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H.B. 273 Enrolled

                 

TAX AND CHARGE AMENDMENTS

                 
2004 GENERAL SESSION

                 
STATE OF UTAH

                 
Sponsor: Wayne A. Harper

                 
                  LONG TITLE
                  General Description:
                      This bill amends the Sales and Use Tax Act, provisions relating to a municipality's
                  authority to levy a tax on taxable energy or a municipal telecommunications license tax,
                  and provisions relating to a county's or municipality's authority to impose an emergency
                  services telephone charge.
                  Highlighted Provisions:
                      This bill:
                      .    modifies the municipal energy sales and use tax and the municipal
                  telecommunications license tax to coordinate those taxes with the Streamlined Sales
                  and Use Tax Agreement and state and local sales and use taxes;
                      .    amends tax penalty provisions including:
                          .    changing references to the term "vendor" to "seller";
                          .    clarifying that penalty provisions apply to a seller that fails to remit a tax, fee, or
                  charge monthly; and
                          .    providing that a seller that fails to remit a tax, fee, or charge by electronic funds
                  transfer is subject to penalties and may not retain the percentage of sales and use
                  taxes that the seller could otherwise retain;
                      .    provides, amends, and repeals state and local sales and use tax definitions;
                      .    repeals obsolete language;
                      .    provides that certain state sales and use tax revenues are required to be deposited
                  into the Remote Sales Restricted Account;
                      .    requires the Division of Finance to deposit any revenues in the Remote Sales
                  Restricted Account as of July 1, 2004 into the General Fund;


                      .    provides that the Remote Sales Restricted Account shall earn interest and that the
                  interest shall be deposited into the account;
                      .    modifies the sales and use tax exemption for prescription drugs;
                      .    modifies the exempt sales that are required to be reported to the State Tax
                  Commission;
                      .    requires certain sellers that file a simplified electronic return with the commission to
                  file a report with the commission, provides the information to be contained in the
                  report, provides a due date for filing the report, provides a penalty for failing to file the
                  report, and authorizes the State Tax Commission to waive, reduce, or compromise the
                  penalty under certain circumstances;
                      .    amends provisions relating to the collection, remittance, and payment of a tax by a
                  seller;
                      .    addresses the duties of a certified service provider and a model 1 seller;
                      .    addresses the sales and use tax liability of a seller or certified service provider that
                  relies on State Tax Commission information or certain systems in collecting and
                  remitting sales and use taxes;
                      .    requires certain sellers to file returns with the State Tax Commission electronically and
                  to remit a tax, fee, or charge to the State Tax Commission electronically;
                      .    modifies the amount that a seller required to file a return and remit a tax, fee, or
                  charge to the State Tax Commission monthly may retain;
                      .    requires the State Tax Commission to make a calculation and make distributions of
                  state and local sales and use tax revenues to local taxing jurisdictions under certain
                  circumstances;
                      .    provides the circumstances under which a seller that has collected state or local sales
                  and use taxes that exceed the amount of state or local sales and use taxes the seller is
                  required to collect is presumed to have a reasonable business practice;
                      .    provides for monetary allowances for sellers registered under the Streamlined Sales
                  and Use Tax Agreement;

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                      .    grants rulemaking authority to the State Tax Commission;
                      .    amends provisions relating to determining the location of certain transactions;
                      .    amends provisions relating to the imposition of taxes on certain accommodations and
                  services;
                      .    repeals references to certain tax names;
                      .    amends provisions relating to the enactment, repeal, or change in the rate of a tax or
                  charge;
                      .    addresses procedures for administering, collecting, and enforcing state and local sales
                  and use taxes;
                      .    addresses when a tax rate change in the motor vehicle rental tax takes effect;
                      .    modifies the local sales and use tax for highways and public transit systems to be in
                  compliance with the Streamlined Sales and Use Tax Agreement and to coordinate that
                  tax with other state and local sales and use taxes;
                      .    modifies the emergency services telephone charge to coordinate with the Streamlined
                  Sales and Use Tax Agreement and state and local sales and use taxes; and
                      .    makes technical changes.
                  Monies Appropriated in this Bill:
                      None
                  Other Special Clauses:
                      This bill takes effect on July 1, 2004.
                  Utah Code Sections Affected:
                  AMENDS:
                      10-1-304 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
                      10-1-307 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
                      10-1-403, as enacted by Chapter 253, Laws of Utah 2003
                      10-1-405, as enacted by Chapter 253, Laws of Utah 2003
                      10-1-407, as enacted by Chapter 253, Laws of Utah 2003
                      10-1-408, as enacted by Chapter 253, Laws of Utah 2003

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                      17-31-8, as enacted by Chapter 159, Laws of Utah 2001
                      59-1-302, as last amended by Chapter 107, Laws of Utah 1994
                      59-1-401, as last amended by Chapters 104 and 177, Laws of Utah 2001
                      59-12-102 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
                      59-12-103 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
                      59-12-103.2 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
                      59-12-104 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
                      59-12-105 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
                      59-12-107 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
                      59-12-107.1 (Effective 07/01/04), as enacted by Chapter 312, Laws of Utah 2003
                      59-12-107.2 (Effective 07/01/04), as enacted by Chapter 312, Laws of Utah 2003
                      59-12-108 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
                      59-12-110 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
                      59-12-110.1 (Effective 07/01/04), as enacted by Chapter 312, Laws of Utah 2003
                      59-12-205 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
                      59-12-207.1 (Effective 07/01/04), as enacted by Chapter 312, Laws of Utah 2003
                      59-12-207.3 (Effective 07/01/04), as enacted by Chapter 312, Laws of Utah 2003
                      59-12-207.5 (Effective 07/01/04), as enacted by Chapter 312, Laws of Utah 2003
                      59-12-208.1 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
                      59-12-301 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
                      59-12-302 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
                      59-12-352, as last amended by Chapter 291, Laws of Utah 1998
                      59-12-353, as last amended by Chapter 291, Laws of Utah 1998
                      59-12-354 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
                      59-12-355 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
                      59-12-356 (Effective 07/01/04), as enacted by Chapter 312, Laws of Utah 2003
                      59-12-402 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
                      59-12-403 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003

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                      59-12-404 (Effective 07/01/04), as enacted by Chapter 312, Laws of Utah 2003
                      59-12-501 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
                      59-12-502 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
                      59-12-504 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
                      59-12-505 (Effective 07/01/04), as enacted by Chapter 312, Laws of Utah 2003
                      59-12-603 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
                      59-12-604 (Effective 07/01/04), as enacted by Chapter 312, Laws of Utah 2003
                      59-12-703 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
                      59-12-706 (Effective 07/01/04), as enacted by Chapter 312, Laws of Utah 2003
                      59-12-802 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
                      59-12-804 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
                      59-12-806 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
                      59-12-807 (Effective 07/01/04), as enacted by Chapter 312, Laws of Utah 2003
                      59-12-1001 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
                      59-12-1002, as last amended by Chapter 101, Laws of Utah 2002
                      59-12-1003 (Effective 07/01/04), as enacted by Chapter 312, Laws of Utah 2003
                      59-12-1102 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
                      59-12-1103 (Effective 07/01/04), as enacted by Chapter 312, Laws of Utah 2003
                      59-12-1201, as last amended by Chapters 270 and 291, Laws of Utah 1998
                      59-12-1302 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
                      59-12-1303 (Effective 07/01/04), as enacted by Chapter 312, Laws of Utah 2003
                      59-12-1402 (Effective 07/01/04), as last amended by Chapter 312, Laws of Utah 2003
                      59-12-1404 (Effective 07/01/04), as enacted by Chapter 312, Laws of Utah 2003
                      59-12-1503, as enacted by Chapter 282, Laws of Utah 2003
                      69-2-5, as last amended by Chapter 253, Laws of Utah 2003
                  ENACTS:
                      59-12-107.4, Utah Code Annotated 1953
                      59-12-107.5, Utah Code Annotated 1953

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                      59-12-122, Utah Code Annotated 1953
                      59-12-303, Utah Code Annotated 1953
                      59-12-1504, Utah Code Annotated 1953
                  REPEALS:
                      59-12-351, as last amended by Chapter 11, Laws of Utah 2001, First Special Session
                 
                  Be it enacted by the Legislature of the state of Utah:
                      Section 1. Section 10-1-304 (Effective 07/01/04) is amended to read:
                       10-1-304 (Effective 07/01/04). Municipality may levy tax -- Rate -- Imposition or
                  repeal of tax -- Tax rate change -- Effective date -- Notice requirements -- Exemptions.
                      (1) Except as provided in Subsection (4), a municipality may levy a municipal energy
                  sales and use tax on the sale or use of taxable energy within the municipality:
                      (a) by ordinance as provided in Section 10-1-305 ; and
                      (b) of up to 6% of the delivered value of the taxable energy.
                      (2) A municipal energy sales and use tax imposed under this part may be in addition to
                  any sales and use tax imposed by the municipality under Title 59, Chapter 12, Sales and Use Tax
                  Act.
                      (3) (a) For purposes of this Subsection (3):
                      (i) "Annexation" means an annexation to a [city or town] municipality under Title 10,
                  Chapter 2, Part 4, Annexation.
                      (ii) "Annexing area" means an area that is annexed into a [city or town] municipality.
                      (b) (i) If, on or after May 1, 2000, a city or town enacts or repeals a tax or changes the
                  rate of a tax under this part, the enactment, repeal, or change shall take effect:
                      (A) on the first day of a calendar quarter; and
                      (B) after a 90-day period beginning on the date the commission receives notice meeting
                  the requirements of Subsection (3)(b)(ii) from the [city or town] municipality.
                      (ii) The notice described in Subsection (3)(b)(i)(B) shall state:
                      (A) that the city or town will enact or repeal a tax or change the rate of a tax under this

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                  part;
                      (B) the statutory authority for the tax described in Subsection (3)(b)(ii)(A);
                      (C) the effective date of the tax described in Subsection (3)(b)(ii)(A); and
                      (D) if the city or town enacts the tax or changes the rate of the tax described in
                  Subsection (3)(b)(ii)(A), the new rate of the tax.
                      (c) (i) If, for an annexation that occurs on or after May 1, 2000, the annexation will result
                  in a change in the rate of a tax under this part for an annexing area, the change shall take effect:
                      (A) on the first day of a calendar quarter; and
                      (B) after a 90-day period beginning on the date the commission receives notice meeting
                  the requirements of Subsection (3)(c)(ii) from the [city or town] municipality that annexes the
                  annexing area.
                      (ii) The notice described in Subsection (3)(c)(i)(B) shall state:
                      (A) that the annexation described in Subsection (3)(c)(i) will result in a change in the rate
                  of a tax under this part for the annexing area;
                      (B) the statutory authority for the tax described in Subsection (3)(c)(ii)(A);
                      (C) the effective date of the tax described in Subsection (3)(c)(ii)(A); and
                      (D) the new rate of the tax described in Subsection (3)(c)(ii)(A).
                      (4) Notwithstanding Subsection (1), a sale or use of electricity within a municipality is
                  exempt from the tax authorized by this section if the sale or use is:
                      (a) made under a tariff adopted by the Public Service Commission of Utah only for
                  purchase of electricity produced from a new wind, geothermal, biomass, or solar power energy
                  source, as designated in the tariff by the Public Service Commission of Utah; and
                      (b) for an amount of electricity that is:
                      (i) unrelated to the amount of electricity used by the person purchasing the electricity
                  under the tariff described in Subsection (4)(a); and
                      (ii) equivalent to the number of kilowatthours specified in the tariff described in
                  Subsection (4)(a) that may be purchased under the tariff described in Subsection (4)(a).
                      Section 2. Section 10-1-307 (Effective 07/01/04) is amended to read:

