subdivisions, except that the state shall be paid any difference between the tax paid and the tax
imposed by this part and Part 2, Local Sales and Use Tax Act, and no adjustment is allowed if the
tax paid was greater than the tax imposed by this part and Part 2, Local Sales and Use Tax Act;
(28) any sale of a service described in Subsections 59-12-103 (1)(b), (c), and (d) to a
person for use in compounding a service taxable under the subsections;
(29) purchases [of supplemental foods as defined in 42 U.S.C. Sec. 1786(b)(14) under]
made in accordance with the special supplemental nutrition program for women, infants, and
children established in 42 U.S.C. Sec. 1786;
(30) beginning on July 1, 1999, through June 30, 2004, sales or leases of rolls, rollers,
refractory brick, electric motors, or other replacement parts used in the furnaces, mills, or ovens
of a steel mill described in SIC Code 3312 of the 1987 Standard Industrial Classification Manual
of the federal Executive Office of the President, Office of Management and Budget;

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(31) sales of boats of a type required to be registered under Title 73, Chapter 18, State
Boating Act, boat trailers, and outboard motors which are made to bona fide nonresidents of this
state and are not thereafter registered or used in this state except as necessary to transport them to
the borders of this state;
[(32) sales of tangible personal property to persons within this state that is subsequently
shipped outside the state and incorporated pursuant to contract into and becomes a part of real
property located outside of this state, except to the extent that the other state or political entity
imposes a sales, use, gross receipts, or other similar transaction excise tax on it against which the
other state or political entity allows a credit for taxes imposed by this chapter;]
[(33)] (32) sales of aircraft manufactured in Utah if sold for delivery and use outside
Utah where a sales or use tax is not imposed, even if the title is passed in Utah;
[(34)] (33) amounts paid for the purchase of telephone service for purposes of providing
telephone service;
[(35)] (34) fares charged to persons transported directly by a public transit district created
under the authority of Title 17A, Chapter 2, Part 10, Utah Public Transit District Act;
[(36)] (35) sales or leases of vehicles to, or use of vehicles by an authorized carrier;
[(37)] (36) (a) 45% of the sales price of any new manufactured home; and
(b) 100% of the sales price of any used manufactured home;
[(38)] (37) sales relating to schools and fundraising sales;
[(39)] (38) sales or rentals of [home] durable medical equipment [or supplies;] if a
person presents a prescription for the durable medical equipment;
[(40)] (39) (a) sales to a ski resort of electricity to operate a passenger ropeway as
defined in Section 72-11-102 ; and
(b) the commission shall by rule determine the method for calculating sales exempt
under Subsection [(40)] (39)(a) that are not separately metered and accounted for in utility
billings;
[(41)] (40) sales to a ski resort of:
(a) snowmaking equipment;

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(b) ski slope grooming equipment;
(c) passenger ropeways as defined in Section 72-11-102 ; or
(d) parts used in the repairs or renovations of equipment or passenger ropeways
described in Subsections [(41)] (40)(a) through (c);
[(42)] (41) sales of natural gas, electricity, heat, coal, fuel oil, or other fuels for industrial
use;
[(43)] (42) sales or rentals of the right to use or operate for amusement, entertainment, or
recreation a coin-operated amusement device as defined in Section 59-12-102 ;
[(44)] (43) sales of cleaning or washing of tangible personal property by a coin-operated
car wash machine;
[(45)] (44) sales by the state or a political subdivision of the state, except state
institutions of higher education as defined in Section 53B-3-102 , of:
(a) photocopies; or
(b) other copies of records held or maintained by the state or a political subdivision of the
state;
[(46)] (45) (a) amounts paid:
(i) to a person providing intrastate transportation to an employer's employee to or from
the employee's primary place of employment;
(ii) by an:
(A) employee; or
(B) employer; and
(iii) pursuant to a written contract between:
(A) the employer; and
(B) (I) the employee; or
(II) a person providing transportation to the employer's employee; and
(b) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
commission may for purposes of Subsection [(46)] (45)(a) make rules defining what constitutes
an employee's primary place of employment;

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[(47)] (46) amounts paid for admission to an athletic event at an institution of higher
education that is subject to the provisions of Title IX of the Education Amendments of 1972, 20
U.S.C. Sec. 1681 et seq.;
[(48)] (47) sales of telephone service charged to a prepaid telephone calling card;
[(49)] (48) (a) sales of:
(i) hearing aids;
(ii) hearing aid accessories; or
(iii) except as provided in Subsection [(49)] (48)(b), parts used in the repairs or
renovations of hearing aids or hearing aid accessories; and
(b) for purposes of this Subsection [(49)] (48), notwithstanding Subsection [(49)]
(48)(a)(iii), "parts" does not include batteries;
[(50)] (49) (a) sales made to or by:
(i) an area agency on aging; or
(ii) a senior citizen center owned by a county, city, or town; or
(b) sales made by a senior citizen center that contracts with an area agency on aging;
[(51)] (50) (a) beginning on July 1, 2000, through June 30, 2002, amounts paid or
charged as admission or user fees described in Subsection 59-12-103 (1)(f) relating to the
Olympic Winter Games of 2002 if the amounts paid or charged are established by the Salt Lake
Organizing Committee for the Olympic Winter Games of 2002 in accordance with requirements
of the International Olympic Committee; and
(b) the State Olympic Officer and the Salt Lake Organizing Committee for the Olympic
Winter Games of 2002 shall make at least two reports during the 2000 interim:
(i) to the:
(A) Olympic Coordination Committee; and
(B) Revenue and Taxation Interim Committee; and
(ii) regarding the status of:
(A) agreements relating to the funding of public safety services for the Olympic Winter
Games of 2002;

