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H.B. 273

This document includes House Committee Amendments incorporated into the bill on Mon, Feb 16, 2004 at 2:51 PM by kholt. --> This document includes House Floor Amendments incorporated into the bill on Wed, Feb 25, 2004 at 3:07 PM by kholt. --> This document includes House Floor Amendments (CORRECTED) incorporated into the bill on Fri, Feb 27, 2004 at 4:19 PM by kholt. --> This document includes Senate 3rd Reading Floor Amendments incorporated into the bill on Mon, Mar 1, 2004 at 6:53 PM by smaeser. --> This document includes Senate 3rd Reading Floor Amendments incorporated into the bill on Mon, Mar 1, 2004 at 7:13 PM by rday. -->              1     

TAX AND CHARGE AMENDMENTS

             2     
2004 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Sponsor: Wayne A. Harper

             5     
             6      LONG TITLE
             7      General Description:
             8          This bill amends the Sales and Use Tax Act, provisions relating to a municipality's
             9      authority to levy a tax on taxable energy for a telecommunications provider, and
             10      provisions relating to a county's or municipality's authority to impose an emergency
             11      services telephone charge.
             12      Highlighted Provisions:
             13          This bill:
             14          .    modifies the municipal energy sales and use tax and the municipal
             15      telecommunications license tax to coordinate those taxes with the Streamlined Sales
             16      and Use Tax Agreement and state and local sales and use taxes;
             17          .    amends tax penalty provisions including:
             18              .    changing references to the term "vendor" to "seller";
             19              .    clarifying that penalty provisions apply to a seller that fails to remit a tax, fee, or
             20      charge monthly; and
             21              .    providing that a seller that fails to remit a tax, fee, or charge by electronic funds
             22      transfer is subject to penalties and may not retain the percentage of sales and use
             23      taxes that the seller could otherwise retain;
             24          .    provides, amends, and repeals state and local sales and use tax definitions;
             25          .     repeals obsolete language;
             25a      H H [ . REPEALS A CAP ON CERTAIN STATE SALES AND USE TAX THAT IS DEDICATED TO
             25b      FUND CERTAIN WATER PROJECTS AND CERTAIN DEPARTMENT OF NATURAL RESOURCES
             25c      PROJECTS;
]
h h
             26      S [     .    provides that certain state sales and use tax revenues H ARE REQUIRED TO h be
             26a      deposited into the Remote
             27      Sales Restricted Account;
] s


             28      S [     . H [    repeals language requiring] REQUIRES h the Division of Finance to deposit any
             28a      revenues in the
             29      Remote Sales Restricted Account H AS OF JULY 1, 2004 h into the General Fund;
             30          .    provides that the Remote Sales Restricted Account shall earn interest and that the
             31      interest shall be deposited into the account;
] s

             32          .    modifies the sales and use tax exemption for prescription drugs;
             33          .    modifies the exempt sales that are required to be reported to the State Tax
             34      Commission;
             35          .    requires certain sellers that file a simplified electronic return with the commission to
             36      file a report with the commission, provides the information to be contained in the
             37      report, provides a due date for filing the report, provides a penalty for failing to file
             38      the report, and authorizes the Utah State Tax Commission to waive, reduce, or
             39      compromise the penalty under certain circumstances;
             40          .    amends provisions relating to the collection, remittance, and payment of a tax by a
             41      seller;
             42          .    addresses the duties of a certified service provider and a model 1 seller;
             43          .    addresses the sales and use tax liability of a seller or certified service provider that
             44      relies on a Utah State Tax Commission database or certain software in collecting
             45      and remitting sales and use taxes;
             46          .    requires certain sellers to file returns with the Utah State Tax Commission
             47      electronically and to remit a tax, fee, or charge to the Utah State Tax Commission
             48      electronically;
             49          .    modifies the amount that a seller required to file a return and remit a tax, fee, or
             50      charge to the Utah State Tax Commission monthly may retain;
             51          .    requires the Utah State Tax Commission to make a calculation and make
             52      distributions of state and local sales and use tax revenues to local taxing
             53      jurisdictions under certain circumstances;
             54          .    provides the circumstances under which a seller that has collected state or local
             55      sales and use taxes that exceed the amount of state or local sales and use taxes the
             56      seller is required to collect is presumed to have a reasonable business practice;
             57          .    provides for monetary allowance for sellers registered under the Streamlined Sales
             58      and Use Tax Agreement;


             59          .    grants rulemaking authority to the Utah State Tax Commission;
             60          .    amends provisions relating to determining the location of certain transactions;
             61          .    amends provisions addressing when a seller or certified service provider that relies
             62      on a Utah State Tax Commission database or certain software is not liable for
             63      failing to collect state and local sales and use taxes;
             64          .    amends provisions relating to the imposition of taxes on certain accommodations
             65      and services;
             65a      H . REPEALS REFERENCES TO CERTAIN TAX NAMES; h
             66          .    amends provisions relating to the enactment, repeal, or change in the rate of a tax or
             67      charge;
             68          .    addresses procedures for administering, collecting, and enforcing state and local
             69      sales and use taxes;
             70          .    addresses when a tax rate change in the motor vehicle rental tax takes effect;
             71          .    modifies the local sales and use tax for highways and public transit systems to be in
             72      compliance with the Streamlined Sales and Use Tax Agreement and to coordinate
             73      that tax with other state and local sales and use taxes;
             74          .    modifies the emergency services telephone charge to coordinate with the
             75      Streamlined Sales and Use Tax Agreement and state and local sales and use taxes;
             76      and
             77          .    makes technical changes.
             78      Monies Appropriated in this Bill:
             79          None
             80      Other Special Clauses:
             81          This bill takes effect on July 1, 2004.
             82      Utah Code Sections Affected:
             83      AMENDS:
             84          10-1-304 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
             85          10-1-307 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
             86          10-1-403, as enacted by Chapter 253, Laws of Utah 2003
             87          10-1-405, as enacted by Chapter 253, Laws of Utah 2003
             88          10-1-407, as enacted by Chapter 253, Laws of Utah 2003
             89          10-1-408, as enacted by Chapter 253, Laws of Utah 2003
             89a           H 17-31-8, as enacted by Chapter 159, Laws of Utah 2001
             89b          59-1-302, as last amended by Chapter 107, Laws of Utah 1994 h


             90          59-1-401, as last amended by Chapters 104 and 177, Laws of Utah 2001
             91          59-12-102 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
             92          59-12-103 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
             93          59-12-103.2 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
             94          59-12-104 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
             95          59-12-105 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
             96          59-12-107 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
             97          59-12-107.1 (Effective 07/01/04), as enacted by Chapter 312, Laws of Utah 2003
             98          59-12-107.2 (Effective 07/01/04), as enacted by Chapter 312, Laws of Utah 2003
             99          59-12-108 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
             100          59-12-110 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
             101          59-12-110.1 (Effective 07/01/04), as enacted by Chapter 312, Laws of Utah 2003
             102          59-12-205 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
             103          59-12-207.1 (Effective 07/01/04), as enacted by Chapter 312, Laws of Utah 2003
             104          59-12-207.3 (Effective 07/01/04), as enacted by Chapter 312, Laws of Utah 2003
             105          59-12-207.5 (Effective 07/01/04), as enacted by Chapter 312, Laws of Utah 2003
             106          59-12-208.1 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
             107          59-12-301 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
             108          59-12-302 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
             109          59-12-352, as last amended by Chapter 291, Laws of Utah 1998
             110          59-12-353, as last amended by Chapter 291, Laws of Utah 1998
             111          59-12-354 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
             112          59-12-355 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
             113          59-12-356 (Effective 07/01/04), as enacted by Chapter 312, Laws of Utah 2003
             114          59-12-402 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
             115          59-12-403 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
             116          59-12-404 (Effective 07/01/04), as enacted by Chapter 312, Laws of Utah 2003
             117          59-12-501 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
             118          59-12-502 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
             119          59-12-504 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
             120          59-12-505 (Effective 07/01/04), as enacted by Chapter 312, Laws of Utah 2003


             121          59-12-603 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
             122          59-12-604 (Effective 07/01/04), as enacted by Chapter 312, Laws of Utah 2003
             123          59-12-703 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
             124          59-12-706 (Effective 07/01/04), as enacted by Chapter 312, Laws of Utah 2003
             125          59-12-802 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
             126          59-12-804 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
             127          59-12-806 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
             128          59-12-807 (Effective 07/01/04), as enacted by Chapter 312, Laws of Utah 2003
             129          59-12-1001 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
             130          59-12-1002, as last amended by Chapter 101, Laws of Utah 2002
             131          59-12-1003 (Effective 07/01/04), as enacted by Chapter 312, Laws of Utah 2003
             132          59-12-1102 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
             133          59-12-1103 (Effective 07/01/04), as enacted by Chapter 312, Laws of Utah 2003
             134          59-12-1201, as last amended by Chapters 270 and 291, Laws of Utah 1998
             135          59-12-1302 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
             136          59-12-1303 (Effective 07/01/04), as enacted by Chapter 312, Laws of Utah 2003
             137          59-12-1402 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
             138          59-12-1404 (Effective 07/01/04), as enacted by Chapter 312, Laws of Utah 2003
             139          59-12-1503, as enacted by Chapter 282, Laws of Utah 2003
             140          69-2-5, as last amended by Chapter 253, Laws of Utah 2003
             141      ENACTS:
             142          59-12-107.4, Utah Code Annotated 1953
             143          59-12-107.5, Utah Code Annotated 1953
             144          59-12-122, Utah Code Annotated 1953
             145          59-12-303, Utah Code Annotated 1953
             146          59-12-1504, Utah Code Annotated 1953
             147      REPEALS:
             148          59-12-351, as last amended by Chapter 11, Laws of Utah 2001, First Special Session
             149     
             150      Be it enacted by the Legislature of the state of Utah:
             151          Section 1. Section 10-1-304 (Effective 07/01/04) is amended to read:


             152           10-1-304 (Effective 07/01/04). Municipality may levy tax -- Rate -- Imposition or
             153      repeal of tax -- Tax rate change -- Effective date -- Notice requirements -- Exemptions.
             154          (1) Except as provided in Subsection (4), a municipality may levy a municipal energy
             155      sales and use tax on the sale or use of taxable energy within the municipality:
             156          (a) by ordinance as provided in Section 10-1-305 ; and
             157          (b) of up to 6% of the delivered value of the taxable energy.
             158          (2) A municipal energy sales and use tax imposed under this part may be in addition to
             159      any sales and use tax imposed by the municipality under Title 59, Chapter 12, Sales and Use
             160      Tax Act.
             161          (3) (a) For purposes of this Subsection (3):
             162          (i) "Annexation" means an annexation to a [city or town] municipality under Title 10,
             163      Chapter 2, Part 4, Annexation.
             164          (ii) "Annexing area" means an area that is annexed into a [city or town] municipality.
             165          (b) (i) If, on or after May 1, 2000, a city or town enacts or repeals a tax or changes the
             166      rate of a tax under this part, the enactment, repeal, or change shall take effect:
             167          (A) on the first day of a calendar quarter; and
             168          (B) after a 90-day period beginning on the date the commission receives notice meeting
             169      the requirements of Subsection (3)(b)(ii) from the [city or town] municipality.
             170          (ii) The notice described in Subsection (3)(b)(i)(B) shall state:
             171          (A) that the city or town will enact or repeal a tax or change the rate of a tax under this
             172      part;
             173          (B) the statutory authority for the tax described in Subsection (3)(b)(ii)(A);
             174          (C) the effective date of the tax described in Subsection (3)(b)(ii)(A); and
             175          (D) if the city or town enacts the tax or changes the rate of the tax described in
             176      Subsection (3)(b)(ii)(A), the new rate of the tax.
             177          (c) (i) If, for an annexation that occurs on or after May 1, 2000, the annexation will
             178      result in a change in the rate of a tax under this part for an annexing area, the change shall take
             179      effect:
             180          (A) on the first day of a calendar quarter; and
             181          (B) after a 90-day period beginning on the date the commission receives notice meeting
             182      the requirements of Subsection (3)(c)(ii) from the [city or town] municipality that annexes the


             183      annexing area.
             184          (ii) The notice described in Subsection (3)(c)(i)(B) shall state:
             185          (A) that the annexation described in Subsection (3)(c)(i) will result in a change in the
             186      rate of a tax under this part for the annexing area;
             187          (B) the statutory authority for the tax described in Subsection (3)(c)(ii)(A);
             188          (C) the effective date of the tax described in Subsection (3)(c)(ii)(A); and
             189          (D) the new rate of the tax described in Subsection (3)(c)(ii)(A).
             190          (4) Notwithstanding Subsection (1), a sale or use of electricity within a municipality is
             191      exempt from the tax authorized by this section if the sale or use is:
             192          (a) made under a tariff adopted by the Public Service Commission of Utah only for
             193      purchase of electricity produced from a new wind, geothermal, biomass, or solar power energy
             194      source, as designated in the tariff by the Public Service Commission of Utah; and
             195          (b) for an amount of electricity that is:
             196          (i) unrelated to the amount of electricity used by the person purchasing the electricity
             197      under the tariff described in Subsection (4)(a); and
             198          (ii) equivalent to the number of kilowatthours specified in the tariff described in
             199      Subsection (4)(a) that may be purchased under the tariff described in Subsection (4)(a).
             200          Section 2. Section 10-1-307 (Effective 07/01/04) is amended to read:
             201           10-1-307 (Effective 07/01/04). Collection of taxes by commission -- Distribution of
             202      revenues -- Charge for services -- Collection of taxes by municipality.
             203          (1) Except for the direct payment provisions provided in Subsection (3), the
             204      commission shall collect, enforce, and administer the municipal energy sales and use tax from
             205      energy suppliers according to the procedures established in Title 59, Chapter 12, Part 1, Tax
             206      Collection, except for Sections 59-12-107.1 through 59-12-107.3 .
             207          (2) (a) Except as provided in Subsections 10-1-203 (3)(d), 10-1-305 (5), and
             208      10-1-310 (2), the commission shall pay a municipality the difference between:
             209          (i) the entire amount collected by the commission from the municipal energy sales and
             210      use tax authorized by this part based on:
             211          (A) the point of sale of the taxable energy if a taxable sale occurs in a municipality that
             212      imposes a municipal energy sales and use tax as provided in this part; or
             213          (B) the point of use of the taxable energy if the use occurs in a municipality that


             214      imposes a municipal energy sales and use tax as provided in this part; and
             215          (ii) the administration fee charged in accordance with Subsection (2)(c).
             216          (b) In accordance with Subsection (2)(a), the commission shall transfer to the
             217      municipality monthly by electronic transfer the revenues generated by the municipal energy
             218      sales and use tax levied by the municipality and collected by the commission.
             219          (c) (i) The commission shall charge a municipality imposing a municipal energy sales
             220      and use tax a fee for administering the tax at the percentage provided in Section 59-12-206 ,
             221      except that the commission may not charge a fee for taxes collected by a municipality under
             222      Subsection (3).
             223          (ii) The fee charged under Subsection (2)(c)(i) shall be:
             224          (A) deposited in the Sales and Use Tax Administrative Fees Account; and
             225          (B) used for sales tax administration as provided in Subsection 59-12-206 (2).
             226          (3) An energy supplier shall pay the municipal energy sales and use tax revenues it
             227      collects from its customers under this part directly to each municipality in which the energy
             228      supplier has sales of taxable energy if:
             229          (a) the municipality is the energy supplier; or
             230          (b) (i) the energy supplier estimates that the municipal energy sales and use tax
             231      collected annually by the energy supplier from its Utah customers equals $1,000,000 or more;
             232      and
             233          (ii) the energy supplier collects the tax imposed by this part.
             234          (4) An energy supplier paying a tax under this part directly to a municipality may retain
             235      the percentage of the tax authorized under Subsection 59-12-108 (2) for the energy supplier's
             236      costs of collecting and remitting the tax.
             237          (5) An energy supplier paying the tax under this part directly to a municipality shall file
             238      an information return with the commission, at least annually, on a form prescribed by the
             239      commission.
             240          Section 3. Section 10-1-403 is amended to read:
             241           10-1-403. Municipality may levy municipal telecommunications license tax --
             242      Recovery from customers -- Annexation.
             243          (1) (a) Subject to the provisions of this section, beginning July 1, 2004, a municipality
             244      may levy on and provide that there is collected from a telecommunications provider a


             245      municipal telecommunications license tax on the telecommunications provider's gross receipts
             246      from telecommunications service that are attributed to the municipality in accordance with
             247      Section 10-1-407 .
             248          (b) To levy and provide for the collection of a municipal telecommunications license
             249      tax under this part, the municipality shall adopt an ordinance that complies with the
             250      requirements of Section 10-1-404 .
             251          (c) A municipal telecommunications license tax imposed under this part shall be at a
             252      rate of up to 4% of the telecommunications provider's gross receipts from telecommunications
             253      service that are attributed to the municipality in accordance with Section 10-1-407 .
             254          (2) A telecommunications provider may recover the amounts paid in municipal
             255      telecommunications license taxes from the customers of the telecommunications provider
             256      within the municipality imposing the municipal telecommunications license tax through a
             257      charge that is separately identified in the statement of the transaction with the customer as the
             258      recovery of a tax.
             259          (3) (a) For purposes of this Subsection (3):
             260          (i) "Annexation" means an annexation to a municipality under Title 10, Chapter 2, Part
             261      4, Annexation.
             262          (ii) "Annexing area" means an area that is annexed into a municipality.
             263          (b) (i) If, on or after July 1, 2004, a municipality enacts or repeals a tax [under this
             264      part] or changes the rate of the tax under this part, the enactment, repeal, or change shall take
             265      effect:
             266          (A) on the first day of a calendar quarter; and
             267          (B) after a [75-day] 90-day period beginning on the date the commission receives
             268      notice meeting the requirements of Subsection (3)(b)(ii) from the municipality.
             269          (ii) The notice described in Subsection (3)(b)(i)(B) shall state:
             270          (A) that the municipality will enact or repeal a tax under this part or change the rate of
             271      the tax;
             272          (B) the statutory authority for the tax described in Subsection (3)(b)(ii)(A);
             273          (C) the effective date of the tax described in Subsection (3)(b)(ii)(A); and
             274          (D) if the municipality enacts the municipal telecommunications license tax or changes
             275      the rate of the tax, the new rate of the tax.


             276          (c) (i) If, for an annexation that occurs on or after July 1, 2004, the annexation will
             277      result in a change in the rate of the tax under this part for an annexing area, the change shall
             278      take effect:
             279          (A) on the first day of a calendar quarter; and
             280          (B) after a [75-day] 90-day period beginning on the date the commission receives
             281      notice meeting the requirements of Subsection (3)(c)(ii) from the municipality that annexes the
             282      annexing area.
             283          (ii) The notice described in Subsection (3)(c)(i)(B) shall state:
             284          (A) that the annexation described in Subsection (3)(c)(i) will result in a change in the
             285      rate of a tax under this part for the annexing area;
             286          (B) the statutory authority for the tax described in Subsection (3)(c)(ii)(A);
             287          (C) the effective date of the tax described in Subsection (3)(c)(ii)(A); and
             288          (D) the new rate of the tax described in Subsection (3)(c)(ii)(A).
             289          Section 4. Section 10-1-405 is amended to read:
             290           10-1-405. Collection of taxes by commission -- Uniform interlocal agreement --
             291      Charge for services.
             292          (1) Subject to the other provisions of this section, the commission shall collect,
             293      enforce, and administer any municipal telecommunications license tax imposed under this part
             294      pursuant to:
             295          (a) the same procedures used in the administration, collection, and enforcement of the
             296      state sales and use tax under:
             297          (i) Title 59, Chapter 1, General Taxation Policies; and
             298          (ii) Title 59, Chapter 12, Part 1, Tax Collection:
             299          (A) except for [Sections]:
             300          (I) Subsection 59-12-103 (2)(d);
             301          (II) Subsection 59-12-103 (2)(e);
             302          (III) Section 59-12-104 [,];
             303          (IV) Section 59-12-104.1 [, and];
             304          (V) Section 59-12-104.2 ; and
             305          (VI) Sections 59-12-107.1 through 59-12-107.3 ; and
             306          (B) except that for purposes of Section 59-12-110 , the term "taxpayer" may include a


             307      customer from whom a municipal telecommunications license tax is recovered in accordance
             308      with Subsection 10-1-403 (2); and
             309          (b) a uniform interlocal agreement:
             310          (i) between:
             311          (A) the municipality that imposes the municipal telecommunications license tax; and
             312          (B) the commission;
             313          (ii) that is executed under Title 11, Chapter 13, Interlocal Cooperation Act;
             314          (iii) that complies with Subsection (2)(a); and
             315          (iv) that is developed by rule in accordance with Subsection (2)(b).
             316          (2) (a) The uniform interlocal agreement described in Subsection (1) shall provide that
             317      the commission shall:
             318          (i) transmit monies collected under this part:
             319          (A) monthly; and
             320          (B) by electronic funds transfer by the commission to the municipality;
             321          (ii) conduct audits of the municipal telecommunications license tax;
             322          (iii) charge the municipality for the commission's services under this section in an
             323      amount:
             324          (A) sufficient to reimburse the commission for the cost to the commission in rendering
             325      the services; and
             326          (B) that may not exceed an amount equal to 1.5% of the municipal telecommunications
             327      license tax imposed by the ordinance of the municipality; and
             328          (iv) collect, enforce, and administer the municipal telecommunications license tax
             329      authorized under this part pursuant to the same procedures used in the administration,
             330      collection, and enforcement of the state sales and use tax as provided in Subsection (1)(a).
             331          (b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             332      commission shall develop a uniform interlocal agreement that meets the requirements of this
             333      section.
             334          (3) The administrative fee charged under Subsection (2)(a) shall be:
             335          (a) deposited in the Sales and Use Tax Administrative Fees Account; and
             336          (b) used for administration of municipal telecommunications license taxes under this
             337      part.


