First Substitute S.B. 147

Representative Wayne A. Harper proposes the following substitute bill:

1 STREAMLINED SALES TAX PROJECT
2 AMENDMENTS
3 2003 GENERAL SESSION
4 STATE OF UTAH
5 Sponsor: Lyle W. Hillyard
6 This act modifies the Municipal Energy Sales and Use Tax Act and the Sales and Use Tax
7 Act. The act provides and amends definitions. This act authorizes the State Tax
8 Commission to enter into an agreement with one or more states relating to sales and use
9 taxes. The act provides the purposes of the agreement and prescribes the scope of the
10 agreement. The act grants the State Tax Commission rulemaking authority. The act
11 provides that the agreement may require each state that is a member of the agreement to
12 abide by certain requirements and establishes those requirements. The act modifies state
13 and local sales and use tax rates for taxes collected by certain sellers. The act provides
14 and modifies effective dates for state and local sales and use taxes. The act modifies
15 requirements for enacting, repealing, or changing the tax rate of a local sales and use tax.
16 The act repeals obsolete language. The act provides that revenues in the Remote Sales
17 Restricted Account shall be deposited into the General Fund on a certain date. The act
18 provides, modifies, and repeals sales and use tax exemptions. The act provides income
19 tax credits for certain hand tools used in a farming operation. The act modifies
20 requirements to report certain sales and use tax information to the State Tax
21 Commission. The act modifies requirements pertaining to exemption certificates. The act
22 amends provisions relating to the voluntary collection of sales and use taxes by a seller.
23 The act addresses for certain sellers registered under the agreement the due dates for
24 paying certain sales and use tax obligations and the requirements for calculating certain
25 sales and use tax obligations. The act permits a seller or a seller's certified service

26 provider to deduct or file a refund claim for bad debt under certain circumstances. The
27 act addresses the recovery of bad debt. The act authorizes the commission to issue a
28 direct payment permit to certain sellers and provides procedures and requirements for
29 the State Tax Commission to issue or revoke a direct payment permit and for sellers to
30 use direct payment permits. The act addresses the sales and use tax treatment of certain
31 goods or services that will be concurrently available for use in more than one location.
32 The act addresses the collection, remittance, and payment of sales and use taxes on direct
33 mail. The act modifies provisions relating to filing sales and use tax returns and
34 retaining a portion of sales and use taxes collected. The act provides procedures and
35 requirements for a seller to obtain a refund or credit for taxes erroneously charged to a
36 purchaser. The act requires the State Tax Commission to grant a seller amnesty under
37 certain circumstances and provides procedures and requirements for granting amnesty.
38 The act modifies the procedures and requirements for determining the location of
39 transactions for certain sales and use taxes imposed by a county, city, or town. The act
40 provides that a county, city, or town may impose a sales or use tax on transactions located
41 within the county, city, or town. The act limits a seller's sales and use tax liability if the
42 seller relies on a database created by the State Tax Commission. The act addresses the
43 collection and distribution of local sales and use taxes. The act makes technical changes.
44 The act requires the Revenue and Taxation Interim Committee to conduct a study and
45 prescribes the scope of that study. The act provides an effective date.
46 This act affects sections of Utah Code Annotated 1953 as follows:
47 AMENDS:
48 10-1-304, as last amended by Chapter 138, Laws of Utah 2002
49 10-1-307, as last amended by Chapter 305, Laws of Utah 1997
50 17A-2-1064, as last amended by Chapter 253, Laws of Utah 2000
51 59-1-403, as last amended by Chapters 52 and 175, Laws of Utah 2002
52 59-12-102, as last amended by Chapters 77, 117, 192 and 320, Laws of Utah 2002
53 59-12-103, as last amended by Chapter 2, Laws of Utah 2002, Sixth Special Session
54 59-12-103.1, as enacted by Chapter 253, Laws of Utah 2000
55 59-12-103.2, as last amended by Chapter 104, Laws of Utah 2001
56 59-12-104, as last amended by Chapters 117, 138, 217 and 286, Laws of Utah 2002

57 59-12-104.1, as last amended by Chapter 291, Laws of Utah 1998
58 59-12-104.2, as enacted by Chapter 243, Laws of Utah 2001
59 59-12-105, as last amended by Chapter 262, Laws of Utah 2001
60 59-12-106, as last amended by Chapter 253, Laws of Utah 2000
61 59-12-107, as last amended by Chapter 104, Laws of Utah 2001
62 59-12-108, as last amended by Chapter 289, Laws of Utah 1998
63 59-12-110, as last amended by Chapter 253, Laws of Utah 2000
64 59-12-113, as renumbered and amended by Chapter 5, Laws of Utah 1987
65 59-12-115, as renumbered and amended by Chapter 5, Laws of Utah 1987
66 59-12-117, as last amended by Chapter 9, Laws of Utah 2001
67 59-12-204, as last amended by Chapters 2 and 253, Laws of Utah 2000
68 59-12-205, as last amended by Chapters 2, 253 and 318, Laws of Utah 2000
69 59-12-208.1, as enacted by Chapter 319, Laws of Utah 2000
70 59-12-210, as enacted by Chapter 259, Laws of Utah 1994
71 59-12-301, as last amended by Chapter 207, Laws of Utah 2002
72 59-12-302, as last amended by Chapter 305, Laws of Utah 1997
73 59-12-354, as last amended by Chapter 319, Laws of Utah 2000
74 59-12-355, as enacted by Chapter 319, Laws of Utah 2000
75 59-12-401, as last amended by Chapter 253, Laws of Utah 2000
76 59-12-402, as last amended by Chapters 253 and 319, Laws of Utah 2000
77 59-12-403, as enacted by Chapter 319, Laws of Utah 2000
78 59-12-501, as last amended by Chapter 253, Laws of Utah 2000
79 59-12-502, as last amended by Chapter 217, Laws of Utah 2001
80 59-12-504, as enacted by Chapter 319, Laws of Utah 2000
81 59-12-603, as last amended by Chapter 11, Laws of Utah 2001, First Special Session
82 59-12-703, as last amended by Chapter 192, Laws of Utah 2001
83 59-12-802, as last amended by Chapters 104 and 226, Laws of Utah 2001
84 59-12-804, as last amended by Chapter 104, Laws of Utah 2001
85 59-12-806, as enacted by Chapter 319, Laws of Utah 2000
86 59-12-901, as last amended by Chapter 162, Laws of Utah 2001
87 59-12-902, as last amended by Chapters 104 and 162, Laws of Utah 2001

88 59-12-1001, as last amended by Chapter 101, Laws of Utah 2002
89 59-12-1102, as last amended by Chapters 253 and 319, Laws of Utah 2000
90 59-12-1302, as last amended by Chapters 253 and 319, Laws of Utah 2000
91 59-12-1402, as enacted by Chapter 192, Laws of Utah 2001
92 ENACTS:
93 59-7-614.1, Utah Code Annotated 1953
94 59-10-134.1, Utah Code Annotated 1953
95 59-12-102.1, Utah Code Annotated 1953
96 59-12-107.1, Utah Code Annotated 1953
97 59-12-107.2, Utah Code Annotated 1953
98 59-12-107.3, Utah Code Annotated 1953
99 59-12-110.1, Utah Code Annotated 1953
100 59-12-121, Utah Code Annotated 1953
101 59-12-207.1, Utah Code Annotated 1953
102 59-12-207.2, Utah Code Annotated 1953
103 59-12-207.3, Utah Code Annotated 1953
104 59-12-207.4, Utah Code Annotated 1953
105 59-12-207.5, Utah Code Annotated 1953
106 59-12-356, Utah Code Annotated 1953
107 59-12-404, Utah Code Annotated 1953
108 59-12-505, Utah Code Annotated 1953
109 59-12-604, Utah Code Annotated 1953
110 59-12-706, Utah Code Annotated 1953
111 59-12-807, Utah Code Annotated 1953
112 59-12-1003, Utah Code Annotated 1953
113 59-12-1103, Utah Code Annotated 1953
114 59-12-1303, Utah Code Annotated 1953
115 59-12-1404, Utah Code Annotated 1953
116 REPEALS:
117 59-12-207, as last amended by Chapters 157 and 320, Laws of Utah 2002
118 Be it enacted by the Legislature of the state of Utah:

119 Section 1. Section 10-1-304 is amended to read:
120 10-1-304. Municipality may levy tax -- Rate -- Imposition or repeal of tax -- Tax
121 rate change -- Effective date -- Notice requirements -- Exemptions.
122 (1) Except as provided in Subsection (4), a municipality may levy a municipal energy
123 sales and use tax on the sale or use of taxable energy within the municipality:
124 (a) by ordinance as provided in Section 10-1-305 ; and
125 (b) of up to 6% of the delivered value of the taxable energy.
126 (2) A municipal energy sales and use tax imposed under this part may be in addition to
127 any [local option] sales and use tax imposed by the municipality [as provided in] under Title
128 59, Chapter 12, [Part 2, Local Sales and Use Tax Act] Sales and Use Tax Act.
129 (3) (a) For purposes of this Subsection (3):
130 (i) "Annexation" means an annexation to a city or town under Title 10, Chapter 2, Part
131 4, Annexation.
132 (ii) "Annexing area" means an area that is annexed into a city or town.
133 (b) (i) If, on or after May 1, 2000, a city or town enacts or repeals a tax or changes the
134 rate of a tax under this part, the enactment, repeal, or change shall take effect:
135 (A) on the first day of a calendar quarter; and
136 (B) after a [75-day] 90-day period beginning on the date the commission receives
137 notice meeting the requirements of Subsection (3)(b)(ii) from the city or town.
138 (ii) The notice described in Subsection (3)(b)(i)(B) shall state:
139 (A) that the city or town will enact or repeal a tax or change the rate of a tax under this
140 part;
141 (B) the statutory authority for the tax described in Subsection (3)(b)(ii)(A);
142 (C) the effective date of the tax described in Subsection (3)(b)(ii)(A); and
143 (D) if the city or town enacts the tax or changes the rate of the tax described in
144 Subsection (3)(b)(ii)(A), the new rate of the tax.
145 (c) (i) If, for an annexation that occurs on or after May 1, 2000, the annexation will
146 result in a change in the rate of a tax under this part for an annexing area, the change shall take
147 effect:
148 (A) on the first day of a calendar quarter; and
149 (B) after a [75-day] 90-day period beginning on the date the commission receives

150 notice meeting the requirements of Subsection (3)(c)(ii) from the city or town that annexes the
151 annexing area.
152 (ii) The notice described in Subsection (3)(c)(i)(B) shall state:
153 (A) that the annexation described in Subsection (3)(c)(i) will result in a change in the
154 rate of a tax under this part for the annexing area;
155 (B) the statutory authority for the tax described in Subsection (3)(c)(ii)(A);
156 (C) the effective date of the tax described in Subsection (3)(c)(ii)(A); and
157 (D) the new rate of the tax described in Subsection (3)(c)(ii)(A).
158 (4) Notwithstanding Subsection (1), a sale or use of electricity within a municipality is
159 exempt from the tax authorized by this section if the sale or use is:
160 (a) made under a tariff adopted by the Public Service Commission of Utah only for
161 purchase of electricity produced from a new wind, geothermal, biomass, or solar power energy
162 source, as designated in the tariff by the Public Service Commission of Utah; and
163 (b) for an amount of electricity that is:
164 (i) unrelated to the amount of electricity used by the person purchasing the electricity
165 under the tariff described in Subsection (4)(a); and
166 (ii) equivalent to the number of kilowatthours specified in the tariff described in
167 Subsection (4)(a) that may be purchased under the tariff described in Subsection (4)(a).
168 Section 2. Section 10-1-307 is amended to read:
169 10-1-307. Collection of taxes by commission -- Distribution of revenues -- Charge
170 for services -- Collection of taxes by municipality.
171 (1) Except for the direct payment provisions provided in Subsection (3), the
172 commission shall collect, enforce, and administer the municipal energy sales and use tax from
173 energy suppliers according to the procedures established in Title 59, Chapter 12, Part 1, Tax
174 Collection.
175 (2) (a) Except as provided in Subsections 10-1-203 (3)(d), 10-1-305 (5), and
176 10-1-310 (2), the commission shall pay a municipality the difference between:
177 (i) the entire amount collected by the commission from the municipal energy sales and
178 use tax authorized by this part based on:
179 (A) the point of sale of the taxable energy if a taxable sale occurs in a municipality that
180 imposes a municipal energy sales and use tax as provided in this part; or

181 (B) the point of use of the taxable energy if the use occurs in a municipality that
182 imposes a municipal energy sales and use tax as provided in this part; and
183 (ii) [minus] the administration fee charged in accordance with Subsection (2)(c).
184 (b) In accordance with Subsection (2)(a), the commission shall transfer to the
185 municipality monthly by electronic transfer the revenues generated by the municipal energy
186 sales and use tax levied by the municipality and collected by the commission.
187 (c) (i) The commission shall charge a municipality imposing a municipal energy sales
188 and use tax a fee for administering the tax at the percentage provided in Section 59-12-206 ,
189 except that the commission may not charge a fee for taxes collected by a municipality under
190 Subsection (3).
191 (ii) The fee charged under Subsection (2)(c)(i) shall be:
192 (A) deposited in the Sales and Use Tax Administrative Fees Account; and
193 (B) used for sales tax administration as provided in Subsection 59-12-206 (2).
194 (3) An energy supplier shall pay the municipal energy sales and use tax revenues it
195 collects from its customers under this part directly to each municipality in which the energy
196 supplier has sales of taxable energy if:
197 (a) the municipality is the energy supplier; or
198 (b) (i) the energy supplier estimates that the municipal energy sales and use tax
199 collected annually by the energy supplier from its Utah customers equals $1,000,000 or more;
200 and
201 (ii) the energy supplier collects the tax imposed by this part.
202 (4) An energy supplier paying a tax under this part directly to a municipality may retain
203 the percentage of the tax authorized under Subsection 59-12-108 [(3)] (2) for the energy
204 supplier's costs of collecting and remitting the tax.
205 (5) An energy supplier paying the tax under this part directly to a municipality shall file
206 an information return with the commission, at least annually, on a form prescribed by the
207 commission.
208 Section 3. Section 17A-2-1064 is amended to read:
209 17A-2-1064. Airport to University of Utah Light Rail Restricted Account --
210 Creation -- Use of revenues.
211 (1) There is created within the General Fund a restricted account known as the "Airport

212 to University of Utah Light Rail Restricted Account."
213 (2) The account shall be funded from the portion of the sales and use tax under
214 [Sections] Section 59-12-204 [and 59-12-205 ] that is:
215 (a) generated by a city or town that will have constructed within its boundaries the
216 Airport to University of Utah Light Rail described in the Transportation Equity Act for the 21st
217 Century, Pub. L. No. 105-178, Sec. 3030(c)(2)(B)(i)(II), 112 Stat. 107; and
218 (b) equal to the revenues generated by a 1/64% tax rate on the taxable transactions
219 under Subsection 59-12-103 (1).
220 (3) The Utah State Tax Commission shall deposit the revenues described in Subsection
221 (2) into the account.
222 (4) The account shall earn interest which shall be deposited into the account.
223 (5) (a) A district may use the revenues in the account for a purpose described in
224 Subsection (5)(b) if:
225 (i) more than 200,000 people reside within the district boundaries; and
226 (ii) the district receives a grant or a loan under 49 U.S.C. Sec. 5309:
227 (A) for the Airport to University of Utah Light Rail project described in the
228 Transportation Equity Act for the 21st Century, Pub. L. No. 105-178, Sec. 3030(c)(2)(B)(i)(II),
229 112 Stat. 107; and
230 (B) before the construction of the Airport to University of Utah Light Rail project
231 described in Subsection (5)(a)(ii)(A) is completed.
232 (b) Subsection (5)(a) applies to:
233 (i) maintaining the Airport to University of Utah Light Rail described in Subsection
234 (5)(a)(ii)(A); or
235 (ii) operating the Airport to University of Utah Light Rail described in Subsection
236 (5)(a)(ii)(A).
237 Section 4. Section 59-1-403 is amended to read:
238 59-1-403. Confidentiality -- Exceptions -- Penalty -- Application to property tax.
239 (1) (a) Except as provided in this section, any of the following may not divulge or make
240 known in any manner any information gained by that person from any return filed with the
241 commission:
242 (i) a tax commissioner;

243 (ii) an agent, clerk, or other officer or employee of the commission; or
244 (iii) a representative, agent, clerk, or other officer or employee of any county, city, or
245 town.
246 (b) Except as provided in Subsection (1)(c), an official charged with the custody of a
247 return filed with the commission is not required to produce the return or evidence of anything
248 contained in the return in any action or proceeding in any court, except:
249 (i) in accordance with judicial order;
250 (ii) on behalf of the commission in any action or proceeding under:
251 (A) this title; or
252 (B) other law under which persons are required to file returns with the commission;
253 (iii) on behalf of the commission in any action or proceeding to which the commission
254 is a party; or
255 (iv) on behalf of any party to any action or proceeding under this title if the report or
256 facts shown by the return are directly involved in the action or proceeding.
257 (c) Notwithstanding Subsection (1)(b), a court may require the production of, and may
258 admit in evidence, any portion of a return or of the facts shown by the return, as are specifically
259 pertinent to the action or proceeding.
260 (2) This section does not prohibit:
261 (a) a person or that person's duly authorized representative from receiving a copy of
262 any return or report filed in connection with that person's own tax;
263 (b) the publication of statistics as long as the statistics are classified to prevent the
264 identification of particular reports or returns; and
265 (c) the inspection by the attorney general or other legal representative of the state of the
266 report or return of any taxpayer:
267 (i) who brings action to set aside or review a tax based on the report or return;
268 (ii) against whom an action or proceeding is contemplated or has been instituted under
269 this title; or
270 (iii) against whom the state has an unsatisfied money judgment.
271 (3) (a) Notwithstanding Subsection (1) and for purposes of administration, the
272 commission may by rule, made in accordance with Title 63, Chapter 46a, Utah Administrative
273 Rulemaking Act, provide for a reciprocal exchange of information with:

274 (i) the United States Internal Revenue Service; or
275 (ii) the revenue service of any other state.
276 (b) Notwithstanding Subsection (1) and for all taxes except individual income tax and
277 corporate franchise tax, the commission may by rule, made in accordance with Title 63,
278 Chapter 46a, Utah Administrative Rulemaking Act, share information gathered from returns
279 and other written statements with the federal government, any other state, any of the political
280 subdivisions of another state, or any political subdivision of this state, except as limited by
281 Sections 59-12-209 and 59-12-210 , if these political subdivisions or the federal government
282 grant substantially similar privileges to this state.
283 (c) Notwithstanding Subsection (1) and for all taxes except individual income tax and
284 corporate franchise tax, the commission may by rule, in accordance with Title 63, Chapter 46a,
285 Utah Administrative Rulemaking Act, provide for the issuance of information concerning the
286 identity and other information of taxpayers who have failed to file tax returns or to pay any tax
287 due.
288 (d) Notwithstanding Subsection (1), the commission shall provide to the Solid and
289 Hazardous Waste Control Board executive secretary, as defined in Section 19-6-102 , as
290 requested by the executive secretary, any records, returns, or other information filed with the
291 commission under Chapter 13, Motor and Special Fuel Tax Act, or Section 19-6-410.5
292 regarding the environmental assurance program participation fee.
293 (e) Notwithstanding Subsection (1), at the request of any person the commission shall
294 provide that person sales and purchase volume data reported to the commission on a report,
295 return, or other information filed with the commission under:
296 (i) Chapter 13, Part 2, Motor Fuel; or
297 (ii) Chapter 13, Part 4, Aviation Fuel.
298 (f) Notwithstanding Subsection (1), upon request from a tobacco product manufacturer,
299 as defined in Section 59-22-202 , the commission shall report to the manufacturer:
300 (i) the quantity of cigarettes, as defined in Section 59-22-202 , produced by the
301 manufacturer and reported to the commission for the previous calendar year under Section
302 59-14-407 ; and
303 (ii) the quantity of cigarettes, as defined in Section 59-22-202 , produced by the
304 manufacturer for which a tax refund was granted during the previous calendar year under

305 Section 59-14-401 and reported to the commission under Subsection 59-14-401 (1)(a)(v).
306 (g) Notwithstanding Subsection (1), the commission shall notify manufacturers,
307 distributors, wholesalers, and retail dealers of a tobacco product manufacturer that is prohibited
308 from selling cigarettes to consumers within the state under Subsection 59-14-210 (2).
309 (h) Notwithstanding Subsection (1), the commission may:
310 (i) provide to the Division of Consumer Protection within the Department of
311 Commerce and the attorney general data:
312 (A) reported to the commission under Section 59-14-212 ; or
313 (B) related to a violation under Section 59-14-211 ; and
314 (ii) upon request provide to any person data reported to the commission under
315 Subsections 59-14-212 (1)(a) through(c) and Subsection 59-14-212 (1)(g).
316 (i) Notwithstanding Subsection (1), the commission shall, at the request of a committee
317 of the Legislature, Office of the Legislative Fiscal Analyst, or Governor's Office of Planning
318 and Budget, provide to the committee or office the total amount of revenues collected by the
319 commission under Chapter 24, Radioactive Waste Tax Act, for the time period specified by the
320 committee or office.
321 (j) Notwithstanding Subsection (1), the commission shall at the request of the
322 Legislature provide to the Legislature the total amount of sales or uses exempt under
323 Subsection 59-12-104 [(52)] (51) reported to the commission in accordance with Section
324 59-12-105 .
325 (k) Notwithstanding Subsection (1), the commission shall make the list required by
326 Subsection 59-14-408 (3) available for public inspection.
327 (4) (a) Reports and returns shall be preserved for at least three years.
328 (b) After the three-year period provided in Subsection (4)(a) the commission may
329 destroy a report or return.
330 (5) (a) Any person who violates this section is guilty of a class A misdemeanor.
331 (b) If the person described in Subsection (5)(a) is an officer or employee of the state,
332 the person shall be dismissed from office and be disqualified from holding public office in this
333 state for a period of five years thereafter.
334 (6) This part does not apply to the property tax.
335 Section 5. Section 59-7-614.1 is enacted to read:

336 59-7-614.1. Refundable tax credit for hand tools used in farming operations --
337 Procedures for refund -- Transfers from General Fund to Uniform School Fund.
338 (1) For taxable years beginning on or after January 1, 2004, a taxpayer may claim a
339 refundable tax credit:
340 (a) as provided in this section;
341 (b) against taxes otherwise due under this chapter; and
342 (c) in an amount equal to the amount of tax the taxpayer pays:
343 (i) on a purchase of a hand tool:
344 (A) if the purchase is made on or after July 1, 2004;
345 (B) if the hand tool is used or consumed primarily and directly in a farming operation
346 in the state; and
347 (C) if the unit purchase price of the hand tool is more than $250; and
348 (ii) under Chapter 12, Sales and Use Tax Act, on the purchase described in Subsection
349 (1)(c)(i).
350 (2) A taxpayer:
351 (a) shall retain the following to establish the amount of tax the resident or nonresident
352 individual paid under Chapter 12, Sales and Use Tax Act, on the purchase described in
353 Subsection (1)(c)(i):
354 (i) a receipt;
355 (ii) an invoice; or
356 (iii) a document similar to a document described in Subsection (2)(a)(i) or (ii); and
357 (b) may not carry forward or carry back a tax credit under this section.
358 (3) (a) In accordance with any rules prescribed by the commission under Subsection
359 (3)(b), the commission shall:
360 (i) make a refund to a taxpayer that claims a tax credit under this section if the amount
361 of the tax credit exceeds the taxpayer's tax liability under this chapter; and
362 (ii) transfer at least annually from the General Fund into the Uniform School Fund an
363 amount equal to the amount of tax credit claimed under this section.
364 (b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
365 commission may make rules providing procedures for making:
366 (i) a refund to a taxpayer as required by Subsection (3)(a)(i); or

367 (ii) transfers from the General Fund into the Uniform School Fund as required by
368 Subsection (3)(a)(ii).
369 Section 6. Section 59-10-134.1 is enacted to read:
370 59-10-134.1. Refundable tax credit for hand tools used in farming operations --
371 Procedures for refund -- Transfers from General Fund to Uniform School Fund.
372 (1) For taxable years beginning on or after January 1, 2004, a resident or nonresident
373 individual may claim a refundable tax credit:
374 (a) as provided in this section;
375 (b) against taxes otherwise due under this chapter; and
376 (c) in an amount equal to the amount of tax the resident or nonresident individual pays:
377 (i) on a purchase of a hand tool:
378 (A) if the purchase is made on or after July 1, 2004;
379 (B) if the hand tool is used or consumed primarily and directly in a farming operation
380 in the state; and
381 (C) if the unit purchase price of the hand tool is more than $250; and
382 (ii) under Chapter 12, Sales and Use Tax Act, on the purchase described in Subsection
383 (1)(c)(i).
384 (2) A resident or nonresident individual:
385 (a) shall retain the following to establish the amount of tax the resident or nonresident
386 individual paid under Chapter 12, Sales and Use Tax Act, on the purchase described in
387 Subsection (1)(c)(i):
388 (i) a receipt;
389 (ii) an invoice; or
390 (iii) a document similar to a document described in Subsection (2)(a)(i) or (ii); and
391 (b) may not carry forward or carry back a tax credit under this section.
392 (3) (a) In accordance with any rules prescribed by the commission under Subsection
393 (3)(b), the commission shall:
394 (i) make a refund to a resident or nonresident individual who claims a tax credit under
395 this section if the amount of the tax credit exceeds the resident or nonresident individual's tax
396 liability under this chapter; and
397 (ii) transfer at least annually from the General Fund into the Uniform School Fund an

398 amount equal to the amount of tax credit claimed under this section.
399 (b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
400 commission may make rules providing procedures for making:
401 (i) a refund to a resident or nonresident individual as required by Subsection (3)(a)(i);
402 or
403 (ii) transfers from the General Fund into the Uniform School Fund as required by
404 Subsection (3)(a)(ii).
405 Section 7. Section 59-12-102 is amended to read:
406 59-12-102. Definitions.
407 As used in this chapter:
408 (1) (a) "Admission or user fees" includes season passes.
409 (b) "Admission or user fees" does not include annual membership dues to private
410 organizations.
411 (2) "Agreement" means the Streamlined Sales and Use Tax agreement described in
412 Section 59-12-102.1 .
413 (3) "Agreement combined tax rate" means the sum of the tax rates:
414 (a) listed under Subsection (4); and
415 (b) that are imposed within a local taxing jurisdiction.
416 (4) "Agreement sales and use tax" means a tax imposed under:
417 (a) Subsection 59-12-103 (2)(a)(i);
418 (b) Section 59-12-204 ;
419 (c) Section 59-12-401 ;
420 (d) Section 59-12-402 ;
421 (e) Section 59-12-501 ;
422 (f) Section 59-12-502 ;
423 (g) Section 59-12-703 ;
424 (h) Section 59-12-802 ;
425 (i) Section 59-12-804 ;
426 (j) Section 59-12-1001 ;
427 (k) Section 59-12-1102 ;
428 (l) Section 59-12-1302 ; or

429 (m) Section 59-12-1402 .
430 (5) "Alcoholic beverage" means a beverage that:
431 (a) is suitable for human consumption; and
432 (b) contains .5% or more alcohol by volume.
433 [(2)] (6) "Area agency on aging" is as defined in Section 62A-3-101 .
434 [(3)] (7) "Authorized carrier" means:
435 (a) in the case of vehicles operated over public highways, the holder of credentials
436 indicating that the vehicle is or will be operated pursuant to both the International Registration
437 Plan and the International Fuel Tax Agreement;
438 (b) in the case of aircraft, the holder of a Federal Aviation Administration operating
439 certificate or air carrier's operating certificate; or
440 (c) in the case of locomotives, freight cars, railroad work equipment, or other rolling
441 stock, the holder of a certificate issued by the United States Surface Transportation Board.
442 (8) "Certified automated system" means software certified by the governing board of
443 the agreement in accordance with Section 59-12-102.1 that:
444 (a) calculates the agreement sales and use tax imposed within a local taxing
445 jurisdiction:
446 (i) on a transaction; and
447 (ii) in the states that are members of the agreement;
448 (b) determines the amount of agreement sales and use tax to remit to a state that is a
449 member of the agreement; and
450 (c) maintains a record of the transaction described in Subsection (8)(a)(i).
451 (9) "Certified service provider" means an agent certified:
452 (a) by the governing board of the agreement in accordance with Section 59-12-102.1 ;
453 and
454 (b) to perform all of a seller's sales and use tax functions for an agreement sales and
455 use tax.
456 (10) (a) Subject to Subsection (10)(b), "clothing" means all human wearing apparel
457 suitable for general use.
458 (b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
459 commission shall make rules:

460 (i) listing the items that constitute "clothing"; and
461 (ii) that are consistent with the list of items that constitute "clothing" under the
462 agreement.
463 [(4)] (11) (a) For purposes of Subsection 59-12-104 [(43)] (42), "coin-operated
464 amusement device" means:
465 (i) a coin-operated amusement, skill, or ride device;
466 (ii) that is not controlled through [vendor-assisted] seller-assisted, over-the-counter,
467 sales of tokens; and
468 (iii) includes a music machine, pinball machine, billiard machine, video game machine,
469 arcade machine, and a mechanical or electronic skill game or ride.
470 (b) For purposes of Subsection 59-12-104 [(43)] (42), "coin-operated amusement
471 device" does not mean a coin-operated amusement device possessing a coinage mechanism
472 that:
473 (i) accepts and registers multiple denominations of coins; and
474 (ii) allows the [vendor] seller to collect the sales and use tax at the time an amusement
475 device is activated and operated by a person inserting coins into the device.
476 [(5)] (12) "Commercial use" means the use of gas, electricity, heat, coal, fuel oil, or
477 other fuels that does not constitute industrial use under Subsection [(13)] (30) or residential use
478 under Subsection [(23)] (52).
479 [(6)] (13) (a) "Common carrier" means a person engaged in or transacting the business
480 of transporting passengers, freight, merchandise, or other property for hire within this state.
481 (b) (i) "Common carrier" does not include a person who, at the time the person is
482 traveling to or from that person's place of employment, transports a passenger to or from the
483 passenger's place of employment.
484 (ii) For purposes of Subsection [(6)] (13)(b)(i), in accordance with Title 63, Chapter
485 46a, Utah Administrative Rulemaking Act, the commission may make rules defining what
486 constitutes a person's place of employment.
487 [(7)] (14) "Component part" includes:
488 (a) poultry, dairy, and other livestock feed, and their components;
489 (b) baling ties and twine used in the baling of hay and straw;
490 (c) fuel used for providing temperature control of orchards and commercial

491 greenhouses doing a majority of their business in wholesale sales, and for providing power for
492 off-highway type farm machinery; and
493 (d) feed, seeds, and seedlings.
494 (15) "Computer" means an electronic device that accepts information:
495 (a) (i) in digital form; or
496 (ii) in a form similar to digital form; and
497 (b) manipulates that information for a result based on a sequence of instructions.
498 (16) "Computer software" means a set of coded instructions designed to cause:
499 (a) a computer to perform a task; or
500 (b) automatic data processing equipment to perform a task.
501 [(8)] (17) "Construction materials" means any tangible personal property that will be
502 converted into real property.
503 (18) "Delivered electronically" means delivered to a purchaser by means other than
504 tangible storage media.
505 (19) (a) "Delivery charge" means a charge:
506 (i) by a seller of:
507 (A) tangible personal property; or
508 (B) services; and
509 (ii) for preparation and delivery of the tangible personal property or services described
510 in Subsection (19)(a)(i) to a location designated by the purchaser.
511 (b) "Delivery charge" includes a charge for the following:
512 (i) transportation;
513 (ii) shipping;
514 (iii) postage;
515 (iv) handling;
516 (v) crating; or
517 (vi) packing.
518 (20) "Dietary supplement" means a product, other than tobacco, that:
519 (a) is intended to supplement the diet;
520 (b) contains one or more of the following dietary ingredients:
521 (i) a vitamin;

522 (ii) a mineral;
523 (iii) an herb or other botanical;
524 (iv) an amino acid;
525 (v) a dietary substance for use by humans to supplement the diet by increasing the total
526 dietary intake; or
527 (vi) a concentrate, metabolite, constituent, extract, or combination of any ingredient
528 described in Subsections (20)(b)(i) through (v);
529 (c) (i) except as provided in Subsection (20)(c)(ii), is intended for ingestion in:
530 (A) tablet form;
531 (B) capsule form;
532 (C) powder form;
533 (D) softgel form;
534 (E) gelcap form; or
535 (F) liquid form; or
536 (ii) notwithstanding Subsection (20)(c)(i), if the product is not intended for ingestion in
537 a form described in Subsections (20)(c)(i)(A) through (F), is not represented:
538 (A) as conventional food; and
539 (B) for use as a sole item of:
540 (I) a meal; or
541 (II) the diet; and
542 (d) is required to be labeled as a dietary supplement:
543 (i) identifiable by the "Supplemental Facts" box found on the label; and
544 (ii) as required by 21 C.F.R. Sec. 101.36.
545 (21) (a) "Direct mail" means printed material delivered or distributed by United States
546 mail or other delivery service:
547 (i) to:
548 (A) a mass audience; or
549 (B) addressees on a mailing list provided by a purchaser of the mailing list; and
550 (ii) if the cost of the printed material is not billed directly to the recipients.
551 (b) "Direct mail" includes tangible personal property supplied directly or indirectly by a
552 purchaser to a seller of direct mail for inclusion in a package containing the printed material.

553 (c) "Direct mail" does not include multiple items of printed material delivered to a
554 single address.
555 (22) (a) "Drug" means a compound, substance, or preparation, or a component of a
556 compound, substance, or preparation that is:
557 (i) recognized in:
558 (A) the official United States Pharmacopoeia;
559 (B) the official Homeopathic Pharmacopoeia of the United States;
560 (C) the official National Formulary; or
561 (D) a supplement to a publication listed in Subsections (22)(a)(i)(A) through (C);
562 (ii) intended for use in the:
563 (A) diagnosis of disease;
564 (B) cure of disease;
565 (C) mitigation of disease;
566 (D) treatment of disease; or
567 (E) prevention of disease; or
568 (iii) intended to affect:
569 (A) the structure of the body; or
570 (B) any function of the body.
571 (b) "Drug" does not include:
572 (i) food and food ingredients;
573 (ii) a dietary supplement;
574 (iii) an alcoholic beverage; or
575 (iv) a prosthetic device.
576 (23) (a) Except as provided in Subsection (23)(c), "durable medical equipment" means
577 equipment that:
578 (i) can withstand repeated use;
579 (ii) is primarily and customarily used to serve a medical purpose;
580 (iii) generally is not useful to a person in the absence of illness or injury;
581 (iv) is not worn in or on the body; and
582 (v) is listed as eligible for payment under:
583 (A) Title XVIII of the federal Social Security Act; or

584 (B) the state plan for medical assistance under Title XIX of the federal Social Security
585 Act.
586 (b) "Durable medical equipment" includes parts used in the repair or replacement of the
587 equipment described in Subsection (23)(a).
588 (c) Notwithstanding Subsection (23)(a), "durable medical equipment" does not include
589 mobility enhancing equipment.
590 (24) "Electronic" means:
591 (a) relating to technology; and
592 (b) having:
593 (i) electrical capabilities;
594 (ii) digital capabilities;
595 (iii) magnetic capabilities;
596 (iv) wireless capabilities;
597 (v) optical capabilities;
598 (vi) electromagnetic capabilities; or
599 (vii) capabilities similar to Subsections (24)(b)(i) through (vi).
600 (25) (a) "Food and food ingredients" means substances:
601 (i) regardless of whether the substances are in:
602 (A) liquid form;
603 (B) concentrated form;
604 (C) solid form;
605 (D) frozen form;
606 (E) dried form; or
607 (F) dehydrated form; and
608 (ii) that are:
609 (A) sold for:
610 (I) ingestion by humans; or
611 (II) chewing by humans; and
612 (B) consumed for the substance's:
613 (I) taste; or
614 (II) nutritional value.

615 (b) "Food and food ingredients" does not include:
616 (i) an alcoholic beverage;
617 (ii) tobacco; or
618 (iii) prepared food.
619 [(9)] (26) (a) "Fundraising sales" means sales:
620 (i) (A) made by a school; or
621 (B) made by a school student;
622 (ii) that are for the purpose of raising funds for the school to purchase equipment,
623 materials, or provide transportation; and
624 (iii) that are part of an officially sanctioned school activity.
625 (b) For purposes of Subsection [(9)] (26)(a)(iii), "officially sanctioned school activity"
626 means a school activity:
627 (i) that is conducted in accordance with a formal policy adopted by the school or school
628 district governing the authorization and supervision of fundraising activities;
629 (ii) that does not directly or indirectly compensate an individual teacher or other
630 educational personnel by direct payment, commissions, or payment in kind; and
631 (iii) the net or gross revenues from which are deposited in a dedicated account
632 controlled by the school or school district.
633 (27) "Governing board of the agreement" means the governing board of the agreement
634 that is:
635 (a) authorized to administer the agreement; and
636 (b) established in accordance with the agreement.
637 [(10)] (28) (a) "Hearing aid" means:
638 (i) an instrument or device having an electronic component that is designed to:
639 (A) (I) improve impaired human hearing; or
640 (II) correct impaired human hearing; and
641 (B) (I) be worn in the human ear; or
642 (II) affixed behind the human ear;
643 (ii) an instrument or device that is surgically implanted into the cochlea; or
644 (iii) a telephone amplifying device.
645 (b) "Hearing aid" does not include:

646 (i) except as provided in Subsection [(10)] (28)(a)(i)(B) or [(10)] (28)(a)(ii), an
647 instrument or device having an electronic component that is designed to be worn on the body;
648 (ii) except as provided in Subsection [(10)] (28)(a)(iii), an assistive listening device or
649 system designed to be used by one individual, including:
650 (A) a personal amplifying system;
651 (B) a personal FM system;
652 (C) a television listening system; or
653 (D) a device or system similar to a device or system described in Subsections [(10)]
654 (28)(b)(ii)(A) through (C); or
655 (iii) an assistive listening device or system designed to be used by more than one
656 individual, including:
657 (A) a device or system installed in:
658 (I) an auditorium;
659 (II) a church;
660 (III) a conference room;
661 (IV) a synagogue; or
662 (V) a theater; or
663 (B) a device or system similar to a device or system described in Subsections [(10)]
664 (28)(b)(iii)(A)(I) through (V).
665 [(11)] (29) (a) "Hearing aid accessory" means a hearing aid:
666 (i) component;
667 (ii) attachment; or
668 (iii) accessory.
669 (b) "Hearing aid accessory" includes:
670 (i) a hearing aid neck loop;
671 (ii) a hearing aid cord;
672 (iii) a hearing aid ear mold;
673 (iv) hearing aid tubing;
674 (v) a hearing aid ear hook; or
675 (vi) a hearing aid remote control.
676 (c) "Hearing aid accessory" does not include:

677 (i) a component, attachment, or accessory designed to be used only with an:
678 (A) instrument or device described in Subsection [(10)] (28)(b)(i); or
679 (B) assistive listening device or system described in Subsection [(10)] (28)(b)(ii) or
680 (iii); or
681 (ii) a hearing aid battery.
682 [(12) (a) Except as provided in Subsection (12)(c), "home medical equipment or
683 supplies" means equipment or supplies that:]
684 [(i) a licensed physician prescribes or authorizes in writing as necessary:]
685 [(A) for the treatment of a medical illness or injury; or]
686 [(B) to mitigate an impairment resulting from illness or injury;]
687 [(ii) are used exclusively by the person for whom they are prescribed to serve a medical
688 purpose; and]
689 [(iii) are listed as eligible for payment under:]
690 [(A) Title XVIII of the federal Social Security Act; or]
691 [(B) the state plan for medical assistance under Title XIX of the federal Social Security
692 Act.]
693 [(b) "Home medical equipment or supplies" includes parts used in the repairs or
694 renovations of equipment or supplies described in Subsection (12)(a).]
695 [(c) Notwithstanding Subsection (12)(a), "home medical equipment or supplies" does
696 not include:]
697 [(i) equipment or supplies purchased by, for, or on behalf of any:]
698 [(A) health care facility, as defined in Subsection (12)(d); or]
699 [(B) one or more of the following for use in a professional practice:]
700 [(I) a doctor;]
701 [(II) a nurse; or]
702 [(III) another health care provider;]
703 [(ii) eyeglasses, contact lenses, or equipment to correct impaired vision; or]
704 [(iii) hearing aids or hearing aid accessories.]
705 [(d) For purposes of Subsection (12)(c)(i)(A), "health care facility" includes:]
706 [(i) a clinic;]
707 [(ii) a doctor's office; or]

708 [(iii) a health care facility as defined in Section 26-21-2 .]
709 [(13)] (30) "Industrial use" means the use of natural gas, electricity, heat, coal, fuel oil,
710 or other fuels:
711 (a) in mining or extraction of minerals;
712 (b) in agricultural operations to produce an agricultural product up to the time of
713 harvest or placing the agricultural product into a storage facility, including:
714 (i) commercial greenhouses;
715 (ii) irrigation pumps;
716 (iii) farm machinery;
717 (iv) implements of husbandry as defined in Subsection 41-1a-102 (23) that are not
718 registered under Title 41, Chapter 1a, Part 2, Registration; and
719 (v) other farming activities;
720 (c) in manufacturing tangible personal property at an establishment described in SIC
721 Codes 2000 to 3999 of the 1987 Standard Industrial Classification Manual of the federal
722 Executive Office of the President, Office of Management and Budget; or
723 (d) by a scrap recycler if:
724 (i) from a fixed location, the scrap recycler utilizes machinery or equipment to process
725 one or more of the following items into prepared grades of processed materials for use in new
726 products:
727 (A) iron;
728 (B) steel;
729 (C) nonferrous metal;
730 (D) paper;
731 (E) glass;
732 (F) plastic;
733 (G) textile; or
734 (H) rubber; and
735 (ii) the new products under Subsection [(13)] (30)(d)(i) would otherwise be made with
736 nonrecycled materials.
737 (31) (a) "Lease" or "rental" means a transfer of possession or control of tangible
738 personal property for:

739 (i) (A) a fixed term; or
740 (B) an indeterminate term; and
741 (ii) consideration.
742 (b) "Lease" or "rental" includes an agreement covering a motor vehicle and trailer if the
743 amount of consideration may be increased or decreased by reference to the amount realized
744 upon sale or disposition of the property as defined in 26 U.S.C. Sec. 7701(h)(1).
745 (c) "Lease" or "rental" does not include:
746 (i) a transfer of possession or control of property under a security agreement or
747 deferred payment plan that requires the transfer of title upon completion of the required
748 payments;
749 (ii) a transfer of possession or control of property under an agreement:
750 (A) that requires the transfer of title upon completion of required payments; and
751 (B) in which the payment of an option price does not exceed the greater of:
752 (I) $100; or
753 (II) 1% of the total required payments; or
754 (iii) providing tangible personal property along with an operator for a fixed period of
755 time or an indeterminate period of time if the operator is necessary for equipment to perform as
756 designed.
757 (d) For purposes of Subsection (31)(c)(iii), an operator is necessary for equipment to
758 perform as designed if the operator's duties exceed the:
759 (i) set-up of tangible personal property;
760 (ii) maintenance of tangible personal property; or
761 (iii) inspection of tangible personal property.
762 (32) "Local taxing jurisdiction" means a:
763 (a) county that is authorized to impose an agreement sales and use tax;
764 (b) city that is authorized to impose an agreement sales and use tax; or
765 (c) town that is authorized to impose an agreement sales and use tax.
766 [(14)] (33) "Manufactured home" means any manufactured home or mobile home as
767 defined in Title 58, Chapter 56, Utah Uniform Building Standards Act.
768 [(15)] (34) For purposes of Subsection 59-12-104 (14), "manufacturing facility" means:
769 (a) an establishment described in SIC Codes 2000 to 3999 of the 1987 Standard