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(B) agreements relating to the funding of services, other than public safety services, for
the Olympic Winter Games of 2002;
(C) other agreements relating to the Olympic Winter Games of 2002 as requested by the
Olympic Coordination Committee or the Revenue and Taxation Interim Committee;
(D) other issues as requested by the Olympic Coordination Committee or the Revenue
and Taxation Interim Committee; or
(E) a combination of Subsections [(51)] (50)(b)(ii)(A) through (D);
[(52)] (51) (a) beginning on July 1, 2001, through June 30, 2004, and subject to
Subsection [(52)] (51)(b), a sale or lease of semiconductor fabricating or processing materials
regardless of whether the semiconductor fabricating or processing materials:
(i) actually come into contact with a semiconductor; or
(ii) ultimately become incorporated into real property;
(b) (i) beginning on July 1, 2001, through June 30, 2002, 10% of the sale or lease
described in Subsection [(52)] (51)(a) is exempt;
(ii) beginning on July 1, 2002, through June 30, 2003, 50% of the sale or lease described
in Subsection [(52)] (51)(a) is exempt; and
(iii) beginning on July 1, 2003, through June 30, 2004, the entire amount of the sale or
lease described in Subsection [(52)] (51)(a) is exempt; and
(c) each year on or before the November interim meeting, the Revenue and Taxation
Interim Committee shall:
(i) review the exemption described in this Subsection [(52)] (51) and make
recommendations concerning whether the exemption should be continued, modified, or repealed;
and
(ii) include in the review under this Subsection [(52)] (51)(c):
(A) the cost of the exemption;
(B) the purpose and effectiveness of the exemption; and
(C) the benefits of the exemption to the state;
[(53)] (52) an amount paid by or charged to a purchaser for accommodations and

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services described in Subsection 59-12-103 (1)(i) to the extent the amount is exempt under
Section 59-12-104.2 ;
[(54)] (53) beginning on September 1, 2001, the lease or use of a vehicle issued a
temporary sports event registration certificate in accordance with Section 41-3-306 for the event
period specified on the temporary sports event registration certificate; [or]
[(55)] (54) sales or uses of electricity, if the sales or uses are:
(a) made under a tariff adopted by the Public Service Commission of Utah only for
purchase of electricity produced from a new wind, geothermal, biomass, or solar power energy
source, as designated in the tariff by the Public Service Commission of Utah; and
(b) for an amount of electricity that is:
(i) unrelated to the amount of electricity used by the person purchasing the electricity
under the tariff described in Subsection [(55)] (54)(a); and
(ii) equivalent to the number of kilowatthours specified in the tariff described in
Subsection [(55)] (54)(a) that may be purchased under the tariff described in Subsection [(55)]
(54)(a)[.];
(55) sales or rentals of mobility enhancing equipment if a person presents a prescription
for the mobility enhancing equipment;
(56) sales of water in a:
(a) pipe;
(b) conduit;
(c) ditch; or
(d) reservoir;
(57) sales of currency or coinage that constitute legal tender of the United States or of a
foreign nation;
(58) (a) sales of an item described in Subsection (58)(b) if the item:
(i) does not constitute legal tender of any nation; and
(ii) has a gold, silver, or platinum content of 80% or more; and
(b) Subsection (58)(a) applies to a gold, silver, or platinum:

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(i) ingot;
(ii) bar;
(iii) medallion; or
(iv) decorative coin;
(59) amounts paid on a sale-leaseback transaction; and
(60) sales of a prosthetic device:
(a) for use on or in a human;
(b) for which a prescription is issued; and
(c) to a person that presents a prescription for the prosthetic device.
Section 13. Section 59-12-104.1 is amended to read:
59-12-104.1. Exemptions for religious or charitable institutions.
(1) Except as provided in Section 59-12-104 , sales made by religious or charitable
institutions or organizations are exempt from the sales and use tax imposed by this chapter if the
sale is made in the conduct of the institution's or organization's regular religious or charitable
functions or activities.
(2) (a) Except as provided in Section 59-12-104 , sales made to a religious or charitable
institution or organization are exempt from the sales and use tax imposed by this chapter if the
sale is made in the conduct of the institution's or organization's regular religious or charitable
functions and activities.
(b) In order to facilitate the efficient administration of the exemption granted by this
section, the exemption shall be administered as follows:
(i) [The] the exemption shall be at point of sale if the sale is in the amount of at least
$1,000[.];
(ii) [If] except as provided in Subsection (2)(b)(iii), if the sale is less than $1,000, the
exemption shall be in the form of a refund of sales or use taxes paid at the point of sale[.]; and
(iii) [Notwithstanding] notwithstanding Subsection (2)(b)(ii), the exemption under this
[subsection] section shall be at point of sale if the sale is:
(A) made pursuant to a contract between the [vendor] seller and the charitable or

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religious institution or organization; or
(B) made by a public utility, as defined in Section 54-2-1 , to a religious or charitable
institution or organization.
(3) (a) Religious or charitable institutions or organizations entitled to a refund under
Subsection (2)(b)(ii) may apply to the commission for the refund of sales or use taxes paid.
(b) The commission shall designate the following by commission rule adopted in
accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act:
(i) procedures for applying for a sales and use tax refund;
(ii) standards for determining and verifying the amount of purchase at the point of sale;
(iii) procedures for submitting a request for refund on a monthly basis anytime the
taxpayer has accumulated $100 or more in sales tax payments; and
(iv) procedures for submitting a request for refund on a quarterly basis for any
cummulative amount of sales tax payments.
Section 14. Section 59-12-104.2 is amended to read:
59-12-104.2. Exemption for accommodations and services taxed by the Navajo
Nation.
(1) As used in this section "tribal taxing area" means the geographical area that:
(a) is subject to the taxing authority of the Navajo Nation; and
(b) consists of:
(i) notwithstanding the issuance of a patent, all land:
(A) within the limits of an Indian reservation under the jurisdiction of the federal
government; and
(B) including any rights-of-way running through the reservation; and
(ii) all Indian allotments the Indian titles to which have not been extinguished, including
any rights-of-way running through an Indian allotment.
(2) (a) Beginning July 1, 2001, amounts paid by or charged to a purchaser for
accommodations and services described in Subsection 59-12-103 (1)(i) are exempt from the tax
imposed by Subsection 59-12-103 (2)(a)(i) to the extent permitted under Subsection (2)(b) if:

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(i) the accommodations and services described in Subsection 59-12-103 (1)(i) are
provided within:
(A) the state; and
(B) a tribal taxing area;
(ii) the Navajo Nation imposes and collects a tax on the amounts paid by or charged to
the purchaser for the accommodations and services described in Subsection 59-12-103 (1)(i);
(iii) the Navajo Nation imposes the tax described in Subsection (2)(a)(ii) without regard
to whether or not the purchaser that pays or is charged for the accommodations and services is an
enrolled member of the Navajo Nation; and
(iv) the requirements of Subsection (4) are met.
(b) If but for Subsection (2)(a) the amounts paid by or charged to a purchaser for
accommodations and services described in Subsection (2)(a) are subject to a tax imposed by
Subsection 59-12-103 (2)(a)(i):
(i) the [vendor] seller shall collect and pay to the state the difference described in
Subsection (3) if that difference is greater than $0; and
(ii) a person may not require the state to provide a refund, a credit, or similar tax relief if
the difference described in Subsection (3) is equal to or less than $0.
(3) The difference described in Subsection (2)(b) is equal to the difference between:
(a) the amount of tax imposed by Subsection 59-12-103 (2)(a)(i) on the amounts paid by
or charged to a purchaser for accommodations and services described in Subsection
59-12-103 (1)(i); less
(b) the tax imposed and collected by the Navajo Nation on the amounts paid by or
charged to a purchaser for the accommodations and services described in Subsection
59-12-103 (1)(i).
(4) (a) If, on or after July 1, 2001, the Navajo Nation changes the tax rate of a tax
imposed on amounts paid by or charged to a purchaser for accommodations and services
described in Subsection 59-12-103 (1)(i), any change in the amount of the exemption under
Subsection (2) as a result of the change in the tax rate is not effective until the first day of the

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calender quarter after a 90-day period beginning on the date the commission receives notice
meeting the requirements of Subsection (4)(b) from the Navajo Nation.
(b) The notice described in Subsection (4)(a) shall state:
(i) that the Navajo Nation has changed or will change the tax rate of a tax imposed on
amounts paid by or charged to a purchaser for accommodations and services described in
Subsection 59-12-103 (1)(i);
(ii) the effective date of the rate change on the tax described in Subsection (4)(b)(i); and
(iii) the new rate of the tax described in Subsection (4)(b)(i).
(5) Beginning with the 2006 interim, the Revenue and Taxation Interim Committee:
(a) shall review the exemption provided for in this section one or more times every five
years;
(b) shall determine on or before the November interim meeting of the year in which the
Revenue and Taxation Interim Committee reviews the exemption provided for in this section
whether the exemption should be:
(i) continued;
(ii) modified; or
(iii) repealed; and
(c) may review any other issue related to the exemption provided for in this section as
determined by the Revenue and Taxation Interim Committee.
Section 15. Section 59-12-105 is amended to read:
59-12-105. Certain exempt sales to be reported -- Penalties.
(1) (a) An owner[, vendor,] or purchaser shall report to the commission the amount of
sales or uses exempt under Subsection 59-12-104 (14), [(20),] (39), (40), [(41),] or [(52)] (51).
(b) The report required by Subsection (1)(a) shall be filed:
(i) with the commission; and
(ii) on a form prescribed by the commission.
(c) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
commission shall make rules providing:

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(i) the information required to be included in the report described in Subsection (1)(a);
and
(ii) one or more due dates for filing the report described in Subsection (1)(a).
(2) Except as provided in Subsections (3) and (4), if the owner[, vendor,] or purchaser
fails to report the full amount of the exemptions granted under Subsection 59-12-104 (14), [(20),]
(39), (40), [(41),] or [(52)] (51) on the [owner's, vendor's, or purchaser's original filed return]
report required by Subsection (1)(a), the commission shall impose a penalty equal to the lesser
of:
(a) 10% of the sales and use tax that would have been imposed if the exemption had not
applied; or
(b) $1,000.
(3) Notwithstanding Subsection (2), the commission may not impose a penalty under
Subsection (2) if the owner[, vendor,] or purchaser files an amended [return] report:
(a) containing the amount of the exemption [prior to]; and
(b) before the owner[, vendor,] or purchaser [receiving] receives a notice of audit from
the commission.
(4) (a) Notwithstanding Subsection (2), the commission may waive, reduce, or
compromise a penalty imposed under this section if the commission finds there are reasonable
grounds for the waiver, reduction, or compromise.
(b) If the commission waives, reduces, or compromises a penalty under Subsection
(4)(a), the commission shall make a record of the grounds for waiving, reducing, or
compromising the penalty.
Section 16. Section 59-12-106 is amended to read:
59-12-106. Sales and use tax license -- No fee -- Presumption of taxability --
Exemption certificates -- Exemption certificate license number to accompany contract bids.
(1) (a) It is unlawful for any person required [by this chapter] to collect [sales or use tax,]
a tax under this chapter to engage in business within the state without first having obtained a
license to do so. [This]

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(b) The license described in Subsection (1)(a):
(i) shall be granted and issued by the commission[. The license];
(ii) is not assignable [and];
(iii) is valid only for the person in whose name [it] the license is issued;
(iv) is valid until [that]:
(A) the person described in Subsection (1)(b)(iii):
(I) ceases to do business; or
(II) changes [his] that person's business address[,]; or [until]
(B) the license is revoked by the commission[. Such license]; and
(v) shall be granted by the commission only upon an application [stating] that:
(A) states the name and address of the applicant; and
(B) provides other information the commission may require.
(c) At the time [of] a person makes an application under Subsection (1)(b)(v), the
commission shall notify the applicant of the responsibilities and liability of a business owner
successor under Section 59-12-112 .
(d) If business is transacted at two or more separate places by one person, a separate
license for each place of business [shall be] is required.
(e) (i) The commission shall, on a reasonable notice and after a hearing, revoke the
license of any person violating any provisions of this chapter [and no].
(ii) A license may not be issued to [such] a person described in Subsection (1)(e)(i) until
the [taxpayer] person has complied with the requirements of this chapter.
(f) Any person required [by this chapter] to collect [sales or use tax] a tax under this
chapter within this state without having secured a license to do so[,] is guilty of a criminal
violation as provided in Section 59-1-401 . [No]
(g) A license:
(i) is not required for any person engaged exclusively in the business of selling
commodities [which] that are exempt from taxation under this chapter[. A license]; and
(ii) shall be issued to the [applicant] person by the commission without a license fee.