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                       10-1-307 (Effective 07/01/04). Collection of taxes by commission -- Distribution of
                  revenues -- Charge for services -- Collection of taxes by municipality.
                      (1) Except for the direct payment provisions provided in Subsection (3), the commission
                  shall collect, enforce, and administer the municipal energy sales and use tax from energy suppliers
                  according to the procedures established in Title 59, Chapter 12, Part 1, Tax Collection, except for
                  Sections 59-12-107.1 through 59-12-107.3 .
                      (2) (a) Except as provided in Subsections 10-1-203 (3)(d), 10-1-305 (5), and 10-1-310 (2),
                  the commission shall pay a municipality the difference between:
                      (i) the entire amount collected by the commission from the municipal energy sales and use
                  tax authorized by this part based on:
                      (A) the point of sale of the taxable energy if a taxable sale occurs in a municipality that
                  imposes a municipal energy sales and use tax as provided in this part; or
                      (B) the point of use of the taxable energy if the use occurs in a municipality that imposes
                  a municipal energy sales and use tax as provided in this part; and
                      (ii) the administration fee charged in accordance with Subsection (2)(c).
                      (b) In accordance with Subsection (2)(a), the commission shall transfer to the
                  municipality monthly by electronic transfer the revenues generated by the municipal energy sales
                  and use tax levied by the municipality and collected by the commission.
                      (c) (i) The commission shall charge a municipality imposing a municipal energy sales and
                  use tax a fee for administering the tax at the percentage provided in Section 59-12-206 , except
                  that the commission may not charge a fee for taxes collected by a municipality under Subsection
                  (3).
                      (ii) The fee charged under Subsection (2)(c)(i) shall be:
                      (A) deposited in the Sales and Use Tax Administrative Fees Account; and
                      (B) used for sales tax administration as provided in Subsection 59-12-206 (2).
                      (3) An energy supplier shall pay the municipal energy sales and use tax revenues it
                  collects from its customers under this part directly to each municipality in which the energy
                  supplier has sales of taxable energy if:

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                      (a) the municipality is the energy supplier; or
                      (b) (i) the energy supplier estimates that the municipal energy sales and use tax collected
                  annually by the energy supplier from its Utah customers equals $1,000,000 or more; and
                      (ii) the energy supplier collects the tax imposed by this part.
                      (4) An energy supplier paying a tax under this part directly to a municipality may retain
                  the percentage of the tax authorized under Subsection 59-12-108 (2) for the energy supplier's
                  costs of collecting and remitting the tax.
                      (5) An energy supplier paying the tax under this part directly to a municipality shall file an
                  information return with the commission, at least annually, on a form prescribed by the
                  commission.
                      Section 3. Section 10-1-403 is amended to read:
                       10-1-403. Municipality may levy municipal telecommunications license tax --
                  Recovery from customers -- Enactment, repeal, or change in rate of tax -- Annexation.
                      (1) (a) Subject to the provisions of this section, beginning July 1, 2004, a municipality
                  may levy on and provide that there is collected from a telecommunications provider a municipal
                  telecommunications license tax on the telecommunications provider's gross receipts from
                  telecommunications service that are attributed to the municipality in accordance with Section
                  10-1-407 .
                      (b) To levy and provide for the collection of a municipal telecommunications license tax
                  under this part, the municipality shall adopt an ordinance that complies with the requirements of
                  Section 10-1-404 .
                      (c) A municipal telecommunications license tax imposed under this part shall be at a rate
                  of up to 4% of the telecommunications provider's gross receipts from telecommunications service
                  that are attributed to the municipality in accordance with Section 10-1-407 .
                      (2) A telecommunications provider may recover the amounts paid in municipal
                  telecommunications license taxes from the customers of the telecommunications provider within
                  the municipality imposing the municipal telecommunications license tax through a charge that is
                  separately identified in the statement of the transaction with the customer as the recovery of a tax.

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                      (3) (a) For purposes of this Subsection (3):
                      (i) "Annexation" means an annexation to a municipality under Title 10, Chapter 2, Part 4,
                  Annexation.
                      (ii) "Annexing area" means an area that is annexed into a municipality.
                      (b) (i) If, on or after July 1, 2004, a municipality enacts or repeals a tax [under this part]
                  or changes the rate of the tax under this part, the enactment, repeal, or change shall take effect:
                      (A) on the first day of a calendar quarter; and
                      (B) after a [75-day] 90-day period beginning on the date the commission receives notice
                  meeting the requirements of Subsection (3)(b)(ii) from the municipality.
                      (ii) The notice described in Subsection (3)(b)(i)(B) shall state:
                      (A) that the municipality will enact or repeal a tax under this part or change the rate of the
                  tax;
                      (B) the statutory authority for the tax described in Subsection (3)(b)(ii)(A);
                      (C) the effective date of the tax described in Subsection (3)(b)(ii)(A); and
                      (D) if the municipality enacts the municipal telecommunications license tax or changes the
                  rate of the tax, the new rate of the tax.
                      (c) (i) If, for an annexation that occurs on or after July 1, 2004, the annexation will result
                  in a change in the rate of the tax under this part for an annexing area, the change shall take effect:
                      (A) on the first day of a calendar quarter; and
                      (B) after a [75-day] 90-day period beginning on the date the commission receives notice
                  meeting the requirements of Subsection (3)(c)(ii) from the municipality that annexes the annexing
                  area.
                      (ii) The notice described in Subsection (3)(c)(i)(B) shall state:
                      (A) that the annexation described in Subsection (3)(c)(i) will result in a change in the rate
                  of a tax under this part for the annexing area;
                      (B) the statutory authority for the tax described in Subsection (3)(c)(ii)(A);
                      (C) the effective date of the tax described in Subsection (3)(c)(ii)(A); and
                      (D) the new rate of the tax described in Subsection (3)(c)(ii)(A).

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                      Section 4. Section 10-1-405 is amended to read:
                       10-1-405. Collection of taxes by commission -- Uniform interlocal agreement --
                  Charge for services.
                      (1) Subject to the other provisions of this section, the commission shall collect, enforce,
                  and administer any municipal telecommunications license tax imposed under this part pursuant to:
                      (a) the same procedures used in the administration, collection, and enforcement of the
                  state sales and use tax under:
                      (i) Title 59, Chapter 1, General Taxation Policies; and
                      (ii) Title 59, Chapter 12, Part 1, Tax Collection:
                      (A) except for [Sections]:
                      (I) Subsection 59-12-103 (2)(d);
                      (II) Subsection 59-12-103 (2)(e);
                      (III) Section 59-12-104 [,];
                      (IV) Section 59-12-104.1 [, and];
                      (V) Section 59-12-104.2 ; and
                      (VI) Sections 59-12-107.1 through 59-12-107.3 ; and
                      (B) except that for purposes of Section 59-12-110 , the term "taxpayer" may include a
                  customer from whom a municipal telecommunications license tax is recovered in accordance with
                  Subsection 10-1-403 (2); and
                      (b) a uniform interlocal agreement:
                      (i) between:
                      (A) the municipality that imposes the municipal telecommunications license tax; and
                      (B) the commission;
                      (ii) that is executed under Title 11, Chapter 13, Interlocal Cooperation Act;
                      (iii) that complies with Subsection (2)(a); and
                      (iv) that is developed by rule in accordance with Subsection (2)(b).
                      (2) (a) The uniform interlocal agreement described in Subsection (1) shall provide that the
                  commission shall:

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                      (i) transmit monies collected under this part:
                      (A) monthly; and
                      (B) by electronic funds transfer by the commission to the municipality;
                      (ii) conduct audits of the municipal telecommunications license tax;
                      (iii) charge the municipality for the commission's services under this section in an amount:
                      (A) sufficient to reimburse the commission for the cost to the commission in rendering the
                  services; and
                      (B) that may not exceed an amount equal to 1.5% of the municipal telecommunications
                  license tax imposed by the ordinance of the municipality; and
                      (iv) collect, enforce, and administer the municipal telecommunications license tax
                  authorized under this part pursuant to the same procedures used in the administration, collection,
                  and enforcement of the state sales and use tax as provided in Subsection (1)(a).
                      (b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
                  commission shall develop a uniform interlocal agreement that meets the requirements of this
                  section.
                      (3) The administrative fee charged under Subsection (2)(a) shall be:
                      (a) deposited in the Sales and Use Tax Administrative Fees Account; and
                      (b) used for administration of municipal telecommunications license taxes under this part.
                      Section 5. Section 10-1-407 is amended to read:
                       10-1-407. Attributing the gross receipts from telecommunications service to a
                  municipality -- Rate impact.
                      (1) The gross receipts from a telecommunications service are attributed to a municipality
                  if the gross receipts are from a transaction for telecommunications service that is located within
                  the municipality:
                      (a) for purposes of sales and use taxes under Title 59, Chapter 12, Sales and Use Tax
                  Act; and
                      (b) determined in accordance with Section [ 59-12-207 ] 59-12-207.4 .
                      (2) (a) The rate imposed on the gross receipts for telecommunications service shall be

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                  determined in accordance with Subsection (2)(b) if the location of a transaction for
                  telecommunications service is determined under Subsection (1) to be a municipality other than the
                  municipality in which is located:
                      (i) for telecommunications service other than mobile telecommunications service, the
                  customer's service address; or
                      (ii) for mobile telecommunications service, the customer's primary place of use.
                      (b) The rate imposed on the gross receipts for telecommunications service described in
                  Subsection (2)(a) shall be the lower of:
                      (i) the rate imposed by the taxing jurisdiction in which the transaction is located under
                  Subsection (1); or
                      (ii) the rate imposed by the municipality in which it is located:
                      (A) for telecommunications service other than mobile telecommunications service, the
                  customer's service address; or
                      (B) for mobile telecommunications service, the customer's primary place of use.
                      Section 6. Section 10-1-408 is amended to read:
                       10-1-408. Procedure for taxes erroneously recovered from customers.
                      A customer may not bring a cause of action against a telecommunications provider on the
                  basis that the telecommunications provider erroneously recovered from the customer municipal
                  telecommunications license taxes authorized by this part[: (1)] unless the customer [provides the
                  telecommunications provider written notice that:] meets the same requirements that a purchaser is
                  required to meet to bring a cause of action against a seller for a refund or credit as provided in
                  Subsection 59-12-110.1 (3).
                      [(a) the customer requests a refund of the amounts paid by the customer pursuant to
                  Subsection 10-1-403 (2); and]
                      [(b) contains the information necessary to determine the validity of the request described
                  in Subsection (1)(a); and]
                      [(2) before 60 days from the day on which the telecommunications provider receives the
                  written notice required by Subsection (1).]