             338          Section 5. Section 10-1-407 is amended to read:
             339           10-1-407. Attributing the gross receipts from telecommunications service to a
             340      municipality -- Rate impact.
             341          (1) The gross receipts from a telecommunications service are attributed to a
             342      municipality if the gross receipts are from a transaction for telecommunications service that is
             343      located within the municipality:
             344          (a) for purposes of sales and use taxes under Title 59, Chapter 12, Sales and Use Tax
             345      Act; and
             346          (b) determined in accordance with Section [ 59-12-207 ] 59-12-207.4 .
             347          (2) (a) The rate imposed on the gross receipts for telecommunications service shall be
             348      determined in accordance with Subsection (2)(b) if the location of a transaction for
             349      telecommunications service is determined under Subsection (1) to be a municipality other than
             350      the municipality in which is located:
             351          (i) for telecommunications service other than mobile telecommunications service, the
             352      customer's service address; or
             353          (ii) for mobile telecommunications service, the customer's primary place of use.
             354          (b) The rate imposed on the gross receipts for telecommunications service described in
             355      Subsection (2)(a) shall be the lower of:
             356          (i) the rate imposed by the taxing jurisdiction in which the transaction is located under
             357      Subsection (1); or
             358          (ii) the rate imposed by the municipality in which it is located:
             359          (A) for telecommunications service other than mobile telecommunications service, the
             360      customer's service address; or
             361          (B) for mobile telecommunications service, the customer's primary place of use.
             362          Section 6. Section 10-1-408 is amended to read:
             363           10-1-408. Procedure for taxes erroneously recovered from customers.
             364          A customer may not bring a cause of action against a telecommunications provider on
             365      the basis that the telecommunications provider erroneously recovered from the customer
             366      municipal telecommunications license taxes authorized by this part[: (1)] unless the customer
             367      [provides the telecommunications provider written notice that:] meets the same requirements
             368      that a purchaser is required to meet to bring a cause of action against a seller for a refund or


             369      credit as provided in Subsection 59-12-110.1 (3).
             370          [(a) the customer requests a refund of the amounts paid by the customer pursuant to
             371      Subsection 10-1-403 (2); and]
             372          [(b) contains the information necessary to determine the validity of the request
             373      described in Subsection (1)(a); and]
             374          [(2) before 60 days from the day on which the telecommunications provider receives
             375      the written notice required by Subsection (1).]
             375a           H Section 7. Section 17-31-8, is amended to read:
             375b          17-31-8.   Tourism tax advisory boards.
             375c          (1) (a) Except as provided in Subsection (1)(b), any county that collects the following taxes
             375d      shall operate a tourism tax advisory board:
             375e          (i) the [transient room] tax allowed under Section 59-12-301; or
             375f          (ii) the [tourism, recreation, cultural, and convention facilities] tax allowed under Section
             375g      59-12-603.
             375h          (b) Notwithstanding Subsection (1)(a), a county is exempt from Subsection (1)(a) if the county
             375i      has an existing board, council, committee, convention visitor's bureau, or body that substantially
             375j      conforms with Subsections (2), (3), and (4).
             375k          (2) A tourism tax advisory board created under Subsection (1) shall consist of at least five
             375l      members.
             375m          (3) A tourism tax advisory board shall be composed of any of the following members that:
             375n          (a) are residents of the county; and
             375o          (b) represent the local:
             375p          (i) hotel and lodging industry;
             375q          (ii) restaurant industry;
             375r          (iii) recreational facilities;
             375s          (iv) convention facilities;
             375t          (v) museums;
             375u          (vi) cultural attractions; or
             375v          (vii) other tourism-related industries.
             375w          (4) A tourism tax advisory board shall advise the county legislative body on the best use of
             375x      revenues collected from:
             375y          (a) the [transient room] tax allowed under Section 59-12-301; and
             375z          (b) the [tourism, recreation, cultural, and convention facilities] tax allowed under Section
             375aa      59-12-603.
             375ab          (5) A member of any county tourism tax advisory board:
             375ac          (a) may not receive compensation or benefits for the member's services; and
             375ad          (b) may receive per diem and expenses incurred in the performance of the member's official
             375ae      duties.
             375af          Section 8. Section 59-1-302, is amended to read:
             375ag          59-1-302.   Penalty for nonpayment of sales, use, withholding, or fuels taxes -- Jeopardy
             375ah      proceedings.


             375ai          (1) The provisions of this section apply to the following taxes in this title: h


             375aj           H (a) [state and local sales and use] A tax under Chapter 12, [Parts 1 and 2] PART 1, TAX
             375ak      COLLECTION;
             375al          (b) [transient room] A TAX UNDER CHAPTER 12, PART 2, LOCAL SALES AND USE TAX ACT;
             375am          (c) A tax under Chapter 12, Part 3, TRANSIENT ROOM TAX;
             375an          [(c) resort communities] (d) A tax under Chapter 12, Part 4, RESORT COMMUNITIES TAX;
             375ao          [(d) public transit] (e) A tax under Chapter 12, Part 5, PUBLIC TRANSIT TAX;
             375ap          [(e) tourism, recreation, cultural, and convention facilities]
             375aq          (f) A tax under Chapter 12, Part 6, TOURISM, RECREATION, CULTURAL, AND CONVENTION
             375ar      FACILITIES TAX;
             375as          [(f) motor fuel, clean fuel, special fuel, and aviation fuel taxes under Chapter 13, Parts 2, 3, and
             375at      4; and]
             375au          [(g) withholding tax under Chapter 10, Part 4.]
             375av          (g) A TAX UNDER CHAPTER 13, PART 2, MOTOR FUEL;
             375aw          (h) A TAX UNDER CHAPTER 13, PART 3, SPECIAL FUEL;
             375ax          (i) A TAX UNDER CHAPTER 13, PART 4, AVIATION FUEL; AND
             375ay          (j) A TAX UNDER CHAPTER 10, PART 4, WITHHOLDING OF TAX.
             375az          (2) Any person required to collect, truthfully account for, and pay over any tax listed in
             375ba      Subsection (1) who willfully fails to collect the tax, fails to truthfully account for and pay over the tax,
             375bb      or attempts in any manner to evade or defeat any tax or the payment of the tax, shall be liable for a
             375bc      penalty equal to the total amount of the tax evaded, not collected, not accounted for, or not paid over.
             375bd      This penalty is in addition to other penalties provided by law.
             375be          (3) (a) If the commission determines in accordance with Subsection (2) that a person is liable
             375bf      for the penalty, the commission shall notify the taxpayer of the proposed penalty.
             375bg          (b) The notice of proposed penalty shall:
             375bh          (i) set forth the basis of the assessment; and
             375bi          (ii) be mailed by registered mail, postage prepaid, to the person's last-known address.
             375bj          (4) Upon receipt of the notice of proposed penalty, the person against whom the penalty is
             375bk      proposed may:
             375bl          (a) pay the amount of the proposed penalty at the place and time stated in the notice; or
             375bm          (b) proceed in accordance with the review procedures of Subsection (5).
             375bn          (5) Any person against whom a penalty has been proposed in accordance with Subsections
             375bo      (2) and (3) may contest the proposed penalty by filing a petition for an adjudicative proceeding with
             375bp      the commission.
             375bq          (6) If the commission determines that the collection of the penalty is in jeopardy, nothing in
             375br      this section may prevent the immediate collection of the penalty in accordance with the procedures
             375bs      and requirements for emergency proceedings in Title 63, Chapter 46b, Administrative Procedures Act.
             375bt          (7) (a) In any hearing before the commission and in any judicial review of the hearing, the
             375bu      commission and the court shall consider any inference and evidence that a person has willfully failed
             375bv      to collect, truthfully account for, or pay over any tax listed in Subsection (1).


             375bw           (b) It is prima facie evidence that a person has willfully failed to collect, truthfully account
             375bx      for, or pay over any of the taxes listed in Subsection (1) if the commission or a court finds that the
             375by      person charged with the responsibility of collecting, accounting for, or paying over the taxes:
             375bz          (i) made a voluntary, conscious, and intentional decision to prefer other creditors over the h


             375ca      H state government or utilize the tax money for personal purposes;
             375cb          (ii) recklessly disregarded obvious or known risks, which resulted in the failure to collect,
             375cc      account for, or pay over the tax; or
             375cd          (iii) failed to investigate or to correct mismanagement, having notice that the tax was not or is
             375ce      not being collected, accounted for, or paid over as provided by law.
             375cf          (c) The commission or court need not find a bad motive or specific intent to defraud the
             375cg      government or deprive it of revenue to establish willfulness under this section.
             375ch          (d) If the commission determines that a person is liable for the penalty under Subsection (2),
             375ci      the commission shall assess the penalty and give notice and demand for payment. The notice and
             375cj      demand for payment shall be mailed by registered mail, postage prepaid, to the person's last-known
             375ck      address. h
             376          Section 7. Section 59-1-401 is amended to read:
             377           59-1-401. Offenses and penalties -- Statute of limitations -- Commission authority
             378      to waive, reduce, or compromise penalty or interest.
             379          (1) (a) The penalty for failure to file a tax return within the time prescribed by law
             380      including extensions is the greater of $20 or 10% of the unpaid tax due on the return.
             381          (b) Subsection (1) does not apply to amended returns.
             382          (2) The penalty for failure to pay tax due shall be the greater of $20 or 10% of the
             383      unpaid tax for:
             384          (a) failure to pay any tax, as reported on a timely filed return;
             385          (b) failure to pay any tax within 90 days of the due date of the return, if there was a late
             386      filed return subject to the penalty provided under Subsection (1)(a);
             387          (c) failure to pay any tax within 30 days of the date of mailing any notice of deficiency
             388      of tax unless a petition for redetermination or a request for agency action is filed within 30 days
             389      of the date of mailing the notice of deficiency;
             390          (d) failure to pay any tax within 30 days after the date the commission's order
             391      constituting final agency action resulting from a timely filed petition for redetermination or
             392      request for agency action is issued or is considered to have been denied under Subsection
             393      63-46b-13 (3)(b); and
             394          (e) failure to pay any tax within 30 days after the date of a final judicial decision
             395      resulting from a timely filed petition for judicial review.
             396          (3) (a) Beginning January 1, 1995, in the case of any underpayment of estimated tax or
             397      quarterly installments required by Sections 59-5-107 , 59-5-207 , 59-7-504 , and 59-9-104 , there
             398      shall be added a penalty in an amount determined by applying the interest rate provided under
             399      Section 59-1-402 plus four percentage points to the amount of the underpayment for the period


             400      of the underpayment.
             401          (b) (i) For purposes of Subsection (3)(a), the amount of the underpayment shall be the
             402      excess of the required installment over the amount, if any, of the installment paid on or before
             403      the due date for the installment.
             404          (ii) The period of the underpayment shall run from the due date for the installment to
             405      whichever of the following dates is the earlier:
             406          (A) the original due date of the tax return, without extensions, for the taxable year; or
             407          (B) with respect to any portion of the underpayment, the date on which that portion is
             408      paid.
             409          (iii) For purposes of this Subsection (3), a payment of estimated tax shall be credited
             410      against unpaid required installments in the order in which the installments are required to be
             411      paid.
             412          (4) (a) In case of an extension of time to file an individual income tax or corporate
             413      franchise tax return, if the lesser of 90% of the total tax reported on the tax return or 100% of
             414      the prior year's tax is not paid by the due date of the return, not including extensions, a 2% per
             415      month penalty shall apply on the unpaid tax during the period of extension.
             416          (b) If a return is not filed within the extension time period as provided in Section
             417      59-7-505 or 59-10-516 , penalties as provided in Subsection (1) and Subsection (2)(b) shall be
             418      added in lieu of the penalty assessed under this Subsection (4) as if no extension of time for
             419      filing a return had been granted.
             420          (5) (a) Additional penalties for underpayments of tax are as provided in Subsections
             421      (5)(a)(i) through (iv).
             422          (i) Except as provided in Subsection (5)(c), if any underpayment of tax is due to
             423      negligence, the penalty is 10% of the underpayment.
             424          (ii) Except as provided in Subsection (5)(d), if any underpayment of tax is due to
             425      intentional disregard of law or rule, the penalty is 15% of the underpayment.
             426          (iii) For intent to evade the tax, the penalty is the greater of $500 per period or 50% of
             427      the tax due.
             428          (iv) If the underpayment is due to fraud with intent to evade the tax, the penalty is the
             429      greater of $500 per period or 100% of the underpayment.
             430          (b) If the commission determines that a person is liable for a penalty imposed under


             431      Subsection (5)(a)(ii), (iii), or (iv), the commission shall notify the taxpayer of the proposed
             432      penalty.
             433          (i) The notice of proposed penalty shall:
             434          (A) set forth the basis of the assessment; and
             435          (B) be mailed by registered mail, postage prepaid, to the person's last-known address.
             436          (ii) Upon receipt of the notice of proposed penalty, the person against whom the
             437      penalty is proposed may:
             438          (A) pay the amount of the proposed penalty at the place and time stated in the notice;
             439      or
             440          (B) proceed in accordance with the review procedures of Subsection (5)(b)(iii).
             441          (iii) Any person against whom a penalty has been proposed in accordance with this
             442      Subsection (5) may contest the proposed penalty by filing a petition for an adjudicative
             443      proceeding with the commission.
             444          (iv) If the commission determines that a person is liable for a penalty under this
             445      Subsection (5), the commission shall assess the penalty and give notice and demand for
             446      payment. The notice and demand for payment shall be mailed by registered mail, postage
             447      prepaid, to the person's last-known address.
             448          (c) Notwithstanding Subsection (5)(a)(i), a [vendor] seller that voluntarily collects a
             449      tax under Subsection 59-12-107 (1)(b) is not subject to the penalty under Subsection (5)(a)(i) if
             450      on or after July 1, 2001:
             451          (i) a court of competent jurisdiction issues a final unappealable judgment or order
             452      determining that:
             453          (A) the [vendor] seller meets one or more of the criteria described in Subsection
             454      59-12-107 (1)(a); and
             455          (B) the commission or a county, city, or town may require the [vendor] seller to collect
             456      a tax under Subsection 59-12-103 (2)(a) or (b); or
             457          (ii) the commission issues a final unappealable administrative order determining that:
             458          (A) the [vendor] seller meets one or more of the criteria described in Subsection
             459      59-12-107 (1)(a); and
             460          (B) the commission or a county, city, or town may require the [vendor] seller to collect
             461      a tax under Subsection 59-12-103 (2)(a) or (b).


             462          (d) Notwithstanding Subsection (5)(a)(ii), a [vendor] seller that voluntarily collects a
             463      tax under Subsection 59-12-107 (1)(b) is not subject to the penalty under Subsection (5)(a)(ii)
             464      if:
             465          (i) (A) a court of competent jurisdiction issues a final unappealable judgment or order
             466      determining that:
             467          (I) the [vendor] seller meets one or more of the criteria described in Subsection
             468      59-12-107 (1)(a); and
             469          (II) the commission or a county, city, or town may require the [vendor] seller to collect
             470      a tax under Subsection 59-12-103 (2)(a) or (b); or
             471          (B) the commission issues a final unappealable administrative order determining that:
             472          (I) the [vendor] seller meets one or more of the criteria described in Subsection
             473      59-12-107 (1)(a); and
             474          (II) the commission or a county, city, or town may require the [vendor] seller to collect
             475      a tax under Subsection 59-12-103 (2)(a) or (b); and
             476          (ii) the [vendor's] seller's intentional disregard of law or rule is warranted by existing
             477      law or by a nonfrivolous argument for the extension, modification, or reversal of existing law
             478      or the establishment of new law.
             479          (6) [The] Except as provided in Section 59-12-105 , the penalty for failure to file an
             480      information return, information report, or a complete supporting schedule is $50 for each
             481      information return, information report, or supporting schedule up to a maximum of $1,000.
             482          (7) If any taxpayer, in furtherance of a frivolous position, has a prima facie intent to
             483      delay or impede administration of the tax law and files a purported return that fails to contain
             484      information from which the correctness of reported tax liability can be determined or that
             485      clearly indicates that the tax liability shown must be substantially incorrect, the penalty is $500.
             486          (8) (a) [For monthly payment of sales and use taxes under Section 59-12-108 , in
             487      addition to any other penalties for late payment, a vendor] A seller that fails to remit a tax, fee,
             488      or charge monthly as required by Subsection 59-12-108 (1)(a)(i):
             489          (i) is subject to the penalties described in Subsection (1); and
             490          (ii) may not retain [a] the percentage of sales and use taxes [collected as] that would
             491      otherwise be allowable under [Section] Subsection 59-12-108 (2).
             492          (b) A seller that fails to remit a tax, fee, or charge by electronic funds transfer as


             493      required by Subsection 59-12-108 (1)(a)(ii)(A)(II):
             494          (i) is subject to the penalties described in Subsection (1); and
             495          (ii) may not retain the percentage of sales and use taxes that would otherwise be
             496      allowable under Subsection 59-12-108 (2).
             497          (9) (a) As provided in Section 76-8-1101 , criminal offenses and penalties are as
             498      provided in Subsections (9)(b) through (d).
             499          (b) (i) Any person who is required by this title or any laws the commission administers
             500      or regulates to register with or obtain a license or permit from the commission, who operates
             501      without having registered or secured a license or permit, or who operates when the registration,
             502      license, or permit is expired or not current, is guilty of a class B misdemeanor.
             503          (ii) Notwithstanding Section 76-3-301 , for purposes of Subsection (9)(b)(i), the fine
             504      may not:
             505          (A) be less than $500; or
             506          (B) exceed $1,000.
             507          (c) (i) Any person who, with intent to evade any tax or requirement of this title or any
             508      lawful requirement of the commission, fails to make, render, sign, or verify any return or to
             509      supply any information within the time required by law, or who makes, renders, signs, or
             510      verifies any false or fraudulent return or statement, or who supplies any false or fraudulent
             511      information, is guilty of a third degree felony.
             512          (ii) Notwithstanding Section 76-3-301 , for purposes of Subsection (9)(c)(i), the fine
             513      may not:
             514          (A) be less than $1,000; or
             515          (B) exceed $5,000.
             516          (d) (i) Any person who intentionally or willfully attempts to evade or defeat any tax or
             517      the payment of a tax is, in addition to other penalties provided by law, guilty of a second degree
             518      felony.
             519          (ii) Notwithstanding Section 76-3-301 , for purposes of Subsection (9)(d)(i), the fine
             520      may not:
             521          (A) be less than $1,500; or
             522          (B) exceed $25,000.
             523          (e) The statute of limitations for prosecution for a violation of this Subsection (9) is the


             524      later of six years:
             525          (i) from the date the tax should have been remitted; or
             526          (ii) after the day on which the person commits the criminal offense.
             527          (10) Upon making a record of its actions, and upon reasonable cause shown, the
             528      commission may waive, reduce, or compromise any of the penalties or interest imposed under
             529      this part.
             530          Section 8. Section 59-12-102 (Effective 07/01/04) is amended to read:
             531           59-12-102 (Effective 07/01/04). Definitions.
             532          As used in this chapter:
             533          (1) (a) "Admission or user fees" includes season passes.
             534          (b) "Admission or user fees" does not include annual membership dues to private
             535      organizations.
             536          (2) "Agreement" means the Streamlined Sales and Use Tax Agreement described in
             537      Section 59-12-102.1 .
             538          (3) "Agreement combined tax rate" means the sum of the tax rates:
             539          (a) listed under Subsection (4); and
             540          (b) that are imposed within a local taxing jurisdiction.
             541          (4) "Agreement sales and use tax" means a tax imposed under:
             542          (a) Subsection 59-12-103 (2)(a)(i);
             543          (b) Section 59-12-204 ;
             544          (c) Section 59-12-401 ;
             545          (d) Section 59-12-402 ;
             546          (e) Section 59-12-501 ;
             547          (f) Section 59-12-502 ;
             548          (g) Section 59-12-703 ;
             549          (h) Section 59-12-802 ;
             550          (i) Section 59-12-804 ;
             551          (j) Section 59-12-1001 ;
             552          (k) Section 59-12-1102 ;
             553          (l) Section 59-12-1302 ; [or]
             554          (m) Section 59-12-1402 [.]; or


             555          (n) Section 59-12-1503 .
             556          (5) "Aircraft" is as defined in Section 72-10-102 .
             557          [(5)] (6) "Alcoholic beverage" means a beverage that:
             558          (a) is suitable for human consumption; and
             559          (b) contains .5% or more alcohol by volume.
             560          [(6)] (7) "Area agency on aging" is as defined in Section 62A-3-101 .
             561          [(7)] (8) "Authorized carrier" means:
             562          (a) in the case of vehicles operated over public highways, the holder of credentials
             563      indicating that the vehicle is or will be operated pursuant to both the International Registration
             564      Plan and the International Fuel Tax Agreement;
             565          (b) in the case of aircraft, the holder of a Federal Aviation Administration operating
             566      certificate or air carrier's operating certificate; or
             567          (c) in the case of locomotives, freight cars, railroad work equipment, or other rolling
             568      stock, the holder of a certificate issued by the United States Surface Transportation Board.
             569          [(8)] (9) "Certified automated system" means software certified by the governing board
             570      of the agreement in accordance with Section 59-12-102.1 that:
             571          (a) calculates the agreement sales and use tax imposed within a local taxing
             572      jurisdiction:
             573          (i) on a transaction; and
             574          (ii) in the states that are members of the agreement;
             575          (b) determines the amount of agreement sales and use tax to remit to a state that is a
             576      member of the agreement; and
             577          (c) maintains a record of the transaction described in Subsection [(8)] (9)(a)(i).
             578          [(9)] (10) "Certified service provider" means an agent certified:
             579          (a) by the governing board of the agreement in accordance with Section 59-12-102.1 ;
             580      and
             581          (b) to perform all of a seller's sales and use tax functions for an agreement sales and
             582      use tax other than the seller's obligation under Section 59-12-107.4 to remit a tax on the seller's
             583      own purchases.
             584          [(10)] (11) (a) Subject to Subsection [(10)] (11)(b), "clothing" means all human
             585      wearing apparel suitable for general use.