770 Industrial Classification Manual of the federal Executive Office of the President, Office of
771 Management and Budget; or
772 (b) a scrap recycler if:
773 (i) from a fixed location, the scrap recycler utilizes machinery or equipment to process
774 one or more of the following items into prepared grades of processed materials for use in new
775 products:
776 (A) iron;
777 (B) steel;
778 (C) nonferrous metal;
779 (D) paper;
780 (E) glass;
781 (F) plastic;
782 (G) textile; or
783 (H) rubber; and
784 (ii) the new products under Subsection [(15)] (34)(b)(i) would otherwise be made with
785 nonrecycled materials.
786 [(16) (a) "Medicine" means:]
787 [(i) insulin, syringes, and any medicine prescribed for the treatment of human ailments
788 by a person authorized to prescribe treatments and dispensed on prescription filled by a
789 registered pharmacist, or supplied to patients by a physician, surgeon, or podiatric physician;]
790 [(ii) any medicine dispensed to patients in a county or other licensed hospital if
791 prescribed for that patient and dispensed by a registered pharmacist or administered under the
792 direction of a physician; and]
793 [(iii) any oxygen or stoma supplies prescribed by a physician or administered under the
794 direction of a physician or paramedic.]
795 [(b) "Medicine" does not include:]
796 [(i) any auditory, prosthetic, ophthalmic, or ocular device or appliance; or]
797 [(ii) any alcoholic beverage.]
798 [(17)] (35) "Mobile telecommunications service" is as defined in the Mobile
799 Telecommunications Sourcing Act, 4 U.S.C. Sec. 124.
800 (36) (a) Except as provided in Subsection (36)(c), "mobility enhancing equipment"

801 means equipment that is:
802 (i) primarily and customarily used to provide or increase the ability to move from one
803 place to another;
804 (ii) appropriate for use in a:
805 (A) home; or
806 (B) motor vehicle;
807 (iii) not generally used by persons with normal mobility; and
808 (iv) listed as eligible for payment under:
809 (A) Title XVIII of the federal Social Security Act; or
810 (B) the state plan for medical assistance under Title XIX of the federal Social Security
811 Act.
812 (b) "Mobility enhancing equipment" includes parts used in the repair or replacement of
813 the equipment described in Subsection (36)(a).
814 (c) Notwithstanding Subsection (36)(a), "mobility enhancing equipment" does not
815 include:
816 (i) a motor vehicle;
817 (ii) equipment on a motor vehicle if that equipment is normally provided by the motor
818 vehicle manufacturer;
819 (iii) durable medical equipment; or
820 (iv) a prosthetic device.
821 (37) "Model 1 seller" means a seller that has selected a certified service provider as the
822 seller's agent to perform all of the seller's sales tax functions for agreement sales and use taxes.
823 (38) "Model 2 seller" means a seller that:
824 (a) except as provided in Subsection (38)(b), has selected a certified automated system
825 to perform the seller's sales tax functions for agreement sales and use taxes; and
826 (b) notwithstanding Subsection (38)(a), retains responsibility for remitting all of the
827 sales tax:
828 (i) collected by the seller; and
829 (ii) to the appropriate local taxing jurisdiction.
830 (39) (a) Subject to Subsection (39)(b), "model 3 seller" means a seller that has:
831 (i) sales in at least five states that are members of the agreement;

832 (ii) total annual sales revenues of at least $500,000,000;
833 (iii) a proprietary system that calculates the amount of tax:
834 (A) for an agreement sales and use tax; and
835 (B) due to each local taxing jurisdiction; and
836 (iv) entered into a performance agreement with the governing board of the agreement.
837 (b) For purposes of Subsection (39)(a), "model 3 seller" includes an affiliated group of
838 sellers using the same proprietary system.
839 [(18)] (40) "Olympic merchandise" means tangible personal property bearing an
840 Olympic designation, emblem, insignia, mark, logo, service mark, symbol, terminology,
841 trademark, or other copyrighted or protected material, including:
842 (a) one or more of the following terms:
843 (i) "Olympic";
844 (ii) "Olympiad"; or
845 (iii) "Citius Altius Fortius";
846 (b) the symbol of the International Olympic Committee, consisting of five interlocking
847 rings;
848 (c) the emblem of the International Olympic Committee Corporation;
849 (d) a United States Olympic Committee designation, emblem, insignia, mark, logo,
850 service mark, symbol, terminology, trademark, or other copyrighted or protected material;
851 (e) any emblem of the Olympic Winter Games of 2002 that is officially designated by
852 the Salt Lake Organizing Committee of the Olympic Winter Games of 2002; or
853 (f) the mascot of the Olympic Winter Games of 2002.
854 [(19)] (41) (a) "Other fuels" means products that burn independently to produce heat or
855 energy.
856 (b) "Other fuels" includes oxygen when it is used in the manufacturing of tangible
857 personal property.
858 [(20)] (42) "Person" includes any individual, firm, partnership, joint venture,
859 association, corporation, estate, trust, business trust, receiver, syndicate, this state, any county,
860 city, municipality, district, or other local governmental entity of the state, or any group or
861 combination acting as a unit.
862 [(21) "Purchase price" means the amount paid or charged for tangible personal property

863 or any other taxable transaction under Subsection 59-12-103 (1), excluding only cash discounts
864 taken or any excise tax imposed on the purchase price by the federal government.]
865 (43) (a) "Prepared food" means:
866 (i) food:
867 (A) sold in a heated state; or
868 (B) heated by a seller;
869 (ii) two or more food ingredients mixed or combined by the seller for sale as a single
870 item; or
871 (iii) except as provided in Subsection (43)(c), food sold with an eating utensil provided
872 by the seller, including a:
873 (A) plate;
874 (B) knife;
875 (C) fork;
876 (D) spoon;
877 (E) glass;
878 (F) cup;
879 (G) napkin; or
880 (H) straw.
881 (b) "Prepared food" does not include:
882 (i) food that a seller only:
883 (A) cuts;
884 (B) repackages; or
885 (C) pasteurizes; or
886 (ii) (A) the following:
887 (I) raw egg;
888 (II) raw fish;
889 (III) raw meat;
890 (IV) raw poultry; or
891 (V) a food containing an item described in Subsections (43)(b)(ii)(A)(I) through (IV);
892 and
893 (B) if the Food and Drug Administration recommends in Chapter 3, Part 401.11 of the

894 Food and Drug Administration's Food Code that a consumer cook the items described in
895 Subsection (43)(b)(ii)(A) to prevent food borne illness.
896 (c) Notwithstanding Subsection (43)(a)(iii), an eating utensil provided by the seller
897 does not include the following used to transport the food:
898 (i) a container; or
899 (ii) packaging.
900 (44) "Prescription" means an order, formula, or recipe that is issued:
901 (a) (i) orally;
902 (ii) in writing;
903 (iii) electronically; or
904 (iv) by any other manner of transmission; and
905 (b) by a licensed practitioner authorized by the laws of a state.
906 (45) (a) Except as provided in Subsection (45)(b)(ii) or (iii), "prewritten computer
907 software" means computer software that is not designed and developed:
908 (i) by the author or other creator of the computer software; and
909 (ii) to the specifications of a specific purchaser.
910 (b) "Prewritten computer software" includes:
911 (i) a prewritten upgrade to computer software if the prewritten upgrade to the computer
912 software is not designed and developed:
913 (A) by the author or other creator of the computer software; and
914 (B) to the specifications of a specific purchaser;
915 (ii) notwithstanding Subsection (45)(a), computer software designed and developed by
916 the author or other creator of the computer software to the specifications of a specific purchaser
917 if the computer software is sold to a person other than the purchaser; or
918 (iii) notwithstanding Subsection (45)(a) and except as provided in Subsection (45)(c),
919 prewritten computer software or a prewritten portion of prewritten computer software:
920 (A) that is modified or enhanced to any degree; and
921 (B) if the modification or enhancement described in Subsection (45)(b)(iii)(A) is
922 designed and developed to the specifications of a specific purchaser.
923 (c) Notwithstanding Subsection (45)(b)(iii), "prewritten computer software" does not
924 include a modification or enhancement described in Subsection (45)(b)(iii) if the charges for

925 the modification or enhancement are:
926 (i) reasonable; and
927 (ii) separately stated on the invoice or other statement of price provided to the
928 purchaser.
929 (46) (a) "Prosthetic device" means a device that is:
930 (i) worn on or in the body to:
931 (A) artificially replace a missing portion of the body;
932 (B) prevent or correct a physical deformity or physical malfunction; or
933 (C) support a weak or deformed portion of the body; and
934 (ii) listed as eligible for payment under:
935 (A) Title XVIII of the federal Social Security Act; or
936 (B) the state plan for medical assistance under Title XIX of the federal Social Security
937 Act.
938 (b) "Prosthetic device" includes:
939 (i) parts used in the repairs or renovation of a prosthetic device; or
940 (ii) replacement parts for a prosthetic device.
941 (c) "Prosthetic device" does not include:
942 (i) corrective eyeglasses;
943 (ii) contact lenses;
944 (iii) hearing aids; or
945 (iv) dental prostheses.
946 (47) (a) "Protective equipment" means an item:
947 (i) for human wear; and
948 (ii) that is:
949 (A) designed as protection:
950 (I) to the wearer against injury or disease; or
951 (II) against damage or injury of other persons or property; and
952 (B) not suitable for general use.
953 (b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
954 commission shall make rules:
955 (i) listing the items that constitute "protective equipment"; and

956 (ii) that are consistent with the list of items that constitute "protective equipment"
957 under the agreement.
958 (48) (a) "Purchase price" and "sales price" mean the total amount of consideration:
959 (i) valued in money; and
960 (ii) for which tangible personal property or services are:
961 (A) sold;
962 (B) leased; or
963 (C) rented.
964 (b) "Purchase price" and "sales price" include:
965 (i) the seller's cost of the tangible personal property or services sold;
966 (ii) expenses of the seller, including:
967 (A) the cost of materials used;
968 (B) a labor cost;
969 (C) a service cost;
970 (D) interest;
971 (E) a loss;
972 (F) the cost of transportation to the seller; or
973 (G) a tax imposed on the seller;
974 (iii) a charge by the seller for any service necessary to complete the sale;
975 (iv) a delivery charge; or
976 (v) an installation charge.
977 (c) "Purchase price" and "sales price" do not include:
978 (i) a discount:
979 (A) in a form including:
980 (I) cash;
981 (II) term; or
982 (III) coupon;
983 (B) that is allowed by a seller;
984 (C) taken by a purchaser on a sale; and
985 (D) that is not reimbursed by a third party; or
986 (ii) the following if separately stated on an invoice, bill of sale, or similar document

987 provided to the purchaser:
988 (A) the amount of a trade-in;
989 (B) the following from credit extended on the sale of tangible personal property or
990 services:
991 (I) interest charges;
992 (II) financing charges; or
993 (III) carrying charges; or
994 (C) a tax or fee legally imposed directly on the consumer.
995 (49) "Purchaser" means a person to whom:
996 (a) a sale of tangible personal property is made; or
997 (b) a service is furnished.
998 [(22)] (50) "Regularly rented" means:
999 (a) rented to a guest for value three or more times during a calendar year; or
1000 (b) advertised or held out to the public as a place that is regularly rented to guests for
1001 value.
1002 (51) "Rental" is as defined in Subsection (31).
1003 [(23)] (52) "Residential use" means the use in or around a home, apartment building,
1004 sleeping quarters, and similar facilities or accommodations.
1005 [(24) (a) "Retail sale" means any sale within the state of tangible personal property or
1006 any other taxable transaction under Subsection 59-12-103 (1), other than resale of such
1007 property, item, or service by a retailer or wholesaler to a user or consumer.]
1008 [(b) "Retail sale" includes sales by any farmer or other agricultural producer of poultry,
1009 eggs, or dairy products to consumers if the sales have an average monthly sales value of $125
1010 or more.]
1011 [(c) "Retail sale" does not include, and no additional sales or use tax shall be assessed
1012 against, those transactions where a purchaser of tangible personal property pays applicable
1013 sales or use taxes on its initial nonexempt purchases of property and then enters into a
1014 sale-leaseback transaction by which title to such property is transferred by the purchaser-lessee
1015 to a lessor for consideration, provided:]
1016 [(i) the transaction is intended as a form of financing for the property to the
1017 purchaser-lessee; and]

1018 [(ii) pursuant to generally accepted accounting principles, the purchaser-lessee is
1019 required to capitalize the subject property for financial reporting purposes, and account for the
1020 lease payments as payments made under a financing arrangement.]
1021 (53) "Retail sale" or "sale at retail" means a sale, lease, or rental for a purpose other
1022 than:
1023 (a) resale;
1024 (b) sublease; or
1025 (c) subrent.
1026 [(25)] (54) (a) "Retailer" means any person engaged in a regularly organized [retail]
1027 business in tangible personal property or any other taxable transaction under Subsection
1028 59-12-103 (1), and who is selling to the user or consumer and not for resale.
1029 (b) "Retailer" includes commission merchants, auctioneers, and any person regularly
1030 engaged in the business of selling to users or consumers within the state.
1031 [(c) "Retailer" does not include farmers, gardeners, stockmen, poultrymen, or other
1032 growers or agricultural producers producing and doing business on their own premises, except
1033 those who are regularly engaged in the business of buying or selling for a profit.]
1034 [(d) For purposes of this chapter the commission may regard as retailers the following
1035 if they determine it is necessary for the efficient administration of this chapter: salesmen,
1036 representatives, peddlers, or canvassers as the agents of the dealers, distributors, supervisors, or
1037 employers under whom they operate or from whom they obtain the tangible personal property
1038 sold by them, irrespective of whether they are making sales on their own behalf or on behalf of
1039 these dealers, distributors, supervisors, or employers, except that:]
1040 [(i) a printer's facility with which a retailer has contracted for printing shall not be
1041 considered to be a salesman, representative, peddler, canvasser, or agent of the retailer; and]
1042 [(ii) the ownership of property that is located at the premises of a printer's facility with
1043 which the retailer has contracted for printing and that consists of the final printed product,
1044 property that becomes a part of the final printed product, or copy from which the printed
1045 product is produced, shall not result in the retailer being deemed to have or maintain an office,
1046 distribution house, sales house, warehouse, service enterprise, or other place of business, or to
1047 maintain a stock of goods, within this state.]
1048 [(26)] (55) (a) "Sale" means any transfer of title, exchange, or barter, conditional or

1049 otherwise, in any manner, of tangible personal property or any other taxable transaction under
1050 Subsection 59-12-103 (1), for consideration. [It]
1051 (b) "Sale" includes:
1052 [(a)] (i) installment and credit sales;
1053 [(b)] (ii) any closed transaction constituting a sale;
1054 [(c)] (iii) any sale of electrical energy, gas, services, or entertainment taxable under this
1055 chapter;
1056 [(d)] (iv) any transaction if the possession of property is transferred but the seller
1057 retains the title as security for the payment of the price; and
1058 [(e)] (v) any transaction under which right to possession, operation, or use of any
1059 article of tangible personal property is granted under a lease or contract and the transfer of
1060 possession would be taxable if an outright sale were made.
1061 (56) "Sale at retail" is as defined in Subsection (53).
1062 (57) "Sale-leaseback transaction" means a transaction by which title to tangible
1063 personal property that is subject to a tax under this chapter is transferred:
1064 (a) by a purchaser-lessee;
1065 (b) to a lessor;
1066 (c) for consideration; and
1067 (d) if:
1068 (i) the purchaser-lessee paid sales and use tax on the purchaser-lessee's initial purchase
1069 of the tangible personal property;
1070 (ii) the sale of the tangible personal property to the lessor is intended as a form of
1071 financing:
1072 (A) for the property; and
1073 (B) to the purchaser-lessee; and
1074 (iii) in accordance with generally accepted accounting principles, the purchaser-lessee
1075 is required to:
1076 (A) capitalize the property for financial reporting purposes; and
1077 (B) account for the lease payments as payments made under a financing arrangement.
1078 (58) "Sales price" is as defined in Subsection (48).
1079 [(27)] (59) (a) "Sales relating to schools" means the following sales by, amounts paid

1080 to, or amounts charged by a school:
1081 (i) sales that are directly related to the school's educational functions or activities
1082 including:
1083 (A) the sale of:
1084 (I) textbooks;
1085 (II) textbook fees;
1086 (III) laboratory fees;
1087 (IV) laboratory supplies; or
1088 (V) safety equipment;
1089 (B) the sale of [clothing] a uniform, protective equipment, or sports or recreational
1090 equipment that:
1091 (I) a student is specifically required to wear as a condition of participation in a
1092 school-related event or school-related activity; and
1093 (II) is not readily adaptable to general or continued usage to the extent that it takes the
1094 place of ordinary clothing;
1095 (C) sales of [food] the following if the net or gross revenues generated by the [food]
1096 sales are deposited into a school district fund or school fund dedicated to school meals[; or]:
1097 (I) food and food ingredients; or
1098 (II) prepared food; or
1099 (D) transportation charges for official school activities; or
1100 (ii) amounts paid to or amounts charged by a school for admission to a school-related
1101 event or school-related activity.
1102 (b) "Sales relating to schools" does not include:
1103 (i) bookstore sales of items that are not educational materials or supplies;
1104 (ii) except as provided in Subsection [(27)] (59)(a)(i)(B)[, clothing; or]:
1105 (A) clothing;
1106 (B) clothing accessories or equipment;
1107 (C) protective equipment; or
1108 (D) sports or recreational equipment; or
1109 (iii) amounts paid to or amounts charged by a school for admission to a school-related
1110 event or school-related activity if the amounts paid or charged are passed through to a person:

1111 (A) other than a:
1112 (I) school;
1113 (II) nonprofit organization authorized by a school board or a governing body of a
1114 private school to organize and direct a competitive secondary school activity; or
1115 (III) nonprofit association authorized by a school board or a governing body of a
1116 private school to organize and direct a competitive secondary school activity; and
1117 (B) that is required to collect sales and use taxes under this chapter.
1118 (c) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
1119 commission may make rules defining the term "passed through."
1120 [(28)] (60) For purposes of this section and Section 59-12-104 , "school" means:
1121 (a) an elementary school or a secondary school that:
1122 (i) is a:
1123 (A) public school; or
1124 (B) private school; and
1125 (ii) provides instruction for one or more grades kindergarten through 12; or
1126 (b) a public school district.
1127 (61) "Seller" means a person that makes a sale, lease, or rental of:
1128 (a) tangible personal property; or
1129 (b) a service.
1130 [(29)] (62) (a) "Semiconductor fabricating or processing materials" means tangible
1131 personal property:
1132 (i) used primarily in the process of:
1133 (A) (I) manufacturing a semiconductor; or
1134 (II) fabricating a semiconductor; or
1135 (B) maintaining an environment suitable for a semiconductor; or
1136 (ii) consumed primarily in the process of:
1137 (A) (I) manufacturing a semiconductor; or
1138 (II) fabricating a semiconductor; or
1139 (B) maintaining an environment suitable for a semiconductor.
1140 (b) "Semiconductor fabricating or processing materials" includes:
1141 (i) parts used in the repairs or renovations of tangible personal property described in

1142 Subsection [(29)] (62)(a); or
1143 (ii) a chemical, catalyst, or other material used to:
1144 (A) produce or induce in a semiconductor a:
1145 (I) chemical change; or
1146 (II) physical change;
1147 (B) remove impurities from a semiconductor; or
1148 (C) improve the marketable condition of a semiconductor.
1149 [(30)] (63) "Senior citizen center" means a facility having the primary purpose of
1150 providing services to the aged as defined in Section 62A-3-101 .
1151 (64) (a) "Sports or recreational equipment" means an item:
1152 (i) designed for human use; and
1153 (ii) that is:
1154 (A) worn in conjunction with:
1155 (I) an athletic activity; or
1156 (II) a recreational activity; and
1157 (B) not suitable for general use.
1158 (b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
1159 commission shall make rules:
1160 (i) listing the items that constitute "sports or recreational equipment"; and
1161 (ii) that are consistent with the list of items that constitute "sports or recreational
1162 equipment" under the agreement.
1163 [(31)] (65) "State" means the state of Utah, its departments, and agencies.
1164 [(32)] (66) "Storage" means any keeping or retention of tangible personal property or
1165 any other taxable transaction under Subsection 59-12-103 (1), in this state for any purpose
1166 except sale in the regular course of business.
1167 [(33)] (67) (a) "Tangible personal property" means[:] personal property that:
1168 (i) may be:
1169 (A) seen;
1170 (B) weighed;
1171 (C) measured;
1172 (D) felt; or

1173 (E) touched; or
1174 (ii) is in any manner perceptible to the senses.
1175 (b) "Tangible personal property" includes:
1176 (i) electricity;
1177 (ii) water;
1178 (iii) gas;
1179 (iv) steam; or
1180 (v) prewritten computer software.
1181 [(i) all goods, wares, merchandise, produce, and commodities;]
1182 [(ii) all tangible or corporeal things and substances which are dealt in or capable of
1183 being possessed or exchanged;]
1184 [(iii) water in bottles, tanks, or other containers; and]
1185 [(iv) all other physically existing articles or things, including property severed from
1186 real estate.]
1187 [(b) "Tangible personal property" does not include:]
1188 [(i) real estate or any interest or improvements in real estate;]
1189 [(ii) bank accounts, stocks, bonds, mortgages, notes, and other evidence of debt;]
1190 [(iii) insurance certificates or policies;]
1191 [(iv) personal or governmental licenses;]
1192 [(v) water in pipes, conduits, ditches, or reservoirs;]
1193 [(vi) currency and coinage constituting legal tender of the United States or of a foreign
1194 nation; and]
1195 [(vii) all gold, silver, or platinum ingots, bars, medallions, or decorative coins, not
1196 constituting legal tender of any nation, with a gold, silver, or platinum content of not less than
1197 80%.]
1198 [(34)] (68) (a) For purposes of Subsection [(35)] (69) and Section 59-12-103 ,
1199 "telephone service" means a two-way transmission:
1200 (i) by:
1201 (A) wire;
1202 (B) radio;
1203 (C) lightwave; or

1204 (D) other electromagnetic means; and
1205 (ii) of one or more of the following:
1206 (A) a sign;
1207 (B) a signal;
1208 (C) writing;
1209 (D) an image;
1210 (E) sound;
1211 (F) a message;
1212 (G) data; or
1213 (H) other information of any nature.
1214 (b) "Telephone service" includes:
1215 (i) [cellular telephone] mobile telecommunications service;
1216 (ii) private communications service; or
1217 (iii) automated digital telephone answering service.
1218 (c) "Telephone service" does not include a service or a transaction that a state or a
1219 political subdivision of a state is prohibited from taxing as of July 1, 2001, under the Internet
1220 Tax Freedom Act, Pub. L. No. 105-277.
1221 [(35)] (69) (a) "Telephone service provider" means a person that:
1222 (i) owns, controls, operates, or manages a telephone service; and
1223 (ii) engages in an activity described in Subsection [(35)] (69)(a)(i) for the shared use
1224 with or resale to any person of the telephone service.
1225 (b) A person described in Subsection [(35)] (69)(a) is a telephone service provider
1226 whether or not the Public Service Commission of Utah regulates:
1227 (i) that person; or
1228 (ii) the telephone service that the person owns, controls, operates, or manages.
1229 (70) "Tobacco" means:
1230 (a) a cigarette;
1231 (b) a cigar;
1232 (c) chewing tobacco;
1233 (d) pipe tobacco; or
1234 (e) any other item that contains tobacco.