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                      Section 7. Section 17-31-8 is amended to read:
                       17-31-8. Tourism tax advisory boards.
                      (1) (a) Except as provided in Subsection (1)(b), any county that collects the following
                  taxes shall operate a tourism tax advisory board:
                      (i) the [transient room] tax allowed under Section 59-12-301 ; or
                      (ii) the [tourism, recreation, cultural, and convention facilities] tax allowed under Section
                  59-12-603 .
                      (b) Notwithstanding Subsection (1)(a), a county is exempt from Subsection (1)(a) if the
                  county has an existing board, council, committee, convention visitor's bureau, or body that
                  substantially conforms with Subsections (2), (3), and (4).
                      (2) A tourism tax advisory board created under Subsection (1) shall consist of at least five
                  members.
                      (3) A tourism tax advisory board shall be composed of any of the following members
                  that:
                      (a) are residents of the county; and
                      (b) represent the local:
                      (i) hotel and lodging industry;
                      (ii) restaurant industry;
                      (iii) recreational facilities;
                      (iv) convention facilities;
                      (v) museums;
                      (vi) cultural attractions; or
                      (vii) other tourism-related industries.
                      (4) A tourism tax advisory board shall advise the county legislative body on the best use
                  of revenues collected from:
                      (a) the [transient room] tax allowed under Section 59-12-301 ; and
                      (b) the [tourism, recreation, cultural, and convention facilities] tax allowed under Section
                  59-12-603 .

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                      (5) A member of any county tourism tax advisory board:
                      (a) may not receive compensation or benefits for the member's services; and
                      (b) may receive per diem and expenses incurred in the performance of the member's
                  official duties.
                      Section 8. Section 59-1-302 is amended to read:
                       59-1-302. Penalty for nonpayment of certain taxes -- Jeopardy proceedings.
                      (1) The provisions of this section apply to the following taxes in this title:
                      (a) a tax under Chapter 10, Part 4, Withholding of Tax;
                      [(a) state and local sales and use] (b) a tax under Chapter 12, [Parts 1 and 2] Part 1, Tax
                  Collection;
                      [(b) transient room] (c) a tax under Chapter 12, Part 2, Local Sales and Use Tax Act;
                      (d) a tax under Chapter 12, Part 3, Transient Room Tax;
                      [(c) resort communities] (e) a tax under Chapter 12, Part 4, Resort Communities Tax;
                      [(d) public transit] (f) a tax under Chapter 12, Part 5, Public Transit Tax;
                      [(e) tourism, recreation, cultural, and convention facilities]
                      (g) a tax under Chapter 12, Part 6, Tourism, Recreation, Cultural, and Convention
                  Facilities Tax;
                      [(f) motor fuel, clean fuel, special fuel, and aviation fuel taxes under Chapter 13, Parts 2,
                  3, and 4; and]
                      [(g) withholding tax under Chapter 10, Part 4.]
                      (h) a tax under Chapter 13, Part 2, Motor Fuel;
                      (i) a tax under Chapter 13, Part 3, Special Fuel; and
                      (j) a tax under Chapter 13, Part 4, Aviation Fuel.
                      (2) Any person required to collect, truthfully account for, and pay over any tax listed in
                  Subsection (1) who willfully fails to collect the tax, fails to truthfully account for and pay over the
                  tax, or attempts in any manner to evade or defeat any tax or the payment of the tax, shall be liable
                  for a penalty equal to the total amount of the tax evaded, not collected, not accounted for, or not
                  paid over. This penalty is in addition to other penalties provided by law.

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                      (3) (a) If the commission determines in accordance with Subsection (2) that a person is
                  liable for the penalty, the commission shall notify the taxpayer of the proposed penalty.
                      (b) The notice of proposed penalty shall:
                      (i) set forth the basis of the assessment; and
                      (ii) be mailed by registered mail, postage prepaid, to the person's last-known address.
                      (4) Upon receipt of the notice of proposed penalty, the person against whom the penalty
                  is proposed may:
                      (a) pay the amount of the proposed penalty at the place and time stated in the notice; or
                      (b) proceed in accordance with the review procedures of Subsection (5).
                      (5) Any person against whom a penalty has been proposed in accordance with
                  Subsections (2) and (3) may contest the proposed penalty by filing a petition for an adjudicative
                  proceeding with the commission.
                      (6) If the commission determines that the collection of the penalty is in jeopardy, nothing
                  in this section may prevent the immediate collection of the penalty in accordance with the
                  procedures and requirements for emergency proceedings in Title 63, Chapter 46b, Administrative
                  Procedures Act.
                      (7) (a) In any hearing before the commission and in any judicial review of the hearing, the
                  commission and the court shall consider any inference and evidence that a person has willfully
                  failed to collect, truthfully account for, or pay over any tax listed in Subsection (1).
                      (b) It is prima facie evidence that a person has willfully failed to collect, truthfully account
                  for, or pay over any of the taxes listed in Subsection (1) if the commission or a court finds that the
                  person charged with the responsibility of collecting, accounting for, or paying over the taxes:
                      (i) made a voluntary, conscious, and intentional decision to prefer other creditors over the
                  state government or utilize the tax money for personal purposes;
                      (ii) recklessly disregarded obvious or known risks, which resulted in the failure to collect,
                  account for, or pay over the tax; or
                      (iii) failed to investigate or to correct mismanagement, having notice that the tax was not
                  or is not being collected, accounted for, or paid over as provided by law.

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                      (c) The commission or court need not find a bad motive or specific intent to defraud the
                  government or deprive it of revenue to establish willfulness under this section.
                      (d) If the commission determines that a person is liable for the penalty under Subsection
                  (2), the commission shall assess the penalty and give notice and demand for payment. The notice
                  and demand for payment shall be mailed by registered mail, postage prepaid, to the person's
                  last-known address.
                      Section 9. Section 59-1-401 is amended to read:
                       59-1-401. Offenses and penalties -- Statute of limitations -- Commission authority
                  to waive, reduce, or compromise penalty or interest.
                      (1) (a) The penalty for failure to file a tax return within the time prescribed by law
                  including extensions is the greater of $20 or 10% of the unpaid tax due on the return.
                      (b) Subsection (1) does not apply to amended returns.
                      (2) The penalty for failure to pay tax due shall be the greater of $20 or 10% of the unpaid
                  tax for:
                      (a) failure to pay any tax, as reported on a timely filed return;
                      (b) failure to pay any tax within 90 days of the due date of the return, if there was a late
                  filed return subject to the penalty provided under Subsection (1)(a);
                      (c) failure to pay any tax within 30 days of the date of mailing any notice of deficiency of
                  tax unless a petition for redetermination or a request for agency action is filed within 30 days of
                  the date of mailing the notice of deficiency;
                      (d) failure to pay any tax within 30 days after the date the commission's order constituting
                  final agency action resulting from a timely filed petition for redetermination or request for agency
                  action is issued or is considered to have been denied under Subsection 63-46b-13 (3)(b); and
                      (e) failure to pay any tax within 30 days after the date of a final judicial decision resulting
                  from a timely filed petition for judicial review.
                      (3) (a) Beginning January 1, 1995, in the case of any underpayment of estimated tax or
                  quarterly installments required by Sections 59-5-107 , 59-5-207 , 59-7-504 , and 59-9-104 , there
                  shall be added a penalty in an amount determined by applying the interest rate provided under

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                  Section 59-1-402 plus four percentage points to the amount of the underpayment for the period of
                  the underpayment.
                      (b) (i) For purposes of Subsection (3)(a), the amount of the underpayment shall be the
                  excess of the required installment over the amount, if any, of the installment paid on or before the
                  due date for the installment.
                      (ii) The period of the underpayment shall run from the due date for the installment to
                  whichever of the following dates is the earlier:
                      (A) the original due date of the tax return, without extensions, for the taxable year; or
                      (B) with respect to any portion of the underpayment, the date on which that portion is
                  paid.
                      (iii) For purposes of this Subsection (3), a payment of estimated tax shall be credited
                  against unpaid required installments in the order in which the installments are required to be paid.
                      (4) (a) In case of an extension of time to file an individual income tax or corporate
                  franchise tax return, if the lesser of 90% of the total tax reported on the tax return or 100% of the
                  prior year's tax is not paid by the due date of the return, not including extensions, a 2% per month
                  penalty shall apply on the unpaid tax during the period of extension.
                      (b) If a return is not filed within the extension time period as provided in Section
                  59-7-505 or 59-10-516 , penalties as provided in Subsection (1) and Subsection (2)(b) shall be
                  added in lieu of the penalty assessed under this Subsection (4) as if no extension of time for filing
                  a return had been granted.
                      (5) (a) Additional penalties for underpayments of tax are as provided in Subsections
                  (5)(a)(i) through (iv).
                      (i) Except as provided in Subsection (5)(c), if any underpayment of tax is due to
                  negligence, the penalty is 10% of the underpayment.
                      (ii) Except as provided in Subsection (5)(d), if any underpayment of tax is due to
                  intentional disregard of law or rule, the penalty is 15% of the underpayment.
                      (iii) For intent to evade the tax, the penalty is the greater of $500 per period or 50% of
                  the tax due.