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(2) (a) For the purpose of the proper administration of this chapter and to prevent evasion
of the tax and the duty to collect the tax, it shall be presumed that tangible personal property or
any other taxable transaction under Subsection 59-12-103 (1)[,] sold by any person for delivery in
this state is sold for storage, use, or other consumption in this state unless the person selling
[such] the property, item, or service has taken from the purchaser an exemption certificate
[signed by and]:
(i) bearing the name and address of the purchaser [to the effect]; and
(ii) providing that the property, item, or service was exempted under Section 59-12-104 .
[The exemption certificates]
(b) An exemption certificate described in Subsection (2)(a):
(i) shall contain information as prescribed by the commission[.]; and
(ii) if a paper exemption certificate is used, shall be signed by the purchaser.
(c) Except as provided in Subsection (2)(d), a seller that has taken an exemption
certificate from a purchaser in accordance with this Subsection (2) with respect to a transaction is
not liable to collect a tax under this chapter:
(i) on that transaction; and
(ii) if the commission or a court of competent jurisdiction subsequently determines that
the purchaser improperly claimed the exemption.
(d) Notwithstanding Subsection (2)(c), Subsection (2)(c) does not apply to a seller that:
(i) fraudulently fails to collect a tax under this chapter; or
(ii) solicits a purchaser to participate in improperly claiming an exemption from a tax
under this chapter.
(3) [All persons] A person filing a contract [bids] bid with the state or [any of its] a
political [subdivisions] subdivision of the state for the sale of tangible personal property or any
other taxable transaction under Subsection 59-12-103 (1)[,] shall include with the bid the [sales
tax license] number of the license issued to [them] that person under Subsection (1).
Section 17. Section 59-12-107 is amended to read:
59-12-107. Collection, remittance, and payment of tax by sellers or other persons --

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Voluntary collection may not be used as a factor in determining whether a seller is required
to pay certain taxes, fees, or charges -- Returns -- Direct payment by purchaser of vehicle --
Other liability for collection -- Credits -- Treatment of bad debt -- Deposit and sale of
security -- Penalties.
(1) (a) [Each vendor] Except as provided in Sections 59-12-107.1 through 59-12-107.3 ,
each seller shall pay or collect and remit the sales and use taxes imposed by this chapter if within
this state the [vendor] seller:
(i) has or utilizes:
(A) an office;
(B) a distribution house;
(C) a sales house;
(D) a warehouse;
(E) a service enterprise; or
(F) a place of business similar to Subsections (1)(a)(i)(A) through (E);
(ii) maintains a stock of goods;
(iii) regularly solicits orders, regardless of whether or not the orders are accepted in the
state, unless the [vendor's] seller's only activity in the state is:
(A) advertising; or
(B) solicitation by:
(I) direct mail;
(II) electronic mail;
(III) the Internet;
(IV) telephone; or
(V) a means similar to Subsections (1)(a)(iii)(A) or (B);
(iv) regularly engages in the delivery of property in the state other than by:
(A) common carrier; or
(B) United States mail; or
(v) regularly engages in an activity directly related to the leasing or servicing of property

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located within the state.
(b) If a [vendor] seller does not meet one or more of the criteria provided for in
Subsection (1)(a), the [vendor] seller:
(i) except as provided in Subsection (1)(b)(ii), may voluntarily:
(A) collect a tax [as provided in Subsection 59-12-103 (2)(c)] on a transaction described
in Subsection 59-12-103 (1); and
(B) remit the tax to the commission as provided in this part; or
(ii) notwithstanding Subsection (1)(b)(i), shall collect a tax [as provided in Subsection
59-12-103 (2)(c)] on a transaction described in Subsection 59-12-103 (1) if Section 59-12-103.1
requires the [vendor] seller to collect the tax.
(c) The voluntary collection and remittance of a tax under this chapter may not be used
as a factor in determining whether a seller is required by Subsection (1)(a) to:
(i) pay a tax, fee, or charge under:
(A) Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;
(B) Section 19-6-716 ;
(C) Section 19-6-805 ;
(D) Section 69-2-5.5 ; or
(E) this title; or
(ii) collect and remit a tax, fee, or charge under:
(A) Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;
(B) Section 19-6-716 ;
(C) Section 19-6-805 ;
(D) Section 69-2-5.5 ; or
(E) this title.
[(c)] (d) A person shall pay a use tax imposed by this chapter on a transaction described
in Subsection 59-12-103 (1) if:
(i) the [vendor] seller did not collect a use tax imposed by this chapter on the transaction;
and

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(ii) the person:
(A) stores the tangible personal property in the state;
(B) uses the tangible personal property in the state; or
(C) consumes the tangible personal property in the state.
[(d)] (e) Notwithstanding the provisions of Subsection (1)(a), the ownership of property
that is located at the premises of a printer's facility with which the retailer has contracted for
printing and that consists of the final printed product, property that becomes a part of the final
printed product, or copy from which the printed product is produced, shall not result in the
retailer being considered to have or maintain an office, distribution house, sales house,
warehouse, service enterprise, or other place of business, or to maintain a stock of goods, within
this state.
(2) (a) [Each vendor] Except as provided in Sections 59-12-107.1 through 59-12-107.3 , a
seller shall collect [the sales or use tax] a tax under this chapter from [the] a purchaser.
(b) A [vendor] seller may not collect as tax an amount, without regard to fractional parts
of one cent, in excess of the tax computed at the rates prescribed by this chapter.
(c) (i) Each [vendor] seller shall:
(A) give the purchaser a receipt for the use tax collected; or
(B) bill the use tax as a separate item and declare the name of this state and the [vendor's]
seller's use tax license number on the invoice for the sale.
(ii) The receipt or invoice is prima facie evidence that the [vendor] seller has collected
the use tax and relieves the purchaser of the liability for reporting the use tax to the commission
as a consumer.
(d) A [vendor] seller is not required to maintain a separate account for the tax collected,
but is considered to be a person charged with receipt, safekeeping, and transfer of public moneys.
(e) Taxes collected by a [vendor] seller pursuant to this chapter shall be held in trust for
the benefit of the state and for payment to the commission in the manner and at the time provided
for in this chapter.
(f) If any [vendor] seller, during any reporting period, collects as a tax an amount in