1235 [(36)] (71) (a) "Use" means the exercise of any right or power over tangible personal
1236 property under Subsection 59-12-103 (1), incident to the ownership or the leasing of that
1237 property, item, or service.
1238 (b) "Use" does not include the sale, display, demonstration, or trial of that property in
1239 the regular course of business and held for resale.
1240 [(37)] (72) "Vehicle" means any aircraft, as defined in Section 72-10-102 ; any vehicle,
1241 as defined in Section 41-1a-102 ; any off-highway vehicle, as defined in Section 41-22-2 ; and
1242 any vessel, as defined in Section 41-1a-102 ; that is required to be titled, registered, or both.
1243 "Vehicle," for purposes of Subsection 59-12-104 [(36)] (35) only, also includes any locomotive,
1244 freight car, railroad work equipment, or other railroad rolling stock.
1245 [(38)] (73) "Vehicle dealer" means a person engaged in the business of buying, selling,
1246 or exchanging vehicles as defined in Subsection [(37)] (72).
1247 [(39) (a) "Vendor" means any person receiving any payment or consideration upon a
1248 sale of tangible personal property or any other taxable transaction under Subsection
1249 59-12-103 (1), or to whom the payment or consideration is payable.]
1250 [(b) "Vendor" does not mean a printer's facility described in Subsection (25)(d).]
1251 Section 8. Section 59-12-102.1 is enacted to read:
1252 59-12-102.1. Authority to enter into agreement.
1253 (1) The commission may:
1254 (a) enter into the agreement described in Subsection (2) with one or more states to:
1255 (i) simplify and modernize agreement sales and use tax administration in order to
1256 substantially reduce the burden of sales and use tax compliance for all sellers and for all types
1257 of commerce;
1258 (ii) establish standards for certification of a:
1259 (A) certified service provider; and
1260 (B) certified automated system; and
1261 (iii) act jointly with other states that are members of the agreement to establish
1262 performance standards for multistate sellers ; and
1263 (b) take other actions reasonably required to implement the provisions of the
1264 agreement:
1265 (i) if those actions are not in conflict with statute; and

1266 (ii) subject to Subsection (1)(b)(i), including:
1267 (A) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
1268 adopting administrative rules; and
1269 (B) in furtherance of the agreement, jointly procuring goods or services with other
1270 states that are members of the agreement.
1271 (2) The agreement the commission may enter into under Subsection (1), may require
1272 each state that is a member of the agreement to abide by the following requirements:
1273 (a) establish restrictions to achieve over time more uniform state sales and use tax rates
1274 by:
1275 (i) limiting the number of sales and use tax rates within the state;
1276 (ii) limiting the application of maximums on the amount of sales and use tax that is due
1277 on a transaction; and
1278 (iii) limiting the application of thresholds on the application of sales and use taxes;
1279 (b) establish uniform standards for:
1280 (i) the sourcing of transactions to local taxing jurisdictions;
1281 (ii) the administration of exempt sales;
1282 (iii) the allowance a seller may take for bad debts; and
1283 (iv) agreement sales and use tax:
1284 (A) returns; and
1285 (B) remittances;
1286 (c) develop and adopt uniform definitions:
1287 (i) of sales and use tax terms; and
1288 (ii) that enable each state to preserve the state's ability to make policy choices
1289 consistent with the uniform definitions;
1290 (d) provide a central, electronic registration system that allows a seller to register to
1291 collect and remit agreement sales and use tax for all states that are members of the agreement;
1292 (e) require that the following may not be used as a factor in determining whether a
1293 seller has sufficient contacts with a state to be required to collect a sales or use tax:
1294 (i) registration with a central registration system; or
1295 (ii) the collection of sales or use taxes in the states that are members of the agreement;
1296 (f) reduce the burdens of collecting and remitting local sales and use taxes by:

1297 (i) restricting variances between transactions that are subject to state sales and use tax
1298 and transactions that are subject to local sales and use taxes;
1299 (ii) requiring states to administer any agreement sales and use tax imposed by a local
1300 taxing jurisdiction within the state so that a seller that collects or remits the agreement sales
1301 and use tax will not have to:
1302 (A) register with the local taxing jurisdiction;
1303 (B) file a return with the local taxing jurisdiction;
1304 (C) remit funds to the local taxing jurisdiction; or
1305 (D) be subject to an independent audit by a local taxing jurisdiction;
1306 (iii) restricting the frequency of changes in sales and use tax rates for an agreement
1307 sales and use tax imposed by a local taxing jurisdiction;
1308 (iv) establishing effective dates for the application of a change in a local taxing
1309 jurisdiction boundary to an agreement sales and use tax imposed by the local taxing
1310 jurisdiction; and
1311 (v) providing notice of a change in:
1312 (A) a sales and use tax rate for an agreement sales and use tax imposed by a local
1313 taxing jurisdiction; and
1314 (B) a boundary of a local taxing jurisdiction;
1315 (g) provide a monetary allowance to a seller or certified service provider;
1316 (h) (i) certify compliance with the terms of the agreement prior to entering into the
1317 agreement; and
1318 (ii) maintain compliance with all of the provisions of the agreement:
1319 (A) during the time period that the state is a member of the agreement; and
1320 (B) under the laws of the state entering into the agreement;
1321 (i) adopt a uniform policy for certified service providers that:
1322 (i) protects the privacy of consumers; and
1323 (ii) maintains the confidentiality of tax information;
1324 (j) appoint the following advisory councils:
1325 (i) a council consisting of private sector representatives to consult with in the
1326 administration of the agreement; and
1327 (ii) a council consisting of state government representatives to consult with in the

1328 administration of the agreement;
1329 (k) (i) require that a certified service provider is the agent of a seller with whom the
1330 certified service provider has contracted for the collection and remittance of agreement sales
1331 and use tax; and
1332 (ii) except as provided in Subsection (2)(l), require that the certified service provider
1333 that is the seller's agent is liable for agreement sales and use tax due:
1334 (A) to each state that is a member of the agreement; and
1335 (B) on all agreement sales and use tax transactions that the certified service provider
1336 processes for the seller;
1337 (l) notwithstanding Subsection (2)(k), require that:
1338 (i) a seller that contracts with a certified service provider is not liable to the state for
1339 agreement sales and use tax due on a transaction processed by the certified service provider or
1340 subject to audit on a transaction processed by the certified service provider unless the seller:
1341 (A) misrepresented the type of items the seller sells; or
1342 (B) committed fraud;
1343 (ii) a seller is subject to audit for transactions not processed by the certified service
1344 provider; and
1345 (iii) the states that are members of the agreement acting jointly may perform a system
1346 check of a seller or review a seller's procedures to determine:
1347 (A) if a certified service provider's system is functioning properly; or
1348 (B) the extent to which a seller's transactions are being processed by a certified service
1349 provider;
1350 (m) require that:
1351 (i) a person that provides a certified automated system is:
1352 (A) responsible for the proper functioning of that certified automated system; and
1353 (B) liable to the state for underpayments of agreement sales and use tax attributable to
1354 errors in the functioning of the certified automated system; and
1355 (ii) a seller that uses a certified automated system remains responsible for and is liable
1356 to the state for reporting, collecting, and remitting agreement sales and use tax; and
1357 (n) require that a seller that has a proprietary system for determining the amount of
1358 agreement sales and use tax due on a transaction and has signed an agreement with the

1359 commission establishing a performance standard for that proprietary system is liable for the
1360 failure of the proprietary system to meet the performance standard.
1361 (3) The agreement described in this section:
1362 (a) is an accord among individual cooperating sovereigns in furtherance of the
1363 cooperating sovereigns' governmental functions; and
1364 (b) provides a mechanism among the states that are members of the agreement to
1365 establish and maintain a cooperative, simplified system for the application and administration
1366 of sales and use tax under laws adopted by each state that is a member of the agreement.
1367 (4) (a) The agreement described in this section may bind and inure only to the benefit
1368 of this state and other states that are members of the agreement.
1369 (b) A person, other than a state that is a member of the agreement, is not an intended
1370 beneficiary of the agreement.
1371 (c) Any benefit of the agreement to a person other than a state is established by the law
1372 of this state and the laws of other states that are members of the agreement and not by the terms
1373 of the agreement.
1374 (5) (a) Subject to Subsection (4), a person may not have a cause of action or defense:
1375 (i) under the agreement; or
1376 (ii) as a result of this state's approval of the agreement.
1377 (b) A person may not challenge, in any action brought under any provision of law, an
1378 action or inaction:
1379 (i) by:
1380 (A) a department;
1381 (B) an agency;
1382 (C) a commission;
1383 (D) an entity of the state other than an entity described in Subsections (5)(b)(i)(A)
1384 through (C); or
1385 (E) a political subdivision of the state; and
1386 (ii) on the ground that the action or inaction is inconsistent with the agreement.
1387 (c) A law of this state, or the application of a law of this state, may not be declared
1388 invalid as to any person or circumstance on the ground that the law or application is
1389 inconsistent with the agreement.

1390 Section 9. Section 59-12-103 is amended to read:
1391 59-12-103. Sales and use tax base -- Rate -- Use of sales and use tax revenues.
1392 (1) A tax is imposed on the purchaser as provided in this part for amounts paid or
1393 charged for the following transactions:
1394 (a) retail sales of tangible personal property made within the state;
1395 (b) amounts paid:
1396 (i) (A) to a common carrier; or
1397 (B) whether the following are municipally or privately owned, to a:
1398 (I) telephone service provider; or
1399 (II) telegraph corporation as defined in Section 54-2-1 ; and
1400 (ii) for:
1401 (A) all transportation;
1402 (B) telephone service, other than mobile telecommunications service, that originates
1403 and terminates within the boundaries of this state;
1404 (C) mobile telecommunications service that originates and terminates within the
1405 boundaries of one state only to the extent permitted by the Mobile Telecommunications
1406 Sourcing Act, 4 U.S.C. Sec. 116 et seq.; or
1407 (D) telegraph service;
1408 (c) sales of the following for commercial use:
1409 (i) gas;
1410 (ii) electricity;
1411 (iii) heat;
1412 (iv) coal;
1413 (v) fuel oil; or
1414 (vi) other fuels;
1415 (d) sales of the following for residential use:
1416 (i) gas;
1417 (ii) electricity;
1418 (iii) heat;
1419 (iv) coal;
1420 (v) fuel oil; or

1421 (vi) other fuels;
1422 (e) sales of [meals] prepared food;
1423 (f) except as provided in Section 59-12-104 , amounts paid or charged as admission or
1424 user fees for theaters, movies, operas, museums, planetariums, shows of any type or nature,
1425 exhibitions, concerts, carnivals, amusement parks, amusement rides, circuses, menageries,
1426 fairs, races, contests, sporting events, dances, boxing matches, wrestling matches, closed circuit
1427 television broadcasts, billiard parlors, pool parlors, bowling lanes, golf, miniature golf, golf
1428 driving ranges, batting cages, skating rinks, ski lifts, ski runs, ski trails, snowmobile trails,
1429 tennis courts, swimming pools, water slides, river runs, jeep tours, boat tours, scenic cruises,
1430 horseback rides, sports activities, or any other amusement, entertainment, recreation,
1431 exhibition, cultural, or athletic activity;
1432 (g) amounts paid or charged for services:
1433 (i) for repairs or renovations of tangible personal property, unless Section 59-12-104
1434 provides for an exemption from sales and use tax for:
1435 (A) the tangible personal property; and
1436 (B) parts used in the repairs or renovations of the tangible personal property described
1437 in Subsection (1)(g)(i)(A), whether or not any parts are actually used in the repairs or
1438 renovations of that tangible personal property; or
1439 (ii) to install tangible personal property in connection with other tangible personal
1440 property, unless the tangible personal property being installed is exempt from sales and use tax
1441 under Section 59-12-104 ;
1442 (h) except as provided in Subsection 59-12-104 (7), amounts paid or charged for
1443 cleaning or washing of tangible personal property;
1444 (i) amounts paid or charged for tourist home, hotel, motel, or trailer court
1445 accommodations and services that are regularly rented for less than 30 consecutive days;
1446 (j) amounts paid or charged for laundry or dry cleaning services;
1447 (k) amounts paid or charged for leases or rentals of tangible personal property if:
1448 (i) the tangible personal property's situs is in this state;
1449 (ii) the lessee took possession of the tangible personal property in this state; or
1450 (iii) within this state the tangible personal property is:
1451 (A) stored;

1452 (B) used; or
1453 (C) otherwise consumed;
1454 (l) amounts paid or charged for tangible personal property if within this state the
1455 tangible personal property is:
1456 (i) stored;
1457 (ii) used; or
1458 (iii) consumed; and
1459 (m) amounts paid or charged for prepaid telephone calling cards.
1460 (2) (a) Except as provided in [Subsections] Subsection (2)(b) [and (c)], beginning on
1461 July 1, 2001, a state tax and a local tax is imposed on a transaction described in Subsection (1)
1462 equal to the sum of:
1463 (i) a state tax imposed on the transaction at a rate of 4.75%; and
1464 (ii) a local tax equal to the sum of the tax rates a county, city, or town imposes on the
1465 transaction under this chapter other than this part.
1466 (b) Notwithstanding Subsection (2)(a), beginning on July 1, 2001, a state tax and a
1467 local tax is imposed on a transaction described in Subsection (1)(d) equal to the sum of:
1468 (i) a state tax imposed on the transaction at a rate of 2%; and
1469 (ii) a local tax equal to the sum of the tax rates a county, city, or town imposes on the
1470 transaction under this chapter other than this part.
1471 [(c) Notwithstanding Subsections (2)(a) and (b), beginning on July 1, 2001, if a vendor
1472 collects a tax under Subsection 59-12-107 (1)(b) on a transaction described in Subsection (1), a
1473 state tax and a local tax is imposed on the transaction equal to the sum of:]
1474 [(i) a state tax imposed on the transaction at a rate of:]
1475 [(A) 4.75% for a transaction other than a transaction described in Subsection (1)(d); or]
1476 [(B) 2% for a transaction described in Subsection (1)(d); and]
1477 [(ii) except as provided in Subsection (2)(d), a local tax imposed on the transaction at a
1478 rate equal to the sum of the following tax rates:]
1479 [(A) (I) the lowest tax rate imposed by a county, city, or town under Section 59-12-204 ,
1480 but only if all of the counties, cities, and towns in the state impose the tax under Section
1481 59-12-204 ; or]
1482 [(II) the lowest tax rate imposed by a county, city, or town under Section 59-12-205 ,

1483 but only if all of the counties, cities, and towns in the state impose the tax under Section
1484 59-12-205 ; and]
1485 [(B) the tax rate authorized by Section 59-12-1102 , but only if all of the counties in the
1486 state impose the tax under Section 59-12-1102 .]
1487 [(d) Tax rates authorized under the following do not apply to Subsection (2)(c)(ii):]
1488 [(i) Subsection (2)(a)(i);]
1489 [(ii) Subsection (2)(b)(i);]
1490 [(iii) Subsection (2)(c)(i);]
1491 [(iv) Section 59-12-301 ;]
1492 [(v) Section 59-12-352 ;]
1493 [(vi) Section 59-12-353 ;]
1494 [(vii) Section 59-12-401 ;]
1495 [(viii) Section 59-12-402 ;]
1496 [(ix) Section 59-12-501 ;]
1497 [(x) Section 59-12-502 ;]
1498 [(xi) Section 59-12-603 ;]
1499 [(xii) Section 59-12-703 ;]
1500 [(xiii) Section 59-12-802 ;]
1501 [(xiv) Section 59-12-804 ;]
1502 [(xv) Section 59-12-1001 ;]
1503 [(xvi) Section 59-12-1201 ; or]
1504 [(xvii) Section 59-12-1302 .]
1505 (c) Subject to Subsections (2)(d) and (e), a tax rate change for a tax rate imposed under
1506 the following shall take effect on the first day of a calendar quarter:
1507 (i) Subsection (2)(a)(i); or
1508 (ii) Subsection (2)(b)(i).
1509 (d) (i) For a transaction described in Subsection (2)(d)(iii), a tax rate increase shall take
1510 effect on the first day of the first billing period:
1511 (A) that begins after the effective date of the tax rate increase; and
1512 (B) if the billing period for the transaction begins before the effective date of a tax rate
1513 increase imposed under:

1514 (I) Subsection (2)(a)(i); or
1515 (II) Subsection (2)(b)(i).
1516 (ii) For a transaction described in Subsection (2)(d)(iii), a tax rate decrease shall take
1517 effect on the first day of the last billing period:
1518 (A) that began before the effective date of the tax rate decrease; and
1519 (B) if the billing period for the transaction begins before the effective date of a tax rate
1520 decrease imposed under:
1521 (I) Subsection (2)(a)(i); or
1522 (II) Subsection (2)(b)(i).
1523 (iii) Subsections (2)(d)(i) and (ii) apply to transactions subject to a tax under:
1524 (A) Subsection 59-12-103 (1)(b);
1525 (B) Subsection 59-12-103 (1)(c);
1526 (C) Subsection 59-12-103 (1)(d);
1527 (D) Subsection 59-12-103 (1)(e);
1528 (E) Subsection 59-12-103 (1)(f);
1529 (F) Subsection 59-12-103 (1)(g);
1530 (G) Subsection 59-12-103 (1)(h);
1531 (H) Subsection 59-12-103 (1)(i);
1532 (I) Subsection 59-12-103 (1)(j); or
1533 (J) Subsection 59-12-103 (1)(k).
1534 (e) (i) If a tax due under Subsection (2)(a)(i) on a catalogue sale is computed on the
1535 basis of sales and use tax rates published in the catalogue, a change in a tax rate imposed under
1536 Subsection (2)(a)(i) takes effect:
1537 (A) on the first day of a calendar quarter; and
1538 (B) beginning 60 days after the effective date of the tax rate change under Subsection
1539 (2)(a)(i).
1540 (ii) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
1541 the commission may by rule define the term "catalogue sale."
1542 (3) (a) Except as provided in Subsections (4) through (7) and (9), the following state
1543 taxes shall be deposited into the General Fund:
1544 (i) the tax imposed by Subsection (2)(a)(i); or

1545 (ii) the tax imposed by Subsection (2)(b)(i)[; and].
1546 [(iii) the tax imposed by Subsection (2)(c)(i).]
1547 (b) The local taxes described in Subsections (2)(a)(ii) and (2)(b)(ii) shall be distributed
1548 to a county, city, or town as provided in this chapter.
1549 [(c) (i) Notwithstanding any provision of this chapter, each county, city, or town in the
1550 state shall receive the county's, city's, or town's proportionate share of the revenues generated
1551 by the local tax described in Subsection (2)(c)(ii) as provided in Subsection (3)(c)(ii).]
1552 [(ii) The commission shall determine a county's, city's, or town's proportionate share of
1553 the revenues under Subsection (3)(c)(i) by:]
1554 [(A) calculating an amount equal to:]
1555 [(I) the population of the county, city, or town; divided by]
1556 [(II) the total population of the state; and]
1557 [(B) multiplying the amount determined under Subsection (3)(c)(ii)(A) by the total
1558 amount of revenues generated by the local tax under Subsection (2)(c)(ii) for all counties,
1559 cities, and towns.]
1560 [(iii) (A) Except as provided in Subsection (3)(c)(iii)(B), population figures for
1561 purposes of this section shall be derived from the most recent official census or census estimate
1562 of the United States Census Bureau.]
1563 [(B) Notwithstanding Subsection (3)(c)(iii)(A), if a needed population estimate is not
1564 available from the United States Census Bureau, population figures shall be derived from the
1565 estimate from the Utah Population Estimates Committee created by executive order of the
1566 governor.]
1567 [(C) For purposes of this section, the population of a county may only include the
1568 population of the unincorporated areas of the county.]
1569 [(4) (a) Notwithstanding Subsection (3)(a), there shall be deposited in an Olympics
1570 special revenue fund or funds as determined by the Division of Finance under Section 51-5-4 ,
1571 for the use of the Utah Sports Authority created under Title 63A, Chapter 7, Utah Sports
1572 Authority Act:]
1573 [(i) from January 1, 1990, through December 31, 1999, the amount of sales and use tax
1574 generated by a 1/64% tax rate on the taxable transactions under Subsection (1);]
1575 [(ii) from January 1, 1990, through June 30, 1999, the amount of revenue generated by