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                      (iv) If the underpayment is due to fraud with intent to evade the tax, the penalty is the
                  greater of $500 per period or 100% of the underpayment.
                      (b) If the commission determines that a person is liable for a penalty imposed under
                  Subsection (5)(a)(ii), (iii), or (iv), the commission shall notify the taxpayer of the proposed
                  penalty.
                      (i) The notice of proposed penalty shall:
                      (A) set forth the basis of the assessment; and
                      (B) be mailed by registered mail, postage prepaid, to the person's last-known address.
                      (ii) Upon receipt of the notice of proposed penalty, the person against whom the penalty
                  is proposed may:
                      (A) pay the amount of the proposed penalty at the place and time stated in the notice; or
                      (B) proceed in accordance with the review procedures of Subsection (5)(b)(iii).
                      (iii) Any person against whom a penalty has been proposed in accordance with this
                  Subsection (5) may contest the proposed penalty by filing a petition for an adjudicative
                  proceeding with the commission.
                      (iv) If the commission determines that a person is liable for a penalty under this
                  Subsection (5), the commission shall assess the penalty and give notice and demand for payment.
                  The notice and demand for payment shall be mailed by registered mail, postage prepaid, to the
                  person's last-known address.
                      (c) Notwithstanding Subsection (5)(a)(i), a [vendor] seller that voluntarily collects a tax
                  under Subsection 59-12-107 (1)(b) is not subject to the penalty under Subsection (5)(a)(i) if on or
                  after July 1, 2001:
                      (i) a court of competent jurisdiction issues a final unappealable judgment or order
                  determining that:
                      (A) the [vendor] seller meets one or more of the criteria described in Subsection
                  59-12-107 (1)(a); and
                      (B) the commission or a county, city, or town may require the [vendor] seller to collect a
                  tax under Subsection 59-12-103 (2)(a) or (b); or

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                      (ii) the commission issues a final unappealable administrative order determining that:
                      (A) the [vendor] seller meets one or more of the criteria described in Subsection
                  59-12-107 (1)(a); and
                      (B) the commission or a county, city, or town may require the [vendor] seller to collect a
                  tax under Subsection 59-12-103 (2)(a) or (b).
                      (d) Notwithstanding Subsection (5)(a)(ii), a [vendor] seller that voluntarily collects a tax
                  under Subsection 59-12-107 (1)(b) is not subject to the penalty under Subsection (5)(a)(ii) if:
                      (i) (A) a court of competent jurisdiction issues a final unappealable judgment or order
                  determining that:
                      (I) the [vendor] seller meets one or more of the criteria described in Subsection
                  59-12-107 (1)(a); and
                      (II) the commission or a county, city, or town may require the [vendor] seller to collect a
                  tax under Subsection 59-12-103 (2)(a) or (b); or
                      (B) the commission issues a final unappealable administrative order determining that:
                      (I) the [vendor] seller meets one or more of the criteria described in Subsection
                  59-12-107 (1)(a); and
                      (II) the commission or a county, city, or town may require the [vendor] seller to collect a
                  tax under Subsection 59-12-103 (2)(a) or (b); and
                      (ii) the [vendor's] seller's intentional disregard of law or rule is warranted by existing law
                  or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the
                  establishment of new law.
                      (6) [The] Except as provided in Section 59-12-105 , the penalty for failure to file an
                  information return, information report, or a complete supporting schedule is $50 for each
                  information return, information report, or supporting schedule up to a maximum of $1,000.
                      (7) If any taxpayer, in furtherance of a frivolous position, has a prima facie intent to delay
                  or impede administration of the tax law and files a purported return that fails to contain
                  information from which the correctness of reported tax liability can be determined or that clearly
                  indicates that the tax liability shown must be substantially incorrect, the penalty is $500.

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                      (8) (a) [For monthly payment of sales and use taxes under Section 59-12-108 , in addition
                  to any other penalties for late payment, a vendor] A seller that fails to remit a tax, fee, or charge
                  monthly as required by Subsection 59-12-108 (1)(a)(i):
                      (i) is subject to the penalties described in Subsection (1); and
                      (ii) may not retain [a] the percentage of sales and use taxes [collected as] that would
                  otherwise be allowable under [Section] Subsection 59-12-108 (2).
                      (b) A seller that fails to remit a tax, fee, or charge by electronic funds transfer as required
                  by Subsection 59-12-108 (1)(a)(ii)(A)(II):
                      (i) is subject to the penalties described in Subsection (1); and
                      (ii) may not retain the percentage of sales and use taxes that would otherwise be
                  allowable under Subsection 59-12-108 (2).
                      (9) (a) As provided in Section 76-8-1101 , criminal offenses and penalties are as provided
                  in Subsections (9)(b) through (d).
                      (b) (i) Any person who is required by this title or any laws the commission administers or
                  regulates to register with or obtain a license or permit from the commission, who operates
                  without having registered or secured a license or permit, or who operates when the registration,
                  license, or permit is expired or not current, is guilty of a class B misdemeanor.
                      (ii) Notwithstanding Section 76-3-301 , for purposes of Subsection (9)(b)(i), the fine may
                  not:
                      (A) be less than $500; or
                      (B) exceed $1,000.
                      (c) (i) Any person who, with intent to evade any tax or requirement of this title or any
                  lawful requirement of the commission, fails to make, render, sign, or verify any return or to supply
                  any information within the time required by law, or who makes, renders, signs, or verifies any
                  false or fraudulent return or statement, or who supplies any false or fraudulent information, is
                  guilty of a third degree felony.
                      (ii) Notwithstanding Section 76-3-301 , for purposes of Subsection (9)(c)(i), the fine may
                  not:

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                      (A) be less than $1,000; or
                      (B) exceed $5,000.
                      (d) (i) Any person who intentionally or willfully attempts to evade or defeat any tax or the
                  payment of a tax is, in addition to other penalties provided by law, guilty of a second degree
                  felony.
                      (ii) Notwithstanding Section 76-3-301 , for purposes of Subsection (9)(d)(i), the fine may
                  not:
                      (A) be less than $1,500; or
                      (B) exceed $25,000.
                      (e) The statute of limitations for prosecution for a violation of this Subsection (9) is the
                  later of six years:
                      (i) from the date the tax should have been remitted; or
                      (ii) after the day on which the person commits the criminal offense.
                      (10) Upon making a record of its actions, and upon reasonable cause shown, the
                  commission may waive, reduce, or compromise any of the penalties or interest imposed under this
                  part.
                      Section 10. Section 59-12-102 (Effective 07/01/04) is amended to read:
                       59-12-102 (Effective 07/01/04). Definitions.
                      As used in this chapter:
                      (1) (a) "Admission or user fees" includes season passes.
                      (b) "Admission or user fees" does not include annual membership dues to private
                  organizations.
                      (2) "Agreement" means the Streamlined Sales and Use Tax Agreement described in
                  Section 59-12-102.1 .
                      (3) "Agreement combined tax rate" means the sum of the tax rates:
                      (a) listed under Subsection (4); and
                      (b) that are imposed within a local taxing jurisdiction.
                      (4) "Agreement sales and use tax" means a tax imposed under:

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                      (a) Subsection 59-12-103 (2)(a)(i);
                      (b) Section 59-12-204 ;
                      (c) Section 59-12-401 ;
                      (d) Section 59-12-402 ;
                      (e) Section 59-12-501 ;
                      (f) Section 59-12-502 ;
                      (g) Section 59-12-703 ;
                      (h) Section 59-12-802 ;
                      (i) Section 59-12-804 ;
                      (j) Section 59-12-1001 ;
                      (k) Section 59-12-1102 ;
                      (l) Section 59-12-1302 ; [or]
                      (m) Section 59-12-1402 [.]; or
                      (n) Section 59-12-1503 .
                      (5) "Aircraft" is as defined in Section 72-10-102 .
                      [(5)] (6) "Alcoholic beverage" means a beverage that:
                      (a) is suitable for human consumption; and
                      (b) contains .5% or more alcohol by volume.
                      [(6)] (7) "Area agency on aging" is as defined in Section 62A-3-101 .
                      [(7)] (8) "Authorized carrier" means:
                      (a) in the case of vehicles operated over public highways, the holder of credentials
                  indicating that the vehicle is or will be operated pursuant to both the International Registration
                  Plan and the International Fuel Tax Agreement;
                      (b) in the case of aircraft, the holder of a Federal Aviation Administration operating
                  certificate or air carrier's operating certificate; or
                      (c) in the case of locomotives, freight cars, railroad work equipment, or other rolling
                  stock, the holder of a certificate issued by the United States Surface Transportation Board.
                      [(8)] (9) "Certified automated system" means software certified by the governing board of

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                  the agreement in accordance with Section 59-12-102.1 that:
                      (a) calculates the agreement sales and use tax imposed within a local taxing jurisdiction:
                      (i) on a transaction; and
                      (ii) in the states that are members of the agreement;
                      (b) determines the amount of agreement sales and use tax to remit to a state that is a
                  member of the agreement; and
                      (c) maintains a record of the transaction described in Subsection [(8)] (9)(a)(i).
                      [(9)] (10) "Certified service provider" means an agent certified:
                      (a) by the governing board of the agreement in accordance with Section 59-12-102.1 ; and
                      (b) to perform all of a seller's sales and use tax functions for an agreement sales and use
                  tax other than the seller's obligation under Section 59-12-107.4 to remit a tax on the seller's own
                  purchases.
                      [(10)] (11) (a) Subject to Subsection [(10)] (11)(b), "clothing" means all human wearing
                  apparel suitable for general use.
                      (b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
                  commission shall make rules:
                      (i) listing the items that constitute "clothing"; and
                      (ii) that are consistent with the list of items that constitute "clothing" under the
                  agreement.
                      [(11)] (12) (a) For purposes of Subsection 59-12-104 (42), "coin-operated amusement
                  device" means:
                      (i) a coin-operated amusement, skill, or ride device;
                      (ii) that is not controlled through seller-assisted, over-the-counter, sales of tokens; and
                      (iii) includes a music machine, pinball machine, billiard machine, video game machine,
                  arcade machine, and a mechanical or electronic skill game or ride.
                      (b) For purposes of Subsection 59-12-104 (42), "coin-operated amusement device" does
                  not mean a coin-operated amusement device possessing a coinage mechanism that:
                      (i) accepts and registers multiple denominations of coins; and

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                      (ii) allows the seller to collect the sales and use tax at the time an amusement device is
                  activated and operated by a person inserting coins into the device.
                      [(12)] (13) "Commercial use" means the use of gas, electricity, heat, coal, fuel oil, or
                  other fuels that does not constitute industrial use under Subsection [(30)] (31) or residential use
                  under Subsection [(54)] (59).
                      [(13)] (14) (a) "Common carrier" means a person engaged in or transacting the business
                  of transporting passengers, freight, merchandise, or other property for hire within this state.
                      (b) (i) "Common carrier" does not include a person who, at the time the person is
                  traveling to or from that person's place of employment, transports a passenger to or from the
                  passenger's place of employment.
                      (ii) For purposes of Subsection [(13)] (14)(b)(i), in accordance with Title 63, Chapter
                  46a, Utah Administrative Rulemaking Act, the commission may make rules defining what
                  constitutes a person's place of employment.
                      [(14)] (15) "Component part" includes:
                      (a) poultry, dairy, and other livestock feed, and their components;
                      (b) baling ties and twine used in the baling of hay and straw;
                      (c) fuel used for providing temperature control of orchards and commercial greenhouses
                  doing a majority of their business in wholesale sales, and for providing power for off-highway
                  type farm machinery; and
                      (d) feed, seeds, and seedlings.
                      [(15)] (16) "Computer" means an electronic device that accepts information:
                      (a) (i) in digital form; or
                      (ii) in a form similar to digital form; and
                      (b) manipulates that information for a result based on a sequence of instructions.
                      [(16)] (17) "Computer software" means a set of coded instructions designed to cause:
                      (a) a computer to perform a task; or
                      (b) automatic data processing equipment to perform a task.
                      [(17)] (18) "Construction materials" means any tangible personal property that will be