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excess of the lawful state and local percentage of total taxable sales allowed under this [part and
Part 2, Local Sales and Use Tax Act] chapter, the [vendor] seller shall remit to the commission
the full amount of the tax imposed under this [part and Part 2, Local Sales and Use Tax Act]
chapter, plus any excess.
(g) If the accounting methods regularly employed by the [vendor] seller in the transaction
of the [vendor's] seller's business are such that reports of sales made during a calendar month or
quarterly period will impose unnecessary hardships, the commission may accept reports at
intervals that will, in [its] the commission's opinion, better suit the convenience of the taxpayer
or [vendor] seller and will not jeopardize collection of the tax.
(3) (a) Except as provided in [Subsection] Subsections (4) and (5) and in Section
59-12-108 , the sales or use tax imposed by this chapter is due and payable to the commission
quarterly on or before the last day of the month next succeeding each calendar quarterly period.
(b) (i) Each [vendor] seller shall, on or before the last day of the month next succeeding
each calendar quarterly period, file with the commission a return for the preceding quarterly
period.
(ii) The [vendor] seller shall remit with the return under Subsection (3)(b)(i) the amount
of the tax required under this chapter to be collected or paid for the period covered by the return.
(c) Each return shall contain information and be in a form the commission prescribes by
rule.
(d) The sales tax as computed in the return shall be based upon the total nonexempt sales
made during the period, including both cash and charge sales.
(e) The use tax as computed in the return shall be based upon the total amount of sales
[or] and purchases for storage, use, or other consumption in this state made during the period,
including both by cash and by charge.
(f) The commission may by rule extend the time for making returns and paying the taxes.
No extension may be for more than 90 days.
(g) The commission may require returns and payment of the tax to be made for other
than quarterly periods if [it] the commission considers it necessary in order to ensure the payment

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of the tax imposed by this chapter.
(h) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
commission may make rules requiring a seller to file an information return:
(i) for information required by this chapter that is not included in any sales and use tax
return developed in accordance with the agreement; and
(ii) not more frequently than every six months.
(4) (a) (i) Notwithstanding Subsection (3) and except as provided in Subsection (4)(a)(ii),
a tax collected in accordance with Subsection (1)(b) by a seller described in Subsection (4)(d)
shall be due and payable:
(A) to the commission;
(B) annually; and
(C) on or before the last day of the month immediately following the last day of each
calendar year.
(ii) Notwithstanding Subsection (4)(a)(i), the commission may require that a tax
collected in accordance with Subsection (1)(b) by a seller described in Subsection (4)(d) be due
and payable:
(A) to the commission; and
(B) on the last day of the month immediately following any month in which the seller has
accumulated a total of at least $1,000 in agreement sales and use tax.
(b) (i) A tax remitted to the commission under Subsection (4)(a) shall be accompanied by
a return that:
(A) contains information prescribed by the commission; and
(B) is in a form prescribed by the commission.
(ii) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
commission shall make rules prescribing:
(A) the information required to be contained in a return described in Subsection (4)(b)(i);
and
(B) the form of the return described in Subsection (4)(b)(i).

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(c) The tax collected in accordance with this Subsection (4) calculated in the return
described in Subsection (4)(b) shall be calculated on the basis of the total amount of taxable
transactions described in Subsection 59-12-103 (1) conducted by a seller described in Subsection
(4)(d), including:
(i) a cash transaction; and
(ii) a charge transaction.
(d) This Subsection (4) applies to a seller that is:
(i) registered under the agreement;
(ii) does not meet one or more of the criteria provided for in Subsection (1)(a) to be
required to collect a tax under this chapter; and
(iii) not a:
(A) model 1 seller;
(B) model 2 seller; or
(C) model 3 seller.
[(4) On] (5) (a) Notwithstanding Subsection (3), on each vehicle sale made by other than
a regular licensed vehicle dealer, the purchaser shall pay the sales or use tax directly to the
commission if the vehicle is subject to titling or registration under the laws of this state.
(b) The commission shall collect the tax described in Subsection (5)(a) when the vehicle
is titled or registered.
[(5)] (6) If any sale of tangible personal property or any other taxable transaction under
Subsection 59-12-103 (1), is made by a wholesaler to a retailer, the wholesaler is not responsible
for the collection or payment of the tax imposed on the sale and the retailer is responsible for the
collection or payment of the tax imposed on the sale if:
(a) the retailer represents that the personal property is purchased by the retailer for resale;
and
(b) the personal property [thereafter] is not subsequently resold. [Instead, the retailer is
solely liable for the tax.]
[(6)] (7) If any sale of property or service subject to the tax is made to a person prepaying

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sales or use tax in accordance with Title 63, Chapter 51, Resource Development, or to a
contractor or subcontractor of that person, the person to whom such payment or consideration is
payable is not responsible for the collection or payment of the sales or use tax and the person
prepaying the sales or use tax is responsible for the collection or payment of the sales or use tax
if the person prepaying the sales or use tax represents that the amount prepaid as sales or use tax
has not been fully credited against sales or use tax due and payable under the rules promulgated
by the commission. [Instead, the person prepaying the sales or use tax is solely liable for the
tax.]
[(7) Credit is allowed for prepaid taxes and for taxes paid on that portion of an account
determined to be worthless and actually charged off for income tax purposes or on the portion of
the purchase price remaining unpaid at the time of a repossession made under the terms of a
conditional sales contract.]
(8) (a) For purposes of this Subsection (8):
(i) Except as provided in Subsection (8)(a)(ii), "bad debt" is as defined in Section 166,
Internal Revenue Code.
(ii) Notwithstanding Subsection (8)(a)(i), "bad debt" does not include:
(A) an amount included in the purchase price of tangible personal property or a service
that is:
(I) not a transaction described in Subsection 59-12-103 (1); or
(II) exempt under Section 59-12-104 ;
(B) a financing charge;
(C) interest;
(D) a tax imposed under this chapter on the purchase price of tangible personal property
or a service;
(E) an uncollectible amount on tangible personal property that:
(I) is subject to a tax under this chapter; and
(II) remains in the possession of a seller until the full purchase price is paid;
(F) an expense incurred in attempting to collect any debt; or