1576 a 1/64% tax rate under Section 59-12-204 or Section 59-12-205 on the taxable transactions
1577 under Subsection (1); and]
1578 [(iii) interest earned on the amounts under Subsections (4)(a)(i) and (ii).]
1579 [(b) These funds shall be used:]
1580 [(i) by the Utah Sports Authority as follows:]
1581 [(A) to the extent funds are available, to transfer directly to a debt service fund or to
1582 otherwise reimburse to the state any amount expended on debt service or any other cost of any
1583 bonds issued by the state to construct any public sports facility as defined in Section
1584 63A-7-103 ;]
1585 [(B) to pay for the actual and necessary operating, administrative, legal, and other
1586 expenses of the Utah Sports Authority, but not including protocol expenses for seeking and
1587 obtaining the right to host the Winter Olympic Games;]
1588 [(C) as otherwise appropriated by the Legislature; and]
1589 [(D) unless the Legislature appropriates additional funds from the Olympics Special
1590 Revenue Fund to the Utah Sports Authority, the Utah Sports Authority may not expend, loan,
1591 or pledge in the aggregate more than:]
1592 [(I) $59,000,000 of sales and use tax deposited into the Olympics Special Revenue
1593 Fund under Subsection (4)(a);]
1594 [(II) the interest earned on the amount described in Subsection (4)(b)(i)(D)(I); and]
1595 [(III) the revenues deposited into the Olympics Special Revenue Fund that are not sales
1596 and use taxes deposited under Subsection (4)(a) or interest on the sales and use taxes;]
1597 [(ii) to pay salary, benefits, or administrative costs associated with the State Olympic
1598 Officer under Subsection 63A-10-103 (3), except that the salary, benefits, or administrative
1599 costs may not be paid from the sales and use tax revenues generated by municipalities or
1600 counties and deposited under Subsection (4)(a)(ii).]
1601 [(c) A payment of salary, benefits, or administrative costs under Subsection
1602 63A-10-103 (3) is not considered an expenditure of the Utah Sports Authority.]
1603 [(d) If the Legislature appropriates additional funds under Subsection (4)(b)(i)(D), the
1604 authority may not expend, loan, pledge, or enter into any agreement to expend, loan, or pledge
1605 the appropriated funds unless the authority:]
1606 [(i) contracts in writing for the full reimbursement of the monies to the Olympics

1607 Special Revenue Fund by a public sports entity or other person benefitting from the
1608 expenditure; and]
1609 [(ii) obtains a security interest that secures payment or performance of the obligation to
1610 reimburse.]
1611 [(e) A contract or agreement entered into in violation of Subsection (4)(d) is void.]
1612 [(5)] (4) (a) (i) Notwithstanding Subsection (3)(a) and except as provided in Subsection
1613 [(11)] (9), for fiscal year 2002-03 only, the lesser of the following amounts shall be transferred
1614 or deposited as provided in Subsections [(5)] (4)(a)(ii) through (vii):
1615 (A) for taxes listed under Subsection (3)(a), the amount of tax revenue generated:
1616 (I) by a 1/16% tax rate on the transactions described in Subsection (1); and
1617 (II) for fiscal year 2002-03; or
1618 (B) $18,743,000.
1619 (ii) (A) For fiscal year 2002-03 only, $2,300,000 of the amount described in Subsection
1620 [(5)] (4)(a)(i) shall be transferred as dedicated credits to the Department of Natural Resources
1621 to:
1622 (I) implement the measures described in Subsections 63-34-14 (4)(a) through (d) to
1623 protect sensitive plant and animal species; or
1624 (II) award grants, up to the amount authorized by the Legislature in an appropriations
1625 act, to political subdivisions of the state to implement the measures described in Subsections
1626 63-34-14 (4)(a) through (d) to protect sensitive plant and animal species.
1627 (B) Money transferred to the Department of Natural Resources under Subsection [(5)]
1628 (4)(a)(ii)(A) may not be used to assist the United States Fish and Wildlife Service or any other
1629 person to list or attempt to have listed a species as threatened or endangered under the
1630 Endangered Species Act of 1973, 16 U.S.C. Sec. 1531 et seq.
1631 (C) At the end of fiscal year 2002-03:
1632 (I) 50% of any unexpended dedicated credits shall lapse to the Water Resources
1633 Conservation and Development Fund created in Section 73-10-24 ;
1634 (II) 25% of any unexpended dedicated credits shall lapse to the Utah Wastewater Loan
1635 Program Subaccount created in Section 73-10c-5 ; and
1636 (III) 25% of any unexpended dedicated credits shall lapse to the Drinking Water Loan
1637 Program Subaccount created in Section 73-10c-5 .

1638 (iii) For fiscal year 2002-03 only, $500,000 of the amount described in Subsection [(5)]
1639 (4)(a)(i) shall be deposited in the Agriculture Resource Development Fund created in Section
1640 4-18-6 .
1641 (iv) (A) For fiscal year 2002-03 only, $100,000 of the amount described in Subsection
1642 [(5)] (4)(a)(i) shall be transferred as dedicated credits to the Division of Water Rights to cover
1643 the costs incurred in hiring legal and technical staff for the adjudication of water rights.
1644 (B) At the end of fiscal year 2002-03:
1645 (I) 50% of any unexpended dedicated credits shall lapse to the Water Resources
1646 Conservation and Development Fund created in Section 73-10-24 ;
1647 (II) 25% of any unexpended dedicated credits shall lapse to the Utah Wastewater Loan
1648 Program Subaccount created in Section 73-10c-5 ; and
1649 (III) 25% of any unexpended dedicated credits shall lapse to the Drinking Water Loan
1650 Program Subaccount created in Section 73-10c-5 .
1651 (v) (A) For fiscal year 2002-03 only, 50% of the amount described in Subsection [(5)]
1652 (4)(a)(i) that remains after making the transfers and deposits required by Subsections [(5)]
1653 (4)(a)(ii) through (iv) shall be deposited in the Water Resources Conservation and
1654 Development Fund created in Section 73-10-24 for use by the Division of Water Resources.
1655 (B) In addition to the uses allowed of the Water Resources Conservation and
1656 Development Fund under Section 73-10-24 , the Water Resources Conservation and
1657 Development Fund may also be used to:
1658 (I) provide a portion of the local cost share, not to exceed in fiscal year 2002-03 50%
1659 of the funds made available to the Division of Water Resources under this section, of potential
1660 project features of the Central Utah Project;
1661 (II) conduct hydrologic and geotechnical investigations by the Department of Natural
1662 Resources in a cooperative effort with other state, federal, or local entities, for the purpose of
1663 quantifying surface and ground water resources and describing the hydrologic systems of an
1664 area in sufficient detail so as to enable local and state resource managers to plan for and
1665 accommodate growth in water use without jeopardizing the resource;
1666 (III) fund state required dam safety improvements; and
1667 (IV) protect the state's interest in interstate water compact allocations, including the
1668 hiring of technical and legal staff.

1669 (vi) For fiscal year 2002-03 only, 25% of the amount described in Subsection [(5)]
1670 (4)(a)(i) that remains after making the transfers and deposits required by Subsections [(5)]
1671 (4)(a)(ii) through (iv) shall be deposited in the Utah Wastewater Loan Program Subaccount
1672 created in Section 73-10c-5 for use by the Water Quality Board to fund wastewater projects.
1673 (vii) For fiscal year 2002-03 only, 25% of the amount described in Subsection [(5)]
1674 (4)(a)(i) that remains after making the transfers and deposits required by Subsections [(5)]
1675 (4)(a)(ii) through (iv) shall be deposited in the Drinking Water Loan Program Subaccount
1676 created in Section 73-10c-5 for use by the Division of Drinking Water to:
1677 (A) provide for the installation and repair of collection, treatment, storage, and
1678 distribution facilities for any public water system, as defined in Section 19-4-102 ;
1679 (B) develop underground sources of water, including springs and wells; and
1680 (C) develop surface water sources.
1681 (b) (i) Notwithstanding Subsection (3)(a), for a fiscal year beginning on or after July 1,
1682 2003, the lesser of the following amounts shall be used as provided in Subsections [(5)]
1683 (4)(b)(ii) through (vii):
1684 (A) for taxes listed under Subsection (3)(a), the amount of tax revenue generated:
1685 (I) by a 1/16% tax rate on the transactions described in Subsection (1); and
1686 (II) for the fiscal year; or
1687 (B) $17,500,000.
1688 (ii) (A) For a fiscal year beginning on or after July 1, 2003, 14% of the amount
1689 described in Subsection [(5)] (4)(b)(i) shall be transferred each year as dedicated credits to the
1690 Department of Natural Resources to:
1691 (I) implement the measures described in Subsections 63-34-14 (4)(a) through (d) to
1692 protect sensitive plant and animal species; or
1693 (II) award grants, up to the amount authorized by the Legislature in an appropriations
1694 act, to political subdivisions of the state to implement the measures described in Subsections
1695 63-34-14 (4)(a) through (d) to protect sensitive plant and animal species.
1696 (B) Money transferred to the Department of Natural Resources under Subsection [(5)]
1697 (4)(b)(ii)(A) may not be used to assist the United States Fish and Wildlife Service or any other
1698 person to list or attempt to have listed a species as threatened or endangered under the
1699 Endangered Species Act of 1973, 16 U.S.C. Sec. 1531 et seq.

1700 (C) At the end of each fiscal year:
1701 (I) 50% of any unexpended dedicated credits shall lapse to the Water Resources
1702 Conservation and Development Fund created in Section 73-10-24 ;
1703 (II) 25% of any unexpended dedicated credits shall lapse to the Utah Wastewater Loan
1704 Program Subaccount created in Section 73-10c-5 ; and
1705 (III) 25% of any unexpended dedicated credits shall lapse to the Drinking Water Loan
1706 Program Subaccount created in Section 73-10c-5 .
1707 (iii) For a fiscal year beginning on or after July 1, 2003, 3% of the amount described in
1708 Subsection [(5)] (4)(b)(i) shall be deposited each year in the Agriculture Resource
1709 Development Fund created in Section 4-18-6 .
1710 (iv) (A) For a fiscal year beginning on or after July 1, 2003, 1% of the amount
1711 described in Subsection [(5)] (4)(b)(i) shall be transferred each year as dedicated credits to the
1712 Division of Water Rights to cover the costs incurred in hiring legal and technical staff for the
1713 adjudication of water rights.
1714 (B) At the end of each fiscal year:
1715 (I) 50% of any unexpended dedicated credits shall lapse to the Water Resources
1716 Conservation and Development Fund created in Section 73-10-24 ;
1717 (II) 25% of any unexpended dedicated credits shall lapse to the Utah Wastewater Loan
1718 Program Subaccount created in Section 73-10c-5 ; and
1719 (III) 25% of any unexpended dedicated credits shall lapse to the Drinking Water Loan
1720 Program Subaccount created in Section 73-10c-5 .
1721 (v) (A) For a fiscal year beginning on or after July 1, 2003, 41% of the amount
1722 described in Subsection [(5)] (4)(b)(i) shall be deposited in the Water Resources Conservation
1723 and Development Fund created in Section 73-10-24 for use by the Division of Water
1724 Resources.
1725 (B) In addition to the uses allowed of the Water Resources Conservation and
1726 Development Fund under Section 73-10-24 , the Water Resources Conservation and
1727 Development Fund may also be used to:
1728 (I) provide a portion of the local cost share, not to exceed in any fiscal year 50% of the
1729 funds made available to the Division of Water Resources under this section, of potential project
1730 features of the Central Utah Project;

1731 (II) conduct hydrologic and geotechnical investigations by the Department of Natural
1732 Resources in a cooperative effort with other state, federal, or local entities, for the purpose of
1733 quantifying surface and ground water resources and describing the hydrologic systems of an
1734 area in sufficient detail so as to enable local and state resource managers to plan for and
1735 accommodate growth in water use without jeopardizing the resource;
1736 (III) fund state required dam safety improvements; and
1737 (IV) protect the state's interest in interstate water compact allocations, including the
1738 hiring of technical and legal staff.
1739 (vi) For a fiscal year beginning on or after July 1, 2003, 20.5% of the amount described
1740 in Subsection [(5)] (4)(b)(i) shall be deposited in the Utah Wastewater Loan Program
1741 Subaccount created in Section 73-10c-5 for use by the Water Quality Board to fund wastewater
1742 projects.
1743 (vii) For a fiscal year beginning on or after July 1, 2003, 20.5% of the amount
1744 described in Subsection [(5)] (4)(b)(i) shall be deposited in the Drinking Water Loan Program
1745 Subaccount created in Section 73-10c-5 for use by the Division of Drinking Water to:
1746 (A) provide for the installation and repair of collection, treatment, storage, and
1747 distribution facilities for any public water system, as defined in Section 19-4-102 ;
1748 (B) develop underground sources of water, including springs and wells; and
1749 (C) develop surface water sources.
1750 [(6)] (5) (a) (i) Notwithstanding Subsection (3)(a), for fiscal year 2002-03 only, the
1751 lesser of the following amounts shall be transferred or deposited as provided in Subsections
1752 [(6)] (5)(a)(ii) through (iv):
1753 (A) for taxes listed under Subsection (3)(a), the amount of tax revenue generated:
1754 (I) by a 1/16% tax rate on the transactions described in Subsection (1); and
1755 (II) for the fiscal year; or
1756 (B) $18,743,000.
1757 (ii) (A) For fiscal year 2002-03 only, $500,000 of the amount described in Subsection
1758 [(6)] (5)(a)(i) shall be deposited in the Transportation Corridor Preservation Revolving Loan
1759 Fund created in Section 72-2-117 .
1760 (B) At least 50% of the money deposited in the Transportation Corridor Preservation
1761 Revolving Loan Fund under Subsection [(6)] (5)(a)(ii)(A) shall be used to fund loan

1762 applications made by the Department of Transportation at the request of local governments.
1763 (iii) For fiscal year 2002-03 only, $500,000 of the amount described in Subsection [(6)]
1764 (5)(a)(i) shall be transferred as nonlapsing dedicated credits to the Department of
1765 Transportation for the State Park Access Highways Improvement Program created in Section
1766 72-3-207 .
1767 (iv) For fiscal year 2002-03 only, the amount described in Subsection [(6)] (5)(a)(i) that
1768 remains after making the transfers and deposits required by Subsections [(6)] (5)(a)(ii) and (iii)
1769 shall be deposited in the class B and class C roads account to be expended as provided in Title
1770 72, Chapter 2, Transportation Finances Act, for the use of class B and C roads.
1771 (b) (i) Notwithstanding Subsection (3)(a), for a fiscal year beginning on or after July 1,
1772 2003, the lesser of the following amounts shall be used as provided in Subsections [(6)]
1773 (5)(b)(ii) through (iv):
1774 (A) for taxes listed under Subsection (3)(a), the amount of tax revenue generated:
1775 (I) by a 1/16% tax rate on the transactions described in Subsection (1); and
1776 (II) for the fiscal year; or
1777 (B) $18,743,000.
1778 (ii) (A) For a fiscal year beginning on or after July 1, 2003, 3% of the amount
1779 described in Subsection [(6)] (5)(b)(i) shall be deposited each year in the Transportation
1780 Corridor Preservation Revolving Loan Fund created in Section 72-2-117 .
1781 (B) At least 50% of the money deposited in the Transportation Corridor Preservation
1782 Revolving Loan Fund under Subsection [(6)] (5)(b)(ii)(A) shall be used to fund loan
1783 applications made by the Department of Transportation at the request of local governments.
1784 (iii) For a fiscal year beginning on or after July 1, 2003, 3% of the amount described in
1785 Subsection [(6)] (5)(b)(i) shall be transferred each year as nonlapsing dedicated credits to the
1786 Department of Transportation for the State Park Access Highways Improvement Program
1787 created in Section 72-3-207 .
1788 (iv) For a fiscal year beginning on or after July 1, 2003, 94% of the amount described
1789 in Subsection [(6)] (5)(b)(i) shall be deposited in the class B and class C roads account to be
1790 expended as provided in Title 72, Chapter 2, Transportation Finances Act, for the use of class
1791 B and C roads.
1792 [(7) (a)] (6) Notwithstanding Subsection (3)(a), beginning on January 1, 2000, the

1793 Division of Finance shall deposit into the Centennial Highway Fund created in Section
1794 72-2-118 a portion of the taxes listed under Subsection (3)(a) equal to the revenues generated
1795 by a 1/64% tax rate on the taxable transactions under Subsection (1).
1796 [(b) Except for sales and use taxes deposited under Subsection (8), beginning on July
1797 1, 1999, the revenues generated by the 1/64% tax rate:]
1798 [(i) retained under Subsection 59-12-204 (7)(a) shall be retained by the counties, cities,
1799 or towns as provided in Section 59-12-204 ; and]
1800 [(ii) retained under Subsection 59-12-205 (4)(a) shall be distributed to each county, city,
1801 and town as provided in Section 59-12-205 .]
1802 [(8)] (7) Notwithstanding Subsection (3)(a), beginning on July 1, 1999, the
1803 commission shall deposit into the Airport to University of Utah Light Rail Restricted Account
1804 created in Section 17A-2-1064 the portion of the sales and use tax under [Sections] Section
1805 59-12-204 [and 59-12-205 ] that is:
1806 (a) generated by a city or town that will have constructed within its boundaries the
1807 Airport to University of Utah Light Rail described in the Transportation Equity Act for the 21st
1808 Century, Pub. L. No. 105-178, Sec. 3030(c)(2)(B)(i)(II), 112 Stat. 107; and
1809 (b) equal to the revenues generated by a 1/64% tax rate on the taxable items and
1810 services under Subsection (1).
1811 [(9) (a) Notwithstanding Subsection (3)(a), for fiscal years beginning on or after fiscal
1812 year 2002-03, the commission shall on or before September 30 of each year deposit the
1813 difference described in Subsection (9)(b) into the Remote Sales Restricted Account created in
1814 Section 59-12-103.2 if that difference is greater than $0.]
1815 [(b) The difference described in Subsection (9)(a) is equal to the difference between:]
1816 [(i) the total amount of revenues under Subsection (2)(c)(i) the commission received
1817 from vendors collecting a tax under Subsection 59-12-107 (1)(b) for the fiscal year immediately
1818 preceding the September 30 described in Subsection (9)(a); and]
1819 [(ii) the total amount of revenues under Subsection (2)(c)(i) the commission estimates
1820 that the commission received from vendors described in Subsection 59-12-107 (1)(b) for fiscal
1821 year 2000-01.]
1822 [(10)] (8) (a) For purposes of amounts paid or charged as admission or user fees
1823 relating to the Olympic Winter Games of 2002, the amounts are considered to be paid or

1824 charged on the day on which the Salt Lake Organizing Committee for the Olympic Winter
1825 Games of 2002 or a person designated by the Salt Lake Organizing Committee for the Olympic
1826 Winter Games of 2002 sends a purchaser confirmation of the purchase of an admission or user
1827 fee described in Subsection (1)(f).
1828 (b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
1829 commission shall make rules defining what constitutes sending a purchaser confirmation under
1830 Subsection [(10)] (8)(a).
1831 [(11)] (9) (a) For fiscal year 2002-03 only, the following amounts shall be subtracted
1832 from the total amount required to be deposited or transferred in accordance with Subsection
1833 [(5)] (4):
1834 (i) $25,000 shall be subtracted from the total amount required to be transferred to the
1835 Division of Water Rights in accordance with Subsection [(5)] (4)(a)(iv);
1836 (ii) $385,000 shall be subtracted from the total amount required to be deposited into the
1837 Agriculture Resource Development Fund in accordance with Subsection [(5)] (4)(a)(iii);
1838 (iii) $350,000 shall be subtracted from the total amount required to be transferred to the
1839 Department of Natural Resources in accordance with Subsection [(5)] (4)(a)(ii);
1840 (iv) $3,012,500 shall be subtracted from the total amount required to be deposited into
1841 the Drinking Water Loan Program Subaccount in accordance with Subsection [(5)] (4)(a)(vii);
1842 (v) $3,012,500 shall be subtracted from the total amount required to be deposited into
1843 the Utah Wastewater Loan Program Subaccount in accordance with Subsection [(5)] (4)(a)(vi);
1844 and
1845 (vi) $5,715,000 shall be subtracted from the total amount required to be deposited into
1846 the Water Resources Conservation and Development Fund in accordance with Subsection [(5)]
1847 (4)(a)(v).
1848 (b) The amounts subtracted under Subsection [(11)] (9)(a) shall be deposited into the
1849 General Fund.
1850 Section 10. Section 59-12-103.1 is amended to read:
1851 59-12-103.1. Action by Supreme Court of the United States authorizing or action
1852 by Congress permitting a state to require certain sellers to collect a sales or use tax --
1853 Collection of tax by commission -- Commission report to Utah Tax Review Commission --
1854 Utah Tax Review Commission study.