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                  converted into real property.
                      [(18)] (19) "Delivered electronically" means delivered to a purchaser by means other than
                  tangible storage media.
                      [(19)] (20) (a) "Delivery charge" means a charge:
                      (i) by a seller of:
                      (A) tangible personal property; or
                      (B) services; and
                      (ii) for preparation and delivery of the tangible personal property or services described in
                  Subsection [(19)] (20)(a)(i) to a location designated by the purchaser.
                      (b) "Delivery charge" includes a charge for the following:
                      (i) transportation;
                      (ii) shipping;
                      (iii) postage;
                      (iv) handling;
                      (v) crating; or
                      (vi) packing.
                      [(20)] (21) "Dietary supplement" means a product, other than tobacco, that:
                      (a) is intended to supplement the diet;
                      (b) contains one or more of the following dietary ingredients:
                      (i) a vitamin;
                      (ii) a mineral;
                      (iii) an herb or other botanical;
                      (iv) an amino acid;
                      (v) a dietary substance for use by humans to supplement the diet by increasing the total
                  dietary intake; or
                      (vi) a concentrate, metabolite, constituent, extract, or combination of any ingredient
                  described in Subsections [(20)] (21)(b)(i) through (v);
                      (c) (i) except as provided in Subsection [(20)] (21)(c)(ii), is intended for ingestion in:

- 26 -


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

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                      (A) the official United States Pharmacopoeia;
                      (B) the official Homeopathic Pharmacopoeia of the United States;
                      (C) the official National Formulary; or
                      (D) a supplement to a publication listed in Subsections [(22)] (23)(a)(i)(A) through (C);
                      (ii) intended for use in the:
                      (A) diagnosis of disease;
                      (B) cure of disease;
                      (C) mitigation of disease;
                      (D) treatment of disease; or
                      (E) prevention of disease; or
                      (iii) intended to affect:
                      (A) the structure of the body; or
                      (B) any function of the body.
                      (b) "Drug" does not include:
                      (i) food and food ingredients;
                      (ii) a dietary supplement;
                      (iii) an alcoholic beverage; or
                      (iv) a prosthetic device.
                      [(23)] (24) (a) Except as provided in Subsection [(23)] (24)(c), "durable medical
                  equipment" means equipment that:
                      (i) can withstand repeated use;
                      (ii) is primarily and customarily used to serve a medical purpose;
                      (iii) generally is not useful to a person in the absence of illness or injury;
                      (iv) is not worn in or on the body; [and]
                      (v) is listed as eligible for payment under:
                      (A) Title XVIII of the federal Social Security Act; or
                      (B) the state plan for medical assistance under Title XIX of the federal Social Security
                  Act[.]; and

- 28 -


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

- 29 -


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

- 30 -


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

- 31 -


                      (b) "Hearing aid accessory" includes:
                      (i) a hearing aid neck loop;
                      (ii) a hearing aid cord;
                      (iii) a hearing aid ear mold;
                      (iv) hearing aid tubing;
                      (v) a hearing aid ear hook; or
                      (vi) a hearing aid remote control.
                      (c) "Hearing aid accessory" does not include:
                      (i) a component, attachment, or accessory designed to be used only with an:
                      (A) instrument or device described in Subsection [(28)] (29)(b)(i); or
                      (B) assistive listening device or system described in Subsection [(28)] (29)(b)(ii) or (iii);
                  or
                      (ii) a hearing aid battery.
                      [(30)] (31) "Industrial use" means the use of natural gas, electricity, heat, coal, fuel oil, or
                  other fuels:
                      (a) in mining or extraction of minerals;
                      (b) in agricultural operations to produce an agricultural product up to the time of harvest
                  or placing the agricultural product into a storage facility, including:
                      (i) commercial greenhouses;
                      (ii) irrigation pumps;
                      (iii) farm machinery;
                      (iv) implements of husbandry as defined in Subsection 41-1a-102 (23) that are not
                  registered under Title 41, Chapter 1a, Part 2, Registration; and
                      (v) other farming activities;
                      (c) in manufacturing tangible personal property at an establishment described in SIC
                  Codes 2000 to 3999 of the 1987 Standard Industrial Classification Manual of the federal
                  Executive Office of the President, Office of Management and Budget; or
                      (d) by a scrap recycler if:

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

- 33 -


                      (II) 1% of the total required payments; or
                      (iii) providing tangible personal property along with an operator for a fixed period of time
                  or an indeterminate period of time if the operator is necessary for equipment to perform as
                  designed.
                      (d) For purposes of Subsection [(31)] (32)(c)(iii), an operator is necessary for equipment
                  to perform as designed if the operator's duties exceed the:
                      (i) set-up of tangible personal property;
                      (ii) maintenance of tangible personal property; or
                      (iii) inspection of tangible personal property.
                      (33) "Load and leave" means delivery to a purchaser by use of a tangible storage media if
                  the tangible storage media is not physically transferred to the purchaser.
                      [(32)] (34) "Local taxing jurisdiction" means a:
                      (a) county that is authorized to impose an agreement sales and use tax;
                      (b) city that is authorized to impose an agreement sales and use tax; or
                      (c) town that is authorized to impose an agreement sales and use tax.
                      [(33)] (35) "Manufactured home" [means any manufactured home or mobile home] is as
                  defined in [Title 58, Chapter 56, Utah Uniform Building Standards Act] Section 58-56-3 .
                      [(34)] (36) For purposes of Subsection 59-12-104 (14), "manufacturing facility" means:
                      (a) an establishment described in SIC Codes 2000 to 3999 of the 1987 Standard Industrial
                  Classification Manual of the federal Executive Office of the President, Office of Management and
                  Budget; or
                      (b) a scrap recycler if:
                      (i) from a fixed location, the scrap recycler utilizes machinery or equipment to process
                  one or more of the following items into prepared grades of processed materials for use in new
                  products:
                      (A) iron;
                      (B) steel;
                      (C) nonferrous metal;

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                      (D) paper;
                      (E) glass;
                      (F) plastic;
                      (G) textile; or
                      (H) rubber; and
                      (ii) the new products under Subsection [(34)] (36)(b)(i) would otherwise be made with
                  nonrecycled materials.
                      (37) "Mobile home" is as defined in Section 58-56-3 .
                      [(35)] (38) "Mobile telecommunications service" is as defined in the Mobile
                  Telecommunications Sourcing Act, 4 U.S.C. Sec. 124.
                      [(36)] (39) (a) Except as provided in Subsection [(36)] (39)(c), "mobility enhancing
                  equipment" means equipment that is:
                      (i) primarily and customarily used to provide or increase the ability to move from one
                  place to another;
                      (ii) appropriate for use in a:
                      (A) home; or
                      (B) motor vehicle;
                      (iii) not generally used by persons with normal mobility; and
                      (iv) listed as eligible for payment under:
                      (A) Title XVIII of the federal Social Security Act; or
                      (B) the state plan for medical assistance under Title XIX of the federal Social Security
                  Act.
                      (b) "Mobility enhancing equipment" includes parts used in the repair or replacement of
                  the equipment described in Subsection [(36)] (39)(a).
                      (c) Notwithstanding Subsection [(36)] (39)(a), "mobility enhancing equipment" does not
                  include:
                      (i) a motor vehicle;
                      (ii) equipment on a motor vehicle if that equipment is normally provided by the motor

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                  vehicle manufacturer;
                      (iii) durable medical equipment; or
                      (iv) a prosthetic device.
                      [(37)] (40) "Model 1 seller" means a seller that has selected a certified service provider as
                  the seller's agent to perform all of the seller's sales and use tax functions for agreement sales and
                  use taxes other than the seller's obligation under Section 59-12-107.4 to remit a tax on the seller's
                  own purchases.
                      [(38)] (41) "Model 2 seller" means a seller that:
                      (a) except as provided in Subsection [(38)] (41)(b), has selected a certified automated
                  system to perform the seller's sales tax functions for agreement sales and use taxes; and
                      (b) notwithstanding Subsection [(38)] (41)(a), retains responsibility for remitting all of the
                  sales tax:
                      (i) collected by the seller; and
                      (ii) to the appropriate local taxing jurisdiction.
                      [(39)] (42) (a) Subject to Subsection [(39)] (42)(b), "model 3 seller" means a seller that
                  has:
                      (i) sales in at least five states that are members of the agreement;
                      (ii) total annual sales revenues of at least $500,000,000;
                      (iii) a proprietary system that calculates the amount of tax:
                      (A) for an agreement sales and use tax; and
                      (B) due to each local taxing jurisdiction; and
                      (iv) entered into a performance agreement with the governing board of the agreement.
                      (b) For purposes of Subsection [(39)] (42)(a), "model 3 seller" includes an affiliated
                  group of sellers using the same proprietary system.
                      (43) "Modular home" means a modular unit as defined in Section 58-56-3 .
                      (44) "Motor vehicle" is as defined in Section 41-1a-102 .
                      [(40)] (45) (a) "Multi-channel video or audio service provider" means any person or
                  group of persons that:

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                      (i) provides multi-channel video or audio service and directly or indirectly owns a
                  significant interest in the multi-channel video or audio service; or
                      (ii) otherwise controls or is responsible through any arrangement, the management and
                  operation of the multi-channel video or audio service.
                      (b) "Multi-channel video or audio service provider" includes the following except as
                  specifically exempted by state or federal law:
                      (i) a cable operator;
                      (ii) a CATV provider;
                      (iii) a multi-point distribution provider;
                      (iv) a MMDS provider;
                      (v) a SMATV operator;
                      (vi) a direct-to-home satellite service provider; or
                      (vii) a DBS provider.
                      [(41)] (46) "Olympic merchandise" means tangible personal property bearing an Olympic
                  designation, emblem, insignia, mark, logo, service mark, symbol, terminology, trademark, or other
                  copyrighted or protected material, including:
                      (a) one or more of the following terms:
                      (i) "Olympic";
                      (ii) "Olympiad"; or
                      (iii) "Citius Altius Fortius";
                      (b) the symbol of the International Olympic Committee, consisting of five interlocking
                  rings;
                      (c) the emblem of the International Olympic Committee Corporation;
                      (d) a United States Olympic Committee designation, emblem, insignia, mark, logo,
                  service mark, symbol, terminology, trademark, or other copyrighted or protected material;
                      (e) any emblem of the Olympic Winter Games of 2002 that is officially designated by the
                  Salt Lake Organizing Committee of the Olympic Winter Games of 2002; or
                      (f) the mascot of the Olympic Winter Games of 2002.