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(G) an amount that a seller does not collect on repossessed property.
(b) A seller may deduct bad debt from the total amount from which a tax under this
chapter is calculated on a return.
(c) A seller may file a refund claim with the commission if:
(i) the amount of bad debt for the time period described in Subsection (8)(e) exceeds the
amount of the seller's sales that are subject to a tax under this chapter for that same time period;
and
(ii) as provided in Section 59-12-110 .
(d) A bad debt deduction under this section may not include interest.
(e) A bad debt may be deducted under this Subsection (8) on a return for the time period
during which the bad debt:
(i) is written off as uncollectible in the seller's books and records; and
(ii) would be eligible for a bad debt deduction:
(A) for federal income tax purposes; and
(B) if the seller were required to file a federal income tax return.
(f) If a seller recovers any portion of bad debt for which the seller makes a deduction or
claims a refund under this Subsection (8), the seller shall report and remit a tax under this
chapter:
(i) on the portion of the bad debt the seller recovers; and
(ii) on a return filed for the time period for which the portion of the bad debt is
recovered.
(g) For purposes of reporting a recovery of a portion of bad debt under Subsection (8)(f),
a seller shall apply amounts received on the bad debt in the following order:
(A) in a proportional amount:
(I) to the purchase price of the tangible personal property or service; and
(II) to the tax due under this chapter on the tangible personal property or service; and
(B) to:
(I) interest charges;

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(II) service charges; and
(III) other charges.
(h) A seller's certified service provider may make a deduction or claim a refund for bad
debt on behalf of the seller:
(i) in accordance with this Subsection (8); and
(ii) if the certified service provider credits or refunds the full amount of the bad debt
deduction or refund to the seller.
(i) A bad debt may be allocated among the states that are members of the agreement if a
seller's books and records support that allocation.
[(8)] (9) (a) The commission may require any person subject to the tax imposed under
this chapter to deposit with [it] the commission security as the commission determines, if the
commission considers it necessary to ensure compliance with this chapter.
(b) The commission may sell the security at public sale if it becomes necessary to do so
in order to recover any tax, interest, or penalty due.
(c) (i) The commission shall serve notice of the sale upon the person who deposited the
securities.
(ii) Notice under Subsection [(8)] (9)(c)(i) sent to the last-known address as it appears in
the records of the commission is sufficient for the purposes of this requirement.
(d) The commission shall return to the person who deposited the security any amount of
the sale proceeds that exceed the amounts due under this chapter.
[(9)] (10) (a) A [vendor] seller may not, with intent to evade any tax, fail to timely remit
the full amount of tax required by this chapter.
(b) A violation of this section is punishable as provided in Section 59-1-401 .
(c) Each person who fails to pay any tax to the state or any amount of tax required to be
paid to the state, except amounts determined to be due by the commission under Sections
59-12-110 and 59-12-111 , within the time required by this chapter, or who fails to file any return
as required by this chapter, shall pay, in addition to the tax, penalties and interest as provided in
Section 59-12-110 .

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(d) For purposes of prosecution under this section, each quarterly tax period in which a
[vendor] seller, with intent to evade any tax, collects a tax and fails to timely remit the full
amount of the tax required to be remitted, constitutes a separate offense.
Section 18. Section 59-12-107.1 is enacted to read:
59-12-107.1. Direct payment permit.
(1) The commission may issue a direct payment permit to a seller that:
(a) obtains a license under Section 59-12-106 ;
(b) is required to remit taxes under this chapter by electronic funds transfer in accordance
with Section 59-12-108 ;
(c) has a record of timely payment of taxes under this chapter as determined by the
commission; and
(d) demonstrates to the commission that the seller has the ability to determine the
appropriate location of a transaction:
(i) under:
(A) Section 59-12-205 ;
(B) Section 59-12-207.1 ; and
(C) Section 59-12-207.3 ; and
(ii) for each transaction for which the seller makes a purchase using the direct payment
permit.
(2) A direct payment permit may not be used in connection with the following
transactions:
(a) a purchase of the following purchased in the same transaction:
(i) prepared food; and
(ii) food and food ingredients;
(b) amounts paid or charged for accommodations and services described in Subsection
59-12-103 (1)(i);
(c) amounts paid or charged for admission or user fees under Subsection 59-12-103 (1)(f);
(d) a purchase of:

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(i) a motor vehicle;
(ii) an aircraft;
(iii) a watercraft;
(iv) a modular home;
(v) a manufactured home; or
(vi) a mobile home;
(e) amounts paid under Subsection 59-12-103 (1)(b); or
(f) sales under Subsection 59-12-103 (1)(c).
(3) The holder of a direct payment permit shall:
(a) present evidence of the direct payment permit to a seller at the time the holder of the
direct payment permit makes a purchase using the direct payment permit;
(b) determine the appropriate location of a transaction under:
(i) (A) Section 59-12-205 ;
(B) Section 59-12-207.1 ; or
(C) Section 59-12-207.3 ; and
(ii) for each transaction for which the holder of the direct payment permit makes a
purchase using the direct payment permit;
(c) notwithstanding Section 59-12-107 and subject to Subsection 59-12-107.2 (4),
determine the amount of any agreement sales and use tax due on each transaction for which the
holder of the direct payment permit uses the direct payment permit;
(d) report and remit to the commission the agreement sales and use tax described in
Subsection (3)(c) at the same time and in the same manner as the holder of the direct payment
permit reports and remits a tax under this chapter; and
(e) maintain records:
(i) that indicate the appropriate location of a transaction:
(A) under:
(I) Section 59-12-205 ;
(II) Section 59-12-207.1 ; or

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(III) Section 59-12-207.3 ; and
(B) for each transaction for which a purchase is made using the direct payment permit;
and
(ii) necessary to determine the amount described in Subsection (3)(c) for each transaction
for which the holder of the direct payment permit uses the direct payment permit.
(4) A seller that is presented evidence of a direct payment permit at the time of a
transaction:
(a) notwithstanding Section 59-12-107 , may not collect agreement sales and use tax on
the transaction;
(b) shall, for a period of three years from the date the seller files a return with the
commission reporting the transaction, retain records to verify that the transaction was made using
a direct payment permit; and
(c) notwithstanding Section 59-12-107 , is not liable for agreement sales and use tax on
the transaction.
(5) The holder of a direct payment permit may calculate the amount the holder of the
direct payment permit may retain under Section 59-12-108 on the amount described in
Subsection (3)(c):
(a) for each transaction for which the holder of the direct payment permit uses the direct
payment permit; and
(b) that the holder of the direct payment permit remits to the commission under this
section.
(6) The commission may revoke a direct payment permit issued under this section at any
time if the holder of the direct payment permit fails to comply with any provision of this chapter.
(7) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
commission may make rules to administer this section.
Section 19. Section 59-12-107.2 is enacted to read:
59-12-107.2. Services, computer software, or digital goods concurrently available
for use in more than one location.