             586          (b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             587      commission shall make rules:
             588          (i) listing the items that constitute "clothing"; and
             589          (ii) that are consistent with the list of items that constitute "clothing" under the
             590      agreement.
             591          [(11)] (12) (a) For purposes of Subsection 59-12-104 (42), "coin-operated amusement
             592      device" means:
             593          (i) a coin-operated amusement, skill, or ride device;
             594          (ii) that is not controlled through seller-assisted, over-the-counter, sales of tokens; and
             595          (iii) includes a music machine, pinball machine, billiard machine, video game machine,
             596      arcade machine, and a mechanical or electronic skill game or ride.
             597          (b) For purposes of Subsection 59-12-104 (42), "coin-operated amusement device" does
             598      not mean a coin-operated amusement device possessing a coinage mechanism that:
             599          (i) accepts and registers multiple denominations of coins; and
             600          (ii) allows the seller to collect the sales and use tax at the time an amusement device is
             601      activated and operated by a person inserting coins into the device.
             602          [(12)] (13) "Commercial use" means the use of gas, electricity, heat, coal, fuel oil, or
             603      other fuels that does not constitute industrial use under Subsection [(30)] (31) or residential use
             604      under Subsection [(54)] (59).
             605          [(13)] (14) (a) "Common carrier" means a person engaged in or transacting the
             606      business of transporting passengers, freight, merchandise, or other property for hire within this
             607      state.
             608          (b) (i) "Common carrier" does not include a person who, at the time the person is
             609      traveling to or from that person's place of employment, transports a passenger to or from the
             610      passenger's place of employment.
             611          (ii) For purposes of Subsection [(13)] (14)(b)(i), in accordance with Title 63, Chapter
             612      46a, Utah Administrative Rulemaking Act, the commission may make rules defining what
             613      constitutes a person's place of employment.
             614          [(14)] (15) "Component part" includes:
             615          (a) poultry, dairy, and other livestock feed, and their components;
             616          (b) baling ties and twine used in the baling of hay and straw;


             617          (c) fuel used for providing temperature control of orchards and commercial
             618      greenhouses doing a majority of their business in wholesale sales, and for providing power for
             619      off-highway type farm machinery; and
             620          (d) feed, seeds, and seedlings.
             621          [(15)] (16) "Computer" means an electronic device that accepts information:
             622          (a) (i) in digital form; or
             623          (ii) in a form similar to digital form; and
             624          (b) manipulates that information for a result based on a sequence of instructions.
             625          [(16)] (17) "Computer software" means a set of coded instructions designed to cause:
             626          (a) a computer to perform a task; or
             627          (b) automatic data processing equipment to perform a task.
             628          [(17)] (18) "Construction materials" means any tangible personal property that will be
             629      converted into real property.
             630          [(18)] (19) "Delivered electronically" means delivered to a purchaser by means other
             631      than tangible storage media.
             632          [(19)] (20) (a) "Delivery charge" means a charge:
             633          (i) by a seller of:
             634          (A) tangible personal property; or
             635          (B) services; and
             636          (ii) for preparation and delivery of the tangible personal property or services described
             637      in Subsection [(19)] (20)(a)(i) to a location designated by the purchaser.
             638          (b) "Delivery charge" includes a charge for the following:
             639          (i) transportation;
             640          (ii) shipping;
             641          (iii) postage;
             642          (iv) handling;
             643          (v) crating; or
             644          (vi) packing.
             645          [(20)] (21) "Dietary supplement" means a product, other than tobacco, that:
             646          (a) is intended to supplement the diet;
             647          (b) contains one or more of the following dietary ingredients:


             648          (i) a vitamin;
             649          (ii) a mineral;
             650          (iii) an herb or other botanical;
             651          (iv) an amino acid;
             652          (v) a dietary substance for use by humans to supplement the diet by increasing the total
             653      dietary intake; or
             654          (vi) a concentrate, metabolite, constituent, extract, or combination of any ingredient
             655      described in Subsections [(20)] (21)(b)(i) through (v);
             656          (c) (i) except as provided in Subsection [(20)] (21)(c)(ii), is intended for ingestion in:
             657          (A) tablet form;
             658          (B) capsule form;
             659          (C) powder form;
             660          (D) softgel form;
             661          (E) gelcap form; or
             662          (F) liquid form; or
             663          (ii) notwithstanding Subsection [(20)] (21)(c)(i), if the product is not intended for
             664      ingestion in a form described in Subsections [(20)] (21)(c)(i)(A) through (F), is not
             665      represented:
             666          (A) as conventional food; and
             667          (B) for use as a sole item of:
             668          (I) a meal; or
             669          (II) the diet; and
             670          (d) is required to be labeled as a dietary supplement:
             671          (i) identifiable by the "Supplemental Facts" box found on the label; and
             672          (ii) as required by 21 C.F.R. Sec. 101.36.
             673          [(21)] (22) (a) "Direct mail" means printed material delivered or distributed by United
             674      States mail or other delivery service:
             675          (i) to:
             676          (A) a mass audience; or
             677          (B) addressees on a mailing list provided by a purchaser of the mailing list; and
             678          (ii) if the cost of the printed material is not billed directly to the recipients.


             679          (b) "Direct mail" includes tangible personal property supplied directly or indirectly by a
             680      purchaser to a seller of direct mail for inclusion in a package containing the printed material.
             681          (c) "Direct mail" does not include multiple items of printed material delivered to a
             682      single address.
             683          [(22)] (23) (a) "Drug" means a compound, substance, or preparation, or a component of
             684      a compound, substance, or preparation that is:
             685          (i) recognized in:
             686          (A) the official United States Pharmacopoeia;
             687          (B) the official Homeopathic Pharmacopoeia of the United States;
             688          (C) the official National Formulary; or
             689          (D) a supplement to a publication listed in Subsections [(22)] (23)(a)(i)(A) through
             690      (C);
             691          (ii) intended for use in the:
             692          (A) diagnosis of disease;
             693          (B) cure of disease;
             694          (C) mitigation of disease;
             695          (D) treatment of disease; or
             696          (E) prevention of disease; or
             697          (iii) intended to affect:
             698          (A) the structure of the body; or
             699          (B) any function of the body.
             700          (b) "Drug" does not include:
             701          (i) food and food ingredients;
             702          (ii) a dietary supplement;
             703          (iii) an alcoholic beverage; or
             704          (iv) a prosthetic device.
             705          [(23)] (24) (a) Except as provided in Subsection [(23)] (24)(c), "durable medical
             706      equipment" means equipment that:
             707          (i) can withstand repeated use;
             708          (ii) is primarily and customarily used to serve a medical purpose;
             709          (iii) generally is not useful to a person in the absence of illness or injury;


             710          (iv) is not worn in or on the body; [and]
             711          (v) is listed as eligible for payment under:
             712          (A) Title XVIII of the federal Social Security Act; or
             713          (B) the state plan for medical assistance under Title XIX of the federal Social Security
             714      Act[.]; and
             715          (vi) is used for home use only.
             716          (b) "Durable medical equipment" includes parts used in the repair or replacement of the
             717      equipment described in Subsection [(23)] (24)(a).
             718          (c) Notwithstanding Subsection [(23)] (24)(a), "durable medical equipment" does not
             719      include mobility enhancing equipment.
             720          [(24)] (25) "Electronic" means:
             721          (a) relating to technology; and
             722          (b) having:
             723          (i) electrical capabilities;
             724          (ii) digital capabilities;
             725          (iii) magnetic capabilities;
             726          (iv) wireless capabilities;
             727          (v) optical capabilities;
             728          (vi) electromagnetic capabilities; or
             729          (vii) capabilities similar to Subsections [(24)] (25)(b)(i) through (vi).
             730          [(25)] (26) (a) "Food and food ingredients" means substances:
             731          (i) regardless of whether the substances are in:
             732          (A) liquid form;
             733          (B) concentrated form;
             734          (C) solid form;
             735          (D) frozen form;
             736          (E) dried form; or
             737          (F) dehydrated form; and
             738          (ii) that are:
             739          (A) sold for:
             740          (I) ingestion by humans; or


             741          (II) chewing by humans; and
             742          (B) consumed for the substance's:
             743          (I) taste; or
             744          (II) nutritional value.
             745          (b) "Food and food ingredients" does not include:
             746          (i) an alcoholic beverage;
             747          (ii) tobacco; or
             748          (iii) prepared food.
             749          [(26)] (27) (a) "Fundraising sales" means sales:
             750          (i) (A) made by a school; or
             751          (B) made by a school student;
             752          (ii) that are for the purpose of raising funds for the school to purchase equipment,
             753      materials, or provide transportation; and
             754          (iii) that are part of an officially sanctioned school activity.
             755          (b) For purposes of Subsection [(26)] (27)(a)(iii), "officially sanctioned school activity"
             756      means a school activity:
             757          (i) that is conducted in accordance with a formal policy adopted by the school or school
             758      district governing the authorization and supervision of fundraising activities;
             759          (ii) that does not directly or indirectly compensate an individual teacher or other
             760      educational personnel by direct payment, commissions, or payment in kind; and
             761          (iii) the net or gross revenues from which are deposited in a dedicated account
             762      controlled by the school or school district.
             763          [(27)] (28) "Governing board of the agreement" means the governing board of the
             764      agreement that is:
             765          (a) authorized to administer the agreement; and
             766          (b) established in accordance with the agreement.
             767          [(28)] (29) (a) "Hearing aid" means:
             768          (i) an instrument or device having an electronic component that is designed to:
             769          (A) (I) improve impaired human hearing; or
             770          (II) correct impaired human hearing; and
             771          (B) (I) be worn in the human ear; or


             772          (II) affixed behind the human ear;
             773          (ii) an instrument or device that is surgically implanted into the cochlea; or
             774          (iii) a telephone amplifying device.
             775          (b) "Hearing aid" does not include:
             776          (i) except as provided in Subsection [(28)] (29)(a)(i)(B) or [(28)] (29)(a)(ii), an
             777      instrument or device having an electronic component that is designed to be worn on the body;
             778          (ii) except as provided in Subsection [(28)] (29)(a)(iii), an assistive listening device or
             779      system designed to be used by one individual, including:
             780          (A) a personal amplifying system;
             781          (B) a personal FM system;
             782          (C) a television listening system; or
             783          (D) a device or system similar to a device or system described in Subsections [(28)]
             784      (29)(b)(ii)(A) through (C); or
             785          (iii) an assistive listening device or system designed to be used by more than one
             786      individual, including:
             787          (A) a device or system installed in:
             788          (I) an auditorium;
             789          (II) a church;
             790          (III) a conference room;
             791          (IV) a synagogue; or
             792          (V) a theater; or
             793          (B) a device or system similar to a device or system described in Subsections [(28)]
             794      (29)(b)(iii)(A)(I) through (V).
             795          [(29)] (30) (a) "Hearing aid accessory" means a hearing aid:
             796          (i) component;
             797          (ii) attachment; or
             798          (iii) accessory.
             799          (b) "Hearing aid accessory" includes:
             800          (i) a hearing aid neck loop;
             801          (ii) a hearing aid cord;
             802          (iii) a hearing aid ear mold;


             803          (iv) hearing aid tubing;
             804          (v) a hearing aid ear hook; or
             805          (vi) a hearing aid remote control.
             806          (c) "Hearing aid accessory" does not include:
             807          (i) a component, attachment, or accessory designed to be used only with an:
             808          (A) instrument or device described in Subsection [(28)] (29)(b)(i); or
             809          (B) assistive listening device or system described in Subsection [(28)] (29)(b)(ii) or
             810      (iii); or
             811          (ii) a hearing aid battery.
             812          [(30)] (31) "Industrial use" means the use of natural gas, electricity, heat, coal, fuel oil,
             813      or other fuels:
             814          (a) in mining or extraction of minerals;
             815          (b) in agricultural operations to produce an agricultural product up to the time of
             816      harvest or placing the agricultural product into a storage facility, including:
             817          (i) commercial greenhouses;
             818          (ii) irrigation pumps;
             819          (iii) farm machinery;
             820          (iv) implements of husbandry as defined in Subsection 41-1a-102 (23) that are not
             821      registered under Title 41, Chapter 1a, Part 2, Registration; and
             822          (v) other farming activities;
             823          (c) in manufacturing tangible personal property at an establishment described in SIC
             824      Codes 2000 to 3999 of the 1987 Standard Industrial Classification Manual of the federal
             825      Executive Office of the President, Office of Management and Budget; or
             826          (d) by a scrap recycler if:
             827          (i) from a fixed location, the scrap recycler utilizes machinery or equipment to process
             828      one or more of the following items into prepared grades of processed materials for use in new
             829      products:
             830          (A) iron;
             831          (B) steel;
             832          (C) nonferrous metal;
             833          (D) paper;


             834          (E) glass;
             835          (F) plastic;
             836          (G) textile; or
             837          (H) rubber; and
             838          (ii) the new products under Subsection [(30)] (31)(d)(i) would otherwise be made with
             839      nonrecycled materials.
             840          [(31)] (32) (a) "Lease" or "rental" means a transfer of possession or control of tangible
             841      personal property for:
             842          (i) (A) a fixed term; or
             843          (B) an indeterminate term; and
             844          (ii) consideration.
             845          (b) "Lease" or "rental" includes an agreement covering a motor vehicle and trailer if the
             846      amount of consideration may be increased or decreased by reference to the amount realized
             847      upon sale or disposition of the property as defined in Section 7701(h)(1), Internal Revenue
             848      Code.
             849          (c) "Lease" or "rental" does not include:
             850          (i) a transfer of possession or control of property under a security agreement or
             851      deferred payment plan that requires the transfer of title upon completion of the required
             852      payments;
             853          (ii) a transfer of possession or control of property under an agreement:
             854          (A) that requires the transfer of title upon completion of required payments; and
             855          (B) in which the payment of an option price does not exceed the greater of:
             856          (I) $100; or
             857          (II) 1% of the total required payments; or
             858          (iii) providing tangible personal property along with an operator for a fixed period of
             859      time or an indeterminate period of time if the operator is necessary for equipment to perform as
             860      designed.
             861          (d) For purposes of Subsection [(31)] (32)(c)(iii), an operator is necessary for
             862      equipment to perform as designed if the operator's duties exceed the:
             863          (i) set-up of tangible personal property;
             864          (ii) maintenance of tangible personal property; or


             865          (iii) inspection of tangible personal property.
             866          (33) "Load and leave" means delivery to a purchaser by use of a tangible storage media
             867      if the tangible storage media is not physically transferred to the purchaser.
             868          [(32)] (34) "Local taxing jurisdiction" means a:
             869          (a) county that is authorized to impose an agreement sales and use tax;
             870          (b) city that is authorized to impose an agreement sales and use tax; or
             871          (c) town that is authorized to impose an agreement sales and use tax.
             872          [(33)] (35) "Manufactured home" [means any manufactured home or mobile home] is
             873      as defined in [Title 58, Chapter 56, Utah Uniform Building Standards Act] Section 58-56-3 .
             874          [(34)] (36) For purposes of Subsection 59-12-104 (14), "manufacturing facility" means:
             875          (a) an establishment described in SIC Codes 2000 to 3999 of the 1987 Standard
             876      Industrial Classification Manual of the federal Executive Office of the President, Office of
             877      Management and Budget; or
             878          (b) a scrap recycler if:
             879          (i) from a fixed location, the scrap recycler utilizes machinery or equipment to process
             880      one or more of the following items into prepared grades of processed materials for use in new
             881      products:
             882          (A) iron;
             883          (B) steel;
             884          (C) nonferrous metal;
             885          (D) paper;
             886          (E) glass;
             887          (F) plastic;
             888          (G) textile; or
             889          (H) rubber; and
             890          (ii) the new products under Subsection [(34)] (36)(b)(i) would otherwise be made with
             891      nonrecycled materials.
             892          (37) "Mobile home" is as defined in Section 58-56-3 .
             893          [(35)] (38) "Mobile telecommunications service" is as defined in the Mobile
             894      Telecommunications Sourcing Act, 4 U.S.C. Sec. 124.
             895          [(36)] (39) (a) Except as provided in Subsection [(36)] (39)(c), "mobility enhancing


             896      equipment" means equipment that is:
             897          (i) primarily and customarily used to provide or increase the ability to move from one
             898      place to another;
             899          (ii) appropriate for use in a:
             900          (A) home; or
             901          (B) motor vehicle;
             902          (iii) not generally used by persons with normal mobility; and
             903          (iv) listed as eligible for payment under:
             904          (A) Title XVIII of the federal Social Security Act; or
             905          (B) the state plan for medical assistance under Title XIX of the federal Social Security
             906      Act.
             907          (b) "Mobility enhancing equipment" includes parts used in the repair or replacement of
             908      the equipment described in Subsection [(36)] (39)(a).
             909          (c) Notwithstanding Subsection [(36)] (39)(a), "mobility enhancing equipment" does
             910      not include:
             911          (i) a motor vehicle;
             912          (ii) equipment on a motor vehicle if that equipment is normally provided by the motor
             913      vehicle manufacturer;
             914          (iii) durable medical equipment; or
             915          (iv) a prosthetic device.
             916          [(37)] (40) "Model 1 seller" means a seller that has selected a certified service provider
             917      as the seller's agent to perform all of the seller's sales and use tax functions for agreement sales
             918      and use taxes other than the seller's obligation under Section 59-12-107.4 to remit a tax on the
             919      seller's own purchases.
             920          [(38)] (41) "Model 2 seller" means a seller that:
             921          (a) except as provided in Subsection [(38)] (41)(b), has selected a certified automated
             922      system to perform the seller's sales tax functions for agreement sales and use taxes; and
             923          (b) notwithstanding Subsection [(38)] (41)(a), retains responsibility for remitting all of
             924      the sales tax:
             925          (i) collected by the seller; and
             926          (ii) to the appropriate local taxing jurisdiction.


             927          [(39)] (42) (a) Subject to Subsection [(39)] (42)(b), "model 3 seller" means a seller that
             928      has:
             929          (i) sales in at least five states that are members of the agreement;
             930          (ii) total annual sales revenues of at least $500,000,000;
             931          (iii) a proprietary system that calculates the amount of tax:
             932          (A) for an agreement sales and use tax; and
             933          (B) due to each local taxing jurisdiction; and
             934          (iv) entered into a performance agreement with the governing board of the agreement.
             935          (b) For purposes of Subsection [(39)] (42)(a), "model 3 seller" includes an affiliated
             936      group of sellers using the same proprietary system.
             937          (43) "Modular home" means a modular unit as defined in Section 58-56-3 .
             938          (44) "Motor vehicle" is as defined in Section 41-1a-102 .
             939          [(40)] (45) (a) "Multi-channel video or audio service provider" means any person or
             940      group of persons that:
             941          (i) provides multi-channel video or audio service and directly or indirectly owns a
             942      significant interest in the multi-channel video or audio service; or
             943          (ii) otherwise controls or is responsible through any arrangement, the management and
             944      operation of the multi-channel video or audio service.
             945          (b) "Multi-channel video or audio service provider" includes the following except as
             946      specifically exempted by state or federal law:
             947          (i) a cable operator;
             948          (ii) a CATV provider;
             949          (iii) a multi-point distribution provider;
             950          (iv) a MMDS provider;
             951          (v) a SMATV operator;
             952          (vi) a direct-to-home satellite service provider; or
             953          (vii) a DBS provider.
             954          [(41)] (46) "Olympic merchandise" means tangible personal property bearing an
             955      Olympic designation, emblem, insignia, mark, logo, service mark, symbol, terminology,
             956      trademark, or other copyrighted or protected material, including:
             957          (a) one or more of the following terms:


             958          (i) "Olympic";
             959          (ii) "Olympiad"; or
             960          (iii) "Citius Altius Fortius";
             961          (b) the symbol of the International Olympic Committee, consisting of five interlocking
             962      rings;
             963          (c) the emblem of the International Olympic Committee Corporation;
             964          (d) a United States Olympic Committee designation, emblem, insignia, mark, logo,
             965      service mark, symbol, terminology, trademark, or other copyrighted or protected material;
             966          (e) any emblem of the Olympic Winter Games of 2002 that is officially designated by
             967      the Salt Lake Organizing Committee of the Olympic Winter Games of 2002; or
             968          (f) the mascot of the Olympic Winter Games of 2002.
             969          [(42)] (47) (a) "Other fuels" means products that burn independently to produce heat or
             970      energy.
             971          (b) "Other fuels" includes oxygen when it is used in the manufacturing of tangible
             972      personal property.
             973          [(43)] (48) "Person" includes any individual, firm, partnership, joint venture,
             974      association, corporation, estate, trust, business trust, receiver, syndicate, this state, any county,
             975      city, municipality, district, or other local governmental entity of the state, or any group or
             976      combination acting as a unit.
             977          [(44)] (49) "Place of primary use":
             978          (a) for telephone service other than mobile telecommunications service, means the
             979      street address representative of where the purchaser's use of the telephone service primarily
             980      occurs, which shall be:
             981          (i) the residential street address of the purchaser; or
             982          (ii) the primary business street address of the purchaser; or
             983          (b) for mobile telecommunications service, is as defined in the Mobile
             984      Telecommunications Sourcing Act, 4 U.S.C. Sec. 124.
             985          [(45)] (50) (a) "Prepared food" means:
             986          (i) food:
             987          (A) sold in a heated state; or
             988          (B) heated by a seller;


             989          (ii) two or more food ingredients mixed or combined by the seller for sale as a single
             990      item; or
             991          (iii) except as provided in Subsection [(45)] (50)(c), food sold with an eating utensil
             992      provided by the seller, including a:
             993          (A) plate;
             994          (B) knife;
             995          (C) fork;
             996          (D) spoon;
             997          (E) glass;
             998          (F) cup;
             999          (G) napkin; or
             1000          (H) straw.
             1001          (b) "Prepared food" does not include:
             1002          (i) food that a seller only:
             1003          (A) cuts;
             1004          (B) repackages; or
             1005          (C) pasteurizes; or
             1006          (ii) (A) the following:
             1007          (I) raw egg;
             1008          (II) raw fish;
             1009          (III) raw meat;
             1010          (IV) raw poultry; or
             1011          (V) a food containing an item described in Subsections [(45)] (50)(b)(ii)(A)(I) through
             1012      (IV); and
             1013          (B) if the Food and Drug Administration recommends in Chapter 3, Part 401.11 of the
             1014      Food and Drug Administration's Food Code that a consumer cook the items described in
             1015      Subsection [(45)] (50)(b)(ii)(A) to prevent food borne illness.
             1016          (c) Notwithstanding Subsection [(45)] (50)(a)(iii), an eating utensil provided by the
             1017      seller does not include the following used to transport the food:
             1018          (i) a container; or
             1019          (ii) packaging.