1855 (1) [A vendor] Except as provided in Sections 59-12-107.1 through 59-12-107.3 , a
1856 seller shall remit to the commission a tax as provided in [Subsection 59-12-103 (2)(c) and]
1857 Section 59-12-107 if:
1858 (a) the Supreme Court of the United States issues a decision authorizing a state to
1859 require a [vendor] seller that does not meet one or more of the criteria described in Subsection
1860 59-12-107 (1)(a) to collect a sales or use tax; or
1861 (b) Congress permits the state to require a [vendor] seller that does not meet one or
1862 more of the criteria described in Subsection 59-12-107 (1)(a) to collect a sales or use tax.
1863 (2) The commission shall:
1864 (a) collect the tax described in Subsection (1) from the [vendor] seller:
1865 (i) to the extent:
1866 (A) authorized by the Supreme Court of the United States; or
1867 (B) permitted by Congress;
1868 (ii) beginning on the first day of a calendar quarter as prescribed by the Utah Tax
1869 Review Commission; and
1870 (b) make a report to the Utah Tax Review Commission:
1871 (i) regarding the actions taken by:
1872 (A) the Supreme Court of the United States; or
1873 (B) Congress; and
1874 (ii) at the Utah Tax Review Commission meeting immediately following the day on
1875 which the Supreme Court of the United States' or Congress' actions become effective.
1876 (3) The Utah Tax Review Commission shall after hearing the commission's report
1877 under Subsection (2)(b):
1878 (a) review the actions taken by:
1879 (i) the Supreme Court of the United States; or
1880 (ii) Congress;
1881 (b) direct the commission regarding the day on which the commission is required to
1882 collect the tax described in Subsection (1); and
1883 (c) make recommendations to the Revenue and Taxation Interim Committee:
1884 (i) regarding whether as a result of the Supreme Court of the United States' or
1885 Congress' actions any provisions of this chapter should be amended or repealed; and

1886 (ii) within a one-year period after the day on which the commission makes a report
1887 under Subsection (2)(b).
1888 Section 11. Section 59-12-103.2 is amended to read:
1889 59-12-103.2. Remote Sales Restricted Account -- Creation.
1890 (1) There is created within the General Fund a restricted account known as the
1891 "Remote Sales Restricted Account."
1892 [(2) The account shall be funded from the portion of the sales and use tax deposited by
1893 the commission as provided in Subsection 59-12-103 (9).]
1894 (2) On or before December 1, 2004, the Division of Finance shall deposit any revenues
1895 in the Remote Sales Restricted Account into the General Fund.
1896 Section 12. Section 59-12-104 is amended to read:
1897 59-12-104. Exemptions.
1898 The following sales and uses are exempt from the taxes imposed by this chapter:
1899 (1) sales of aviation fuel, motor fuel, and special fuel subject to a Utah state excise tax
1900 under Chapter 13, Motor and Special Fuel Tax Act;
1901 (2) sales to the state, its institutions, and its political subdivisions; however, this
1902 exemption does not apply to sales of:
1903 (a) construction materials except:
1904 (i) construction materials purchased by or on behalf of institutions of the public
1905 education system as defined in Utah Constitution Article X, Section 2, provided the
1906 construction materials are clearly identified and segregated and installed or converted to real
1907 property which is owned by institutions of the public education system; and
1908 (ii) construction materials purchased by the state, its institutions, or its political
1909 subdivisions which are installed or converted to real property by employees of the state, its
1910 institutions, or its political subdivisions; or
1911 (b) tangible personal property in connection with the construction, operation,
1912 maintenance, repair, or replacement of a project, as defined in Section 11-13-103 , or facilities
1913 providing additional project capacity, as defined in Section 11-13-103 ;
1914 (3) (a) sales of [food, beverage, and dairy products] an item described in Subsection
1915 (3)(b) from a vending [machines in which] machine if:
1916 (i) the proceeds of each sale do not exceed $1 [if]; and

1917 (ii) the [vendor] seller or operator of the vending machine reports an amount equal to
1918 150% of the cost of [items] the item described in Subsection (3)(a) as goods consumed; and
1919 (b) Subsection (3)(a) applies to:
1920 (i) food and food ingredients; or
1921 (ii) prepared food;
1922 (4) sales of [food, beverage, dairy products, similar confections, and related services]
1923 the following to a commercial airline [carriers] carrier for in-flight consumption[;]:
1924 (a) food and food ingredients;
1925 (b) prepared food; or
1926 (c) services related to Subsection (4)(a) or (b);
1927 (5) sales of parts and equipment for installation in aircraft operated by common carriers
1928 in interstate or foreign commerce;
1929 (6) sales of commercials, motion picture films, prerecorded audio program tapes or
1930 records, and prerecorded video tapes by a producer, distributor, or studio to a motion picture
1931 exhibitor, distributor, or commercial television or radio broadcaster;
1932 (7) sales of cleaning or washing of tangible personal property by a coin-operated
1933 laundry or dry cleaning machine;
1934 (8) (a) except as provided in Subsection (8)(b), sales made to or by religious or
1935 charitable institutions in the conduct of their regular religious or charitable functions and
1936 activities, if the requirements of Section 59-12-104.1 are fulfilled;
1937 (b) the exemption provided for in Subsection (8)(a) does not apply to the following
1938 sales, uses, leases, or rentals relating to the Olympic Winter Games of 2002 made to or by an
1939 organization exempt from federal income taxation under Section 501(c)(3), Internal Revenue
1940 Code:
1941 (i) retail sales of Olympic merchandise;
1942 (ii) except as provided in Subsection [(51)] (50), admissions or user fees described in
1943 Subsection 59-12-103 (1)(f);
1944 (iii) sales of accommodations and services as provided in Subsection 59-12-103 (1)(i),
1945 except for accommodations and services:
1946 (A) paid for in full by the Salt Lake Organizing Committee for the Olympic Winter
1947 Games of 2002;

1948 (B) exclusively used by:
1949 (I) an officer, a trustee, or an employee of the Salt Lake Organizing Committee for the
1950 Olympic Winter Games of 2002; or
1951 (II) a volunteer supervised by the Salt Lake Organizing Committee for the Olympic
1952 Winter Games of 2002; and
1953 (C) for which the Salt Lake Organizing Committee for the Olympic Winter Games of
1954 2002 does not receive reimbursement; or
1955 (iv) a lease or rental of a vehicle as defined in Section 41-1a-102 , except for a lease or
1956 rental of a vehicle:
1957 (A) paid for in full by the Salt Lake Organizing Committee for the Olympic Winter
1958 Games of 2002;
1959 (B) exclusively used by:
1960 (I) an officer, a trustee, or an employee of the Salt Lake Organizing Committee for the
1961 Olympic Winter Games of 2002; or
1962 (II) a volunteer supervised by the Salt Lake Organizing Committee for the Olympic
1963 Winter Games of 2002; and
1964 (C) for which the Salt Lake Organizing Committee for the Olympic Winter Games of
1965 2002 does not receive reimbursement;
1966 (9) sales of vehicles of a type required to be registered under the motor vehicle laws of
1967 this state which are made to bona fide nonresidents of this state and are not afterwards
1968 registered or used in this state except as necessary to transport them to the borders of this state;
1969 [(10) sales of medicine;]
1970 (10) (a) amounts paid for an item described in Subsection (10)(b) if:
1971 (i) the item is intended for human use; and
1972 (ii) the purchaser presents a prescription for the item; and
1973 (b) (i) Subsection (10)(a) applies to:
1974 (A) a drug;
1975 (B) a syringe; or
1976 (C) a stoma supply; and
1977 (ii) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
1978 commission may by rule define the terms:

1979 (A) "syringe"; or
1980 (B) "stoma supply";
1981 (11) sales or use of property, materials, or services used in the construction of or
1982 incorporated in pollution control facilities allowed by Sections 19-2-123 through 19-2-127 ;
1983 (12) (a) sales of [meals] an item described in Subsection (12)(c) served by:
1984 (i) the following if the [meals are] item described in Subsection (12)(c) is not available
1985 to the general public:
1986 (A) a church; or
1987 (B) a charitable institution;
1988 (ii) an institution of higher education if:
1989 (A) the [meals are] item described in Subsection (12)(c) is not available to the general
1990 public; or
1991 (B) the [meals are] item described in Subsection (12)(c) is prepaid as part of a student
1992 meal plan offered by the institution of higher education; or
1993 (b) [inpatient meals] sales of an item described in Subsection (12)(c) provided at:
1994 (i) a medical facility; or
1995 (ii) a nursing facility; and
1996 (c) Subsections (12)(a) and (b) apply to:
1997 (i) food and food ingredients;
1998 (ii) prepared food; or
1999 (iii) alcoholic beverages;
2000 (13) isolated or occasional sales by persons not regularly engaged in business, except
2001 the sale of vehicles or vessels required to be titled or registered under the laws of this state in
2002 which case the tax is based upon:
2003 (a) the bill of sale or other written evidence of value of the vehicle or vessel being sold;
2004 or
2005 (b) in the absence of a bill of sale or other written evidence of value, the then existing
2006 fair market value of the vehicle or vessel being sold as determined by the commission;
2007 (14) (a) the following purchases or leases by a manufacturer on or after July 1, 1995:
2008 (i) machinery and equipment:
2009 (A) used in the manufacturing process;

2010 (B) having an economic life of three or more years; and
2011 (C) used:
2012 (I) to manufacture an item sold as tangible personal property; and
2013 (II) in new or expanding operations in a manufacturing facility in the state; and
2014 (ii) subject to the provisions of Subsection (14)(b), normal operating replacements that:
2015 (A) have an economic life of three or more years;
2016 (B) are used in the manufacturing process in a manufacturing facility in the state;
2017 (C) are used to replace or adapt an existing machine to extend the normal estimated
2018 useful life of the machine; and
2019 (D) do not include repairs and maintenance;
2020 (b) the rates for the exemption under Subsection (14)(a)(ii) are as follows:
2021 (i) beginning July 1, 1996, through June 30, 1997, 30% of the sale or lease described in
2022 Subsection (14)(a)(ii) is exempt;
2023 (ii) beginning July 1, 1997, through June 30, 1998, 60% of the sale or lease described in
2024 Subsection (14)(a)(ii) is exempt; and
2025 (iii) beginning July 1, 1998, 100% of the sale or lease described in Subsection
2026 (14)(a)(ii) is exempt;
2027 (c) for purposes of this Subsection (14), the commission shall by rule define the terms
2028 "new or expanding operations" and "establishment"; and
2029 (d) on or before October 1, 1991, and every five years after October 1, 1991, the
2030 commission shall:
2031 (i) review the exemptions described in Subsection (14)(a) and make recommendations
2032 to the Revenue and Taxation Interim Committee concerning whether the exemptions should be
2033 continued, modified, or repealed; and
2034 (ii) include in its report:
2035 (A) the cost of the exemptions;
2036 (B) the purpose and effectiveness of the exemptions; and
2037 (C) the benefits of the exemptions to the state;
2038 (15) (a) sales of the following if the requirements of Subsection (15)(b) are met:
2039 (i) tooling;
2040 (ii) special tooling;

2041 (iii) support equipment;
2042 (iv) special test equipment; or
2043 (v) parts used in the repairs or renovations of tooling or equipment described in
2044 Subsections (15)(a)(i) through (iv); and
2045 (b) sales of tooling, equipment, or parts described in Subsection (15)(a) are exempt if:
2046 (i) the tooling, equipment, or parts are used or consumed exclusively in the
2047 performance of any aerospace or electronics industry contract with the United States
2048 government or any subcontract under that contract; and
2049 (ii) under the terms of the contract or subcontract described in Subsection (15)(b)(i),
2050 title to the tooling, equipment, or parts is vested in the United States government as evidenced
2051 by:
2052 (A) a government identification tag placed on the tooling, equipment, or parts; or
2053 (B) listing on a government-approved property record if placing a government
2054 identification tag on the tooling, equipment, or parts is impractical;
2055 (16) intrastate movements of:
2056 (a) freight by common carriers; or
2057 (b) passengers:
2058 (i) by taxicabs as described in SIC Code 4121 of the 1987 Standard Industrial
2059 Classification Manual of the federal Executive Office of the President, Office of Management
2060 and Budget;
2061 (ii) transported by an establishment described in SIC Code 4111 of the 1987 Standard
2062 Industrial Classification Manual of the federal Executive Office of the President, Office of
2063 Management and Budget, if the transportation originates and terminates within a county of the
2064 first, second, or third class; or
2065 (iii) transported by the following described in SIC Code 4789 of the 1987 Standard
2066 Industrial Classification Manual of the federal Executive Office of the President, Office of
2067 Management and Budget:
2068 (A) a horse-drawn cab; or
2069 (B) a horse-drawn carriage[.];
2070 (17) sales of newspapers or newspaper subscriptions;
2071 (18) (a) except as provided in Subsection (18)(b), tangible personal property[, other

2072 than money,] traded in as full or part payment of the purchase price, except that for purposes of
2073 calculating sales or use tax upon vehicles not sold by a vehicle dealer, trade-ins are limited to
2074 other vehicles only, and the tax is based upon:
2075 [(a)] (i) the bill of sale or other written evidence of value of the vehicle being sold and
2076 the vehicle being traded in; or
2077 [(b)] (ii) in the absence of a bill of sale or other written evidence of value, the then
2078 existing fair market value of the vehicle being sold and the vehicle being traded in, as
2079 determined by the commission; and
2080 (b) notwithstanding Subsection (18)(a), Subsection (18)(a) does not apply to the
2081 following items of tangible personal property traded in as full or part payment of the purchase
2082 price:
2083 (i) money;
2084 (ii) electricity;
2085 (iii) water;
2086 (iv) gas; or
2087 (v) steam;
2088 (19) sprays and insecticides used to control insects, diseases, and weeds for
2089 commercial production of fruits, vegetables, feeds, seeds, and animal products, but not those
2090 sprays and insecticides used in the processing of the products;
2091 (20) (a) (i) sales of tangible personal property used or consumed primarily and directly
2092 in farming operations, including sales of irrigation equipment and supplies used for agricultural
2093 production purposes, whether or not they become part of real estate and whether or not
2094 installed by farmer, contractor, or subcontractor, but not sales of:
2095 (A) machinery, equipment, materials, and supplies used in a manner that is incidental
2096 to farming, such as hand tools [with a unit purchase price not in excess of $250,] and
2097 maintenance and janitorial equipment and supplies;
2098 (B) tangible personal property used in any activities other than farming, such as office
2099 equipment and supplies, equipment and supplies used in sales or distribution of farm products,
2100 in research, or in transportation; or
2101 (C) any vehicle required to be registered by the laws of this state, without regard to the
2102 use to which the vehicle is put; or

2103 (ii) sales of parts used in the repairs or renovations of tangible personal property if the
2104 tangible personal property is exempt under Subsection (20)(a); or
2105 (b) sales of hay;
2106 (21) exclusive sale of locally grown seasonal crops, seedling plants, or garden, farm, or
2107 other agricultural produce if sold by a producer during the harvest season;
2108 (22) purchases [of food as defined in 7 U.S.C. Sec. 2012(g)] made using food stamps
2109 issued under the Food Stamp Program, 7 U.S.C. Sec. 2011 et seq.;
2110 (23) sales of nonreturnable containers, nonreturnable labels, nonreturnable bags,
2111 nonreturnable shipping cases, and nonreturnable casings to a manufacturer, processor,
2112 wholesaler, or retailer for use in packaging tangible personal property to be sold by that
2113 manufacturer, processor, wholesaler, or retailer;
2114 (24) property stored in the state for resale;
2115 (25) property brought into the state by a nonresident for his or her own personal use or
2116 enjoyment while within the state, except property purchased for use in Utah by a nonresident
2117 living and working in Utah at the time of purchase;
2118 (26) property purchased for resale in this state, in the regular course of business, either
2119 in its original form or as an ingredient or component part of a manufactured or compounded
2120 product;
2121 (27) property upon which a sales or use tax was paid to some other state, or one of its
2122 subdivisions, except that the state shall be paid any difference between the tax paid and the tax
2123 imposed by this part and Part 2, Local Sales and Use Tax Act, and no adjustment is allowed if
2124 the tax paid was greater than the tax imposed by this part and Part 2, Local Sales and Use Tax
2125 Act;
2126 (28) any sale of a service described in Subsections 59-12-103 (1)(b), (c), and (d) to a
2127 person for use in compounding a service taxable under the subsections;
2128 (29) purchases [of supplemental foods as defined in 42 U.S.C. Sec. 1786(b)(14) under]
2129 made in accordance with the special supplemental nutrition program for women, infants, and
2130 children established in 42 U.S.C. Sec. 1786;
2131 (30) beginning on July 1, 1999, through June 30, 2004, sales or leases of rolls, rollers,
2132 refractory brick, electric motors, or other replacement parts used in the furnaces, mills, or ovens
2133 of a steel mill described in SIC Code 3312 of the 1987 Standard Industrial Classification

2134 Manual of the federal Executive Office of the President, Office of Management and Budget;
2135 (31) sales of boats of a type required to be registered under Title 73, Chapter 18, State
2136 Boating Act, boat trailers, and outboard motors which are made to bona fide nonresidents of
2137 this state and are not thereafter registered or used in this state except as necessary to transport
2138 them to the borders of this state;
2139 [(32) sales of tangible personal property to persons within this state that is
2140 subsequently shipped outside the state and incorporated pursuant to contract into and becomes
2141 a part of real property located outside of this state, except to the extent that the other state or
2142 political entity imposes a sales, use, gross receipts, or other similar transaction excise tax on it
2143 against which the other state or political entity allows a credit for taxes imposed by this
2144 chapter;]
2145 [(33)] (32) sales of aircraft manufactured in Utah if sold for delivery and use outside
2146 Utah where a sales or use tax is not imposed, even if the title is passed in Utah;
2147 [(34)] (33) amounts paid for the purchase of telephone service for purposes of
2148 providing telephone service;
2149 [(35)] (34) fares charged to persons transported directly by a public transit district
2150 created under the authority of Title 17A, Chapter 2, Part 10, Utah Public Transit District Act;
2151 [(36)] (35) sales or leases of vehicles to, or use of vehicles by an authorized carrier;
2152 [(37)] (36) (a) 45% of the sales price of any new manufactured home; and
2153 (b) 100% of the sales price of any used manufactured home;
2154 [(38)] (37) sales relating to schools and fundraising sales;
2155 [(39)] (38) sales or rentals of [home] durable medical equipment [or supplies;] if a
2156 person presents a prescription for the durable medical equipment;
2157 [(40)] (39) (a) sales to a ski resort of electricity to operate a passenger ropeway as
2158 defined in Section 72-11-102 ; and
2159 (b) the commission shall by rule determine the method for calculating sales exempt
2160 under Subsection [(40)] (39)(a) that are not separately metered and accounted for in utility
2161 billings;
2162 [(41)] (40) sales to a ski resort of:
2163 (a) snowmaking equipment;
2164 (b) ski slope grooming equipment;

2165 (c) passenger ropeways as defined in Section 72-11-102 ; or
2166 (d) parts used in the repairs or renovations of equipment or passenger ropeways
2167 described in Subsections [(41)] (40)(a) through (c);
2168 [(42)] (41) sales of natural gas, electricity, heat, coal, fuel oil, or other fuels for
2169 industrial use;
2170 [(43)] (42) sales or rentals of the right to use or operate for amusement, entertainment,
2171 or recreation a coin-operated amusement device as defined in Section 59-12-102 ;
2172 [(44)] (43) sales of cleaning or washing of tangible personal property by a
2173 coin-operated car wash machine;
2174 [(45)] (44) sales by the state or a political subdivision of the state, except state
2175 institutions of higher education as defined in Section 53B-3-102 , of:
2176 (a) photocopies; or
2177 (b) other copies of records held or maintained by the state or a political subdivision of
2178 the state;
2179 [(46)] (45) (a) amounts paid:
2180 (i) to a person providing intrastate transportation to an employer's employee to or from
2181 the employee's primary place of employment;
2182 (ii) by an:
2183 (A) employee; or
2184 (B) employer; and
2185 (iii) pursuant to a written contract between:
2186 (A) the employer; and
2187 (B) (I) the employee; or
2188 (II) a person providing transportation to the employer's employee; and
2189 (b) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
2190 commission may for purposes of Subsection [(46)] (45)(a) make rules defining what constitutes
2191 an employee's primary place of employment;
2192 [(47)] (46) amounts paid for admission to an athletic event at an institution of higher
2193 education that is subject to the provisions of Title IX of the Education Amendments of 1972,
2194 20 U.S.C. Sec. 1681 et seq.;
2195 [(48)] (47) sales of telephone service charged to a prepaid telephone calling card;

2196 [(49)] (48) (a) sales of:
2197 (i) hearing aids;
2198 (ii) hearing aid accessories; or
2199 (iii) except as provided in Subsection [(49)] (48)(b), parts used in the repairs or
2200 renovations of hearing aids or hearing aid accessories; and
2201 (b) for purposes of this Subsection [(49)] (48), notwithstanding Subsection [(49)]
2202 (48)(a)(iii), "parts" does not include batteries;
2203 [(50)] (49) (a) sales made to or by:
2204 (i) an area agency on aging; or
2205 (ii) a senior citizen center owned by a county, city, or town; or
2206 (b) sales made by a senior citizen center that contracts with an area agency on aging;
2207 [(51)] (50) (a) beginning on July 1, 2000, through June 30, 2002, amounts paid or
2208 charged as admission or user fees described in Subsection 59-12-103 (1)(f) relating to the
2209 Olympic Winter Games of 2002 if the amounts paid or charged are established by the Salt Lake
2210 Organizing Committee for the Olympic Winter Games of 2002 in accordance with
2211 requirements of the International Olympic Committee; and
2212 (b) the State Olympic Officer and the Salt Lake Organizing Committee for the Olympic
2213 Winter Games of 2002 shall make at least two reports during the 2000 interim:
2214 (i) to the:
2215 (A) Olympic Coordination Committee; and
2216 (B) Revenue and Taxation Interim Committee; and
2217 (ii) regarding the status of:
2218 (A) agreements relating to the funding of public safety services for the Olympic Winter
2219 Games of 2002;
2220 (B) agreements relating to the funding of services, other than public safety services, for
2221 the Olympic Winter Games of 2002;
2222 (C) other agreements relating to the Olympic Winter Games of 2002 as requested by
2223 the Olympic Coordination Committee or the Revenue and Taxation Interim Committee;
2224 (D) other issues as requested by the Olympic Coordination Committee or the Revenue
2225 and Taxation Interim Committee; or
2226 (E) a combination of Subsections [(51)] (50)(b)(ii)(A) through (D);

2227 [(52)] (51) (a) beginning on July 1, 2001, through June 30, 2004, and subject to
2228 Subsection [(52)] (51)(b), a sale or lease of semiconductor fabricating or processing materials
2229 regardless of whether the semiconductor fabricating or processing materials:
2230 (i) actually come into contact with a semiconductor; or
2231 (ii) ultimately become incorporated into real property;
2232 (b) (i) beginning on July 1, 2001, through June 30, 2002, 10% of the sale or lease
2233 described in Subsection [(52)] (51)(a) is exempt;
2234 (ii) beginning on July 1, 2002, through June 30, 2003, 50% of the sale or lease
2235 described in Subsection [(52)] (51)(a) is exempt; and
2236 (iii) beginning on July 1, 2003, through June 30, 2004, the entire amount of the sale or
2237 lease described in Subsection [(52)] (51)(a) is exempt; and
2238 (c) each year on or before the November interim meeting, the Revenue and Taxation
2239 Interim Committee shall:
2240 (i) review the exemption described in this Subsection [(52)] (51) and make
2241 recommendations concerning whether the exemption should be continued, modified, or
2242 repealed; and
2243 (ii) include in the review under this Subsection [(52)] (51)(c):
2244 (A) the cost of the exemption;
2245 (B) the purpose and effectiveness of the exemption; and
2246 (C) the benefits of the exemption to the state;
2247 [(53)] (52) an amount paid by or charged to a purchaser for accommodations and
2248 services described in Subsection 59-12-103 (1)(i) to the extent the amount is exempt under
2249 Section 59-12-104.2 ;
2250 [(54)] (53) beginning on September 1, 2001, the lease or use of a vehicle issued a
2251 temporary sports event registration certificate in accordance with Section 41-3-306 for the
2252 event period specified on the temporary sports event registration certificate; [or]
2253 [(55)] (54) sales or uses of electricity, if the sales or uses are:
2254 (a) made under a tariff adopted by the Public Service Commission of Utah only for
2255 purchase of electricity produced from a new wind, geothermal, biomass, or solar power energy
2256 source, as designated in the tariff by the Public Service Commission of Utah; and
2257 (b) for an amount of electricity that is:

2258 (i) unrelated to the amount of electricity used by the person purchasing the electricity
2259 under the tariff described in Subsection [(55)] (54)(a); and
2260 (ii) equivalent to the number of kilowatthours specified in the tariff described in
2261 Subsection [(55)] (54)(a) that may be purchased under the tariff described in Subsection [(55)]
2262 (54)(a)[.];
2263 (55) sales or rentals of mobility enhancing equipment if a person presents a
2264 prescription for the mobility enhancing equipment;
2265 (56) sales of water in a:
2266 (a) pipe;
2267 (b) conduit;
2268 (c) ditch; or
2269 (d) reservoir;
2270 (57) sales of currency or coinage that constitute legal tender of the United States or of a
2271 foreign nation;
2272 (58) (a) sales of an item described in Subsection (58)(b) if the item:
2273 (i) does not constitute legal tender of any nation; and
2274 (ii) has a gold, silver, or platinum content of 80% or more; and
2275 (b) Subsection (58)(a) applies to a gold, silver, or platinum:
2276 (i) ingot;
2277 (ii) bar;
2278 (iii) medallion; or
2279 (iv) decorative coin;
2280 (59) amounts paid on a sale-leaseback transaction; and
2281 (60) sales of a prosthetic device:
2282 (a) for use on or in a human;
2283 (b) for which a prescription is issued; and
2284 (c) to a person that presents a prescription for the prosthetic device.
2285 Section 13. Section 59-12-104.1 is amended to read:
2286 59-12-104.1. Exemptions for religious or charitable institutions.
2287 (1) Except as provided in Section 59-12-104 , sales made by religious or charitable
2288 institutions or organizations are exempt from the sales and use tax imposed by this chapter if

2289 the sale is made in the conduct of the institution's or organization's regular religious or
2290 charitable functions or activities.
2291 (2) (a) Except as provided in Section 59-12-104 , sales made to a religious or charitable
2292 institution or organization are exempt from the sales and use tax imposed by this chapter if the
2293 sale is made in the conduct of the institution's or organization's regular religious or charitable
2294 functions and activities.
2295 (b) In order to facilitate the efficient administration of the exemption granted by this
2296 section, the exemption shall be administered as follows:
2297 (i) [The] the exemption shall be at point of sale if the sale is in the amount of at least
2298 $1,000[.];
2299 (ii) [If] except as provided in Subsection (2)(b)(iii), if the sale is less than $1,000, the
2300 exemption shall be in the form of a refund of sales or use taxes paid at the point of sale[.]; and
2301 (iii) [Notwithstanding] notwithstanding Subsection (2)(b)(ii), the exemption under this
2302 [subsection] section shall be at point of sale if the sale is:
2303 (A) made pursuant to a contract between the [vendor] seller and the charitable or
2304 religious institution or organization; or
2305 (B) made by a public utility, as defined in Section 54-2-1 , to a religious or charitable
2306 institution or organization.
2307 (3) (a) Religious or charitable institutions or organizations entitled to a refund under
2308 Subsection (2)(b)(ii) may apply to the commission for the refund of sales or use taxes paid.
2309 (b) The commission shall designate the following by commission rule adopted in
2310 accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act:
2311 (i) procedures for applying for a sales and use tax refund;
2312 (ii) standards for determining and verifying the amount of purchase at the point of sale;
2313 (iii) procedures for submitting a request for refund on a monthly basis anytime the
2314 taxpayer has accumulated $100 or more in sales tax payments; and
2315 (iv) procedures for submitting a request for refund on a quarterly basis for any
2316 cummulative amount of sales tax payments.
2317 Section 14. Section 59-12-104.2 is amended to read:
2318 59-12-104.2. Exemption for accommodations and services taxed by the Navajo
2319 Nation.

2320 (1) As used in this section "tribal taxing area" means the geographical area that:
2321 (a) is subject to the taxing authority of the Navajo Nation; and
2322 (b) consists of:
2323 (i) notwithstanding the issuance of a patent, all land:
2324 (A) within the limits of an Indian reservation under the jurisdiction of the federal
2325 government; and
2326 (B) including any rights-of-way running through the reservation; and
2327 (ii) all Indian allotments the Indian titles to which have not been extinguished,
2328 including any rights-of-way running through an Indian allotment.
2329 (2) (a) Beginning July 1, 2001, amounts paid by or charged to a purchaser for
2330 accommodations and services described in Subsection 59-12-103 (1)(i) are exempt from the tax
2331 imposed by Subsection 59-12-103 (2)(a)(i) to the extent permitted under Subsection (2)(b) if:
2332 (i) the accommodations and services described in Subsection 59-12-103 (1)(i) are
2333 provided within:
2334 (A) the state; and
2335 (B) a tribal taxing area;
2336 (ii) the Navajo Nation imposes and collects a tax on the amounts paid by or charged to
2337 the purchaser for the accommodations and services described in Subsection 59-12-103 (1)(i);
2338 (iii) the Navajo Nation imposes the tax described in Subsection (2)(a)(ii) without
2339 regard to whether or not the purchaser that pays or is charged for the accommodations and
2340 services is an enrolled member of the Navajo Nation; and
2341 (iv) the requirements of Subsection (4) are met.
2342 (b) If but for Subsection (2)(a) the amounts paid by or charged to a purchaser for
2343 accommodations and services described in Subsection (2)(a) are subject to a tax imposed by
2344 Subsection 59-12-103 (2)(a)(i):
2345 (i) the [vendor] seller shall collect and pay to the state the difference described in
2346 Subsection (3) if that difference is greater than $0; and
2347 (ii) a person may not require the state to provide a refund, a credit, or similar tax relief
2348 if the difference described in Subsection (3) is equal to or less than $0.
2349 (3) The difference described in Subsection (2)(b) is equal to the difference between:
2350 (a) the amount of tax imposed by Subsection 59-12-103 (2)(a)(i) on the amounts paid

2351 by or charged to a purchaser for accommodations and services described in Subsection
2352 59-12-103 (1)(i); less
2353 (b) the tax imposed and collected by the Navajo Nation on the amounts paid by or
2354 charged to a purchaser for the accommodations and services described in Subsection
2355 59-12-103 (1)(i).
2356 (4) (a) If, on or after July 1, 2001, the Navajo Nation changes the tax rate of a tax
2357 imposed on amounts paid by or charged to a purchaser for accommodations and services
2358 described in Subsection 59-12-103 (1)(i), any change in the amount of the exemption under
2359 Subsection (2) as a result of the change in the tax rate is not effective until the first day of the
2360 calender quarter after a 90-day period beginning on the date the commission receives notice
2361 meeting the requirements of Subsection (4)(b) from the Navajo Nation.
2362 (b) The notice described in Subsection (4)(a) shall state:
2363 (i) that the Navajo Nation has changed or will change the tax rate of a tax imposed on
2364 amounts paid by or charged to a purchaser for accommodations and services described in
2365 Subsection 59-12-103 (1)(i);
2366 (ii) the effective date of the rate change on the tax described in Subsection (4)(b)(i);
2367 and
2368 (iii) the new rate of the tax described in Subsection (4)(b)(i).
2369 (5) Beginning with the 2006 interim, the Revenue and Taxation Interim Committee:
2370 (a) shall review the exemption provided for in this section one or more times every five
2371 years;
2372 (b) shall determine on or before the November interim meeting of the year in which the
2373 Revenue and Taxation Interim Committee reviews the exemption provided for in this section
2374 whether the exemption should be:
2375 (i) continued;
2376 (ii) modified; or
2377 (iii) repealed; and
2378 (c) may review any other issue related to the exemption provided for in this section as
2379 determined by the Revenue and Taxation Interim Committee.
2380 Section 15. Section 59-12-105 is amended to read:
2381 59-12-105. Certain exempt sales to be reported -- Penalties.

2382 (1) (a) An owner[, vendor,] or purchaser shall report to the commission the amount of
2383 sales or uses exempt under Subsection 59-12-104 (14), [(20),] (39), (40), [(41),] or [(52)] (51).
2384 (b) The report required by Subsection (1)(a) shall be filed:
2385 (i) with the commission; and
2386 (ii) on a form prescribed by the commission.
2387 (c) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
2388 commission shall make rules providing:
2389 (i) the information required to be included in the report described in Subsection (1)(a);
2390 and
2391 (ii) one or more due dates for filing the report described in Subsection (1)(a).
2392 (2) Except as provided in Subsections (3) and (4), if the owner[, vendor,] or purchaser
2393 fails to report the full amount of the exemptions granted under Subsection 59-12-104 (14),
2394 [(20),] (39), (40), [(41),] or [(52)] (51) on the [owner's, vendor's, or purchaser's original filed
2395 return] report required by Subsection (1)(a), the commission shall impose a penalty equal to the
2396 lesser of:
2397 (a) 10% of the sales and use tax that would have been imposed if the exemption had not
2398 applied; or
2399 (b) $1,000.
2400 (3) Notwithstanding Subsection (2), the commission may not impose a penalty under
2401 Subsection (2) if the owner[, vendor,] or purchaser files an amended [return] report:
2402 (a) containing the amount of the exemption [prior to]; and
2403 (b) before the owner[, vendor,] or purchaser [receiving] receives a notice of audit from
2404 the commission.
2405 (4) (a) Notwithstanding Subsection (2), the commission may waive, reduce, or
2406 compromise a penalty imposed under this section if the commission finds there are reasonable
2407 grounds for the waiver, reduction, or compromise.
2408 (b) If the commission waives, reduces, or compromises a penalty under Subsection
2409 (4)(a), the commission shall make a record of the grounds for waiving, reducing, or
2410 compromising the penalty.
2411 Section 16. Section 59-12-106 is amended to read:
2412 59-12-106. Sales and use tax license -- No fee -- Presumption of taxability --

2413 Exemption certificates -- Exemption certificate license number to accompany contract
2414 bids.
2415 (1) (a) It is unlawful for any person required [by this chapter] to collect [sales or use
2416 tax,] a tax under this chapter to engage in business within the state without first having
2417 obtained a license to do so. [This]
2418 (b) The license described in Subsection (1)(a):
2419 (i) shall be granted and issued by the commission[. The license];
2420 (ii) is not assignable [and];
2421 (iii) is valid only for the person in whose name [it] the license is issued;
2422 (iv) is valid until [that]:
2423 (A) the person described in Subsection (1)(b)(iii):
2424 (I) ceases to do business; or
2425 (II) changes [his] that person's business address[,]; or [until]
2426 (B) the license is revoked by the commission[. Such license]; and
2427 (v) shall be granted by the commission only upon an application [stating] that:
2428 (A) states the name and address of the applicant; and
2429 (B) provides other information the commission may require.
2430 (c) At the time [of] a person makes an application under Subsection (1)(b)(v), the
2431 commission shall notify the applicant of the responsibilities and liability of a business owner
2432 successor under Section 59-12-112 .
2433 (d) If business is transacted at two or more separate places by one person, a separate
2434 license for each place of business [shall be] is required.
2435 (e) (i) The commission shall, on a reasonable notice and after a hearing, revoke the
2436 license of any person violating any provisions of this chapter [and no].
2437 (ii) A license may not be issued to [such] a person described in Subsection (1)(e)(i)
2438 until the [taxpayer] person has complied with the requirements of this chapter.
2439 (f) Any person required [by this chapter] to collect [sales or use tax] a tax under this
2440 chapter within this state without having secured a license to do so[,] is guilty of a criminal
2441 violation as provided in Section 59-1-401 . [No]
2442 (g) A license:
2443 (i) is not required for any person engaged exclusively in the business of selling

2444 commodities [which] that are exempt from taxation under this chapter[. A license]; and
2445 (ii) shall be issued to the [applicant] person by the commission without a license fee.
2446 (2) (a) For the purpose of the proper administration of this chapter and to prevent
2447 evasion of the tax and the duty to collect the tax, it shall be presumed that tangible personal
2448 property or any other taxable transaction under Subsection 59-12-103 (1)[,] sold by any person
2449 for delivery in this state is sold for storage, use, or other consumption in this state unless the
2450 person selling [such] the property, item, or service has taken from the purchaser an exemption
2451 certificate [signed by and]:
2452 (i) bearing the name and address of the purchaser [to the effect]; and
2453 (ii) providing that the property, item, or service was exempted under Section
2454 59-12-104 . [The exemption certificates]
2455 (b) An exemption certificate described in Subsection (2)(a):
2456 (i) shall contain information as prescribed by the commission[.]; and
2457 (ii) if a paper exemption certificate is used, shall be signed by the purchaser.
2458 (c) Except as provided in Subsection (2)(d), a seller that has taken an exemption
2459 certificate from a purchaser in accordance with this Subsection (2) with respect to a transaction
2460 is not liable to collect a tax under this chapter:
2461 (i) on that transaction; and
2462 (ii) if the commission or a court of competent jurisdiction subsequently determines that
2463 the purchaser improperly claimed the exemption.
2464 (d) Notwithstanding Subsection (2)(c), Subsection (2)(c) does not apply to a seller that:
2465 (i) fraudulently fails to collect a tax under this chapter; or
2466 (ii) solicits a purchaser to participate in improperly claiming an exemption from a tax
2467 under this chapter.
2468 (3) [All persons] A person filing a contract [bids] bid with the state or [any of its] a
2469 political [subdivisions] subdivision of the state for the sale of tangible personal property or any
2470 other taxable transaction under Subsection 59-12-103 (1)[,] shall include with the bid the [sales
2471 tax license] number of the license issued to [them] that person under Subsection (1).
2472 Section 17. Section 59-12-107 is amended to read:
2473 59-12-107. Collection, remittance, and payment of tax by sellers or other persons
2474 -- Returns -- Direct payment by purchaser of vehicle -- Other liability for collection --

2475 Credits -- Treatment of bad debt -- Deposit and sale of security -- Penalties.
2476 (1) (a) [Each vendor] Except as provided in Sections 59-12-107.1 through 59-12-107.3 ,
2477 each seller shall pay or collect and remit the sales and use taxes imposed by this chapter if
2478 within this state the [vendor] seller:
2479 (i) has or utilizes:
2480 (A) an office;
2481 (B) a distribution house;
2482 (C) a sales house;
2483 (D) a warehouse;
2484 (E) a service enterprise; or
2485 (F) a place of business similar to Subsections (1)(a)(i)(A) through (E);
2486 (ii) maintains a stock of goods;
2487 (iii) regularly solicits orders, regardless of whether or not the orders are accepted in the
2488 state, unless the [vendor's] seller's only activity in the state is:
2489 (A) advertising; or
2490 (B) solicitation by:
2491 (I) direct mail;
2492 (II) electronic mail;
2493 (III) the Internet;
2494 (IV) telephone; or
2495 (V) a means similar to Subsections (1)(a)(iii)(A) or (B);
2496 (iv) regularly engages in the delivery of property in the state other than by:
2497 (A) common carrier; or
2498 (B) United States mail; or
2499 (v) regularly engages in an activity directly related to the leasing or servicing of
2500 property located within the state.
2501 (b) If a [vendor] seller does not meet one or more of the criteria provided for in
2502 Subsection (1)(a), the [vendor] seller:
2503 (i) except as provided in Subsection (1)(b)(ii), may voluntarily:
2504 (A) collect a tax [as provided in Subsection 59-12-103 (2)(c)] on a transaction
2505 described in Subsection 59-12-103 (1); and

2506 (B) remit the tax to the commission as provided in this part; or
2507 (ii) notwithstanding Subsection (1)(b)(i), shall collect a tax [as provided in Subsection
2508 59-12-103 (2)(c)] on a transaction described in Subsection 59-12-103 (1) if Section 59-12-103.1
2509 requires the [vendor] seller to collect the tax.
2510 (c) The voluntary collection and remittance of a tax under this chapter may not be used
2511 as a factor in determining whether a seller is required by Subsection (1)(a) to:
2512 (i) pay a tax, fee, or charge under:
2513 (A) Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;
2514 (B) Section 19-6-716 ;
2515 (C) Section 19-6-805 ;
2516 (D) Section 69-2-5.5 ; or
2517 (E) this title; or
2518 (ii) collect and remit a tax, fee, or charge under:
2519 (A) Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;
2520 (B) Section 19-6-716 ;
2521 (C) Section 19-6-805 ;
2522 (D) Section 69-2-5.5 ; or
2523 (E) this title.
2524 [(c)] (d) A person shall pay a use tax imposed by this chapter on a transaction
2525 described in Subsection 59-12-103 (1) if:
2526 (i) the [vendor] seller did not collect a use tax imposed by this chapter on the
2527 transaction; and
2528 (ii) the person:
2529 (A) stores the tangible personal property in the state;
2530 (B) uses the tangible personal property in the state; or
2531 (C) consumes the tangible personal property in the state.
2532 [(d)] (e) Notwithstanding the provisions of Subsection (1)(a), the ownership of
2533 property that is located at the premises of a printer's facility with which the retailer has
2534 contracted for printing and that consists of the final printed product, property that becomes a
2535 part of the final printed product, or copy from which the printed product is produced, shall not
2536 result in the retailer being considered to have or maintain an office, distribution house, sales

2537 house, warehouse, service enterprise, or other place of business, or to maintain a stock of
2538 goods, within this state.
2539 (2) (a) [Each vendor] Except as provided in Sections 59-12-107.1 through 59-12-107.3 ,
2540 a seller shall collect [the sales or use tax] a tax under this chapter from [the] a purchaser.
2541 (b) A [vendor] seller may not collect as tax an amount, without regard to fractional
2542 parts of one cent, in excess of the tax computed at the rates prescribed by this chapter.
2543 (c) (i) Each [vendor] seller shall:
2544 (A) give the purchaser a receipt for the use tax collected; or
2545 (B) bill the use tax as a separate item and declare the name of this state and the
2546 [vendor's] seller's use tax license number on the invoice for the sale.
2547 (ii) The receipt or invoice is prima facie evidence that the [vendor] seller has collected
2548 the use tax and relieves the purchaser of the liability for reporting the use tax to the
2549 commission as a consumer.
2550 (d) A [vendor] seller is not required to maintain a separate account for the tax
2551 collected, but is considered to be a person charged with receipt, safekeeping, and transfer of
2552 public moneys.
2553 (e) Taxes collected by a [vendor] seller pursuant to this chapter shall be held in trust
2554 for the benefit of the state and for payment to the commission in the manner and at the time
2555 provided for in this chapter.
2556 (f) If any [vendor] seller, during any reporting period, collects as a tax an amount in
2557 excess of the lawful state and local percentage of total taxable sales allowed under this [part
2558 and Part 2, Local Sales and Use Tax Act] chapter, the [vendor] seller shall remit to the
2559 commission the full amount of the tax imposed under this [part and Part 2, Local Sales and Use
2560 Tax Act] chapter, plus any excess.
2561 (g) If the accounting methods regularly employed by the [vendor] seller in the
2562 transaction of the [vendor's] seller's business are such that reports of sales made during a
2563 calendar month or quarterly period will impose unnecessary hardships, the commission may
2564 accept reports at intervals that will, in [its] the commission's opinion, better suit the
2565 convenience of the taxpayer or [vendor] seller and will not jeopardize collection of the tax.
2566 (3) (a) Except as provided in [Subsection] Subsections (4) and (5) and in Section
2567 59-12-108 , the sales or use tax imposed by this chapter is due and payable to the commission

2568 quarterly on or before the last day of the month next succeeding each calendar quarterly period.
2569 (b) (i) Each [vendor] seller shall, on or before the last day of the month next
2570 succeeding each calendar quarterly period, file with the commission a return for the preceding
2571 quarterly period.
2572 (ii) The [vendor] seller shall remit with the return under Subsection (3)(b)(i) the
2573 amount of the tax required under this chapter to be collected or paid for the period covered by
2574 the return.
2575 (c) Each return shall contain information and be in a form the commission prescribes
2576 by rule.
2577 (d) The sales tax as computed in the return shall be based upon the total nonexempt
2578 sales made during the period, including both cash and charge sales.
2579 (e) The use tax as computed in the return shall be based upon the total amount of sales
2580 [or] and purchases for storage, use, or other consumption in this state made during the period,
2581 including both by cash and by charge.
2582 (f) The commission may by rule extend the time for making returns and paying the
2583 taxes. No extension may be for more than 90 days.
2584 (g) The commission may require returns and payment of the tax to be made for other
2585 than quarterly periods if [it] the commission considers it necessary in order to ensure the
2586 payment of the tax imposed by this chapter.
2587 (h) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
2588 commission may make rules requiring a seller to file an information return:
2589 (i) for information required by this chapter that is not included in any sales and use tax
2590 return developed in accordance with the agreement; and
2591 (ii) not more frequently than every six months.
2592 (4) (a) (i) Notwithstanding Subsection (3) and except as provided in Subsection
2593 (4)(a)(ii), a tax collected in accordance with Subsection (1)(b) by a seller described in
2594 Subsection (4)(d) shall be due and payable:
2595 (A) to the commission;
2596 (B) annually; and
2597 (C) on or before the last day of the month immediately following the last day of each
2598 calendar year.