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(1) (a) Notwithstanding Section 59-12-107 and except as provided in Subsection (4), if a
purchaser of a good or service described in Subsection (1)(b) that is not the holder of a direct
payment permit under Section 59-12-107.1 knows at the time of purchase that the good or
service described in Subsection (1)(b) will be concurrently available for use in more than one
location, the purchaser shall:
(i) provide to the seller at the time of purchase a form:
(A) prescribed by the commission; and
(B) indicating that the good or service described in Subsection (1)(b) will be concurrently
available for use in more than one location;
(ii) apportion the purchase price of the good or service described in Subsection (1)(b)
among the locations determined in accordance with Section 59-12-205 and Subsection
59-12-207.1 (9);
(iii) determine the agreement sales and use tax for each location determined in
accordance with Section 59-12-205 and Subsection 59-12-207.1 (9) by calculating the product of:
(A) the tax rate for the location determined in accordance with Section 59-12-205 and
Subsection 59-12-207.1 (9); and
(B) the amount of the purchase price apportioned to that location under Subsection
(1)(a)(ii); and
(iv) remit to the commission the agreement sales and use tax calculated under Subsection
(1)(a)(iii) for each location determined in accordance with Section 59-12-205 and Subsection
59-12-207.1 (9).
(b) Subsection (1)(a) applies to:
(i) a service;
(ii) prewritten computer software delivered electronically; or
(iii) a digital good.
(2) The method a purchaser may use to make the apportionment required by Subsection
(1) shall be:
(a) reasonable;

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(b) uniform;
(c) consistent; and
(d) supported by the purchaser's business records as those business records exist at the
time of the transaction.
(3) Upon receipt of the form described in Subsection (1)(a)(i):
(a) a seller:
(i) is not liable to collect or remit agreement sales and use tax for that transaction; and
(ii) shall keep a record of the form described in Subsection (1)(a)(i) for three years from
the date the seller files a return with the commission reporting that transaction; and
(b) the form shall remain in effect:
(i) for all future transactions between the seller described in Subsection (3)(a) and the
purchaser; and
(ii) until the form is revoked in writing by the purchaser.
(4) (a) Notwithstanding Subsection (1), a purchaser of a good or service described in
Subsection (1)(b) is not required to provide to a seller the form described in Subsection (1)(a)(i)
if the purchaser:
(i) knows at the time of purchase that the good or service described in Subsection (1)(b)
will be concurrently available for use in more than one location; and
(ii) is the holder of a direct payment permit under Section 59-12-107.1 .
(b) A purchaser described in Subsection (4)(a) is subject to Subsection (2) in determining
the apportionment of agreement sales and use tax due on the good or service described in
Subsection (1)(b).
Section 20. Section 59-12-107.3 is enacted to read:
59-12-107.3. Collection, remittance, and payment of taxes on direct mail.
(1) Notwithstanding Section 59-12-107 and except as provided in Subsection (6), a
purchaser of direct mail that is not a holder of a direct payment permit under Section 59-12-107.1
shall provide to a seller at the time of the transaction:
(a) a form:

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(i) prescribed by the commission; and
(ii) indicating that the transaction is a direct mail transaction; or
(b) information that indicates the locations of the recipients to which the direct mail is
delivered.
(2) Upon receipt of a form described in Subsection (1)(a) a seller:
(a) is not liable to collect or remit agreement sales and use tax for that transaction; and
(b) shall keep a record of the form described in Subsection (1)(a) for three years from the
date the seller files a return with the commission reporting that transaction.
(3) The purchaser described in Subsection (1) shall in the same manner as a holder of a
direct payment permit under Section 59-12-107.1 :
(a) determine the amount of any agreement sales and use tax due on the transaction; and
(b) report and remit to the commission the agreement sales and use tax due on the
transaction.
(4) The form described in Subsection (1)(a) shall remain in effect:
(a) for all future transactions between the seller described in Subsection (2)(a) and the
purchaser; and
(b) until the form is revoked in writing by the purchaser.
(5) (a) Upon receipt of information described in Subsection (1)(b) from a purchaser that
indicates the locations of the recipients to which direct mail is delivered, a seller shall collect and
remit agreement sales and use tax according to the information provided by the purchaser.
(b) If a seller collects and remits to the commission agreement sales and use tax on a
transaction in accordance with information provided by a purchaser under Subsection (5)(a),
unless the seller acts in bad faith, the seller is not liable for any further obligation to collect or
remit to the commission agreement sales and use tax on the transaction.
(6) Notwithstanding Subsection (1), if a purchaser of direct mail provides a seller with a
direct payment permit under Section 59-12-107.1 , the purchaser may not be required to provide
to the seller:
(a) the form required by Subsection (1)(a); or

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(b) the information required by Subsection (1)(b).
(7) A seller shall collect and remit agreement sales and use tax as required by Section
59-12-107 if a purchaser of direct mail does not provide the seller with:
(a) a direct payment permit under Section 59-12-107.1 ; or
(b) the:
(i) form required by Subsection (1)(a); or
(ii) information required by Subsection (1)(b).
Section 21. Section 59-12-108 is amended to read:
59-12-108. Monthly payment -- Penalty -- Amount of tax a seller may retain.
(1) [Any person whose] (a) Notwithstanding Section 59-12-107 , a seller that has a tax
liability under this [part, Part 2, The Local Sales and Use Tax Act, Part 5, Public Transit Tax,
Part 10, Highways Tax, Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act,
Subsection 59-12-603 (1)(a)(i), and Subsection 59-12-603 (1)(a)(ii), was] chapter of $50,000 or
more for the previous calendar year shall[, on or before the last day of the month next succeeding
each calendar month,]:
(i) file a return with the commission [a return]:
(A) monthly on or before the last day of the month immediately following the month for
which the seller collects a tax under this chapter; and
(B) for the [preceding monthly period. The vendor shall] month for which the seller
collects a tax under this chapter; and
(ii) except as provided in Subsection (1)(c), remit with the return required by Subsection
(1)(a)(i) the amount [of the state and local tax required under this part, Part 2, The Local Sales
and Use Tax Act, Part 5, Public Transit Tax, Part 10, Highways Tax, Title 10, Chapter 1, Part 3,
Municipal Energy Sales and Use Tax Act, Subsection 59-12-603 (1)(a)(i), and Subsection
59-12-603 (1)(a)(ii), to be collected or paid for the period covered by the return. The] the person
is required to remit to the commission for each tax, fee, or charge described in Subsection (1)(b):
(A) if that seller's tax liability under this chapter for the previous calendar year is less
than $96,000, by any method permitted by the commission; or