             1020          [(46)] (51) "Prescription" means an order, formula, or recipe that is issued:
             1021          (a) (i) orally;
             1022          (ii) in writing;
             1023          (iii) electronically; or
             1024          (iv) by any other manner of transmission; and
             1025          (b) by a licensed practitioner authorized by the laws of a state.
             1026          [(47)] (52) (a) Except as provided in Subsection [(47)] (52)(b)(ii) or (iii), "prewritten
             1027      computer software" means computer software that is not designed and developed:
             1028          (i) by the author or other creator of the computer software; and
             1029          (ii) to the specifications of a specific purchaser.
             1030          (b) "Prewritten computer software" includes:
             1031          (i) a prewritten upgrade to computer software if the prewritten upgrade to the computer
             1032      software is not designed and developed:
             1033          (A) by the author or other creator of the computer software; and
             1034          (B) to the specifications of a specific purchaser;
             1035          (ii) notwithstanding Subsection [(47)] (52)(a), computer software designed and
             1036      developed by the author or other creator of the computer software to the specifications of a
             1037      specific purchaser if the computer software is sold to a person other than the purchaser; or
             1038          (iii) notwithstanding Subsection [(47)] (52)(a) and except as provided in Subsection
             1039      [(47)] (52)(c), prewritten computer software or a prewritten portion of prewritten computer
             1040      software:
             1041          (A) that is modified or enhanced to any degree; and
             1042          (B) if the modification or enhancement described in Subsection [(47)] (52)(b)(iii)(A) is
             1043      designed and developed to the specifications of a specific purchaser.
             1044          (c) Notwithstanding Subsection [(47)] (52)(b)(iii), "prewritten computer software"
             1045      does not include a modification or enhancement described in Subsection [(47)] (52)(b)(iii) if
             1046      the charges for the modification or enhancement are:
             1047          (i) reasonable; and
             1048          (ii) separately stated on the invoice or other statement of price provided to the
             1049      purchaser.
             1050          [(48)] (53) (a) "Prosthetic device" means a device that is:


             1051          (i) worn on or in the body to:
             1052          (A) artificially replace a missing portion of the body;
             1053          (B) prevent or correct a physical deformity or physical malfunction; or
             1054          (C) support a weak or deformed portion of the body; and
             1055          (ii) listed as eligible for payment under:
             1056          (A) Title XVIII of the federal Social Security Act; or
             1057          (B) the state plan for medical assistance under Title XIX of the federal Social Security
             1058      Act.
             1059          (b) "Prosthetic device" includes:
             1060          (i) parts used in the repairs or renovation of a prosthetic device; or
             1061          (ii) replacement parts for a prosthetic device.
             1062          (c) "Prosthetic device" does not include:
             1063          (i) corrective eyeglasses;
             1064          (ii) contact lenses;
             1065          (iii) hearing aids; or
             1066          (iv) dental prostheses.
             1067          [(49)] (54) (a) "Protective equipment" means an item:
             1068          (i) for human wear; and
             1069          (ii) that is:
             1070          (A) designed as protection:
             1071          (I) to the wearer against injury or disease; or
             1072          (II) against damage or injury of other persons or property; and
             1073          (B) not suitable for general use.
             1074          (b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             1075      commission shall make rules:
             1076          (i) listing the items that constitute "protective equipment"; and
             1077          (ii) that are consistent with the list of items that constitute "protective equipment"
             1078      under the agreement.
             1079          [(50)] (55) (a) "Purchase price" and "sales price" mean the total amount of
             1080      consideration:
             1081          (i) valued in money; and


             1082          (ii) for which tangible personal property or services are:
             1083          (A) sold;
             1084          (B) leased; or
             1085          (C) rented.
             1086          (b) "Purchase price" and "sales price" include:
             1087          (i) the seller's cost of the tangible personal property or services sold;
             1088          (ii) expenses of the seller, including:
             1089          (A) the cost of materials used;
             1090          (B) a labor cost;
             1091          (C) a service cost;
             1092          (D) interest;
             1093          (E) a loss;
             1094          (F) the cost of transportation to the seller; or
             1095          (G) a tax imposed on the seller;
             1096          (iii) a charge by the seller for any service necessary to complete the sale;
             1097          (iv) a delivery charge; or
             1098          (v) an installation charge.
             1099          (c) "Purchase price" and "sales price" do not include:
             1100          (i) a discount:
             1101          (A) in a form including:
             1102          (I) cash;
             1103          (II) term; or
             1104          (III) coupon;
             1105          (B) that is allowed by a seller;
             1106          (C) taken by a purchaser on a sale; and
             1107          (D) that is not reimbursed by a third party; or
             1108          (ii) the following if separately stated on an invoice, bill of sale, or similar document
             1109      provided to the purchaser:
             1110          (A) the amount of a trade-in;
             1111          (B) the following from credit extended on the sale of tangible personal property or
             1112      services:


             1113          (I) interest charges;
             1114          (II) financing charges; or
             1115          (III) carrying charges; or
             1116          (C) a tax or fee legally imposed directly on the consumer.
             1117          [(51)] (56) "Purchaser" means a person to whom:
             1118          (a) a sale of tangible personal property is made; or
             1119          (b) a service is furnished.
             1120          [(52)] (57) "Regularly rented" means:
             1121          (a) rented to a guest for value three or more times during a calendar year; or
             1122          (b) advertised or held out to the public as a place that is regularly rented to guests for
             1123      value.
             1124          [(53)] (58) "Rental" is as defined in Subsection [(31)] (32).
             1125          [(54)] (59) "Residential use" means the use in or around a home, apartment building,
             1126      sleeping quarters, and similar facilities or accommodations.
             1127          [(55)] (60) "Retail sale" or "sale at retail" means a sale, lease, or rental for a purpose
             1128      other than:
             1129          (a) resale;
             1130          (b) sublease; or
             1131          (c) subrent.
             1132          [(56)] (61) (a) "Retailer" means any person engaged in a regularly organized business
             1133      in tangible personal property or any other taxable transaction under Subsection 59-12-103 (1),
             1134      and who is selling to the user or consumer and not for resale.
             1135          (b) "Retailer" includes commission merchants, auctioneers, and any person regularly
             1136      engaged in the business of selling to users or consumers within the state.
             1137          [(57)] (62) (a) "Sale" means any transfer of title, exchange, or barter, conditional or
             1138      otherwise, in any manner, of tangible personal property or any other taxable transaction under
             1139      Subsection 59-12-103 (1), for consideration.
             1140          (b) "Sale" includes:
             1141          (i) installment and credit sales;
             1142          (ii) any closed transaction constituting a sale;
             1143          (iii) any sale of electrical energy, gas, services, or entertainment taxable under this


             1144      chapter;
             1145          (iv) any transaction if the possession of property is transferred but the seller retains the
             1146      title as security for the payment of the price; and
             1147          (v) any transaction under which right to possession, operation, or use of any article of
             1148      tangible personal property is granted under a lease or contract and the transfer of possession
             1149      would be taxable if an outright sale were made.
             1150          [(58)] (63) "Sale at retail" is as defined in Subsection [(55)] (60).
             1151          [(59)] (64) "Sale-leaseback transaction" means a transaction by which title to tangible
             1152      personal property that is subject to a tax under this chapter is transferred:
             1153          (a) by a purchaser-lessee;
             1154          (b) to a lessor;
             1155          (c) for consideration; and
             1156          (d) if:
             1157          (i) the purchaser-lessee paid sales and use tax on the purchaser-lessee's initial purchase
             1158      of the tangible personal property;
             1159          (ii) the sale of the tangible personal property to the lessor is intended as a form of
             1160      financing:
             1161          (A) for the property; and
             1162          (B) to the purchaser-lessee; and
             1163          (iii) in accordance with generally accepted accounting principles, the purchaser-lessee
             1164      is required to:
             1165          (A) capitalize the property for financial reporting purposes; and
             1166          (B) account for the lease payments as payments made under a financing arrangement.
             1167          [(60)] (65) "Sales price" is as defined in Subsection [(50)] (55).
             1168          [(61)] (66) (a) "Sales relating to schools" means the following sales by, amounts paid
             1169      to, or amounts charged by a school:
             1170          (i) sales that are directly related to the school's educational functions or activities
             1171      including:
             1172          (A) the sale of:
             1173          (I) textbooks;
             1174          (II) textbook fees;


             1175          (III) laboratory fees;
             1176          (IV) laboratory supplies; or
             1177          (V) safety equipment;
             1178          (B) the sale of a uniform, protective equipment, or sports or recreational equipment
             1179      that:
             1180          (I) a student is specifically required to wear as a condition of participation in a
             1181      school-related event or school-related activity; and
             1182          (II) is not readily adaptable to general or continued usage to the extent that it takes the
             1183      place of ordinary clothing;
             1184          (C) sales of the following if the net or gross revenues generated by the sales are
             1185      deposited into a school district fund or school fund dedicated to school meals:
             1186          (I) food and food ingredients; or
             1187          (II) prepared food; or
             1188          (D) transportation charges for official school activities; or
             1189          (ii) amounts paid to or amounts charged by a school for admission to a school-related
             1190      event or school-related activity.
             1191          (b) "Sales relating to schools" does not include:
             1192          (i) bookstore sales of items that are not educational materials or supplies;
             1193          (ii) except as provided in Subsection [(61)] (66)(a)(i)(B):
             1194          (A) clothing;
             1195          (B) clothing accessories or equipment;
             1196          (C) protective equipment; or
             1197          (D) sports or recreational equipment; or
             1198          (iii) amounts paid to or amounts charged by a school for admission to a school-related
             1199      event or school-related activity if the amounts paid or charged are passed through to a person:
             1200          (A) other than a:
             1201          (I) school;
             1202          (II) nonprofit organization authorized by a school board or a governing body of a
             1203      private school to organize and direct a competitive secondary school activity; or
             1204          (III) nonprofit association authorized by a school board or a governing body of a
             1205      private school to organize and direct a competitive secondary school activity; and


             1206          (B) that is required to collect sales and use taxes under this chapter.
             1207          (c) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             1208      commission may make rules defining the term "passed through."
             1209          [(62)] (67) For purposes of this section and Section 59-12-104 , "school" means:
             1210          (a) an elementary school or a secondary school that:
             1211          (i) is a:
             1212          (A) public school; or
             1213          (B) private school; and
             1214          (ii) provides instruction for one or more grades kindergarten through 12; or
             1215          (b) a public school district.
             1216          [(63)] (68) "Seller" means a person that makes a sale, lease, or rental of:
             1217          (a) tangible personal property; or
             1218          (b) a service.
             1219          [(64)] (69) (a) "Semiconductor fabricating or processing materials" means tangible
             1220      personal property:
             1221          (i) used primarily in the process of:
             1222          (A) (I) manufacturing a semiconductor; or
             1223          (II) fabricating a semiconductor; or
             1224          (B) maintaining an environment suitable for a semiconductor; or
             1225          (ii) consumed primarily in the process of:
             1226          (A) (I) manufacturing a semiconductor; or
             1227          (II) fabricating a semiconductor; or
             1228          (B) maintaining an environment suitable for a semiconductor.
             1229          (b) "Semiconductor fabricating or processing materials" includes:
             1230          (i) parts used in the repairs or renovations of tangible personal property described in
             1231      Subsection [(64)] (69)(a); or
             1232          (ii) a chemical, catalyst, or other material used to:
             1233          (A) produce or induce in a semiconductor a:
             1234          (I) chemical change; or
             1235          (II) physical change;
             1236          (B) remove impurities from a semiconductor; or


             1237          (C) improve the marketable condition of a semiconductor.
             1238          [(65)] (70) "Senior citizen center" means a facility having the primary purpose of
             1239      providing services to the aged as defined in Section 62A-3-101 .
             1240          (71) "Simplified electronic return" means the electronic return:
             1241          (a) described in Section 318(C) of the agreement; and
             1242          (b) approved by the governing board of the agreement.
             1243          [(66)] (72) (a) "Sports or recreational equipment" means an item:
             1244          (i) designed for human use; and
             1245          (ii) that is:
             1246          (A) worn in conjunction with:
             1247          (I) an athletic activity; or
             1248          (II) a recreational activity; and
             1249          (B) not suitable for general use.
             1250          (b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             1251      commission shall make rules:
             1252          (i) listing the items that constitute "sports or recreational equipment"; and
             1253          (ii) that are consistent with the list of items that constitute "sports or recreational
             1254      equipment" under the agreement.
             1255          [(67)] (73) "State" means the state of Utah, its departments, and agencies.
             1256          [(68)] (74) "Storage" means any keeping or retention of tangible personal property or
             1257      any other taxable transaction under Subsection 59-12-103 (1), in this state for any purpose
             1258      except sale in the regular course of business.
             1259          [(69)] (75) (a) "Tangible personal property" means personal property that:
             1260          (i) may be:
             1261          (A) seen;
             1262          (B) weighed;
             1263          (C) measured;
             1264          (D) felt; or
             1265          (E) touched; or
             1266          (ii) is in any manner perceptible to the senses.
             1267          (b) "Tangible personal property" includes:


             1268          (i) electricity;
             1269          (ii) water;
             1270          (iii) gas;
             1271          (iv) steam; or
             1272          (v) prewritten computer software.
             1273          [(70)] (76) (a) "Telephone service" means a two-way transmission:
             1274          (i) by:
             1275          (A) wire;
             1276          (B) radio;
             1277          (C) lightwave; or
             1278          (D) other electromagnetic means; and
             1279          (ii) of one or more of the following:
             1280          (A) a sign;
             1281          (B) a signal;
             1282          (C) writing;
             1283          (D) an image;
             1284          (E) sound;
             1285          (F) a message;
             1286          (G) data; or
             1287          (H) other information of any nature.
             1288          (b) "Telephone service" includes:
             1289          (i) mobile telecommunications service;
             1290          (ii) private communications service; or
             1291          (iii) automated digital telephone answering service.
             1292          (c) "Telephone service" does not include a service or a transaction that a state or a
             1293      political subdivision of a state is prohibited from taxing as of July 1, 2001, under the Internet
             1294      Tax Freedom Act, Pub. L. No. 105-277.
             1295          [(71)] (77) Notwithstanding where a call is billed or paid, "telephone service address"
             1296      means:
             1297          (a) if the location described in this Subsection [(71)] (77)(a) is known, the location of
             1298      the telephone service equipment:


             1299          (i) to which a call is charged; and
             1300          (ii) from which the call originates or terminates;
             1301          (b) if the location described in Subsection [(71)] (77)(a) is not known but the location
             1302      described in this Subsection [(71)] (77)(b) is known, the location of the origination point of the
             1303      signal of the telephone service first identified by:
             1304          (i) the telecommunications system of the seller; or
             1305          (ii) if the system used to transport the signal is not that of the seller, information
             1306      received by the seller from its service provider; or
             1307          (c) if the locations described in Subsection [(71)] (77)(a) or (b) are not known, the
             1308      location of a purchaser's primary place of use.
             1309          [(72)] (78) (a) "Telephone service provider" means a person that:
             1310          (i) owns, controls, operates, or manages a telephone service; and
             1311          (ii) engages in an activity described in Subsection [(72)] (78)(a)(i) for the shared use
             1312      with or resale to any person of the telephone service.
             1313          (b) A person described in Subsection [(72)] (78)(a) is a telephone service provider
             1314      whether or not the Public Service Commission of Utah regulates:
             1315          (i) that person; or
             1316          (ii) the telephone service that the person owns, controls, operates, or manages.
             1317          [(73)] (79) "Tobacco" means:
             1318          (a) a cigarette;
             1319          (b) a cigar;
             1320          (c) chewing tobacco;
             1321          (d) pipe tobacco; or
             1322          (e) any other item that contains tobacco.
             1323          [(74)] (80) (a) "Use" means the exercise of any right or power over tangible personal
             1324      property under Subsection 59-12-103 (1), incident to the ownership or the leasing of that
             1325      property, item, or service.
             1326          (b) "Use" does not include the sale, display, demonstration, or trial of that property in
             1327      the regular course of business and held for resale.
             1328          [(75) "Vehicle" means any]
             1329          (81) (a) Subject to Subsection (81)(b), "vehicle" means the following that are required


             1330      to be titled, registered, or titled and registered:
             1331          (i) an aircraft[,] as defined in Section 72-10-102 ; [any]
             1332          (ii) a vehicle[,] as defined in Section 41-1a-102 ; [any]
             1333          (iii) an off-highway vehicle[,] as defined in Section 41-22-2 ; [and any] or
             1334          (iv) a vessel[,] as defined in Section 41-1a-102 [; that is required to be titled, registered,
             1335      or both. "Vehicle," for].
             1336          (b) For purposes of Subsection 59-12-104 (35) only, [also] "vehicle" includes [any]:
             1337          (i) a vehicle described in Subsection (81)(a); or
             1338          (ii) (A) a locomotive[,];
             1339          (B) a freight car[,];
             1340          (C) a railroad work equipment[,]; or
             1341          (D) other railroad rolling stock.
             1342          [(76)] (82) "Vehicle dealer" means a person engaged in the business of buying, selling,
             1343      or exchanging [vehicles] a vehicle as defined in Subsection [(75)] (81).
             1344          (83) "Watercraft" means a vessel as defined in Section 73-18-2 .
             1345          (84) "ZIP Code" means a Zoning Improvement Plan Code assigned to a geographic
             1346      location by the United States Postal Service.
             1347          Section 9. Section 59-12-103 (Effective 07/01/04) is amended to read:
             1348           59-12-103 (Effective 07/01/04). Sales and use tax base -- Rates -- Effective dates --
             1349      Use of sales and use tax revenues.
             1350          (1) A tax is imposed on the purchaser as provided in this part for amounts paid or
             1351      charged for the following transactions:
             1352          (a) retail sales of tangible personal property made within the state;
             1353          (b) amounts paid:
             1354          (i) (A) to a common carrier; or
             1355          (B) whether the following are municipally or privately owned, to a:
             1356          (I) telephone service provider; or
             1357          (II) telegraph corporation as defined in Section 54-2-1 ; and
             1358          (ii) for:
             1359          (A) all transportation;
             1360          (B) telephone service, other than mobile telecommunications service, that originates


             1361      and terminates within the boundaries of this state;
             1362          (C) mobile telecommunications service that originates and terminates within the
             1363      boundaries of one state only to the extent permitted by the Mobile Telecommunications
             1364      Sourcing Act, 4 U.S.C. Sec. 116 et seq.; or
             1365          (D) telegraph service;
             1366          (c) sales of the following for commercial use:
             1367          (i) gas;
             1368          (ii) electricity;
             1369          (iii) heat;
             1370          (iv) coal;
             1371          (v) fuel oil; or
             1372          (vi) other fuels;
             1373          (d) sales of the following for residential use:
             1374          (i) gas;
             1375          (ii) electricity;
             1376          (iii) heat;
             1377          (iv) coal;
             1378          (v) fuel oil; or
             1379          (vi) other fuels;
             1380          (e) sales of prepared food;
             1381          (f) except as provided in Section 59-12-104 , amounts paid or charged as admission or
             1382      user fees for theaters, movies, operas, museums, planetariums, shows of any type or nature,
             1383      exhibitions, concerts, carnivals, amusement parks, amusement rides, circuses, menageries,
             1384      fairs, races, contests, sporting events, dances, boxing matches, wrestling matches, closed circuit
             1385      television broadcasts, billiard parlors, pool parlors, bowling lanes, golf, miniature golf, golf
             1386      driving ranges, batting cages, skating rinks, ski lifts, ski runs, ski trails, snowmobile trails,
             1387      tennis courts, swimming pools, water slides, river runs, jeep tours, boat tours, scenic cruises,
             1388      horseback rides, sports activities, or any other amusement, entertainment, recreation,
             1389      exhibition, cultural, or athletic activity;
             1390          (g) amounts paid or charged for services:
             1391          (i) for repairs or renovations of tangible personal property, unless Section 59-12-104


             1392      provides for an exemption from sales and use tax for:
             1393          (A) the tangible personal property; and
             1394          (B) parts used in the repairs or renovations of the tangible personal property described
             1395      in Subsection (1)(g)(i)(A), whether or not any parts are actually used in the repairs or
             1396      renovations of that tangible personal property; or
             1397          (ii) to install tangible personal property in connection with other tangible personal
             1398      property, unless the tangible personal property being installed is exempt from sales and use tax
             1399      under Section 59-12-104 ;
             1400          (h) except as provided in Subsection 59-12-104 (7), amounts paid or charged for
             1401      cleaning or washing of tangible personal property;
             1402          (i) amounts paid or charged for tourist home, hotel, motel, or trailer court
             1403      accommodations and services that are regularly rented for less than 30 consecutive days;
             1404          (j) amounts paid or charged for laundry or dry cleaning services;
             1405          (k) amounts paid or charged for leases or rentals of tangible personal property if:
             1406          (i) the tangible personal property's situs is in this state;
             1407          (ii) the lessee took possession of the tangible personal property in this state; or
             1408          (iii) within this state the tangible personal property is:
             1409          (A) stored;
             1410          (B) used; or
             1411          (C) otherwise consumed;
             1412          (l) amounts paid or charged for tangible personal property if within this state the
             1413      tangible personal property is:
             1414          (i) stored;
             1415          (ii) used; or
             1416          (iii) consumed;
             1417          (m) amounts paid or charged for prepaid telephone calling cards; and
             1418          (n) amounts paid or charged for multi-channel video or audio service provided by a
             1419      multi-channel video or audio service provider:
             1420          (i) within the state; and
             1421          (ii) to the extent permitted by federal law.
             1422          (2) (a) Except as provided in Subsection (2)(b), beginning on July 1, 2001, a state tax


             1423      and a local tax is imposed on a transaction described in Subsection (1) equal to the sum of:
             1424          (i) a state tax imposed on the transaction at a rate of 4.75%; and
             1425          (ii) a local tax equal to the sum of the tax rates a county, city, or town imposes on the
             1426      transaction under this chapter other than this part.
             1427          (b) Notwithstanding Subsection (2)(a), beginning on July 1, 2001, a state tax and a
             1428      local tax is imposed on a transaction described in Subsection (1)(d) equal to the sum of:
             1429          (i) a state tax imposed on the transaction at a rate of 2%; and
             1430          (ii) a local tax equal to the sum of the tax rates a county, city, or town imposes on the
             1431      transaction under this chapter other than this part.
             1432          (c) Subject to Subsections (2)(d) and (e), a H TAX RATE REPEAL OR h tax rate change for a
             1432a      tax rate imposed under
             1433      the following shall take effect on the first day of a calendar quarter:
             1434          (i) Subsection (2)(a)(i); or
             1435          (ii) Subsection (2)(b)(i).
             1436          (d) (i) For a transaction described in Subsection (2)(d)(iii), a tax rate increase shall take
             1437      effect on the first day of the first billing period:
             1438          (A) that begins after the effective date of the tax rate increase; and
             1439          (B) if the billing period for the transaction begins before the effective date of a tax rate
             1440      increase imposed under:
             1441          (I) Subsection (2)(a)(i); or
             1442          (II) Subsection (2)(b)(i).
             1443          (ii) For a transaction described in Subsection (2)(d)(iii), H THE REPEAL OF A TAX OR h a
             1443a      tax rate decrease shall take
             1444      effect on the first day of the last billing period:
             1445          (A) that began before the effective date of the H REPEAL OF THE TAX OR THE h tax rate
             1445a      decrease; and
             1446          (B) if the billing period for the transaction begins before the effective date of H [ a ] THE
             1446a      REPEAL OF THE TAX OR THE h tax rate
             1447      decrease imposed under:
             1448          (I) Subsection (2)(a)(i); or
             1449          (II) Subsection (2)(b)(i).
             1450          (iii) Subsections (2)(d)(i) and (ii) apply to transactions subject to a tax under:
             1451          (A) Subsection (1)(b);
             1452          (B) Subsection (1)(c);
             1453          (C) Subsection (1)(d);


             1454          (D) Subsection (1)(e);
             1455          (E) Subsection (1)(f);
             1456          (F) Subsection (1)(g);
             1457          (G) Subsection (1)(h);
             1458          (H) Subsection (1)(i);
             1459          (I) Subsection (1)(j); or
             1460          (J) Subsection (1)(k).
             1461          (e) (i) If a tax due under Subsection (2)(a)(i) on a catalogue sale is computed on the
             1462      basis of sales and use tax rates published in the catalogue, a H TAX RATE REPEAL OR h change in a
             1462a      tax rate imposed under
             1463      Subsection (2)(a)(i) takes effect:
             1464          (A) on the first day of a calendar quarter; and
             1465          (B) beginning 60 days after the effective date of the H TAX RATE REPEAL OR h tax rate
             1465a      change under Subsection
             1466      (2)(a)(i).
             1467          (ii) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
             1468      the commission may by rule define the term "catalogue sale."
             1469          (3) (a) Except as provided in Subsections (4) through (7) [and (9)], the following state
             1470      taxes shall be deposited into the General Fund:
             1471          (i) the tax imposed by Subsection (2)(a)(i); or
             1472          (ii) the tax imposed by Subsection (2)(b)(i).
             1473          (b) The local taxes described in Subsections (2)(a)(ii) and (2)(b)(ii) shall be distributed
             1474      to a county, city, or town as provided in this chapter.
             1475          [(4) (a) (i) Notwithstanding Subsection (3)(a) and except as provided in Subsection (9),
             1476      for fiscal year 2002-03 only, the lesser of the following amounts shall be transferred or
             1477      deposited as provided in Subsections (4)(a)(ii) through (vii):]
             1478          [(A) for taxes listed under Subsection (3)(a), the amount of tax revenue generated:]
             1479          [(I) by a 1/16% tax rate on the transactions described in Subsection (1); and]
             1480          [(II) for fiscal year 2002-03; or]
             1481          [(B) $18,743,000.]
             1482          [(ii) (A) For fiscal year 2002-03 only, $2,300,000 of the amount described in
             1483      Subsection (4)(a)(i) shall be transferred as dedicated credits to the Department of Natural
             1484      Resources to:]


