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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