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(B) if that seller's tax liability under this chapter for the previous calendar year is $96,000
or more, by electronic funds transfer.
(b) Subsections (1)(a)(i) and (ii) apply to the following taxes, fees, or charges:
(i) a tax under Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;
(ii) a fee under Section 19-6-716 ;
(iii) a fee under Section 19-6-805 ;
(iv) a charge under Section 69-2-5.5 ; or
(v) a tax under this chapter.
(c) Notwithstanding Subsection (1)(a)(ii) and in accordance with Title 63, Chapter 46a,
Utah Administrative Rulemaking Act, the commission may make rules providing for a method
for making same-day payments other than by electronic funds transfer if making payments by
electronic funds transfer fails.
(d) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
commission shall establish by rule [the] procedures and [guidelines in] requirements for
determining the [tax liability] amount a seller is required to remit to the commission under this
[section] Subsection (1).
[(2) Any person whose tax liability under this part, Part 2, The Local Sales and Use Tax
Act, Part 5, Public Transit Tax, Part 10, Highways Tax, Title 10, Chapter 1, Part 3, Municipal
Energy Sales and Use Tax Act, Subsection 59-12-603 (1)(a)(i), and Subsection
59-12-603 (1)(a)(ii), was $96,000 or more for the previous year shall remit the monthly amount of
state and local tax payment due under this section to the tax commission by electronic funds
transfer.]
[(3)] (2) (a) Except as provided in Subsection [(3)] (2)(b), a [vendor who is required to
remit taxes monthly under this section] seller subject to Subsection (1) or a seller described in
Subsection (3) may retain each month an amount not to exceed:
(i) 1.5% of [the total monthly sales tax collected under Part 1 of this chapter, and] any
amounts the seller is required to remit to the commission:
(A) for the month for which the seller is filing a return in accordance with Subsection

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(1); and
(B) under this part; and
(ii) 1% of [the total monthly sales tax collected under Part 2, The Local Sales and Use
Tax Act, Part 5, Public Transit Tax, Part 10, Highways Tax, Title 10, Chapter 1, Part 3,
Municipal Energy Sales and Use Tax Act, Subsection 59-12-603 (1)(a)(i), and Subsection
59-12-603 (1)(a)(ii), for the cost to it of collecting and remitting sales and use taxes to the
commission on a monthly basis.] any amounts the seller is required to remit to the commission:
(A) for the month for which the seller is filing a return in accordance with Subsection
(1); and
(B) under:
(I) Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;
(II) Part 2, Local Sales and Use Tax Act;
(III) Part 5, Public Transit Tax;
(IV) Part 10, Highways or Public Transit System Tax;
(V) Subsection 59-12-603 (1)(a)(i); or
(VI) Subsection 59-12-603 (1)(a)(ii).
(b) [A] Notwithstanding Subsection (2)(a), a state government entity that is required to
remit taxes monthly [under this chapter] in accordance with Subsection (1) may not retain [any
portion of the taxes it collects to cover the costs of collecting and remitting sales and use taxes to
the commission] any amount under Subsection (2)(a).
(3) A seller that has a tax liability under this chapter for the previous calendar year of less
than $50,000 may:
(a) voluntarily meet the requirements of Subsection (1); and
(b) if the seller voluntarily meets the requirements of Subsection (1), retain the amounts
allowed by Subsection (2)(a).
(4) Penalties for late payment shall be as provided in Section 59-1-401 .
Section 22. Section 59-12-110 is amended to read:
59-12-110. Overpayments, deficiencies, and refunds procedures.

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(1) (a) As soon as practicable after a return is filed, the commission shall examine the
return.
(b) If the commission determines that the correct amount of tax to be remitted is greater
or less than the amount shown to be due on the return, the commission shall recompute the tax.
(c) If the amount paid exceeds the amount due, the excess, plus interest as provided in
Section 59-1-402 , shall be credited or refunded to the taxpayer as provided in Subsection (2).
(d) The commission may not credit or refund to the taxpayer interest on an overpayment
under Subsection (1)(c) if the commission determines that the overpayment was made for the
purpose of investment.
(2) (a) If a taxpayer pays a tax, penalty, or interest more than once or the commission
erroneously receives, collects, or computes any tax, penalty, or interest, including an
overpayment described in Subsection (1)(c), the commission shall:
(i) credit the amount of tax, penalty, or interest paid by the taxpayer against any amounts
of tax, penalties, or interest the taxpayer owes; and
(ii) refund any balance to the taxpayer or the taxpayer's successors, administrators,
executors, or assigns.
(b) Except as provided in [Subsection] Subsections (2)(c) and (d) or Section 19-2-124 , a
taxpayer shall file a claim with the commission to obtain a refund or credit under this Subsection
(2) within three years from the day on which the taxpayer overpaid the tax, penalty, or interest.
(c) Notwithstanding Subsection (2)(b), beginning on July 1, 1998, the commission shall
extend the period for a taxpayer to file a claim under Subsection (2)(b) if:
(i) the three-year period under Subsection (2)(b) has not expired; and
(ii) the commission and the taxpayer sign a written agreement:
(A) authorizing the extension; and
(B) providing for the length of the extension.
(d) Notwithstanding Subsection (2)(b), a seller that files a claim for a refund under
Subsection 59-12-107 (8)(c) for bad debt shall file the claim with the commission within three
years from the date on which the seller could first claim the refund for the bad debt.

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[(d)] (e) A taxpayer may file a claim to obtain a refund or credit under this Subsection (2)
regardless of whether the taxpayer received or objected to a notice of deficiency or a notice of
assessment as provided in Subsection 59-12-114 (1).
[(e)] (f) A taxpayer may obtain a refund under this Subsection (2) of a tax paid under this
chapter on a transaction that is taxable under Section 59-12-103 if:
(i) the sale or use was exempt from sales and use taxes under Section 59-12-104 on the
date of purchase; and
(ii) except as provided in Subsection (2)(c), the taxpayer files a claim for a refund