             1485          [(I) implement the measures described in Subsections 63-34-14 (4)(a) through (d) to
             1486      protect sensitive plant and animal species; or]
             1487          [(II) award grants, up to the amount authorized by the Legislature in an appropriations
             1488      act, to political subdivisions of the state to implement the measures described in Subsections
             1489      63-34-14 (4)(a) through (d) to protect sensitive plant and animal species.]
             1490          [(B) Money transferred to the Department of Natural Resources under Subsection
             1491      (4)(a)(ii)(A) may not be used to assist the United States Fish and Wildlife Service or any other
             1492      person to list or attempt to have listed a species as threatened or endangered under the
             1493      Endangered Species Act of 1973, 16 U.S.C. Sec. 1531 et seq.]
             1494          [(C) At the end of fiscal year 2002-03:]
             1495          [(I) 50% of any unexpended dedicated credits shall lapse to the Water Resources
             1496      Conservation and Development Fund created in Section 73-10-24 ;]
             1497          [(II) 25% of any unexpended dedicated credits shall lapse to the Utah Wastewater Loan
             1498      Program Subaccount created in Section 73-10c-5 ; and]
             1499          [(III) 25% of any unexpended dedicated credits shall lapse to the Drinking Water Loan
             1500      Program Subaccount created in Section 73-10c-5 .]
             1501          [(iii) For fiscal year 2002-03 only, $500,000 of the amount described in Subsection
             1502      (4)(a)(i) shall be deposited in the Agriculture Resource Development Fund created in Section
             1503      4-18-6 .]
             1504          [(iv) (A) For fiscal year 2002-03 only, $100,000 of the amount described in Subsection
             1505      (4)(a)(i) shall be transferred as dedicated credits to the Division of Water Rights to cover the
             1506      costs incurred in hiring legal and technical staff for the adjudication of water rights.]
             1507          [(B) At the end of fiscal year 2002-03:]
             1508          [(I) 50% of any unexpended dedicated credits shall lapse to the Water Resources
             1509      Conservation and Development Fund created in Section 73-10-24 ;]
             1510          [(II) 25% of any unexpended dedicated credits shall lapse to the Utah Wastewater Loan
             1511      Program Subaccount created in Section 73-10c-5 ; and]
             1512          [(III) 25% of any unexpended dedicated credits shall lapse to the Drinking Water Loan
             1513      Program Subaccount created in Section 73-10c-5 .]
             1514          [(v) (A) For fiscal year 2002-03 only, 50% of the amount described in Subsection
             1515      (4)(a)(i) that remains after making the transfers and deposits required by Subsections (4)(a)(ii)


             1516      through (iv) shall be deposited in the Water Resources Conservation and Development Fund
             1517      created in Section 73-10-24 for use by the Division of Water Resources.]
             1518          [(B) In addition to the uses allowed of the Water Resources Conservation and
             1519      Development Fund under Section 73-10-24 , the Water Resources Conservation and
             1520      Development Fund may also be used to:]
             1521          [(I) provide a portion of the local cost share, not to exceed in fiscal year 2002-03 50%
             1522      of the funds made available to the Division of Water Resources under this section, of potential
             1523      project features of the Central Utah Project;]
             1524          [(II) conduct hydrologic and geotechnical investigations by the Department of Natural
             1525      Resources in a cooperative effort with other state, federal, or local entities, for the purpose of
             1526      quantifying surface and ground water resources and describing the hydrologic systems of an
             1527      area in sufficient detail so as to enable local and state resource managers to plan for and
             1528      accommodate growth in water use without jeopardizing the resource;]
             1529          [(III) fund state required dam safety improvements; and]
             1530          [(IV) protect the state's interest in interstate water compact allocations, including the
             1531      hiring of technical and legal staff.]
             1532          [(vi) For fiscal year 2002-03 only, 25% of the amount described in Subsection (4)(a)(i)
             1533      that remains after making the transfers and deposits required by Subsections (4)(a)(ii) through
             1534      (iv) shall be deposited in the Utah Wastewater Loan Program Subaccount created in Section
             1535      73-10c-5 for use by the Water Quality Board to fund wastewater projects.]
             1536          [(vii) For fiscal year 2002-03 only, 25% of the amount described in Subsection (4)(a)(i)
             1537      that remains after making the transfers and deposits required by Subsections (4)(a)(ii) through
             1538      (iv) shall be deposited in the Drinking Water Loan Program Subaccount created in Section
             1539      73-10c-5 for use by the Division of Drinking Water to:]
             1540          [(A) provide for the installation and repair of collection, treatment, storage, and
             1541      distribution facilities for any public water system, as defined in Section 19-4-102 ;]
             1542          [(B) develop underground sources of water, including springs and wells; and]
             1543          [(C) develop surface water sources.]
             1544          [(b) (i)] (4) (a) Notwithstanding Subsection (3)(a), for a fiscal year beginning on or
             1545      after July 1, 2003, H H [ [ ] the lesser of the following amounts [ ] ] [ FOR TAXES LISTED UNDER
             1545a1      SUBSECTION
             1545a      (3) (a), THE AMOUNT OF TAX REVENUE GENERATED BY A 1/16% TAX RATE ON THE TRANSACTIONS
             1545b      DESCRIBED IN SUBSECTION (1) FOR THE FISCAL YEAR
]
h h shall be used as provided in
             1545c      Subsections


             1546      (4)(b)[(ii)] through [(vii)] (g) H H [ [ ] : [ ] ] [ . ] h h


             1547          [(A)] H H [ [ ] (i) for taxes listed under Subsection (3)(a), the amount of tax revenue
             1547a      generated:
             1548          [(I)] (A) by a 1/16% tax rate on the transactions described in Subsection (1); and
             1549          [(II)] (B) for the fiscal year; or
             1550          [(B)] (ii) $17,500,000.
[ ] ] h h
             1551          [(ii) (A)] (b) (i) For a fiscal year beginning on or after July 1, 2003, 14% of the amount
             1552      described in Subsection (4)[(b)(i)](a) shall be transferred each year as dedicated credits to the
             1553      Department of Natural Resources to:
             1554          [(I)] (A) implement the measures described in Subsections 63-34-14 (4)(a) through (d)
             1555      to protect sensitive plant and animal species; or
             1556          [(II)] (B) award grants, up to the amount authorized by the Legislature in an
             1557      appropriations act, to political subdivisions of the state to implement the measures described in
             1558      Subsections 63-34-14 (4)(a) through (d) to protect sensitive plant and animal species.
             1559          [(B)] (ii) Money transferred to the Department of Natural Resources under Subsection
             1560      (4)(b)[(ii)(A)](i) may not be used to assist the United States Fish and Wildlife Service or any
             1561      other person to list or attempt to have listed a species as threatened or endangered under the
             1562      Endangered Species Act of 1973, 16 U.S.C. Sec. 1531 et seq.
             1563          [(C)] (iii) At the end of each fiscal year:
             1564          [(I)] (A) 50% of any unexpended dedicated credits shall lapse to the Water Resources
             1565      Conservation and Development Fund created in Section 73-10-24 ;
             1566          [(II)] (B) 25% of any unexpended dedicated credits shall lapse to the Utah Wastewater
             1567      Loan Program Subaccount created in Section 73-10c-5 ; and
             1568          [(III)] (C) 25% of any unexpended dedicated credits shall lapse to the Drinking Water
             1569      Loan Program Subaccount created in Section 73-10c-5 .
             1570          [(iii)] (c) For a fiscal year beginning on or after July 1, 2003, 3% of the amount
             1571      described in Subsection (4)(b)(i) shall be deposited each year in the Agriculture Resource
             1572      Development Fund created in Section 4-18-6 .
             1573          [(iv) (A)] (d) (i) For a fiscal year beginning on or after July 1, 2003, 1% of the amount
             1574      described in Subsection (4)[(b)(i)](a) shall be transferred each year as dedicated credits to the
             1575      Division of Water Rights to cover the costs incurred in hiring legal and technical staff for the
             1576      adjudication of water rights.
             1577          [(B)] (ii) At the end of each fiscal year:


             1578          [(I)] (A) 50% of any unexpended dedicated credits shall lapse to the Water Resources
             1579      Conservation and Development Fund created in Section 73-10-24 ;
             1580          [(II)] (B) 25% of any unexpended dedicated credits shall lapse to the Utah Wastewater
             1581      Loan Program Subaccount created in Section 73-10c-5 ; and
             1582          [(III)] (C) 25% of any unexpended dedicated credits shall lapse to the Drinking Water
             1583      Loan Program Subaccount created in Section 73-10c-5 .
             1584          [(v) (A)] (e) (i) For a fiscal year beginning on or after July 1, 2003, 41% of the amount
             1585      described in Subsection (4)[(b)(i)](a) shall be deposited in the Water Resources Conservation
             1586      and Development Fund created in Section 73-10-24 for use by the Division of Water
             1587      Resources.
             1588          [(B)] (ii) In addition to the uses allowed of the Water Resources Conservation and
             1589      Development Fund under Section 73-10-24 , the Water Resources Conservation and
             1590      Development Fund may also be used to:
             1591          [(I)] (A) provide a portion of the local cost share, not to exceed in any fiscal year 50%
             1592      of the funds made available to the Division of Water Resources under this section, of potential
             1593      project features of the Central Utah Project;
             1594          [(II)] (B) conduct hydrologic and geotechnical investigations by the Department of
             1595      Natural Resources in a cooperative effort with other state, federal, or local entities, for the
             1596      purpose of quantifying surface and ground water resources and describing the hydrologic
             1597      systems of an area in sufficient detail so as to enable local and state resource managers to plan
             1598      for and accommodate growth in water use without jeopardizing the resource;
             1599          [(III)] (C) fund state required dam safety improvements; and
             1600          [(IV)] (D) protect the state's interest in interstate water compact allocations, including
             1601      the hiring of technical and legal staff.
             1602          [(vi)] (f) For a fiscal year beginning on or after July 1, 2003, 20.5% of the amount
             1603      described in Subsection (4)[(b)(i)](a) shall be deposited in the Utah Wastewater Loan Program
             1604      Subaccount created in Section 73-10c-5 for use by the Water Quality Board to fund wastewater
             1605      projects.
             1606          [(vii)] (g) For a fiscal year beginning on or after July 1, 2003, 20.5% of the amount
             1607      described in Subsection (4)[(b)(i)](a) shall be deposited in the Drinking Water Loan Program
             1608      Subaccount created in Section 73-10c-5 for use by the Division of Drinking Water to:


             1609          [(A)] (i) provide for the installation and repair of collection, treatment, storage, and
             1610      distribution facilities for any public water system, as defined in Section 19-4-102 ;
             1611          [(B)] (ii) develop underground sources of water, including springs and wells; and
             1612          [(C)] (iii) develop surface water sources.
             1613          [(5) (a) (i) Notwithstanding Subsection (3)(a), for fiscal year 2002-03 only, the lesser
             1614      of the following amounts shall be transferred or deposited as provided in Subsections (5)(a)(ii)
             1615      through (iv):]
             1616          [(A) for taxes listed under Subsection (3)(a), the amount of tax revenue generated:]
             1617          [(I) by a 1/16% tax rate on the transactions described in Subsection (1); and]
             1618          [(II) for the fiscal year; or]
             1619          [(B) $18,743,000.]
             1620          [(ii) (A) For fiscal year 2002-03 only, $500,000 of the amount described in Subsection
             1621      (5)(a)(i) shall be deposited in the Transportation Corridor Preservation Revolving Loan Fund
             1622      created in Section 72-2-117 .]
             1623          [(B) At least 50% of the money deposited in the Transportation Corridor Preservation
             1624      Revolving Loan Fund under Subsection (5)(a)(ii)(A) shall be used to fund loan applications
             1625      made by the Department of Transportation at the request of local governments.]
             1626          [(iii) For fiscal year 2002-03 only, $500,000 of the amount described in Subsection
             1627      (5)(a)(i) shall be transferred as nonlapsing dedicated credits to the Department of
             1628      Transportation for the State Park Access Highways Improvement Program created in Section
             1629      72-3-207 .]
             1630          [(iv) For fiscal year 2002-03 only, the amount described in Subsection (5)(a)(i) that
             1631      remains after making the transfers and deposits required by Subsections (5)(a)(ii) and (iii) shall
             1632      be deposited in the class B and class C roads account to be expended as provided in Title 72,
             1633      Chapter 2, Transportation Finances Act, for the use of class B and C roads.]
             1634          [(b) (i)] (5) (a) Notwithstanding Subsection (3)(a), for a fiscal year beginning on or
             1635      after July 1, 2003, the lesser of the following amounts shall be used as provided in Subsections
             1636      (5)(b)[(ii)] through [(iv)] (d):
             1637          [(A)] (i) for taxes listed under Subsection (3)(a), the amount of tax revenue generated:
             1638          [(I)] (A) by a 1/16% tax rate on the transactions described in Subsection (1); and
             1639          [(II)] (B) for the fiscal year; or


             1640          [(B)] (ii) $18,743,000.
             1641          [(ii) (A)] (b) (i) For a fiscal year beginning on or after July 1, 2003, 3% of the amount
             1642      described in Subsection (5)[(b)(i)](a) shall be deposited each year in the Transportation
             1643      Corridor Preservation Revolving Loan Fund created in Section 72-2-117 .
             1644          [(B)] (ii) At least 50% of the money deposited in the Transportation Corridor
             1645      Preservation Revolving Loan Fund under Subsection (5)(b)[(ii)(A)](i) shall be used to fund
             1646      loan applications made by the Department of Transportation at the request of local
             1647      governments.
             1648          [(iii)] (c) For a fiscal year beginning on or after July 1, 2003, 3% of the amount
             1649      described in Subsection (5)[(b)(i)](a) shall be transferred each year as nonlapsing dedicated
             1650      credits to the Department of Transportation for the State Park Access Highways Improvement
             1651      Program created in Section 72-3-207 .
             1652          [(iv)] (d) For a fiscal year beginning on or after July 1, 2003, 94% of the amount
             1653      described in Subsection (5)[(b)(i)](a) shall be deposited in the class B and class C roads
             1654      account to be expended as provided in Title 72, Chapter 2, Transportation Finances Act, for the
             1655      use of class B and C roads.
             1656          (6) Notwithstanding Subsection (3)(a), beginning on January 1, 2000, the Division of
             1657      Finance shall deposit into the Centennial Highway Fund created in Section 72-2-118 a portion
             1658      of the taxes listed under Subsection (3)(a) equal to the revenues generated by a 1/64% tax rate
             1659      on the taxable transactions under Subsection (1).
             1660          [(7) Notwithstanding Subsection (3)(a), beginning on July 1, 1999, the commission
             1661      shall deposit into the Airport to University of Utah Light Rail Restricted Account created in
             1662      Section 17A-2-1064 the portion of the sales and use tax under Section 59-12-204 that is:]
             1663          [(a) generated by a city or town that will have constructed within its boundaries the
             1664      Airport to University of Utah Light Rail described in the Transportation Equity Act for the 21st
             1665      Century, Pub. L. No. 105-178, Sec. 3030(c)(2)(B)(i)(II), 112 Stat. 107; and]
             1666          [(b) equal to the revenues generated by a 1/64% tax rate on the taxable items and
             1667      services under Subsection (1).]
             1668          [(8) (a) For purposes of amounts paid or charged as admission or user fees relating to
             1669      the Olympic Winter Games of 2002, the amounts are considered to be paid or charged on the
             1670      day on which the Salt Lake Organizing Committee for the Olympic Winter Games of 2002 or a


             1671      person designated by the Salt Lake Organizing Committee for the Olympic Winter Games of
             1672      2002 sends a purchaser confirmation of the purchase of an admission or user fee described in
             1673      Subsection (1)(f).]
             1674          [(b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
             1675      the commission shall make rules defining what constitutes sending a purchaser confirmation
             1676      under Subsection (8)(a).]
             1677          [(9) (a) For fiscal year 2002-03 only, the following amounts shall be subtracted from
             1678      the total amount required to be deposited or transferred in accordance with Subsection (4):]
             1679          [(i) $25,000 shall be subtracted from the total amount required to be transferred to the
             1680      Division of Water Rights in accordance with Subsection (4)(a)(iv);]
             1681          [(ii) $385,000 shall be subtracted from the total amount required to be deposited into
             1682      the Agriculture Resource Development Fund in accordance with Subsection (4)(a)(iii);]
             1683          [(iii) $350,000 shall be subtracted from the total amount required to be transferred to
             1684      the Department of Natural Resources in accordance with Subsection (4)(a)(ii);]
             1685          [(iv) $3,012,500 shall be subtracted from the total amount required to be deposited into
             1686      the Drinking Water Loan Program Subaccount in accordance with Subsection (4)(a)(vii);]
             1687          [(v) $3,012,500 shall be subtracted from the total amount required to be deposited into
             1688      the Utah Wastewater Loan Program Subaccount in accordance with Subsection (4)(a)(vi); and]
             1689          [(vi) $5,715,000 shall be subtracted from the total amount required to be deposited into
             1690      the Water Resources Conservation and Development Fund in accordance with Subsection
             1691      (4)(a)(v).]
             1692          [(b) The amounts subtracted under Subsection (9)(a) shall be deposited into the
             1693      General Fund.]
             1694      S    [ (7) (a) Notwithstanding Subsection (3)(a), for fiscal years beginning on or after fiscal
             1695      year 2003-04, the commission shall each year on or before the September 30 immediately
             1696      following the last day of the fiscal year deposit the difference described in Subsection (7)(b)
             1697      into the Remote Sales Restricted Account created in Section 59-12-103.2 if that difference is
             1698      greater than $0.
             1699          (b) The difference described in Subsection (7)(a) is equal to the difference between:
             1700          (i) the total amount of the following revenues the commission received from sellers
             1701      collecting a tax in accordance with Subsection 59-12-107 (1)(b) for the fiscal year immediately
] s


             1702      S [ preceding the September 30 described in Subsection (7)(a):
             1703          (A) revenues under Subsection (2)(a)(i); and
             1704          (B) revenues under Subsection (2)(b)(i); and
             1705          (ii) $7,279,673.
] s

             1706          Section 10. Section 59-12-103.2 (Effective 07/01/04) is amended to read:
             1707           59-12-103.2 (Effective 07/01/04). Remote Sales Restricted Account -- Creation.
             1708          (1) There is created within the General Fund a restricted account known as the
             1709      "Remote Sales Restricted Account."
             1710           S [ [ ] (2) On or before December 1, 2004, the Division of Finance shall deposit any
             1711      revenues in the Remote Sales Restricted Account into the General Fund. [ ] ]

             1712           [ (2) The account shall be funded from the portion of the sales and use tax deposited by
             1713      the commission as provided in Section 59-12-103 .
             1714          (3) (a) The account shall earn interest.
             1715          (b) The interest described in Subsection (3)(a) shall be deposited into the account.
             1715a          H (4) THE DIVISION OF FINANCE SHALL DEPOSIT ANY REVENUES IN THE REMOTE SALES
             1715b      RESTRICTED ACCOUNT AS OF JULY 1, 2004, INTO THE GENERAL FUND. h
] s

             1716          Section 11. Section 59-12-104 (Effective 07/01/04) is amended to read:
             1717           59-12-104 (Effective 07/01/04). Exemptions.
             1718          The following sales and uses are exempt from the taxes imposed by this chapter:
             1719          (1) sales of aviation fuel, motor fuel, and special fuel subject to a Utah state excise tax
             1720      under Chapter 13, Motor and Special Fuel Tax Act;
             1721          (2) sales to the state, its institutions, and its political subdivisions; however, this
             1722      exemption does not apply to sales of:
             1723          (a) construction materials except:
             1724          (i) construction materials purchased by or on behalf of institutions of the public
             1725      education system as defined in Utah Constitution Article X, Section 2, provided the
             1726      construction materials are clearly identified and segregated and installed or converted to real
             1727      property which is owned by institutions of the public education system; and
             1728          (ii) construction materials purchased by the state, its institutions, or its political
             1729      subdivisions which are installed or converted to real property by employees of the state, its
             1730      institutions, or its political subdivisions; or
             1731          (b) tangible personal property in connection with the construction, operation,
             1732      maintenance, repair, or replacement of a project, as defined in Section 11-13-103 , or facilities


             1733      providing additional project capacity, as defined in Section 11-13-103 ;
             1734          (3) (a) sales of an item described in Subsection (3)(b) from a vending machine if:
             1735          (i) the proceeds of each sale do not exceed $1; and
             1736          (ii) the seller or operator of the vending machine reports an amount equal to 150% of
             1737      the cost of the item described in Subsection (3)(a) as goods consumed; and
             1738          (b) Subsection (3)(a) applies to:
             1739          (i) food and food ingredients; or
             1740          (ii) prepared food;
             1741          (4) sales of the following to a commercial airline carrier for in-flight consumption:
             1742          (a) food and food ingredients;
             1743          (b) prepared food; or
             1744          (c) services related to Subsection (4)(a) or (b);
             1745          (5) sales of parts and equipment for installation in aircraft operated by common carriers
             1746      in interstate or foreign commerce;
             1747          (6) sales of commercials, motion picture films, prerecorded audio program tapes or
             1748      records, and prerecorded video tapes by a producer, distributor, or studio to a motion picture
             1749      exhibitor, distributor, or commercial television or radio broadcaster;
             1750          (7) sales of cleaning or washing of tangible personal property by a coin-operated
             1751      laundry or dry cleaning machine;
             1752          (8) (a) except as provided in Subsection (8)(b), sales made to or by religious or
             1753      charitable institutions in the conduct of their regular religious or charitable functions and
             1754      activities, if the requirements of Section 59-12-104.1 are fulfilled;
             1755          (b) the exemption provided for in Subsection (8)(a) does not apply to the following
             1756      sales, uses, leases, or rentals relating to the Olympic Winter Games of 2002 made to or by an
             1757      organization exempt from federal income taxation under Section 501(c)(3), Internal Revenue
             1758      Code:
             1759          (i) retail sales of Olympic merchandise;
             1760          (ii) except as provided in Subsection (50), admissions or user fees described in
             1761      Subsection 59-12-103 (1)(f);
             1762          (iii) sales of accommodations and services as provided in Subsection 59-12-103 (1)(i),
             1763      except for accommodations and services:


             1764          (A) paid for in full by the Salt Lake Organizing Committee for the Olympic Winter
             1765      Games of 2002;
             1766          (B) exclusively used by:
             1767          (I) an officer, a trustee, or an employee of the Salt Lake Organizing Committee for the
             1768      Olympic Winter Games of 2002; or
             1769          (II) a volunteer supervised by the Salt Lake Organizing Committee for the Olympic
             1770      Winter Games of 2002; and
             1771          (C) for which the Salt Lake Organizing Committee for the Olympic Winter Games of
             1772      2002 does not receive reimbursement; or
             1773          (iv) a lease or rental of a vehicle as defined in Section 41-1a-102 , except for a lease or
             1774      rental of a vehicle:
             1775          (A) paid for in full by the Salt Lake Organizing Committee for the Olympic Winter
             1776      Games of 2002;
             1777          (B) exclusively used by:
             1778          (I) an officer, a trustee, or an employee of the Salt Lake Organizing Committee for the
             1779      Olympic Winter Games of 2002; or
             1780          (II) a volunteer supervised by the Salt Lake Organizing Committee for the Olympic
             1781      Winter Games of 2002; and
             1782          (C) for which the Salt Lake Organizing Committee for the Olympic Winter Games of
             1783      2002 does not receive reimbursement;
             1784          (9) sales of vehicles of a type required to be registered under the motor vehicle laws of
             1785      this state which are made to bona fide nonresidents of this state and are not afterwards
             1786      registered or used in this state except as necessary to transport them to the borders of this state;
             1787          (10) (a) amounts paid for an item described in Subsection (10)(b) if:
             1788          (i) the item is intended for human use; and
             1789          (ii) (A) [the purchaser presents] a prescription was issued for the item; [and] or
             1790          (B) the item was purchased by a hospital or other medical facility; and
             1791          (b) (i) Subsection (10)(a) applies to:
             1792          (A) a drug;
             1793          (B) a syringe; or
             1794          (C) a stoma supply; and


             1795          (ii) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             1796      commission may by rule define the terms:
             1797          (A) "syringe"; or
             1798          (B) "stoma supply";
             1799          (11) sales or use of property, materials, or services used in the construction of or
             1800      incorporated in pollution control facilities allowed by Sections 19-2-123 through 19-2-127 ;
             1801          (12) (a) sales of an item described in Subsection (12)(c) served by:
             1802          (i) the following if the item described in Subsection (12)(c) is not available to the
             1803      general public:
             1804          (A) a church; or
             1805          (B) a charitable institution;
             1806          (ii) an institution of higher education if:
             1807          (A) the item described in Subsection (12)(c) is not available to the general public; or
             1808          (B) the item described in Subsection (12)(c) is prepaid as part of a student meal plan
             1809      offered by the institution of higher education; or
             1810          (b) sales of an item described in Subsection (12)(c) provided at:
             1811          (i) a medical facility; or
             1812          (ii) a nursing facility; and
             1813          (c) Subsections (12)(a) and (b) apply to:
             1814          (i) food and food ingredients;
             1815          (ii) prepared food; or
             1816          (iii) alcoholic beverages;
             1817          (13) isolated or occasional sales by persons not regularly engaged in business, except
             1818      the sale of vehicles or vessels required to be titled or registered under the laws of this state in
             1819      which case the tax is based upon:
             1820          (a) the bill of sale or other written evidence of value of the vehicle or vessel being sold;
             1821      or
             1822          (b) in the absence of a bill of sale or other written evidence of value, the then existing
             1823      fair market value of the vehicle or vessel being sold as determined by the commission;
             1824          (14) (a) the following purchases or leases by a manufacturer on or after July 1, 1995:
             1825          (i) machinery and equipment:


             1826          (A) used in the manufacturing process;
             1827          (B) having an economic life of three or more years; and
             1828          (C) used:
             1829          (I) to manufacture an item sold as tangible personal property; and
             1830          (II) in new or expanding operations in a manufacturing facility in the state; and
             1831          (ii) subject to the provisions of Subsection (14)(b), normal operating replacements that:
             1832          (A) have an economic life of three or more years;
             1833          (B) are used in the manufacturing process in a manufacturing facility in the state;
             1834          (C) are used to replace or adapt an existing machine to extend the normal estimated
             1835      useful life of the machine; and
             1836          (D) do not include repairs and maintenance;
             1837          (b) the rates for the exemption under Subsection (14)(a)(ii) are as follows:
             1838          (i) beginning July 1, 1996, through June 30, 1997, 30% of the sale or lease described in
             1839      Subsection (14)(a)(ii) is exempt;
             1840          (ii) beginning July 1, 1997, through June 30, 1998, 60% of the sale or lease described
             1841      in Subsection (14)(a)(ii) is exempt; and
             1842          (iii) beginning July 1, 1998, 100% of the sale or lease described in Subsection
             1843      (14)(a)(ii) is exempt;
             1844          (c) for purposes of this Subsection (14), the commission shall by rule define the terms
             1845      "new or expanding operations" and "establishment"; and
             1846          (d) on or before October 1, 1991, and every five years after October 1, 1991, the
             1847      commission shall:
             1848          (i) review the exemptions described in Subsection (14)(a) and make recommendations
             1849      to the Revenue and Taxation Interim Committee concerning whether the exemptions should be
             1850      continued, modified, or repealed; and
             1851          (ii) include in its report:
             1852          (A) the cost of the exemptions;
             1853          (B) the purpose and effectiveness of the exemptions; and
             1854          (C) the benefits of the exemptions to the state;
             1855          (15) (a) sales of the following if the requirements of Subsection (15)(b) are met:
             1856          (i) tooling;


             1857          (ii) special tooling;
             1858          (iii) support equipment;
             1859          (iv) special test equipment; or
             1860          (v) parts used in the repairs or renovations of tooling or equipment described in
             1861      Subsections (15)(a)(i) through (iv); and
             1862          (b) sales of tooling, equipment, or parts described in Subsection (15)(a) are exempt if:
             1863          (i) the tooling, equipment, or parts are used or consumed exclusively in the
             1864      performance of any aerospace or electronics industry contract with the United States
             1865      government or any subcontract under that contract; and
             1866          (ii) under the terms of the contract or subcontract described in Subsection (15)(b)(i),
             1867      title to the tooling, equipment, or parts is vested in the United States government as evidenced
             1868      by:
             1869          (A) a government identification tag placed on the tooling, equipment, or parts; or
             1870          (B) listing on a government-approved property record if placing a government
             1871      identification tag on the tooling, equipment, or parts is impractical;
             1872          (16) intrastate movements of:
             1873          (a) freight by common carriers; or
             1874          (b) passengers:
             1875          (i) by taxicabs as described in SIC Code 4121 of the 1987 Standard Industrial
             1876      Classification Manual of the federal Executive Office of the President, Office of Management
             1877      and Budget;
             1878          (ii) transported by an establishment described in SIC Code 4111 of the 1987 Standard
             1879      Industrial Classification Manual of the federal Executive Office of the President, Office of
             1880      Management and Budget, if the transportation originates and terminates within a county of the
             1881      first, second, or third class; or
             1882          (iii) transported by the following described in SIC Code 4789 of the 1987 Standard
             1883      Industrial Classification Manual of the federal Executive Office of the President, Office of
             1884      Management and Budget:
             1885          (A) a horse-drawn cab; or
             1886          (B) a horse-drawn carriage;
             1887          (17) sales of newspapers or newspaper subscriptions;


             1888          (18) (a) except as provided in Subsection (18)(b), tangible personal property traded in
             1889      as full or part payment of the purchase price, except that for purposes of calculating sales or use
             1890      tax upon vehicles not sold by a vehicle dealer, trade-ins are limited to other vehicles only, and
             1891      the tax is based upon:
             1892          (i) the bill of sale or other written evidence of value of the vehicle being sold and the
             1893      vehicle being traded in; or
             1894          (ii) in the absence of a bill of sale or other written evidence of value, the then existing
             1895      fair market value of the vehicle being sold and the vehicle being traded in, as determined by the
             1896      commission; and
             1897          (b) notwithstanding Subsection (18)(a), Subsection (18)(a) does not apply to the
             1898      following items of tangible personal property traded in as full or part payment of the purchase
             1899      price:
             1900          (i) money;
             1901          (ii) electricity;
             1902          (iii) water;
             1903          (iv) gas; or
             1904          (v) steam;
             1905          (19) sprays and insecticides used to control insects, diseases, and weeds for
             1906      commercial production of fruits, vegetables, feeds, seeds, and animal products, but not those
             1907      sprays and insecticides used in the processing of the products;
             1908          (20) (a) (i) sales of tangible personal property used or consumed primarily and directly
             1909      in farming operations, including sales of irrigation equipment and supplies used for agricultural
             1910      production purposes, whether or not they become part of real estate and whether or not
             1911      installed by farmer, contractor, or subcontractor, but not sales of:
             1912          (A) machinery, equipment, materials, and supplies used in a manner that is incidental
             1913      to farming, such as hand tools and maintenance and janitorial equipment and supplies;
             1914          (B) tangible personal property used in any activities other than farming, such as office
             1915      equipment and supplies, equipment and supplies used in sales or distribution of farm products,
             1916      in research, or in transportation; or
             1917          (C) any vehicle required to be registered by the laws of this state, without regard to the
             1918      use to which the vehicle is put; or


             1919          (ii) sales of parts used in the repairs or renovations of tangible personal property if the
             1920      tangible personal property is exempt under Subsection (20)(a); or
             1921          (b) sales of hay;
             1922          (21) exclusive sale of locally grown seasonal crops, seedling plants, or garden, farm, or
             1923      other agricultural produce if sold by a producer during the harvest season;
             1924          (22) purchases made using a coupon as defined in 7 U.S.C. Sec. 2012 that is issued
             1925      under the Food Stamp Program, 7 U.S.C. Sec. 2011 et seq.;
             1926          (23) sales of nonreturnable containers, nonreturnable labels, nonreturnable bags,
             1927      nonreturnable shipping cases, and nonreturnable casings to a manufacturer, processor,
             1928      wholesaler, or retailer for use in packaging tangible personal property to be sold by that
             1929      manufacturer, processor, wholesaler, or retailer;
             1930          (24) property stored in the state for resale;
             1931          (25) property brought into the state by a nonresident for his or her own personal use or
             1932      enjoyment while within the state, except property purchased for use in Utah by a nonresident
             1933      living and working in Utah at the time of purchase;
             1934          (26) property purchased for resale in this state, in the regular course of business, either
             1935      in its original form or as an ingredient or component part of a manufactured or compounded
             1936      product;
             1937          (27) property upon which a sales or use tax was paid to some other state, or one of its
             1938      subdivisions, except that the state shall be paid any difference between the tax paid and the tax
             1939      imposed by this part and Part 2, Local Sales and Use Tax Act, and no adjustment is allowed if
             1940      the tax paid was greater than the tax imposed by this part and Part 2, Local Sales and Use Tax
             1941      Act;
             1942          (28) any sale of a service described in Subsections 59-12-103 (1)(b), (c), and (d) to a
             1943      person for use in compounding a service taxable under the subsections;
             1944          (29) purchases made in accordance with the special supplemental nutrition program for
             1945      women, infants, and children established in 42 U.S.C. Sec. 1786;
             1946          (30) beginning on July 1, 1999, through June 30, 2004, sales or leases of rolls, rollers,
             1947      refractory brick, electric motors, or other replacement parts used in the furnaces, mills, or ovens
             1948      of a steel mill described in SIC Code 3312 of the 1987 Standard Industrial Classification
             1949      Manual of the federal Executive Office of the President, Office of Management and Budget;


             1950          (31) sales of boats of a type required to be registered under Title 73, Chapter 18, State
             1951      Boating Act, boat trailers, and outboard motors which are made to bona fide nonresidents of
             1952      this state and are not thereafter registered or used in this state except as necessary to transport
             1953      them to the borders of this state;
             1954          (32) sales of aircraft manufactured in Utah if sold for delivery and use outside Utah
             1955      where a sales or use tax is not imposed, even if the title is passed in Utah;
             1956          (33) amounts paid for the purchase of telephone service for purposes of providing
             1957      telephone service;
             1958          (34) fares charged to persons transported directly by a public transit district created
             1959      under the authority of Title 17A, Chapter 2, Part 10, Utah Public Transit District Act;
             1960          (35) sales or leases of vehicles to, or use of vehicles by an authorized carrier;
             1961          (36) (a) 45% of the sales price of any new manufactured home; and
             1962          (b) 100% of the sales price of any used manufactured home;
             1963          (37) sales relating to schools and fundraising sales;
             1964          (38) sales or rentals of durable medical equipment if a person presents a prescription
             1965      for the durable medical equipment;
             1966          (39) (a) sales to a ski resort of electricity to operate a passenger ropeway as defined in
             1967      Section 72-11-102 ; and
             1968          (b) the commission shall by rule determine the method for calculating sales exempt
             1969      under Subsection (39)(a) that are not separately metered and accounted for in utility billings;
             1970          (40) sales to a ski resort of:
             1971          (a) snowmaking equipment;
             1972          (b) ski slope grooming equipment;
             1973          (c) passenger ropeways as defined in Section 72-11-102 ; or
             1974          (d) parts used in the repairs or renovations of equipment or passenger ropeways
             1975      described in Subsections (40)(a) through (c);
             1976          (41) sales of natural gas, electricity, heat, coal, fuel oil, or other fuels for industrial use;
             1977          (42) sales or rentals of the right to use or operate for amusement, entertainment, or
             1978      recreation a coin-operated amusement device as defined in Section 59-12-102 ;
             1979          (43) sales of cleaning or washing of tangible personal property by a coin-operated car
             1980      wash machine;


             1981          (44) sales by the state or a political subdivision of the state, except state institutions of
             1982      higher education as defined in Section 53B-3-102 , of:
             1983          (a) photocopies; or
             1984          (b) other copies of records held or maintained by the state or a political subdivision of
             1985      the state;
             1986          (45) (a) amounts paid:
             1987          (i) to a person providing intrastate transportation to an employer's employee to or from
             1988      the employee's primary place of employment;
             1989          (ii) by an:
             1990          (A) employee; or
             1991          (B) employer; and
             1992          (iii) pursuant to a written contract between:
             1993          (A) the employer; and
             1994          (B) (I) the employee; or
             1995          (II) a person providing transportation to the employer's employee; and
             1996          (b) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             1997      commission may for purposes of Subsection (45)(a) make rules defining what constitutes an
             1998      employee's primary place of employment;
             1999          (46) amounts paid for admission to an athletic event at an institution of higher
             2000      education that is subject to the provisions of Title IX of the Education Amendments of 1972,
             2001      20 U.S.C. Sec. 1681 et seq.;
             2002          (47) sales of telephone service charged to a prepaid telephone calling card;
             2003          (48) (a) sales of:
             2004          (i) hearing aids;
             2005          (ii) hearing aid accessories; or
             2006          (iii) except as provided in Subsection (48)(b), parts used in the repairs or renovations
             2007      of hearing aids or hearing aid accessories; and
             2008          (b) for purposes of this Subsection (48), notwithstanding Subsection (48)(a)(iii),
             2009      "parts" does not include batteries;
             2010          (49) (a) sales made to or by:
             2011          (i) an area agency on aging; or


             2012          (ii) a senior citizen center owned by a county, city, or town; or
             2013          (b) sales made by a senior citizen center that contracts with an area agency on aging;
             2014          (50) (a) beginning on July 1, 2000, through June 30, 2002, amounts paid or charged as
             2015      admission or user fees described in Subsection 59-12-103 (1)(f) relating to the Olympic Winter
             2016      Games of 2002 if the amounts paid or charged are established by the Salt Lake Organizing
             2017      Committee for the Olympic Winter Games of 2002 in accordance with requirements of the
             2018      International Olympic Committee; and
             2019          (b) the State Olympic Officer and the Salt Lake Organizing Committee for the Olympic
             2020      Winter Games of 2002 shall make at least two reports during the 2000 interim:
             2021          (i) to the:
             2022          (A) Olympic Coordination Committee; and
             2023          (B) Revenue and Taxation Interim Committee; and
             2024          (ii) regarding the status of:
             2025          (A) agreements relating to the funding of public safety services for the Olympic Winter
             2026      Games of 2002;
             2027          (B) agreements relating to the funding of services, other than public safety services, for
             2028      the Olympic Winter Games of 2002;
             2029          (C) other agreements relating to the Olympic Winter Games of 2002 as requested by
             2030      the Olympic Coordination Committee or the Revenue and Taxation Interim Committee;
             2031          (D) other issues as requested by the Olympic Coordination Committee or the Revenue
             2032      and Taxation Interim Committee; or
             2033          (E) a combination of Subsections (50)(b)(ii)(A) through (D);
             2034          (51) (a) beginning on July 1, 2001, through June 30, 2007, and subject to Subsection
             2035      (51)(b), a sale or lease of semiconductor fabricating or processing materials regardless of
             2036      whether the semiconductor fabricating or processing materials:
             2037          (i) actually come into contact with a semiconductor; or
             2038          (ii) ultimately become incorporated into real property;
             2039          (b) (i) beginning on July 1, 2001, through June 30, 2002, 10% of the sale or lease
             2040      described in Subsection (51)(a) is exempt;
             2041          (ii) beginning on July 1, 2002, through June 30, 2003, 50% of the sale or lease
             2042      described in Subsection (51)(a) is exempt; and


             2043          (iii) beginning on July 1, 2003, through June 30, 2007, the entire amount of the sale or
             2044      lease described in Subsection (51)(a) is exempt; and
             2045          (c) each year on or before the November interim meeting, the Revenue and Taxation
             2046      Interim Committee shall:
             2047          (i) review the exemption described in this Subsection (51) and make recommendations
             2048      concerning whether the exemption should be continued, modified, or repealed; and
             2049          (ii) include in the review under this Subsection (51)(c):
             2050          (A) the cost of the exemption;
             2051          (B) the purpose and effectiveness of the exemption; and
             2052          (C) the benefits of the exemption to the state;
             2053          (52) an amount paid by or charged to a purchaser for accommodations and services
             2054      described in Subsection 59-12-103 (1)(i) to the extent the amount is exempt under Section
             2055      59-12-104.2 ;
             2056          (53) beginning on September 1, 2001, the lease or use of a vehicle issued a temporary
             2057      sports event registration certificate in accordance with Section 41-3-306 for the event period
             2058      specified on the temporary sports event registration certificate;
             2059          (54) sales or uses of electricity, if the sales or uses are:
             2060          (a) made under a tariff adopted by the Public Service Commission of Utah only for
             2061      purchase of electricity produced from a new wind, geothermal, biomass, or solar power energy
             2062      source, as designated in the tariff by the Public Service Commission of Utah; and
             2063          (b) for an amount of electricity that is:
             2064          (i) unrelated to the amount of electricity used by the person purchasing the electricity
             2065      under the tariff described in Subsection (54)(a); and
             2066          (ii) equivalent to the number of kilowatthours specified in the tariff described in
             2067      Subsection (54)(a) that may be purchased under the tariff described in Subsection (54)(a);
             2068          (55) sales or rentals of mobility enhancing equipment if a person presents a
             2069      prescription for the mobility enhancing equipment;
             2070          (56) sales of water in a:
             2071          (a) pipe;
             2072          (b) conduit;
             2073          (c) ditch; or


             2074          (d) reservoir;
             2075          (57) sales of currency or coinage that constitute legal tender of the United States or of a
             2076      foreign nation;
             2077          (58) (a) sales of an item described in Subsection (58)(b) if the item:
             2078          (i) does not constitute legal tender of any nation; and
             2079          (ii) has a gold, silver, or platinum content of 80% or more; and
             2080          (b) Subsection (58)(a) applies to a gold, silver, or platinum:
             2081          (i) ingot;
             2082          (ii) bar;
             2083          (iii) medallion; or
             2084          (iv) decorative coin;
             2085          (59) amounts paid on a sale-leaseback transaction; and
             2086          (60) sales of a prosthetic device:
             2087          (a) for use on or in a human;
             2088          (b) for which a prescription is issued; and
             2089          (c) to a person that presents a prescription for the prosthetic device.
             2090          Section 12. Section 59-12-105 (Effective 07/01/04) is amended to read:
             2091           59-12-105 (Effective 07/01/04). Certain exempt sales to be reported -- Penalties.
             2092          (1) [(a)] An owner or purchaser shall report to the commission the amount of sales or
             2093      uses exempt under Subsection 59-12-104 (14)[, (39), (40),] or (51).
             2094          (2) (a) A seller that files a simplified electronic return with the commission shall file a
             2095      report containing the information described in Subsection (2)(b).
             2096          (b) The report required by Subsection (2)(a) shall contain the following amounts:
             2097          (i) for each store location that the seller has within the state:
             2098          (A) the total amount of sales;
             2099          (B) the total amount of sales that are exempt from a tax imposed by this chapter; and
             2100          (C) the difference between the amount described in Subsection (2)(b)(i)(A) and the
             2101      amount described in Subsection (2)(b)(i)(B);
             2102          (ii) for the total amount of sales that the seller makes from a location in the state other
             2103      than a fixed place of business in the state:
             2104          (A) the total amount of sales;


             2105          (B) the total amount of sales that are exempt from a tax imposed by this chapter; and
             2106          (C) the difference between the amount described in Subsection (2)(b)(ii)(A) and the
             2107      amount described in Subsection (2)(b)(ii)(B); and
             2108          (iii) for the total amount of sales that the seller makes where inventory is shipped from
             2109      a location outside the state:
             2110          (A) the total amount of sales;
             2111          (B) the total amount of sales that are exempt from a tax imposed by this chapter; and
             2112          (C) the difference between the amount described in Subsection (2)(b)(iii)(A) and the
             2113      amount described in Subsection (2)(b)(iii)(B).
             2114          [(b) The] (3) (a) A report required by Subsection (1)[(a)] or (2) shall be filed:
             2115          (i) with the commission; and
             2116          (ii) on a form prescribed by the commission.
             2117          (b) A report required by Subsection (2) shall be filed electronically.
             2118          (c) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             2119      commission shall make rules providing:
             2120          (i) the information required to be included in the [report] reports described in
             2121      [Subsection] Subsections (1)[(a)] and (2); and
             2122          (ii) one or more due dates for filing the report described in:
             2123          (A) Subsection (1)[(a).]; and
             2124          (B) Subsection (2).
             2125          [(2) Except] (4) (a) Notwithstanding Section 59-1-401 , and except as provided in
             2126      Subsections [(3)] (4)(b) and [(4)] (6), if the owner or purchaser fails to report the full amount of
             2127      the exemptions granted under Subsection 59-12-104 (14)[, (39), (40),] or (51) on the report
             2128      required by Subsection (1)[(a)], the commission shall impose a penalty equal to the lesser of:
             2129          [(a)] (i) 10% of the sales and use tax that would have been imposed if the exemption
             2130      had not applied; or
             2131          [(b)] (ii) $1,000.
             2132          [(3)] (b) Notwithstanding Subsection [(2)] (4)(a)(i), the commission may not impose a
             2133      penalty under Subsection [(2)] (4)(a)(i) if the owner or purchaser files an amended report:
             2134          [(a)] (i) containing the amount of the exemption; and
             2135          [(b)] (ii) before the owner or purchaser receives a notice of audit from the commission.