2599 (ii) Notwithstanding Subsection (4)(a)(i), the commission may require that a tax
2600 collected in accordance with Subsection (1)(b) by a seller described in Subsection (4)(d) be due
2601 and payable:
2602 (A) to the commission; and
2603 (B) on the last day of the month immediately following any month in which the seller
2604 has accumulated a total of at least $1,000 in agreement sales and use tax.
2605 (b) (i) A tax remitted to the commission under Subsection (4)(a) shall be accompanied
2606 by a return that:
2607 (A) contains information prescribed by the commission; and
2608 (B) is in a form prescribed by the commission.
2609 (ii) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
2610 the commission shall make rules prescribing:
2611 (A) the information required to be contained in a return described in Subsection
2612 (4)(b)(i); and
2613 (B) the form of the return described in Subsection (4)(b)(i).
2614 (c) The tax collected in accordance with this Subsection (4) calculated in the return
2615 described in Subsection (4)(b) shall be calculated on the basis of the total amount of taxable
2616 transactions described in Subsection 59-12-103 (1) conducted by a seller described in
2617 Subsection (4)(d), including:
2618 (i) a cash transaction; and
2619 (ii) a charge transaction.
2620 (d) This Subsection (4) applies to a seller that is:
2621 (i) registered under the agreement;
2622 (ii) does not meet one or more of the criteria provided for in Subsection (1)(a) to be
2623 required to collect a tax under this chapter; and
2624 (iii) not a:
2625 (A) model 1 seller;
2626 (B) model 2 seller; or
2627 (C) model 3 seller.
2628 [(4) On] (5) (a) Notwithstanding Subsection (3), on each vehicle sale made by other
2629 than a regular licensed vehicle dealer, the purchaser shall pay the sales or use tax directly to the

2630 commission if the vehicle is subject to titling or registration under the laws of this state.
2631 (b) The commission shall collect the tax described in Subsection (5)(a) when the
2632 vehicle is titled or registered.
2633 [(5)] (6) If any sale of tangible personal property or any other taxable transaction under
2634 Subsection 59-12-103 (1), is made by a wholesaler to a retailer, the wholesaler is not
2635 responsible for the collection or payment of the tax imposed on the sale and the retailer is
2636 responsible for the collection or payment of the tax imposed on the sale if:
2637 (a) the retailer represents that the personal property is purchased by the retailer for
2638 resale; and
2639 (b) the personal property [thereafter] is not subsequently resold. [Instead, the retailer is
2640 solely liable for the tax.]
2641 [(6)] (7) If any sale of property or service subject to the tax is made to a person
2642 prepaying sales or use tax in accordance with Title 63, Chapter 51, Resource Development, or
2643 to a contractor or subcontractor of that person, the person to whom such payment or
2644 consideration is payable is not responsible for the collection or payment of the sales or use tax
2645 and the person prepaying the sales or use tax is responsible for the collection or payment of the
2646 sales or use tax if the person prepaying the sales or use tax represents that the amount prepaid
2647 as sales or use tax has not been fully credited against sales or use tax due and payable under the
2648 rules promulgated by the commission. [Instead, the person prepaying the sales or use tax is
2649 solely liable for the tax.]
2650 [(7) Credit is allowed for prepaid taxes and for taxes paid on that portion of an account
2651 determined to be worthless and actually charged off for income tax purposes or on the portion
2652 of the purchase price remaining unpaid at the time of a repossession made under the terms of a
2653 conditional sales contract.]
2654 (8) (a) For purposes of this Subsection (8):
2655 (i) Except as provided in Subsection (8)(a)(ii), "bad debt" is as defined in Section 166,
2656 Internal Revenue Code.
2657 (ii) Notwithstanding Subsection (8)(a)(i), "bad debt" does not include:
2658 (A) an amount included in the purchase price of tangible personal property or a service
2659 that is:
2660 (I) not a transaction described in Subsection 59-12-103 (1); or

2661 (II) exempt under Section 59-12-104 ;
2662 (B) a financing charge;
2663 (C) interest;
2664 (D) a tax imposed under this chapter on the purchase price of tangible personal
2665 property or a service;
2666 (E) an uncollectible amount on tangible personal property that:
2667 (I) is subject to a tax under this chapter; and
2668 (II) remains in the possession of a seller until the full purchase price is paid;
2669 (F) an expense incurred in attempting to collect any debt; or
2670 (G) an amount that a seller does not collect on repossessed property.
2671 (b) A seller may deduct bad debt from the total amount from which a tax under this
2672 chapter is calculated on a return.
2673 (c) A seller may file a refund claim with the commission if:
2674 (i) the amount of bad debt for the time period described in Subsection (8)(e) exceeds
2675 the amount of the seller's sales that are subject to a tax under this chapter for that same time
2676 period; and
2677 (ii) as provided in Section 59-12-110 .
2678 (d) A bad debt deduction under this section may not include interest.
2679 (e) A bad debt may be deducted under this Subsection (8) on a return for the time
2680 period during which the bad debt:
2681 (i) is written off as uncollectible in the seller's books and records; and
2682 (ii) would be eligible for a bad debt deduction:
2683 (A) for federal income tax purposes; and
2684 (B) if the seller were required to file a federal income tax return.
2685 (f) If a seller recovers any portion of bad debt for which the seller makes a deduction or
2686 claims a refund under this Subsection (8), the seller shall report and remit a tax under this
2687 chapter:
2688 (i) on the portion of the bad debt the seller recovers; and
2689 (ii) on a return filed for the time period for which the portion of the bad debt is
2690 recovered.
2691 (g) For purposes of reporting a recovery of a portion of bad debt under Subsection

2692 (8)(f), a seller shall apply amounts received on the bad debt in the following order:
2693 (A) in a proportional amount:
2694 (I) to the purchase price of the tangible personal property or service; and
2695 (II) to the tax due under this chapter on the tangible personal property or service; and
2696 (B) to:
2697 (I) interest charges;
2698 (II) service charges; and
2699 (III) other charges.
2700 (h) A seller's certified service provider may make a deduction or claim a refund for bad
2701 debt on behalf of the seller:
2702 (i) in accordance with this Subsection (8); and
2703 (ii) if the certified service provider credits or refunds the full amount of the bad debt
2704 deduction or refund to the seller.
2705 (i) A bad debt may be allocated among the states that are members of the agreement if
2706 a seller's books and records support that allocation.
2707 [(8)] (9) (a) The commission may require any person subject to the tax imposed under
2708 this chapter to deposit with [it] the commission security as the commission determines, if the
2709 commission considers it necessary to ensure compliance with this chapter.
2710 (b) The commission may sell the security at public sale if it becomes necessary to do so
2711 in order to recover any tax, interest, or penalty due.
2712 (c) (i) The commission shall serve notice of the sale upon the person who deposited the
2713 securities.
2714 (ii) Notice under Subsection [(8)] (9)(c)(i) sent to the last-known address as it appears
2715 in the records of the commission is sufficient for the purposes of this requirement.
2716 (d) The commission shall return to the person who deposited the security any amount
2717 of the sale proceeds that exceed the amounts due under this chapter.
2718 [(9)] (10) (a) A [vendor] seller may not, with intent to evade any tax, fail to timely remit
2719 the full amount of tax required by this chapter.
2720 (b) A violation of this section is punishable as provided in Section 59-1-401 .
2721 (c) Each person who fails to pay any tax to the state or any amount of tax required to be
2722 paid to the state, except amounts determined to be due by the commission under Sections

2723 59-12-110 and 59-12-111 , within the time required by this chapter, or who fails to file any
2724 return as required by this chapter, shall pay, in addition to the tax, penalties and interest as
2725 provided in Section 59-12-110 .
2726 (d) For purposes of prosecution under this section, each quarterly tax period in which a
2727 [vendor] seller, with intent to evade any tax, collects a tax and fails to timely remit the full
2728 amount of the tax required to be remitted, constitutes a separate offense.
2729 Section 18. Section 59-12-107.1 is enacted to read:
2730 59-12-107.1. Direct payment permit.
2731 (1) The commission may issue a direct payment permit to a seller that:
2732 (a) obtains a license under Section 59-12-106 ;
2733 (b) is required to remit taxes under this chapter by electronic funds transfer in
2734 accordance with Section 59-12-108 ;
2735 (c) has a record of timely payment of taxes under this chapter as determined by the
2736 commission; and
2737 (d) demonstrates to the commission that the seller has the ability to determine the
2738 appropriate location of a transaction:
2739 (i) under:
2740 (A) Section 59-12-205 ;
2741 (B) Section 59-12-207.1 ; and
2742 (C) Section 59-12-207.3 ; and
2743 (ii) for each transaction for which the seller makes a purchase using the direct payment
2744 permit.
2745 (2) A direct payment permit may not be used in connection with the following
2746 transactions:
2747 (a) a purchase of the following purchased in the same transaction:
2748 (i) prepared food; and
2749 (ii) food and food ingredients;
2750 (b) amounts paid or charged for accommodations and services described in Subsection
2751 59-12-103 (1)(i);
2752 (c) amounts paid or charged for admission or user fees under Subsection
2753 59-12-103 (1)(f);

2754 (d) a purchase of:
2755 (i) a motor vehicle;
2756 (ii) an aircraft;
2757 (iii) a watercraft;
2758 (iv) a modular home;
2759 (v) a manufactured home; or
2760 (vi) a mobile home;
2761 (e) amounts paid under Subsection 59-12-103 (1)(b); or
2762 (f) sales under Subsection 59-12-103 (1)(c).
2763 (3) The holder of a direct payment permit shall:
2764 (a) present evidence of the direct payment permit to a seller at the time the holder of
2765 the direct payment permit makes a purchase using the direct payment permit;
2766 (b) determine the appropriate location of a transaction under:
2767 (i) (A) Section 59-12-205 ;
2768 (B) Section 59-12-207.1 ; or
2769 (C) Section 59-12-207.3 ; and
2770 (ii) for each transaction for which the holder of the direct payment permit makes a
2771 purchase using the direct payment permit;
2772 (c) notwithstanding Section 59-12-107 and subject to Subsection 59-12-107.2 (4),
2773 determine the amount of any agreement sales and use tax due on each transaction for which the
2774 holder of the direct payment permit uses the direct payment permit;
2775 (d) report and remit to the commission the agreement sales and use tax described in
2776 Subsection (3)(c) at the same time and in the same manner as the holder of the direct payment
2777 permit reports and remits a tax under this chapter; and
2778 (e) maintain records:
2779 (i) that indicate the appropriate location of a transaction:
2780 (A) under:
2781 (I) Section 59-12-205 ;
2782 (II) Section 59-12-207.1 ; or
2783 (III) Section 59-12-207.3 ; and
2784 (B) for each transaction for which a purchase is made using the direct payment permit;

2785 and
2786 (ii) necessary to determine the amount described in Subsection (3)(c) for each
2787 transaction for which the holder of the direct payment permit uses the direct payment permit.
2788 (4) A seller that is presented evidence of a direct payment permit at the time of a
2789 transaction:
2790 (a) notwithstanding Section 59-12-107 , may not collect agreement sales and use tax on
2791 the transaction;
2792 (b) shall, for a period of three years from the date the seller files a return with the
2793 commission reporting the transaction, retain records to verify that the transaction was made
2794 using a direct payment permit; and
2795 (c) notwithstanding Section 59-12-107 , is not liable for agreement sales and use tax on
2796 the transaction.
2797 (5) The holder of a direct payment permit may calculate the amount the holder of the
2798 direct payment permit may retain under Section 59-12-108 on the amount described in
2799 Subsection (3)(c):
2800 (a) for each transaction for which the holder of the direct payment permit uses the
2801 direct payment permit; and
2802 (b) that the holder of the direct payment permit remits to the commission under this
2803 section.
2804 (6) The commission may revoke a direct payment permit issued under this section at
2805 any time if the holder of the direct payment permit fails to comply with any provision of this
2806 chapter.
2807 (7) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
2808 commission may make rules to administer this section.
2809 Section 19. Section 59-12-107.2 is enacted to read:
2810 59-12-107.2. Services, computer software, or digital goods concurrently available
2811 for use in more than one location.
2812 (1) (a) Notwithstanding Section 59-12-107 and except as provided in Subsection (4), if
2813 a purchaser of a good or service described in Subsection (1)(b) that is not the holder of a direct
2814 payment permit under Section 59-12-107.1 knows at the time of purchase that the good or
2815 service described in Subsection (1)(b) will be concurrently available for use in more than one

2816 location, the purchaser shall:
2817 (i) provide to the seller at the time of purchase a form:
2818 (A) prescribed by the commission; and
2819 (B) indicating that the good or service described in Subsection (1)(b) will be
2820 concurrently available for use in more than one location;
2821 (ii) apportion the purchase price of the good or service described in Subsection (1)(b)
2822 among the locations determined in accordance with Section 59-12-205 and Subsection
2823 59-12-207.1 (9);
2824 (iii) determine the agreement sales and use tax for each location determined in
2825 accordance with Section 59-12-205 and Subsection 59-12-207.1 (9) by calculating the product
2826 of:
2827 (A) the tax rate for the location determined in accordance with Section 59-12-205 and
2828 Subsection 59-12-207.1 (9); and
2829 (B) the amount of the purchase price apportioned to that location under Subsection
2830 (1)(a)(ii); and
2831 (iv) remit to the commission the agreement sales and use tax calculated under
2832 Subsection (1)(a)(iii) for each location determined in accordance with Section 59-12-205 and
2833 Subsection 59-12-207.1 (9).
2834 (b) Subsection (1)(a) applies to:
2835 (i) a service;
2836 (ii) prewritten computer software delivered electronically; or
2837 (iii) a digital good.
2838 (2) The method a purchaser may use to make the apportionment required by Subsection
2839 (1) shall be:
2840 (a) reasonable;
2841 (b) uniform;
2842 (c) consistent; and
2843 (d) supported by the purchaser's business records as those business records exist at the
2844 time of the transaction.
2845 (3) Upon receipt of the form described in Subsection (1)(a)(i):
2846 (a) a seller:

2847 (i) is not liable to collect or remit agreement sales and use tax for that transaction; and
2848 (ii) shall keep a record of the form described in Subsection (1)(a)(i) for three years
2849 from the date the seller files a return with the commission reporting that transaction; and
2850 (b) the form shall remain in effect:
2851 (i) for all future transactions between the seller described in Subsection (3)(a) and the
2852 purchaser; and
2853 (ii) until the form is revoked in writing by the purchaser.
2854 (4) (a) Notwithstanding Subsection (1), a purchaser of a good or service described in
2855 Subsection (1)(b) is not required to provide to a seller the form described in Subsection
2856 (1)(a)(i) if the purchaser:
2857 (i) knows at the time of purchase that the good or service described in Subsection
2858 (1)(b) will be concurrently available for use in more than one location; and
2859 (ii) is the holder of a direct payment permit under Section 59-12-107.1 .
2860 (b) A purchaser described in Subsection (4)(a) is subject to Subsection (2) in
2861 determining the apportionment of agreement sales and use tax due on the good or service
2862 described in Subsection (1)(b).
2863 Section 20. Section 59-12-107.3 is enacted to read:
2864 59-12-107.3. Collection, remittance, and payment of taxes on direct mail.
2865 (1) Notwithstanding Section 59-12-107 and except as provided in Subsection (6), a
2866 purchaser of direct mail that is not a holder of a direct payment permit under Section
2867 59-12-107.1 shall provide to a seller at the time of the transaction:
2868 (a) a form:
2869 (i) prescribed by the commission; and
2870 (ii) indicating that the transaction is a direct mail transaction; or
2871 (b) information that indicates the locations of the recipients to which the direct mail is
2872 delivered.
2873 (2) Upon receipt of a form described in Subsection (1)(a) a seller:
2874 (a) is not liable to collect or remit agreement sales and use tax for that transaction; and
2875 (b) shall keep a record of the form described in Subsection (1)(a) for three years from
2876 the date the seller files a return with the commission reporting that transaction.
2877 (3) The purchaser described in Subsection (1) shall in the same manner as a holder of a

2878 direct payment permit under Section 59-12-107.1 :
2879 (a) determine the amount of any agreement sales and use tax due on the transaction;
2880 and
2881 (b) report and remit to the commission the agreement sales and use tax due on the
2882 transaction.
2883 (4) The form described in Subsection (1)(a) shall remain in effect:
2884 (a) for all future transactions between the seller described in Subsection (2)(a) and the
2885 purchaser; and
2886 (b) until the form is revoked in writing by the purchaser.
2887 (5) (a) Upon receipt of information described in Subsection (1)(b) from a purchaser
2888 that indicates the locations of the recipients to which direct mail is delivered, a seller shall
2889 collect and remit agreement sales and use tax according to the information provided by the
2890 purchaser.
2891 (b) If a seller collects and remits to the commission agreement sales and use tax on a
2892 transaction in accordance with information provided by a purchaser under Subsection (5)(a),
2893 unless the seller acts in bad faith, the seller is not liable for any further obligation to collect or
2894 remit to the commission agreement sales and use tax on the transaction.
2895 (6) Notwithstanding Subsection (1), if a purchaser of direct mail provides a seller with
2896 a direct payment permit under Section 59-12-107.1 , the purchaser may not be required to
2897 provide to the seller:
2898 (a) the form required by Subsection (1)(a); or
2899 (b) information required by Subsection (1)(b).
2900 (7) A seller shall collect and remit agreement sales and use tax as required by Section
2901 59-12-107 if a purchaser of direct mail does not provide the seller with:
2902 (a) a direct payment permit under Section 59-12-107.1 ; or
2903 (b) the:
2904 (i) form required by Subsection (1)(a); or
2905 (ii) information required by Subsection (1)(b).
2906 Section 21. Section 59-12-108 is amended to read:
2907 59-12-108. Monthly payment -- Penalty.
2908 (1) [Any person whose] (a) Notwithstanding Section 59-12-107 , a seller that has a tax

2909 liability under this [part, Part 2, The Local Sales and Use Tax Act, Part 5, Public Transit Tax,
2910 Part 10, Highways Tax, Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act,
2911 Subsection 59-12-603 (1)(a)(i), and Subsection 59-12-603 (1)(a)(ii), was] chapter of $50,000 or
2912 more for the previous calendar year shall[, on or before the last day of the month next
2913 succeeding each calendar month,]:
2914 (i) file a return with the commission [a return]:
2915 (A) monthly on or before the last day of the month immediately following the month
2916 for which the seller collects a tax under this chapter; and
2917 (B) for the [preceding monthly period. The vendor shall] month for which the seller
2918 collects a tax under this chapter; and
2919 (ii) except as provided in Subsection (1)(c), remit with the return required by
2920 Subsection (1)(a)(i) the amount [of the state and local tax required under this part, Part 2, The
2921 Local Sales and Use Tax Act, Part 5, Public Transit Tax, Part 10, Highways Tax, Title 10,
2922 Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act, Subsection 59-12-603 (1)(a)(i),
2923 and Subsection 59-12-603 (1)(a)(ii), to be collected or paid for the period covered by the return.
2924 The] the person is required to remit to the commission for each tax, fee, or charge described in
2925 Subsection (1)(b):
2926 (A) if that seller's tax liability under this chapter for the previous calendar year is less
2927 than $96,000, by any method permitted by the commission; or
2928 (B) if that seller's tax liability under this chapter for the previous calendar year is
2929 $96,000 or more, by electronic funds transfer.
2930 (b) Subsections (1)(a)(i) and (ii) apply to the following taxes, fees, or charges:
2931 (i) a tax under Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;
2932 (ii) a fee under Section 19-6-716 ;
2933 (iii) a fee under Section 19-6-805 ;
2934 (iv) a charge under Section 69-2-5.5 ; or
2935 (v) a tax under this chapter.
2936 (c) Notwithstanding Subsection (1)(a)(ii) and in accordance with Title 63, Chapter 46a,
2937 Utah Administrative Rulemaking Act, the commission may make rules providing for a method
2938 for making same-day payments other than by electronic funds transfer if making payments by
2939 electronic funds transfer fails.

2940 (d) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
2941 commission shall establish by rule [the] procedures and [guidelines in] requirements for
2942 determining the [tax liability] amount a seller is required to remit to the commission under [this
2943 section] Subsection (1).
2944 [(2) Any person whose tax liability under this part, Part 2, The Local Sales and Use
2945 Tax Act, Part 5, Public Transit Tax, Part 10, Highways Tax, Title 10, Chapter 1, Part 3,
2946 Municipal Energy Sales and Use Tax Act, Subsection 59-12-603 (1)(a)(i), and Subsection
2947 59-12-603 (1)(a)(ii), was $96,000 or more for the previous year shall remit the monthly amount
2948 of state and local tax payment due under this section to the tax commission by electronic funds
2949 transfer.]
2950 [(3)] (2) (a) Except as provided in Subsection [(3)] (2)(b), a [vendor who is required to
2951 remit taxes monthly under this section] seller subject to Subsection (1) or a seller described in
2952 Subsection (3) may retain each month an amount not to exceed:
2953 (i) 1.5% of [the total monthly sales tax collected under Part 1 of this chapter, and] any
2954 amounts the seller is required to remit to the commission:
2955 (A) for the month for which the seller is filing a return in accordance with Subsection
2956 (1); and
2957 (B) under this part; and
2958 (ii) 1% of [the total monthly sales tax collected under Part 2, The Local Sales and Use
2959 Tax Act, Part 5, Public Transit Tax, Part 10, Highways Tax, Title 10, Chapter 1, Part 3,
2960 Municipal Energy Sales and Use Tax Act, Subsection 59-12-603 (1)(a)(i), and Subsection
2961 59-12-603 (1)(a)(ii), for the cost to it of collecting and remitting sales and use taxes to the
2962 commission on a monthly basis.] any amounts the seller is required to remit to the commission:
2963 (A) for the month for which the seller is filing a return in accordance with Subsection
2964 (1); and
2965 (B) under:
2966 (I) Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax;
2967 (II) Part 2, Local Sales and Use Tax Act;
2968 (III) Part 5, Public Transit Tax;
2969 (IV) Part 10, Highways or Public Transit System Tax;
2970 (V) Subsection 59-12-603 (1)(a)(i); or

2971 (VI) Subsection 59-12-603 (1)(a)(ii).
2972 (b) [A] Notwithstanding Subsection (2)(a), a state government entity that is required to
2973 remit taxes monthly [under this chapter] in accordance with Subsection (1) may not retain [any
2974 portion of the taxes it collects to cover the costs of collecting and remitting sales and use taxes
2975 to the commission] any amount under Subsection (2)(a).
2976 (3) A seller that has a tax liability under this chapter for the previous calendar year of
2977 less than $50,000 may:
2978 (a) voluntarily meet the requirements of Subsection (1); and
2979 (b) if the seller voluntarily meets the requirements of Subsection (1), retain the
2980 amounts allowed by Subsection (2)(a).
2981 (4) Penalties for late payment shall be as provided in Section 59-1-401 .
2982 Section 22. Section 59-12-110 is amended to read:
2983 59-12-110. Overpayments, deficiencies, and refunds procedures.
2984 (1) (a) As soon as practicable after a return is filed, the commission shall examine the
2985 return.
2986 (b) If the commission determines that the correct amount of tax to be remitted is
2987 greater or less than the amount shown to be due on the return, the commission shall recompute
2988 the tax.
2989 (c) If the amount paid exceeds the amount due, the excess, plus interest as provided in
2990 Section 59-1-402 , shall be credited or refunded to the taxpayer as provided in Subsection (2).
2991 (d) The commission may not credit or refund to the taxpa