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                      [(42)] (47) (a) "Other fuels" means products that burn independently to produce heat or
                  energy.
                      (b) "Other fuels" includes oxygen when it is used in the manufacturing of tangible
                  personal property.
                      [(43)] (48) "Person" includes any individual, firm, partnership, joint venture, association,
                  corporation, estate, trust, business trust, receiver, syndicate, this state, any county, city,
                  municipality, district, or other local governmental entity of the state, or any group or combination
                  acting as a unit.
                      [(44)] (49) "Place of primary use":
                      (a) for telephone service other than mobile telecommunications service, means the street
                  address representative of where the purchaser's use of the telephone service primarily occurs,
                  which shall be:
                      (i) the residential street address of the purchaser; or
                      (ii) the primary business street address of the purchaser; or
                      (b) for mobile telecommunications service, is as defined in the Mobile
                  Telecommunications Sourcing Act, 4 U.S.C. Sec. 124.
                      [(45)] (50) (a) "Prepared food" means:
                      (i) food:
                      (A) sold in a heated state; or
                      (B) heated by a seller;
                      (ii) two or more food ingredients mixed or combined by the seller for sale as a single item;
                  or
                      (iii) except as provided in Subsection [(45)] (50)(c), food sold with an eating utensil
                  provided by the seller, including a:
                      (A) plate;
                      (B) knife;
                      (C) fork;
                      (D) spoon;

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                      (E) glass;
                      (F) cup;
                      (G) napkin; or
                      (H) straw.
                      (b) "Prepared food" does not include:
                      (i) food that a seller only:
                      (A) cuts;
                      (B) repackages; or
                      (C) pasteurizes; or
                      (ii) (A) the following:
                      (I) raw egg;
                      (II) raw fish;
                      (III) raw meat;
                      (IV) raw poultry; or
                      (V) a food containing an item described in Subsections [(45)] (50)(b)(ii)(A)(I) through
                  (IV); and
                      (B) if the Food and Drug Administration recommends in Chapter 3, Part 401.11 of the
                  Food and Drug Administration's Food Code that a consumer cook the items described in
                  Subsection [(45)] (50)(b)(ii)(A) to prevent food borne illness.
                      (c) Notwithstanding Subsection [(45)] (50)(a)(iii), an eating utensil provided by the seller
                  does not include the following used to transport the food:
                      (i) a container; or
                      (ii) packaging.
                      [(46)] (51) "Prescription" means an order, formula, or recipe that is issued:
                      (a) (i) orally;
                      (ii) in writing;
                      (iii) electronically; or
                      (iv) by any other manner of transmission; and

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                      (b) by a licensed practitioner authorized by the laws of a state.
                      [(47)] (52) (a) Except as provided in Subsection [(47)] (52)(b)(ii) or (iii), "prewritten
                  computer software" means computer software that is not designed and developed:
                      (i) by the author or other creator of the computer software; and
                      (ii) to the specifications of a specific purchaser.
                      (b) "Prewritten computer software" includes:
                      (i) a prewritten upgrade to computer software if the prewritten upgrade to the computer
                  software is not designed and developed:
                      (A) by the author or other creator of the computer software; and
                      (B) to the specifications of a specific purchaser;
                      (ii) notwithstanding Subsection [(47)] (52)(a), computer software designed and
                  developed by the author or other creator of the computer software to the specifications of a
                  specific purchaser if the computer software is sold to a person other than the purchaser; or
                      (iii) notwithstanding Subsection [(47)] (52)(a) and except as provided in Subsection
                  [(47)] (52)(c), prewritten computer software or a prewritten portion of prewritten computer
                  software:
                      (A) that is modified or enhanced to any degree; and
                      (B) if the modification or enhancement described in Subsection [(47)] (52)(b)(iii)(A) is
                  designed and developed to the specifications of a specific purchaser.
                      (c) Notwithstanding Subsection [(47)] (52)(b)(iii), "prewritten computer software" does
                  not include a modification or enhancement described in Subsection [(47)] (52)(b)(iii) if the
                  charges for the modification or enhancement are:
                      (i) reasonable; and
                      (ii) separately stated on the invoice or other statement of price provided to the purchaser.
                      [(48)] (53) (a) "Prosthetic device" means a device that is:
                      (i) worn on or in the body to:
                      (A) artificially replace a missing portion of the body;
                      (B) prevent or correct a physical deformity or physical malfunction; or

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                      (C) support a weak or deformed portion of the body; and
                      (ii) listed as eligible for payment under:
                      (A) Title XVIII of the federal Social Security Act; or
                      (B) the state plan for medical assistance under Title XIX of the federal Social Security
                  Act.
                      (b) "Prosthetic device" includes:
                      (i) parts used in the repairs or renovation of a prosthetic device; or
                      (ii) replacement parts for a prosthetic device.
                      (c) "Prosthetic device" does not include:
                      (i) corrective eyeglasses;
                      (ii) contact lenses;
                      (iii) hearing aids; or
                      (iv) dental prostheses.
                      [(49)] (54) (a) "Protective equipment" means an item:
                      (i) for human wear; and
                      (ii) that is:
                      (A) designed as protection:
                      (I) to the wearer against injury or disease; or
                      (II) against damage or injury of other persons or property; and
                      (B) not suitable for general use.
                      (b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
                  commission shall make rules:
                      (i) listing the items that constitute "protective equipment"; and
                      (ii) that are consistent with the list of items that constitute "protective equipment" under
                  the agreement.
                      [(50)] (55) (a) "Purchase price" and "sales price" mean the total amount of consideration:
                      (i) valued in money; and
                      (ii) for which tangible personal property or services are:

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                      (A) sold;
                      (B) leased; or
                      (C) rented.
                      (b) "Purchase price" and "sales price" include:
                      (i) the seller's cost of the tangible personal property or services sold;
                      (ii) expenses of the seller, including:
                      (A) the cost of materials used;
                      (B) a labor cost;
                      (C) a service cost;
                      (D) interest;
                      (E) a loss;
                      (F) the cost of transportation to the seller; or
                      (G) a tax imposed on the seller;
                      (iii) a charge by the seller for any service necessary to complete the sale;
                      (iv) a delivery charge; or
                      (v) an installation charge.
                      (c) "Purchase price" and "sales price" do not include:
                      (i) a discount:
                      (A) in a form including:
                      (I) cash;
                      (II) term; or
                      (III) coupon;
                      (B) that is allowed by a seller;
                      (C) taken by a purchaser on a sale; and
                      (D) that is not reimbursed by a third party; or
                      (ii) the following if separately stated on an invoice, bill of sale, or similar document
                  provided to the purchaser:
                      (A) the amount of a trade-in;

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                      (B) the following from credit extended on the sale of tangible personal property or
                  services:
                      (I) interest charges;
                      (II) financing charges; or
                      (III) carrying charges; or
                      (C) a tax or fee legally imposed directly on the consumer.
                      [(51)] (56) "Purchaser" means a person to whom:
                      (a) a sale of tangible personal property is made; or
                      (b) a service is furnished.
                      [(52)] (57) "Regularly rented" means:
                      (a) rented to a guest for value three or more times during a calendar year; or
                      (b) advertised or held out to the public as a place that is regularly rented to guests for
                  value.
                      [(53)] (58) "Rental" is as defined in Subsection [(31)] (32).
                      [(54)] (59) "Residential use" means the use in or around a home, apartment building,
                  sleeping quarters, and similar facilities or accommodations.
                      [(55)] (60) "Retail sale" or "sale at retail" means a sale, lease, or rental for a purpose
                  other than:
                      (a) resale;
                      (b) sublease; or
                      (c) subrent.
                      [(56)] (61) (a) "Retailer" means any person engaged in a regularly organized business in
                  tangible personal property or any other taxable transaction under Subsection 59-12-103 (1), and
                  who is selling to the user or consumer and not for resale.
                      (b) "Retailer" includes commission merchants, auctioneers, and any person regularly
                  engaged in the business of selling to users or consumers within the state.
                      [(57)] (62) (a) "Sale" means any transfer of title, exchange, or barter, conditional or
                  otherwise, in any manner, of tangible personal property or any other taxable transaction under

- 43 -


                  Subsection 59-12-103 (1), for consideration.
                      (b) "Sale" includes:
                      (i) installment and credit sales;
                      (ii) any closed transaction constituting a sale;
                      (iii) any sale of electrical energy, gas, services, or entertainment taxable under this
                  chapter;
                      (iv) any transaction if the possession of property is transferred but the seller retains the
                  title as security for the payment of the price; and
                      (v) any transaction under which right to possession, operation, or use of any article of
                  tangible personal property is granted under a lease or contract and the transfer of possession
                  would be taxable if an outright sale were made.
                      [(58)] (63) "Sale at retail" is as defined in Subsection [(55)] (60).
                      [(59)] (64) "Sale-leaseback transaction" means a transaction by which title to tangible
                  personal property that is subject to a tax under this chapter is transferred:
                      (a) by a purchaser-lessee;
                      (b) to a lessor;
                      (c) for consideration; and
                      (d) if:
                      (i) the purchaser-lessee paid sales and use tax on the purchaser-lessee's initial purchase of
                  the tangible personal property;
                      (ii) the sale of the tangible personal property to the lessor is intended as a form of
                  financing:
                      (A) for the property; and
                      (B) to the purchaser-lessee; and
                      (iii) in accordance with generally accepted accounting principles, the purchaser-lessee is
                  required to:
                      (A) capitalize the property for financial reporting purposes; and
                      (B) account for the lease payments as payments made under a financing arrangement.