             2136          (5) Notwithstanding Section 59-1-401 , and except as provided in Subsection (6), if a
             2137      seller fails to report the amounts required by Subsection (2), the commission shall impose a
             2138      penalty of $1,000.
             2139          [(4)] (6) (a) Notwithstanding Subsection [(2)] (4)(a) or (5), the commission may waive,
             2140      reduce, or compromise a penalty imposed under this section if the commission finds there are
             2141      reasonable grounds for the waiver, reduction, or compromise.
             2142          (b) If the commission waives, reduces, or compromises a penalty under Subsection
             2143      [(4)] (6)(a), the commission shall make a record of the grounds for waiving, reducing, or
             2144      compromising the penalty.
             2145          Section 13. Section 59-12-107 (Effective 07/01/04) is amended to read:
             2146           59-12-107 (Effective 07/01/04). Collection, remittance, and payment of tax by
             2147      sellers or other persons -- Voluntary collection may not be used as a factor in determining
             2148      whether a seller is required to pay certain taxes, fees, or charges -- Returns -- Direct
             2149      payment by purchaser of vehicle -- Other liability for collection -- Credits -- Treatment of
             2150      bad debt -- Deposit and sale of security -- Penalties.
             2151          (1) (a) Except as provided in Sections 59-12-107.1 through [ 59-12-107.3 ] 59-12-107.4 ,
             2152      each seller shall pay or collect and remit the sales and use taxes imposed by this chapter if
             2153      within this state the seller:
             2154          (i) has or utilizes:
             2155          (A) an office;
             2156          (B) a distribution house;
             2157          (C) a sales house;
             2158          (D) a warehouse;
             2159          (E) a service enterprise; or
             2160          (F) a place of business similar to Subsections (1)(a)(i)(A) through (E);
             2161          (ii) maintains a stock of goods;
             2162          (iii) regularly solicits orders, regardless of whether or not the orders are accepted in the
             2163      state, unless the seller's only activity in the state is:
             2164          (A) advertising; or
             2165          (B) solicitation by:
             2166          (I) direct mail;


             2167          (II) electronic mail;
             2168          (III) the Internet;
             2169          (IV) telephone; or
             2170          (V) a means similar to Subsections (1)(a)(iii)(A) or (B);
             2171          (iv) regularly engages in the delivery of property in the state other than by:
             2172          (A) common carrier; or
             2173          (B) United States mail; or
             2174          (v) regularly engages in an activity directly related to the leasing or servicing of
             2175      property located within the state.
             2176          (b) [If a] A seller that does not meet one or more of the criteria provided for in
             2177      Subsection (1)(a)[, the seller]:
             2178          (i) except as provided in Subsection (1)(b)(ii), may voluntarily:
             2179          (A) collect a tax on a transaction described in Subsection 59-12-103 (1); and
             2180          (B) remit the tax to the commission as provided in this part; or
             2181          (ii) notwithstanding Subsection (1)(b)(i), shall collect a tax on a transaction described
             2182      in Subsection 59-12-103 (1) if Section 59-12-103.1 requires the seller to collect the tax.
             2183          (c) The [voluntary] collection and remittance of a tax under this chapter by a seller that
             2184      is registered under the agreement may not be used as a factor in determining whether [a] that
             2185      seller is required by Subsection (1)(a) to:
             2186          (i) pay a tax, fee, or charge under:
             2187          (A) Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;
             2188          (B) Section 19-6-716 ;
             2189          (C) Section 19-6-805 ;
             2190          (D) Section 69-2-5.5 ; or
             2191          (E) this title; or
             2192          (ii) collect and remit a tax, fee, or charge under:
             2193          (A) Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;
             2194          (B) Section 19-6-716 ;
             2195          (C) Section 19-6-805 ;
             2196          (D) Section 69-2-5.5 ; or
             2197          (E) this title.


             2198          (d) A person shall pay a use tax imposed by this chapter on a transaction described in
             2199      Subsection 59-12-103 (1) if:
             2200          (i) the seller did not collect a [use] tax imposed by this chapter on the transaction; and
             2201          (ii) the person:
             2202          (A) stores the tangible personal property in the state;
             2203          (B) uses the tangible personal property in the state; or
             2204          (C) consumes the tangible personal property in the state.
             2205          (e) Notwithstanding [the provisions of] Subsection (1)(a), the ownership of property
             2206      that is located at the premises of a printer's facility with which the retailer has contracted for
             2207      printing and that consists of the final printed product, property that becomes a part of the final
             2208      printed product, or copy from which the printed product is produced, shall not result in the
             2209      retailer being considered to have or maintain an office, distribution house, sales house,
             2210      warehouse, service enterprise, or other place of business, or to maintain a stock of goods,
             2211      within this state.
             2212          (2) (a) Except as provided in Sections 59-12-107.1 through [ 59-12-107.3 ] 59-12-107.4 ,
             2213      a seller shall collect a tax under this chapter from a purchaser.
             2214          (b) A seller may not collect as tax an amount, without regard to fractional parts of one
             2215      cent, in excess of the tax computed at the rates prescribed by this chapter.
             2216          (c) (i) Each seller shall:
             2217          (A) give the purchaser a receipt for the [use] tax collected; or
             2218          (B) bill the [use] tax as a separate item and declare the name of this state and the
             2219      seller's sales and use tax license number on the invoice for the sale.
             2220          (ii) The receipt or invoice is prima facie evidence that the seller has collected the [use]
             2221      tax and relieves the purchaser of the liability for reporting the [use] tax to the commission as a
             2222      consumer.
             2223          (d) A seller is not required to maintain a separate account for the tax collected, but is
             2224      considered to be a person charged with receipt, safekeeping, and transfer of public moneys.
             2225          (e) Taxes collected by a seller pursuant to this chapter shall be held in trust for the
             2226      benefit of the state and for payment to the commission in the manner and at the time provided
             2227      for in this chapter.
             2228          (f) If any seller, during any reporting period, collects as a tax an amount in excess of


             2229      the lawful state and local percentage of total taxable sales allowed under this chapter, the seller
             2230      shall remit to the commission the full amount of the tax imposed under this chapter, plus any
             2231      excess.
             2232          (g) If the accounting methods regularly employed by the seller in the transaction of the
             2233      seller's business are such that reports of sales made during a calendar month or quarterly period
             2234      will impose unnecessary hardships, the commission may accept reports at intervals that will, in
             2235      the commission's opinion, better suit the convenience of the taxpayer or seller and will not
             2236      jeopardize collection of the tax.
             2237          (3) (a) Except as provided in Subsections (4) [and (5)] through (6) and in Section
             2238      59-12-108 , the sales or use tax imposed by this chapter is due and payable to the commission
             2239      quarterly on or before the last day of the month next succeeding each calendar quarterly period.
             2240          (b) (i) Each seller shall, on or before the last day of the month next succeeding each
             2241      calendar quarterly period, file with the commission a return for the preceding quarterly period.
             2242          (ii) The seller shall remit with the return under Subsection (3)(b)(i) the amount of the
             2243      tax required under this chapter to be collected or paid for the period covered by the return.
             2244          (c) (i) [Each] Except as provided in Subsections (3)(c)(ii) and (4)(b)(i)(C), each return
             2245      shall contain information and be in a form the commission prescribes by rule.
             2246          (ii) Notwithstanding Subsection (3)(c)(i), a seller described in Subsection (1)(b) that is
             2247      registered under the agreement shall file a return required by this section electronically.
             2248          (d) The sales tax as computed in the return shall be based upon the total nonexempt
             2249      sales made during the period, including both cash and charge sales.
             2250          (e) The use tax as computed in the return shall be based upon the total amount of sales
             2251      and purchases for storage, use, or other consumption in this state made during the period,
             2252      including both by cash and by charge.
             2253          (f) [The] (i) Subject to Subsection (3)(f)(ii) and in accordance with Title 63, Chapter
             2254      46a, Utah Administrative Rulemaking Act, the commission may by rule extend the time for
             2255      making returns and paying the taxes. [No]
             2256          (ii) An extension under Subsection (3)(f)(i) may not be for more than 90 days.
             2257          (g) The commission may require returns and payment of the tax to be made for other
             2258      than quarterly periods if the commission considers it necessary in order to ensure the payment
             2259      of the tax imposed by this chapter.


             2260          [(h) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
             2261      the commission may make rules requiring a seller to file an information return:]
             2262          [(i) for information required by this chapter that is not included in any sales and use tax
             2263      return developed in accordance with the agreement; and]
             2264          [(ii) not more frequently than every six months.]
             2265          (4) (a) (i) Notwithstanding Subsection (3) and except as provided in Subsection
             2266      (4)(a)(ii), a tax collected in accordance with Subsection (1)(b) by a seller described in
             2267      Subsection (4)(d) shall be due and payable:
             2268          (A) to the commission;
             2269          (B) annually; and
             2270          (C) on or before the last day of the month immediately following the last day of each
             2271      calendar year.
             2272          (ii) Notwithstanding Subsection (4)(a)(i), the commission may require that a tax
             2273      collected in accordance with Subsection (1)(b) by a seller described in Subsection (4)(d) be due
             2274      and payable:
             2275          (A) to the commission; and
             2276          (B) on the last day of the month immediately following any month in which the seller
             2277      has accumulated a total of at least $1,000 in agreement sales and use tax.
             2278          (b) (i) A tax remitted to the commission under Subsection (4)(a) shall be accompanied
             2279      by a return that:
             2280          (A) contains information prescribed by the commission; [and]
             2281          (B) is in a form prescribed by the commission[.]; and
             2282          (C) notwithstanding Subsection (3)(c)(i), is filed electronically as required by
             2283      Subsection (3)(c)(ii).
             2284          (ii) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
             2285      the commission shall make rules prescribing:
             2286          (A) the information required to be contained in a return described in Subsection
             2287      (4)(b)(i); and
             2288          (B) the form of the return described in Subsection (4)(b)(i).
             2289          (c) The tax collected in accordance with this Subsection (4) calculated in the return
             2290      described in Subsection (4)(b) shall be calculated on the basis of the total amount of taxable


             2291      transactions described in Subsection 59-12-103 (1) conducted by a seller described in
             2292      Subsection (4)(d), including:
             2293          (i) a cash transaction; and
             2294          (ii) a charge transaction.
             2295          (d) This Subsection (4) applies to a seller that is:
             2296          (i) registered under the agreement;
             2297          [(ii) does not meet one or more of the criteria provided for in Subsection (1)(a) to be
             2298      required to collect a tax under this chapter; and]
             2299          (ii) described in Subsection (1)(b); and
             2300          (iii) not a:
             2301          (A) model 1 seller;
             2302          (B) model 2 seller; or
             2303          (C) model 3 seller.
             2304          (5) (a) Notwithstanding Subsection (3) and except as provided in Subsection (5)(b), a
             2305      tax collected in accordance with this chapter by a seller that files a simplified electronic return
             2306      shall be due and payable:
             2307          (i) monthly on or before the last day of the month immediately following the month for
             2308      which the seller collects a tax under this chapter; and
             2309          (ii) for the month for which the seller collects a tax under this chapter.
             2310          (b) Notwithstanding Subsection (5)(a), a tax collected in accordance with Subsection
             2311      (1)(b) by a seller described in Subsection (4)(d) that files a simplified electronic return, shall be
             2312      due and payable as provided in Subsection (4)(a).
             2313          [(5)] (6) (a) Notwithstanding Subsection (3), on each vehicle sale made by other than a
             2314      regular licensed vehicle dealer, the purchaser shall pay the sales or use tax directly to the
             2315      commission if the vehicle is subject to titling or registration under the laws of this state.
             2316          (b) The commission shall collect the tax described in Subsection [(5)] (6)(a) when the
             2317      vehicle is titled or registered.
             2318          [(6)] (7) If any sale of tangible personal property or any other taxable transaction under
             2319      Subsection 59-12-103 (1), is made by a wholesaler to a retailer, the wholesaler is not
             2320      responsible for the collection or payment of the tax imposed on the sale and the retailer is
             2321      responsible for the collection or payment of the tax imposed on the sale if:


             2322          (a) the retailer represents that the personal property is purchased by the retailer for
             2323      resale; and
             2324          (b) the personal property is not subsequently resold.
             2325          [(7)] (8) If any sale of property or service subject to the tax is made to a person
             2326      prepaying sales or use tax in accordance with Title 63, Chapter 51, Resource Development, or
             2327      to a contractor or subcontractor of that person, the person to whom such payment or
             2328      consideration is payable is not responsible for the collection or payment of the sales or use tax
             2329      and the person prepaying the sales or use tax is responsible for the collection or payment of the
             2330      sales or use tax if the person prepaying the sales or use tax represents that the amount prepaid
             2331      as sales or use tax has not been fully credited against sales or use tax due and payable under the
             2332      rules promulgated by the commission.
             2333          [(8)] (9) (a) For purposes of this Subsection [(8)] (9):
             2334          (i) Except as provided in Subsection [(8)] (9)(a)(ii), "bad debt" is as defined in Section
             2335      166, Internal Revenue Code.
             2336          (ii) Notwithstanding Subsection [(8)] (9)(a)(i), "bad debt" does not include:
             2337          (A) an amount included in the purchase price of tangible personal property or a service
             2338      that is:
             2339          (I) not a transaction described in Subsection 59-12-103 (1); or
             2340          (II) exempt under Section 59-12-104 ;
             2341          (B) a financing charge;
             2342          (C) interest;
             2343          (D) a tax imposed under this chapter on the purchase price of tangible personal
             2344      property or a service;
             2345          (E) an uncollectible amount on tangible personal property that:
             2346          (I) is subject to a tax under this chapter; and
             2347          (II) remains in the possession of a seller until the full purchase price is paid;
             2348          (F) an expense incurred in attempting to collect any debt; or
             2349          (G) an amount that a seller does not collect on repossessed property.
             2350          (b) A seller may deduct bad debt from the total amount from which a tax under this
             2351      chapter is calculated on a return.
             2352          (c) A seller may file a refund claim with the commission if:


             2353          (i) the amount of bad debt for the time period described in Subsection [(8)] (9)(e)
             2354      exceeds the amount of the seller's sales that are subject to a tax under this chapter for that same
             2355      time period; and
             2356          (ii) as provided in Section 59-12-110 .
             2357          (d) A bad debt deduction under this section may not include interest.
             2358          (e) A bad debt may be deducted under this Subsection [(8)] (9) on a return for the time
             2359      period during which the bad debt:
             2360          (i) is written off as uncollectible in the seller's books and records; and
             2361          (ii) would be eligible for a bad debt deduction:
             2362          (A) for federal income tax purposes; and
             2363          (B) if the seller were required to file a federal income tax return.
             2364          (f) If a seller recovers any portion of bad debt for which the seller makes a deduction or
             2365      claims a refund under this Subsection [(8)] (9), the seller shall report and remit a tax under this
             2366      chapter:
             2367          (i) on the portion of the bad debt the seller recovers; and
             2368          (ii) on a return filed for the time period for which the portion of the bad debt is
             2369      recovered.
             2370          (g) For purposes of reporting a recovery of a portion of bad debt under Subsection [(8)]
             2371      (9)(f), a seller shall apply amounts received on the bad debt in the following order:
             2372          (A) in a proportional amount:
             2373          (I) to the purchase price of the tangible personal property or service; and
             2374          (II) to the tax due under this chapter on the tangible personal property or service; and
             2375          (B) to:
             2376          (I) interest charges;
             2377          (II) service charges; and
             2378          (III) other charges.
             2379          (h) A seller's certified service provider may make a deduction or claim a refund for bad
             2380      debt on behalf of the seller:
             2381          (i) in accordance with this Subsection [(8)] (9); and
             2382          (ii) if the certified service provider credits or refunds the full amount of the bad debt
             2383      deduction or refund to the seller.


             2384          (i) A bad debt may be allocated among the states that are members of the agreement if
             2385      a seller's books and records support that allocation.
             2386          [(9)] (10) (a) The commission may require any person subject to the tax imposed under
             2387      this chapter to deposit with the commission security as the commission determines, if the
             2388      commission considers it necessary to ensure compliance with this chapter.
             2389          (b) The commission may sell the security at public sale if it becomes necessary to do so
             2390      in order to recover any tax, interest, or penalty due.
             2391          (c) (i) The commission shall serve notice of the sale upon the person who deposited the
             2392      securities.
             2393          (ii) Notice under Subsection [(9)] (10)(c)(i) sent to the last-known address as it appears
             2394      in the records of the commission is sufficient for the purposes of this requirement.
             2395          (d) The commission shall return to the person who deposited the security any amount
             2396      of the sale proceeds that exceed the amounts due under this chapter.
             2397          [(10)] (11) (a) A seller may not, with intent to evade any tax, fail to timely remit the
             2398      full amount of tax required by this chapter.
             2399          (b) A violation of this section is punishable as provided in Section 59-1-401 .
             2400          (c) Each person who fails to pay any tax to the state or any amount of tax required to be
             2401      paid to the state, except amounts determined to be due by the commission under Sections
             2402      59-12-110 and 59-12-111 , within the time required by this chapter, or who fails to file any
             2403      return as required by this chapter, shall pay, in addition to the tax, penalties and interest as
             2404      provided in Section 59-12-110 .
             2405          (d) For purposes of prosecution under this section, each quarterly tax period in which a
             2406      seller, with intent to evade any tax, collects a tax and fails to timely remit the full amount of the
             2407      tax required to be remitted, constitutes a separate offense.
             2408          Section 14. Section 59-12-107.1 (Effective 07/01/04) is amended to read:
             2409           59-12-107.1 (Effective 07/01/04). Direct payment permit.
             2410          (1) The commission may issue a direct payment permit to a seller that:
             2411          (a) obtains a license under Section 59-12-106 ;
             2412          (b) is required to remit taxes under this chapter by electronic funds transfer in
             2413      accordance with [Section] Subsection 59-12-108 (1);
             2414          (c) has a record of timely payment of taxes under this chapter as determined by the


             2415      commission; and
             2416          (d) demonstrates to the commission that the seller has the ability to determine the
             2417      appropriate location of a transaction:
             2418          (i) under:
             2419          (A) Section 59-12-205 ;
             2420          (B) Section 59-12-207.1 ; and
             2421          (C) Section 59-12-207.3 ; and
             2422          (ii) for each transaction for which the seller makes a purchase using the direct payment
             2423      permit.
             2424          (2) A direct payment permit may not be used in connection with the following
             2425      transactions:
             2426          (a) a purchase of the following purchased in the same transaction:
             2427          (i) prepared food; and
             2428          (ii) food and food ingredients;
             2429          (b) amounts paid or charged for accommodations and services described in Subsection
             2430      59-12-103 (1)(i);
             2431          (c) amounts paid or charged for admission or user fees under Subsection
             2432      59-12-103 (1)(f);
             2433          (d) a purchase of:
             2434          (i) a motor vehicle;
             2435          (ii) an aircraft;
             2436          (iii) a watercraft;
             2437          (iv) a modular home;
             2438          (v) a manufactured home; or
             2439          (vi) a mobile home;
             2440          (e) amounts paid under Subsection 59-12-103 (1)(b); or
             2441          (f) sales under Subsection 59-12-103 (1)(c).
             2442          (3) The holder of a direct payment permit shall:
             2443          (a) present evidence of the direct payment permit to a seller at the time the holder of
             2444      the direct payment permit makes a purchase using the direct payment permit;
             2445          (b) determine the appropriate location of a transaction [under]:


             2446          (i) under:
             2447          (A) Section 59-12-205 ;
             2448          (B) Section 59-12-207.1 ; or
             2449          (C) Section 59-12-207.3 ; and
             2450          (ii) for each transaction for which the holder of the direct payment permit makes a
             2451      purchase using the direct payment permit;
             2452          (c) notwithstanding Section 59-12-107 and subject to Subsection 59-12-107.2 (4),
             2453      determine the amount of any agreement sales and use tax due on each transaction for which the
             2454      holder of the direct payment permit uses the direct payment permit;
             2455          (d) report and remit to the commission the agreement sales and use tax described in
             2456      Subsection (3)(c) at the same time and in the same manner as the holder of the direct payment
             2457      permit reports and remits a tax under this chapter; and
             2458          (e) maintain records:
             2459          (i) that indicate the appropriate location of a transaction:
             2460          (A) under:
             2461          (I) Section 59-12-205 ;
             2462          (II) Section 59-12-207.1 ; or
             2463          (III) Section 59-12-207.3 ; and
             2464          (B) for each transaction for which a purchase is made using the direct payment permit;
             2465      and
             2466          (ii) necessary to determine the amount described in Subsection (3)(c) for each
             2467      transaction for which the holder of the direct payment permit uses the direct payment permit.
             2468          (4) A seller that is presented evidence of a direct payment permit at the time of a
             2469      transaction:
             2470          (a) notwithstanding Section 59-12-107 , may not collect agreement sales and use tax on
             2471      the transaction;
             2472          (b) shall, for a period of three years from the date the seller files a return with the
             2473      commission reporting the transaction, retain records to verify that the transaction was made
             2474      using a direct payment permit; and
             2475          (c) notwithstanding Section 59-12-107 , is not liable for agreement sales and use tax on
             2476      the transaction.


             2477          (5) The holder of a direct payment permit may calculate the amount the holder of the
             2478      direct payment permit may retain under Section 59-12-108 on the amount described in
             2479      Subsection (3)(c):
             2480          (a) for each transaction for which the holder of the direct payment permit uses the
             2481      direct payment permit; and
             2482          (b) that the holder of the direct payment permit remits to the commission under this
             2483      section.
             2484          (6) The commission may revoke a direct payment permit issued under this section at
             2485      any time if the holder of the direct payment permit fails to comply with any provision of this
             2486      chapter.
             2487          (7) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             2488      commission may make rules to administer this section.
             2489          Section 15. Section 59-12-107.2 (Effective 07/01/04) is amended to read:
             2490           59-12-107.2 (Effective 07/01/04). Services, computer software, or digital goods
             2491      concurrently available for use in more than one location.
             2492          (1) (a) Notwithstanding Section 59-12-107 and except as provided in Subsection (4), if
             2493      a purchaser of a good or service described in Subsection (1)(b) that is not the holder of a direct
             2494      payment permit under Section 59-12-107.1 knows at the time of purchase that the good or
             2495      service described in Subsection (1)(b) will be concurrently available for use in more than one
             2496      location, the purchaser shall:
             2497          (i) provide to the seller at the time of purchase a form:
             2498          (A) prescribed by the commission; and
             2499          (B) indicating that the good or service described in Subsection (1)(b) will be
             2500      concurrently available for use in more than one location;
             2501          (ii) apportion the purchase price of the good or service described in Subsection (1)(b)
             2502      among the locations determined in accordance with Section 59-12-205 and Subsection
             2503      59-12-207.1 [(9)](10);
             2504          (iii) determine the agreement sales and use tax for each location determined in
             2505      accordance with Section 59-12-205 and Subsection 59-12-207.1 [(9)](10) by calculating the
             2506      product of:
             2507          (A) the tax rate for the location determined in accordance with Section 59-12-205 and


             2508      Subsection 59-12-207.1 [(9)](10); and
             2509          (B) the amount of the purchase price apportioned to that location under Subsection
             2510      (1)(a)(ii); and
             2511          (iv) remit to the commission the agreement sales and use tax calculated under
             2512      Subsection (1)(a)(iii) for each location determined in accordance with Section 59-12-205 and
             2513      Subsection 59-12-207.1 [(9)](10).
             2514          (b) Subsection (1)(a) applies to:
             2515          (i) a service;
             2516          (ii) prewritten computer software delivered electronically; or
             2517          (iii) a digital good.
             2518          (2) The method a purchaser may use to make the apportionment required by Subsection
             2519      (1) shall be:
             2520          (a) reasonable;
             2521          (b) uniform;
             2522          (c) consistent; and
             2523          (d) supported by the purchaser's business records as those business records exist at the
             2524      time of the transaction.
             2525          (3) Upon receipt of the form described in Subsection (1)(a)(i):
             2526          (a) a seller:
             2527          (i) is not liable to collect or remit agreement sales and use tax for that transaction; and
             2528          (ii) shall keep a record of the form described in Subsection (1)(a)(i) for three years
             2529      from the date the seller files a return with the commission reporting that transaction; and
             2530          (b) the form shall remain in effect:
             2531          (i) for all future transactions between the seller described in Subsection (3)(a) and the
             2532      purchaser; and
             2533          (ii) until the form is revoked in writing by the purchaser.
             2534          (4) (a) Notwithstanding Subsection (1), a purchaser of a good or service described in
             2535      Subsection (1)(b) is not required to provide to a seller the form described in Subsection
             2536      (1)(a)(i) if the purchaser:
             2537          (i) knows at the time of purchase that the good or service described in Subsection
             2538      (1)(b) will be concurrently available for use in more than one location; and


             2539          (ii) is the holder of a direct payment permit under Section 59-12-107.1 .
             2540          (b) A purchaser described in Subsection (4)(a) is subject to Subsection (2) in
             2541      determining the apportionment of agreement sales and use tax due on the good or service
             2542      described in Subsection (1)(b).
             2543          Section 16. Section 59-12-107.4 is enacted to read:
             2544          59-12-107.4. Certified service provider liability.
             2545          (1) Notwithstanding Section 59-12-107 and except as provided in Subsection (2), if a
             2546      model 1 seller selects a certified service provider as the model 1 seller's agent:
             2547          (a) the certified service provider shall collect and remit agreement sales and use taxes
             2548      to the commission:
             2549          (i) that the model 1 seller would otherwise be required to remit to the commission
             2550      under this chapter; and
             2551          (ii) as provided in this chapter; and
             2552          (b) the model 1 seller is not liable for the certified service provider's failure to collect
             2553      and remit any agreement sales and use taxes to the commission that the model 1 seller would
             2554      otherwise be required to remit to the commission under this chapter.
             2555          (2) Notwithstanding Subsection (1), the model 1 seller described in Subsection (1):
             2556          (a) shall remit to the commission any sales and use taxes imposed by this chapter:
             2557          (i) on the model 1 seller's purchases; and
             2558          (ii) as provided in this chapter; and
             2559          (b) is liable for any sales and use tax liability arising from the model 1 seller's fraud.
             2560          Section 17. Section 59-12-107.5 is enacted to read:
             2561          59-12-107.5. Seller or certified service provider reliance on commission database
             2562      or certain software.
             2563          A seller or certified service provider is not liable for failing to collect and remit a tax at
             2564      a tax rate imposed under this part if:
             2565          (1) the tax rate at which the seller or certified service provider collected the tax was
             2566      derived from a database created by the commission containing tax rates;
             2567          (2) the failure to collect and remit the tax is as a result of the seller's or certified service
             2568      provider's reliance on incorrect data provided by the commission in the taxability matrix
             2569      required by Section 328 of the agreement;


             2570          (3) for a model 2 seller, the failure to collect and remit the tax:
             2571          (a) is due to an error in the certified automated system used by the model 2 seller; and
             2572          (b) occurs prior to an audit of the certified automated system that reveals the error in
             2573      the certified automated system; or
             2574          (4) for a model 3 seller, the failure to collect and remit the tax:
             2575          (a) is due to an error in the proprietary system used by the model 3 seller; and
             2576          (b) occurs prior to an audit of the proprietary system that reveals the error in the
             2577      proprietary system.
             2578          Section 18. Section 59-12-108 (Effective 07/01/04) is amended to read:
             2579           59-12-108 (Effective 07/01/04). Monthly payment -- Penalty -- Amount of tax a
             2580      seller may retain.
             2581          (1) (a) Notwithstanding Section 59-12-107 , a seller that has a tax liability under this
             2582      chapter of $50,000 or more for the previous calendar year shall:
             2583          (i) file a return with the commission:
             2584          (A) monthly on or before the last day of the month immediately following the month
             2585      for which the seller collects a tax under this chapter; and
             2586          (B) for the month for which the seller collects a tax under this chapter; and
             2587          (ii) (A) except as provided in Subsection (1)(a)(ii)(B) or (1)(c), remit with the return
             2588      required by Subsection (1)(a)(i) the amount the person is required to remit to the commission
             2589      for each tax, fee, or charge described in Subsection (1)(b):
             2590          [(A)] (I) if that seller's tax liability under this chapter for the previous calendar year is
             2591      less than $96,000, by any method permitted by the commission; or
             2592          [(B)] (II) if that seller's tax liability under this chapter for the previous calendar year is
             2593      $96,000 or more, by electronic funds transfer[.]; or
             2594          (B) notwithstanding Subsection (1)(a)(ii)(A), a seller shall remit electronically with the
             2595      return required by Subsection (1)(a)(i) the amount the person is required to remit to the
             2596      commission for each tax, fee, or charge described in Subsection (1)(b) if that seller:
             2597          (I) is required by Section 59-12-107 to file the return electronically; or
             2598          (II) (Aa) is required to collect and remit a tax under Subsection 59-12-107 (1)(a); and
             2599          (Bb) files a simplified electronic return.
             2600          (b) Subsections (1)(a)(i) and (ii) apply to the following taxes, fees, or charges:


             2601          (i) a tax under Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;
             2602          (ii) a fee under Section 19-6-716 ;
             2603          (iii) a fee under Section 19-6-805 ;
             2604          (iv) a charge under Section 69-2-5.5 ; or
             2605          (v) a tax under this chapter.
             2606          (c) Notwithstanding Subsection (1)(a)(ii) and in accordance with Title 63, Chapter 46a,
             2607      Utah Administrative Rulemaking Act, the commission [may] shall make rules providing for a
             2608      method for making same-day payments other than by electronic funds transfer if making
             2609      payments by electronic funds transfer fails.
             2610          (d) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             2611      commission shall establish by rule procedures and requirements for determining the amount a
             2612      seller is required to remit to the commission under this Subsection (1).
             2613          (2) (a) Except as provided in Subsection (2)(b), a seller subject to Subsection (1) or a
             2614      seller described in Subsection (3) may retain each month an amount not to exceed:
             2615          (i) [1.5%] 1.31% of any amounts the seller is required to remit to the commission for:
             2616          (A) [for] the month for which the seller is filing a return in accordance with Subsection
             2617      (1); and
             2618          (B) [under this part] an agreement sales and use tax; and
             2619          (ii) 1% of any amounts the seller is required to remit to the commission:
             2620          (A) for the month for which the seller is filing a return in accordance with Subsection
             2621      (1); and
             2622          (B) under:
             2623          (I) Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;
             2624          [(II) Part 2, Local Sales and Use Tax Act;]
             2625          [(III) Part 5, Public Transit Tax;]
             2626          [(IV) Part 10, Highways or Public Transit System Tax;]
             2627          [(V)] (II) Subsection 59-12-603 (1)(a)(i); or
             2628          [(VI)] (III) Subsection 59-12-603 (1)(a)(ii).
             2629          (b) Notwithstanding Subsection (2)(a), a state government entity that is required to
             2630      remit taxes monthly in accordance with Subsection (1) may not retain any amount under
             2631      Subsection (2)(a).


             2632          (3) A seller that has a tax liability under this chapter for the previous calendar year of
             2633      less than $50,000 may:
             2634          (a) voluntarily meet the requirements of Subsection (1); and
             2635          (b) if the seller voluntarily meets the requirements of Subsection (1), retain the
             2636      amounts allowed by Subsection (2)(a).
             2637          (4) Penalties for late payment shall be as provided in Section 59-1-401 .
             2638          (5) (a) For any amounts required to be remitted to the commission under this part, the
             2639      commission shall each month calculate an amount equal to the difference between:
             2640          (i) the total amount retained for that month by all sellers had the percentage listed
             2641      under Subsection (2)(a)(i) been 1.5%; and
             2642          (ii) the total amount retained for that month by all sellers at the percentage listed under
             2643      Subsection (2)(a)(i).
             2644          (b) The commission shall each month allocate the amount calculated under Subsection
             2645      (5)(a) to each local taxing jurisdiction on the basis of the proportion of agreement sales and use
             2646      tax that the commission distributes to each local taxing jurisdiction for that month compared to
             2647      the total agreement sales and use tax that the commission distributes for that month to all local
             2648      taxing jurisdictions.
             2649          Section 19. Section 59-12-110 (Effective 07/01/04) is amended to read:
             2650           59-12-110 (Effective 07/01/04). Overpayments, deficiencies, and refunds
             2651      procedures.
             2652          (1) (a) As soon as practicable after a return is filed, the commission shall examine the
             2653      return.
             2654          (b) If the commission determines that the correct amount of tax to be remitted is
             2655      greater or less than the amount shown to be due on the return, the commission shall recompute
             2656      the tax.
             2657          (c) If the amount paid exceeds the amount due, the excess, plus interest as provided in
             2658      Section 59-1-402 , shall be credited or refunded to the taxpayer as provided in Subsection (2).
             2659          (d) The commission may not credit or refund to the taxpayer interest on an
             2660      overpayment under Subsection (1)(c) if the commission determines that the overpayment was
             2661      made for the purpose of investment.
             2662          (2) (a) If a taxpayer pays a tax, penalty, or interest more than once or the commission


             2663      erroneously receives, collects, or computes any tax, penalty, or interest, including an
             2664      overpayment described in Subsection (1)(c), the commission shall:
             2665          (i) credit the amount of tax, penalty, or interest paid by the taxpayer against any
             2666      amounts of tax, penalties, or interest the taxpayer owes; and
             2667          (ii) refund any balance to the taxpayer or the taxpayer's successors, administrators,
             2668      executors, or assigns.
             2669          (b) Except as provided in Subsections (2)(c) and (d) or Section 19-2-124 , a taxpayer
             2670      shall file a claim with the commission to obtain a refund or credit under this Subsection (2)
             2671      within three years from the day on which the taxpayer overpaid the tax, penalty, or interest.
             2672          (c) Notwithstanding Subsection (2)(b), beginning on July 1, 1998, the commission
             2673      shall extend the period for a taxpayer to file a claim under Subsection (2)(b) if:
             2674          (i) the three-year period under Subsection (2)(b) has not expired; and
             2675          (ii) the commission and the taxpayer sign a written agreement:
             2676          (A) authorizing the extension; and
             2677          (B) providing for the length of the extension.
             2678          (d) Notwithstanding Subsection (2)(b), a seller that files a claim for a refund under
             2679      Subsection 59-12-107 [(8)] (9)(c) for bad debt shall file the claim with the commission within
             2680      three years from the date on which the seller could first claim the refund for the bad debt.
             2681          (e) A taxpayer may file a claim to obtain a refund or credit under this Subsection (2)
             2682      regardless of whether the taxpayer received or objected to a notice of deficiency or a notice of
             2683      assessment as provided in Subsection 59-12-114 (1).
             2684          (f) A taxpayer may obtain a refund under this Subsection (2) of a tax paid under this
             2685      chapter on a transaction that is taxable under Section 59-12-103 if:
             2686          (i) the sale or use was exempt from sales and use taxes under Section 59-12-104 on the
             2687      date of purchase; and
             2688          (ii) except as provided in Subsection (2)(c), the taxpayer files a claim for a refund with
             2689      the commission as provided in Subsections (2)(b) through (e).
             2690          (g) If the commission denies a claim for a refund or credit under this Subsection (2),
             2691      the taxpayer may request a redetermination of the denial by filing a petition or request for
             2692      agency action with the commission as provided in Title 63, Chapter 46b, Administrative
             2693      Procedures Act.


             2694          (3) If the commission erroneously determines an amount to be due from a taxpayer, the
             2695      commission shall authorize the amounts to be cancelled upon its records.
             2696          (4) (a) Subject to the provisions of Subsection (4)(b), the commission may impose on a
             2697      deficiency under this section:
             2698          (i) a penalty as provided in Section 59-1-401 ; and
             2699          (ii) interest as provided in Section 59-1-402 .
             2700          (b) The commission may impose a penalty and interest on the entire deficiency if any
             2701      part of the deficiency is due to:
             2702          (i) negligence;
             2703          (ii) intentional disregard of law or rule; or
             2704          (iii) fraud with intent to evade the tax.
             2705          (5) (a) Except as provided in Subsection (5)(b), a taxpayer shall pay a tax deficiency,
             2706      including penalties or interest under this section, within ten days after the commission provides
             2707      the taxpayer notice and demand of the deficiency, penalty, or interest.
             2708          (b) Notwithstanding Subsection (5)(a), a taxpayer may pay a tax deficiency, penalty, or
             2709      interest within 30 days after the commission provides the taxpayer notice and demand of the
             2710      deficiency, penalty, or interest if the commission determines:
             2711          (i) that a greater amount was due than was shown on the return; and
             2712          (ii) the tax is not in jeopardy.
             2713          (6) (a) Except as provided in Subsections (6)(c) through (f), the commission shall
             2714      assess the amount of taxes imposed by this chapter, and any penalties and interest, within three
             2715      years after a taxpayer files a return.
             2716          (b) Except as provided in Subsections (6)(c) through (f), if the commission does not
             2717      make an assessment under Subsection (6)(a) within three years, the commission may not
             2718      commence a proceeding for the collection of the taxes after the expiration of the three-year
             2719      period.
             2720          (c) Notwithstanding Subsections (6)(a) and (b), the commission may make an
             2721      assessment or commence a proceeding to collect a tax at any time if a deficiency is due to:
             2722          (i) fraud; or
             2723          (ii) failure to file a return.
             2724          (d) Notwithstanding Subsections (6)(a) and (b), beginning on July 1, 1998, the


             2725      commission may extend the period to make an assessment or to commence a proceeding to
             2726      collect the tax under this chapter if:
             2727          (i) the three-year period under this Subsection (6) has not expired; and
             2728          (ii) the commission and the taxpayer sign a written agreement:
             2729          (A) authorizing the extension; and
             2730          (B) providing for the length of the extension.
             2731          (e) If the commission delays an audit at the request of a taxpayer, the commission may
             2732      make an assessment as provided in Subsection (6)(f) if:
             2733          (i) the taxpayer subsequently refuses to agree to an extension request by the
             2734      commission; and
             2735          (ii) the three-year period under this Subsection (6) expires before the commission
             2736      completes the audit.
             2737          (f) An assessment under Subsection (6)(e) shall be:
             2738          (i) for the time period for which the commission could not make an assessment
             2739      because of the expiration of the three-year period; and
             2740          (ii) in an amount equal to the difference between:
             2741          (A) the commission's estimate of the amount of taxes the taxpayer would have been
             2742      assessed for the time period described in Subsection (6)(f)(i); and
             2743          (B) the amount of taxes the taxpayer actually paid for the time period described in
             2744      Subsection (6)(f)(i).
             2745          Section 20. Section 59-12-110.1 (Effective 07/01/04) is amended to read:
             2746           59-12-110.1 (Effective 07/01/04). Refund or credit for taxes overpaid by a
             2747      purchaser.
             2748          (1) Subject to the other provisions of this section, a purchaser may request from a seller
             2749      a refund or credit of any amount that:
             2750          (a) the purchaser overpaid in taxes under this chapter; and
             2751          (b) was collected by the seller.
             2752          (2) (a) Except as provided in Subsection (2)(b), the procedure described in Subsection
             2753      (1) is in addition to the process for a taxpayer to file a claim for a refund or credit with the
             2754      commission under Section 59-12-110 .
             2755          (b) Notwithstanding Subsection (2)(a):


             2756          (i) the commission is not required to make a refund or credit of an amount for which as
             2757      of the date the refund or credit is to be given the purchaser has requested or received a refund
             2758      or credit from the seller; and
             2759          (ii) a seller is not required to refund or credit an amount for which as of the date the
             2760      refund is to be given the purchaser has requested or received a refund or credit from the
             2761      commission.
             2762          (3) A purchaser may not bring a cause of action against a seller for a refund or credit
             2763      described in Subsection (1):
             2764          (a) unless the purchaser provided the seller written notice that:
             2765          (i) the purchaser requests the refund or credit described in Subsection (1); and
             2766          (ii) contains the information necessary for the seller to determine the validity of the
             2767      request; and
             2768          (b) sooner than 60 days after the day on which the seller receives the written notice
             2769      described in Subsection (3)(a).
             2770          (4) A seller that has collected a tax under this chapter that exceeds the amount the
             2771      seller is required to collect under this chapter is presumed to have a reasonable business
             2772      practice if the seller:
             2773          (a) collected a tax under this chapter that exceeds the amount the seller is required to
             2774      collect under this chapter through the use of:
             2775          (i) a provider certified by the state; or
             2776          (ii) a system certified by the state, including a proprietary system certified by the state;
             2777      and
             2778          (b) has remitted to the commission all taxes that the seller is required to remit to the
             2779      commission under this chapter.
             2780          Section 21. Section 59-12-122 is enacted to read:
             2781          59-12-122. Monetary allowance for a seller registered under the agreement.
             2782          A seller that is registered under the agreement shall receive the monetary allowance
             2783      determined:
             2784          (1) by the governing board of the agreement; and
             2785          (2) in accordance with Article VI, Monetary Allowances for New Technological
             2786      Models for Sales Tax Collection, of the agreement.


             2787          Section 22. Section 59-12-205 (Effective 07/01/04) is amended to read:
             2788           59-12-205 (Effective 07/01/04). Ordinances to conform with statutory
             2789      amendments -- Distribution of tax revenues -- Rulemaking authority -- Determination of
             2790      population.
             2791          (1) Each county, city, and town, in order to maintain in effect sales and use tax
             2792      ordinances adopted pursuant to Section 59-12-204 , shall, within 30 days of any amendment of
             2793      any applicable provisions of Part 1, Tax Collection, adopt amendments of their respective sales
             2794      and use tax ordinances to conform with the amendments to Part 1, Tax Collection, insofar as
             2795      they relate to sales and use taxes.
             2796          (2) [(a)] Except as provided in Subsection [(3)] (7):
             2797          [(i)] (a) 50% of each dollar collected from the sales and use tax authorized by this part
             2798      shall be paid to each county, city, and town on the basis of the percentage that the population of
             2799      the county, city, or town bears to the total population of all counties, cities, and towns in the
             2800      state; and
             2801          [(ii)] (b) notwithstanding Sections 59-12-207.1 through 59-12-207.4 , 50% of each
             2802      dollar collected from the sales and use tax authorized by this part shall be paid to each county,
             2803      city, and town on the basis of the location where the transaction is consummated [under
             2804      Subsection (2)(b)] as determined under this section.
             2805          [(b)] (3) For purposes of Subsection (2)(a), the location where a transaction is
             2806      consummated is determined [as follows:] in accordance with Subsections (4) through (6).
             2807          (4) (a) For a transaction that is reported to the commission on a return other than a
             2808      simplified electronic return, the location where the transaction is consummated is determined
             2809      in accordance with Subsections (4)(b) through (h).
             2810          [(i)] (b) (i) [except] Except as provided in Subsections [(2)(b)(ii)] (4)(c) through [(iv)]
             2811      (h), for a transaction described in Subsection (4)(b)(ii), the location where [a] the transaction is
             2812      consummated is the place of business of the seller[;].
             2813          (ii) Subsection (4)(b)(i) applies to a transaction other than a transaction described in:
             2814          (A) Subsection (4)(c)(ii);
             2815          (B) Subsection (4)(d)(ii);
             2816          (C) Subsection (4)(e)(ii);
             2817          (D) Subsection (4)(f)(ii);


             2818          (E) Subsection (4)(g)(ii); or
             2819          (F) Subsection (4)(h).
             2820          [(ii)] (c) (i) [notwithstanding] Notwithstanding Subsection [(2)(b)(i), if tangible
             2821      personal property is shipped from outside the state] (4)(b), for a transaction described in
             2822      Subsection (4)(c)(ii), the location where the transaction is consummated [is the same as the
             2823      location of the transaction determined under] is determined by allocating the total revenues
             2824      remitted to the commission each month that are generated by the tax imposed under this
             2825      section on the transactions described in Subsection (4)(c)(ii):
             2826          (A) to each local taxing jurisdiction; and
             2827          (B) on the basis of the population of each local taxing jurisdiction as compared to the
             2828      population of the state.
             2829          [(A) Section 59-12-207.1 ;]
             2830          [(B) Section 59-12-207.2 ;]
             2831          [(C) Section 59-12-207.3 ; or]
             2832          [(D) Section 59-12-207.4 ;]
             2833          (ii) Subsection (4)(c)(i) applies to a transaction:
             2834          (A) made by a seller described in Subsection 59-12-107 (1)(b); and
             2835          (B) involving tangible personal property that is shipped from outside the state.
             2836          [(iii)] (d) (i) [notwithstanding] Notwithstanding Subsection [(2)(b)(i) and subject to
             2837      Subsection (2)(c), if the transaction is made from a location in the state other than a fixed place
             2838      of business in the state] (4)(b), for a transaction described in Subsection (4)(d)(ii), the location
             2839      where the transaction is consummated is [the same as the location of the transaction determined
             2840      under] determined by allocating the total revenues reported to the commission each month that
             2841      are generated by the tax imposed under this section on the transactions described in Subsection
             2842      (4)(d)(ii):
             2843          (A) to local taxing jurisdictions within a county; and
             2844          (B) on the basis of the proportion of total revenues generated by the transactions
             2845      described in Subsection (4)(b)(ii) that are reported to the commission for that month within a
             2846      local taxing jurisdiction within that county as compared to the total revenues generated by the
             2847      transactions described in Subsection (4)(b)(ii) that are reported to the commission for that
             2848      month within all local taxing jurisdictions within that county.


             2849          [(A) Section 59-12-207.1 ;]
             2850          [(B) Section 59-12-207.2 ;]
             2851          [(C) Section 59-12-207.3 ; or]
             2852          [(D) Section 59-12-207.4 ; or]
             2853          (ii) Subsection (4)(d)(i) applies to a transaction:
             2854          (A) made from a location in the state other than a fixed place of business in the state;
             2855      or
             2856          (B) (I) made by a seller described in Subsection 59-12-107 (1)(a); and
             2857          (II) involving tangible personal property that is shipped from outside the state.
             2858          (e) (i) Notwithstanding Subsection (4)(b), for a transaction described in Subsection
             2859      (4)(e)(ii), the location where the transaction is consummated is determined by allocating the
             2860      total revenues reported to the commission each month that are generated by the tax imposed
             2861      under this section on the transactions described in Subsection (4)(e)(ii):
             2862          (A) to local taxing jurisdictions; and
             2863          (B) on the basis of the proportion of the total revenues generated by the transactions
             2864      described in Subsection (4)(b)(ii) that are reported to the commission for that month within
             2865      each local taxing jurisdiction as compared to the total revenues generated by the transactions
             2866      described in Subsection (4)(b)(ii) that are reported to the commission for that month within the
             2867      state.
             2868          (ii) Subsection (4)(e)(i) applies to a transaction involving tangible personal property
             2869      purchased with a direct payment permit in accordance with Section 59-12-107.1 .
           &nbs