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                      [(60)] (65) "Sales price" is as defined in Subsection [(50)] (55).
                      [(61)] (66) (a) "Sales relating to schools" means the following sales by, amounts paid to,
                  or amounts charged by a school:
                      (i) sales that are directly related to the school's educational functions or activities
                  including:
                      (A) the sale of:
                      (I) textbooks;
                      (II) textbook fees;
                      (III) laboratory fees;
                      (IV) laboratory supplies; or
                      (V) safety equipment;
                      (B) the sale of a uniform, protective equipment, or sports or recreational equipment that:
                      (I) a student is specifically required to wear as a condition of participation in a
                  school-related event or school-related activity; and
                      (II) is not readily adaptable to general or continued usage to the extent that it takes the
                  place of ordinary clothing;
                      (C) sales of the following if the net or gross revenues generated by the sales are deposited
                  into a school district fund or school fund dedicated to school meals:
                      (I) food and food ingredients; or
                      (II) prepared food; or
                      (D) transportation charges for official school activities; or
                      (ii) amounts paid to or amounts charged by a school for admission to a school-related
                  event or school-related activity.
                      (b) "Sales relating to schools" does not include:
                      (i) bookstore sales of items that are not educational materials or supplies;
                      (ii) except as provided in Subsection [(61)] (66)(a)(i)(B):
                      (A) clothing;
                      (B) clothing accessories or equipment;

- 45 -


                      (C) protective equipment; or
                      (D) sports or recreational equipment; or
                      (iii) amounts paid to or amounts charged by a school for admission to a school-related
                  event or school-related activity if the amounts paid or charged are passed through to a person:
                      (A) other than a:
                      (I) school;
                      (II) nonprofit organization authorized by a school board or a governing body of a private
                  school to organize and direct a competitive secondary school activity; or
                      (III) nonprofit association authorized by a school board or a governing body of a private
                  school to organize and direct a competitive secondary school activity; and
                      (B) that is required to collect sales and use taxes under this chapter.
                      (c) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
                  commission may make rules defining the term "passed through."
                      [(62)] (67) For purposes of this section and Section 59-12-104 , "school" means:
                      (a) an elementary school or a secondary school that:
                      (i) is a:
                      (A) public school; or
                      (B) private school; and
                      (ii) provides instruction for one or more grades kindergarten through 12; or
                      (b) a public school district.
                      [(63)] (68) "Seller" means a person that makes a sale, lease, or rental of:
                      (a) tangible personal property; or
                      (b) a service.
                      [(64)] (69) (a) "Semiconductor fabricating or processing materials" means tangible
                  personal property:
                      (i) used primarily in the process of:
                      (A) (I) manufacturing a semiconductor; or
                      (II) fabricating a semiconductor; or

- 46 -


                      (B) maintaining an environment suitable for a semiconductor; or
                      (ii) consumed primarily in the process of:
                      (A) (I) manufacturing a semiconductor; or
                      (II) fabricating a semiconductor; or
                      (B) maintaining an environment suitable for a semiconductor.
                      (b) "Semiconductor fabricating or processing materials" includes:
                      (i) parts used in the repairs or renovations of tangible personal property described in
                  Subsection [(64)] (69)(a); or
                      (ii) a chemical, catalyst, or other material used to:
                      (A) produce or induce in a semiconductor a:
                      (I) chemical change; or
                      (II) physical change;
                      (B) remove impurities from a semiconductor; or
                      (C) improve the marketable condition of a semiconductor.
                      [(65)] (70) "Senior citizen center" means a facility having the primary purpose of
                  providing services to the aged as defined in Section 62A-3-101 .
                      (71) "Simplified electronic return" means the electronic return:
                      (a) described in Section 318(C) of the agreement; and
                      (b) approved by the governing board of the agreement.
                      [(66)] (72) (a) "Sports or recreational equipment" means an item:
                      (i) designed for human use; and
                      (ii) that is:
                      (A) worn in conjunction with:
                      (I) an athletic activity; or
                      (II) a recreational activity; and
                      (B) not suitable for general use.
                      (b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
                  commission shall make rules:

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                      (i) listing the items that constitute "sports or recreational equipment"; and
                      (ii) that are consistent with the list of items that constitute "sports or recreational
                  equipment" under the agreement.
                      [(67)] (73) "State" means the state of Utah, its departments, and agencies.
                      [(68)] (74) "Storage" means any keeping or retention of tangible personal property or any
                  other taxable transaction under Subsection 59-12-103 (1), in this state for any purpose except sale
                  in the regular course of business.
                      [(69)] (75) (a) "Tangible personal property" means personal property that:
                      (i) may be:
                      (A) seen;
                      (B) weighed;
                      (C) measured;
                      (D) felt; or
                      (E) touched; or
                      (ii) is in any manner perceptible to the senses.
                      (b) "Tangible personal property" includes:
                      (i) electricity;
                      (ii) water;
                      (iii) gas;
                      (iv) steam; or
                      (v) prewritten computer software.
                      [(70)] (76) (a) "Telephone service" means a two-way transmission:
                      (i) by:
                      (A) wire;
                      (B) radio;
                      (C) lightwave; or
                      (D) other electromagnetic means; and
                      (ii) of one or more of the following:

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                      (A) a sign;
                      (B) a signal;
                      (C) writing;
                      (D) an image;
                      (E) sound;
                      (F) a message;
                      (G) data; or
                      (H) other information of any nature.
                      (b) "Telephone service" includes:
                      (i) mobile telecommunications service;
                      (ii) private communications service; or
                      (iii) automated digital telephone answering service.
                      (c) "Telephone service" does not include a service or a transaction that a state or a
                  political subdivision of a state is prohibited from taxing as of July 1, 2001, under the Internet Tax
                  Freedom Act, Pub. L. No. 105-277.
                      [(71)] (77) Notwithstanding where a call is billed or paid, "telephone service address"
                  means:
                      (a) if the location described in this Subsection [(71)] (77)(a) is known, the location of the
                  telephone service equipment:
                      (i) to which a call is charged; and
                      (ii) from which the call originates or terminates;
                      (b) if the location described in Subsection [(71)] (77)(a) is not known but the location
                  described in this Subsection [(71)] (77)(b) is known, the location of the origination point of the
                  signal of the telephone service first identified by:
                      (i) the telecommunications system of the seller; or
                      (ii) if the system used to transport the signal is not that of the seller, information received
                  by the seller from its service provider; or
                      (c) if the locations described in Subsection [(71)] (77)(a) or (b) are not known, the

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                  location of a purchaser's primary place of use.
                      [(72)] (78) (a) "Telephone service provider" means a person that:
                      (i) owns, controls, operates, or manages a telephone service; and
                      (ii) engages in an activity described in Subsection [(72)] (78)(a)(i) for the shared use with
                  or resale to any person of the telephone service.
                      (b) A person described in Subsection [(72)] (78)(a) is a telephone service provider
                  whether or not the Public Service Commission of Utah regulates:
                      (i) that person; or
                      (ii) the telephone service that the person owns, controls, operates, or manages.
                      [(73)] (79) "Tobacco" means:
                      (a) a cigarette;
                      (b) a cigar;
                      (c) chewing tobacco;
                      (d) pipe tobacco; or
                      (e) any other item that contains tobacco.
                      [(74)] (80) (a) "Use" means the exercise of any right or power over tangible personal
                  property under Subsection 59-12-103 (1), incident to the ownership or the leasing of that
                  property, item, or service.
                      (b) "Use" does not include the sale, display, demonstration, or trial of that property in the
                  regular course of business and held for resale.
                      [(75) "Vehicle" means any]
                      (81) (a) Subject to Subsection (81)(b), "vehicle" means the following that are required to
                  be titled, registered, or titled and registered:
                      (i) an aircraft[,] as defined in Section 72-10-102 ; [any]
                      (ii) a vehicle[,] as defined in Section 41-1a-102 ; [any]
                      (iii) an off-highway vehicle[,] as defined in Section 41-22-2 ; [and any] or
                      (iv) a vessel[,] as defined in Section 41-1a-102 [; that is required to be titled, registered, or
                  both. "Vehicle," for].

- 50 -


                      (b) For purposes of Subsection 59-12-104 (35) only, [also] "vehicle" includes [any]:
                      (i) a vehicle described in Subsection (81)(a); or
                      (ii) (A) a locomotive[,];
                      (B) a freight car[,];
                      (C) railroad work equipment[,]; or
                      (D) other railroad rolling stock.
                      [(76)] (82) "Vehicle dealer" means a person engaged in the business of buying, selling, or
                  exchanging [vehicles] a vehicle as defined in Subsection [(75)] (81).
                      (83) "Watercraft" means a vessel as defined in Section 73-18-2 .
                      (84) "ZIP Code" means a Zoning Improvement Plan Code assigned to a geographic
                  location by the United States Postal Service.
                      Section 11. Section 59-12-103 (Effective 07/01/04) is amended to read:
                       59-12-103 (Effective 07/01/04). Sales and use tax base -- Rates -- Effective dates --
                  Use of sales and use tax revenues.
                      (1) A tax is imposed on the purchaser as provided in this part for amounts paid or
                  charged for the following transactions:
                      (a) retail sales of tangible personal property made within the state;
                      (b) amounts paid:
                      (i) (A) to a common carrier; or
                      (B) whether the following are municipally or privately owned, to a:
                      (I) telephone service provider; or
                      (II) telegraph corporation as defined in Section 54-2-1 ; and
                      (ii) for:
                      (A) all transportation;
                      (B) telephone service, other than mobile telecommunications service, that originates and
                  terminates within the boundaries of this state;
                      (C) mobile telecommunications service that originates and terminates within the
                  boundaries of one state only to the extent permitted by the Mobile Telecommunications Sourcing

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                  Act, 4 U.S.C. Sec. 116 et seq.; or
                      (D) telegraph service;
                      (c) sales of the following for commercial use:
                      (i) gas;
                      (ii) electricity;
                      (iii) heat;
                      (iv) coal;
                      (v) fuel oil; or
                      (vi) other fuels;
                      (d) sales of the following for residential use:
                      (i) gas;
                      (ii) electricity;
                      (iii) heat;
                      (iv) coal;
                      (v) fuel oil; or
                      (vi) other fuels;
                      (e) sales of prepared food;
                      (f) except as provided in Section 59-12-104 , amounts paid or charged as admission or
                  user fees for theaters, movies, operas, museums, planetariums, shows of any type or nature,
                  exhibitions, concerts, carnivals, amusement parks, amusement rides, circuses, menageries, fairs,
                  races, contests, sporting events, dances, boxing matches, wrestling matches, closed circuit
                  television broadcasts, billiard parlors, pool parlors, bowling lanes, golf, miniature golf, golf
                  driving ranges, batting cages, skating rinks, ski lifts, ski runs, ski trails, snowmobile trails, tennis
                  courts, swimming pools, water slides, river runs, jeep tours, boat tours, scenic cruises, horseback
                  rides, sports activities, or any other amusement, entertainment, recreation, exhibition, cultural, or
                  athletic activity;
                      (g) amounts paid or charged for services:
                      (i) for repairs or renovations of tangible personal property, unless Section 59-12-104

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                  provides for an exemption from sales and use tax for:
                      (A) the tangible personal property; and
                      (B) parts used in the repairs or renovations of the tangible personal property described in
                  Subsection (1)(g)(i)(A), whether or not any parts are actually used in the repairs or renovations of
                  that tangible personal property; or
                      (ii) to install tangible personal property in connection with other tangible personal
                  property, unless the tangible personal property being installed is exempt from sales and use tax
                  under Section 59-12-104 ;
                      (h) except as provided in Subsection 59-12-104 (7), amounts paid or charged for cleaning
                  or washing of tangible personal property;
                      (i) amounts paid or charged for tourist home, hotel, motel, or trailer court
                  accommodations and services that are regularly rented for less than 30 consecutive days;
                      (j) amounts paid or charged for laundry or dry cleaning services;
                      (k) amounts paid or charged for leases or rentals of tangible personal property if:
                      (i) the tangible personal property's situs is in this state;
                      (ii) the lessee took possession of the tangible personal property in this state; or
                      (iii) within this state the tangible personal property is:
                      (A) stored;
                      (B) used; or
                      (C) otherwise consumed;
                      (l) amounts paid or charged for tangible personal property if within this state the tangible
                  personal property is:
                      (i) stored;
                      (ii) used; or
                      (iii) consumed;
                      (m) amounts paid or charged for prepaid telephone calling cards; and
                      (n) amounts paid or charged for multi-channel video or audio service provided by a
                  multi-channel video or audio service provider:

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                      (i) within the state; and
                      (ii) to the extent permitted by federal law.
                      (2) (a) Except as provided in Subsection (2)(b), beginning on July 1, 2001, a state tax and
                  a local tax is imposed on a transaction described in Subsection (1) equal to the sum of:
                      (i) a state tax imposed on the transaction at a rate of 4.75%; and
                      (ii) a local tax equal to the sum of the tax rates a county, city, or town imposes on the
                  transaction under this chapter other than this part.
                      (b) Notwithstanding Subsection (2)(a), beginning on July 1, 2001, a state tax and a local
                  tax is imposed on a transaction described in Subsection (1)(d) equal to the sum of:
                      (i) a state tax imposed on the transaction at a rate of 2%; and
                      (ii) a local tax equal to the sum of the tax rates a county, city, or town imposes on the
                  transaction under this chapter other than this part.
                      (c) Subject to Subsections (2)(d) and (e), a tax rate repeal or tax rate change for a tax
                  rate imposed under the following shall take effect on the first day of a calendar quarter:
                      (i) Subsection (2)(a)(i); or
                      (ii) Subsection (2)(b)(i).
                      (d) (i) For a transaction described in Subsection (2)(d)(iii), a tax rate increase shall take
                  effect on the first day of the first billing period:
                      (A) that begins after the effective date of the tax rate increase; and
                      (B) if the billing period for the transaction begins before the effective date of a tax rate
                  increase imposed under:
                      (I) Subsection (2)(a)(i); or
                      (II) Subsection (2)(b)(i).
                      (ii) For a transaction described in Subsection (2)(d)(iii), the repeal of a tax or a tax rate
                  decrease shall take effect on the first day of the last billing period:
                      (A) that began before the effective date of the repeal of the tax or the tax rate decrease;
                  and
                      (B) if the billing period for the transaction begins before the effective date of [a] the

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                  repeal of the tax or the tax rate decrease imposed under:
                      (I) Subsection (2)(a)(i); or
                      (II) Subsection (2)(b)(i).
                      (iii) Subsections (2)(d)(i) and (ii) apply to transactions subject to a tax under:
                      (A) Subsection (1)(b);
                      (B) Subsection (1)(c);
                      (C) Subsection (1)(d);
                      (D) Subsection (1)(e);
                      (E) Subsection (1)(f);
                      (F) Subsection (1)(g);
                      (G) Subsection (1)(h);
                      (H) Subsection (1)(i);
                      (I) Subsection (1)(j); or
                      (J) Subsection (1)(k).
                      (e) (i) If a tax due under Subsection (2)(a)(i) on a catalogue sale is computed on the basis
                  of sales and use tax rates published in the catalogue, a tax rate repeal or change in a tax rate
                  imposed under Subsection (2)(a)(i) takes effect:
                      (A) on the first day of a calendar quarter; and
                      (B) beginning 60 days after the effective date of the tax rate repeal or tax rate change
                  under Subsection (2)(a)(i).
                      (ii) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
                  commission may by rule define the term "catalogue sale."
                      (3) (a) Except as provided in Subsections (4) through (7) [and (9)], the following state
                  taxes shall be deposited into the General Fund:
                      (i) the tax imposed by Subsection (2)(a)(i); or
                      (ii) the tax imposed by Subsection (2)(b)(i).
                      (b) The local taxes described in Subsections (2)(a)(ii) and (2)(b)(ii) shall be distributed to
                  a county, city, or town as provided in this chapter.

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                      [(4) (a) (i) Notwithstanding Subsection (3)(a) and except as provided in Subsection (9),
                  for fiscal year 2002-03 only, the lesser of the following amounts shall be transferred or deposited
                  as provided in Subsections (4)(a)(ii) through (vii):]
                      [(A) for taxes listed under Subsection (3)(a), the amount of tax revenue generated:]
                      [(I) by a 1/16% tax rate on the transactions described in Subsection (1); and]
                      [(II) for fiscal year 2002-03; or]
                      [(B) $18,743,000.]
                      [(ii) (A) For fiscal year 2002-03 only, $2,300,000 of the amount described in Subsection
                  (4)(a)(i) shall be transferred as dedicated credits to the Department of Natural Resources to:]
                      [(I) implement the measures described in Subsections 63-34-14 (4)(a) through (d) to
                  protect sensitive plant and animal species; or]
                      [(II) award grants, up to the amount authorized by the Legislature in an appropriations
                  act, to political subdivisions of the state to implement the measures described in Subsections
                  63-34-14 (4)(a) through (d) to protect sensitive plant and animal species.]
                      [(B) Money transferred to the Department of Natural Resources under Subsection
                  (4)(a)(ii)(A) may not be used to assist the United States Fish and Wildlife Service or any other
                  person to list or attempt to have listed a species as threatened or endangered under the
                  Endangered Species Act of 1973, 16 U.S.C. Sec. 1531 et seq.]
                      [(C) At the end of fiscal year 2002-03:]
                      [(I) 50% of any unexpended dedicated credits shall lapse to the Water Resources
                  Conservation and Development Fund created in Section 73-10-24 ;]
                      [(II) 25% of any unexpended dedicated credits shall lapse to the Utah Wastewater Loan
                  Program Subaccount created in Section 73-10c-5 ; and]
                      [(III) 25% of any unexpended dedicated credits shall lapse to the Drinking Water Loan
                  Program Subaccount created in Section 73-10c-5 .]
                      [(iii) For fiscal year 2002-03 only, $500,000 of the amount described in Subsection
                  (4)(a)(i) shall be deposited in the Agriculture Resource Development Fund created in Section
                  4-18-6 .]

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

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                      [(vi) For fiscal year 2002-03 only, 25% of the amount described in Subsection (4)(a)(i)
                  that remains after making the transfers and deposits required by Subsections (4)(a)(ii) through (iv)
                  shall be deposited in the Utah Wastewater Loan Program Subaccount created in Section 73-10c-5
                  for use by the Water Quality Board to fund wastewater projects.]
                      [(vii) For fiscal year 2002-03 only, 25% of the amount described in Subsection (4)(a)(i)
                  that remains after making the transfers and deposits required by Subsections (4)(a)(ii) through (iv)
                  shall be deposited in the Drinking Water Loan Program Subaccount created in Section 73-10c-5
                  for use by the Division of Drinking Water to:]
                      [(A) provide for the installation and repair of collection, treatment, storage, and
                  distribution facilities for any public water system, as defined in Section 19-4-102 ;]
                      [(B) develop underground sources of water, including springs and wells; and]
                      [(C) develop surface water sources.]
                      [(b) (i)] (4) (a) Notwithstanding Subsection (3)(a), for a fiscal year beginning on or after
                  July 1, 2003, the lesser of the following amounts shall be used as provided in Subsections
                  (4)(b)[(ii)] through [(vii)] (g):
                      [(A)] (i) for taxes listed under Subsection (3)(a), the amount of tax revenue generated:
                      [(I)] (A) by a 1/16% tax rate on the transactions described in Subsection (1); and
                      [(II)] (B) for the fiscal year; or
                      [(B)] (ii) $17,500,000.
                      [(ii) (A)] (b) (i) For a fiscal year beginning on or after July 1, 2003, 14% of the amount
                  described in Subsection (4)[(b)(i)](a) shall be transferred each year as dedicated credits to the
                  Department of Natural Resources to:
                      [(I)] (A) implement the measures described in Subsections 63-34-14 (4)(a) through (d) to
                  protect sensitive plant and animal species; or
                      [(II)] (B) award grants, up to the amount authorized by the Legislature in an
                  appropriations act, to political subdivisions of the state to implement the measures described in
                  Subsections 63-34-14 (4)(a) through (d) to protect sensitive plant and animal species.
                      [(B)] (ii) Money transferred to the Department of Natural Resources under Subsection

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                  (4)(b)[(ii)(A)](i) may not be used to assist the United States Fish and Wildlife Service or any
                  other person to list or attempt to have listed a species as threatened or endangered under the
                  Endangered Species Act of 1973, 16 U.S.C. Sec. 1531 et seq.
                      [(C)] (iii) At the end of each fiscal year:
                      [(I)] (A) 50% of any unexpended dedicated credits shall lapse to the Water Resources
                  Conservation and Development Fund created in Section 73-10-24 ;
                      [(II)] (B) 25% of any unexpended dedicated credits shall lapse to the Utah Wastewater
                  Loan Program Subaccount created in Section 73-10c-5 ; and
                      [(III)] (C) 25% of any unexpended dedicated credits shall lapse to the Drinking Water
                  Loan Program Subaccount created in Section 73-10c-5 .
                      [(iii)] (c) For a fiscal year beginning on or after July 1, 2003, 3% of the amount described
                  in Subsection (4)(b)(i) shall be deposited each year in the Agriculture Resource Development
                  Fund created in Section 4-18-6 .
                      [(iv) (A)] (d) (i) For a fiscal year beginning on or after July 1, 2003, 1% of the amount
                  described in Subsection (4)[(b)(i)](a) shall be transferred each year as dedicated credits to the
                  Division of Water Rights to cover the costs incurred in hiring legal and technical staff for the
                  adjudication of water rights.
                      [(B)] (ii) At the end of each fiscal year:
                      [(I)] (A) 50% of any unexpended dedicated credits shall lapse to the Water Resources
                  Conservation and Development Fund created in Section 73-10-24 ;
                      [(II)] (B) 25% of any unexpended dedicated credits shall lapse to the Utah Wastewater
                  Loan Program Subaccount created in Section 73-10c-5 ; and
                      [(III)] (C) 25% of any unexpended dedicated credits shall lapse to the Drinking Water
                  Loan Program Subaccount created in Section 73-10c-5 .
                      [(v) (A)] (e) (i) For a fiscal year beginning on or after July 1, 2003, 41% of the amount
                  described in Subsection (4)[(b)(i)](a) shall be deposited in the Water Resources Conservation and
                  Development Fund created in Section 73-10-24 for use by the Division of Water Resources.
                      [(B)] (ii) In addition to the uses allowed of the Water Resources Conservation and

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                  Development Fund under Section 73-10-24 , the Water Resources Conservation and Development
                  Fund may also be used to:
                      [(I)] (A) provide a portion of the local cost share, not to exceed in any fiscal year 50% of
                  the funds made available to the Division of Water Resources under this section, of potential
                  project features of the Central Utah Project;
                      [(II)] (B) conduct hydrologic and geotechnical investigations by the Department of
                  Natural Resources in a cooperative effort with other state, federal, or local entities, for the
                  purpose of quantifying surface and ground water resources and describing the hydrologic systems
                  of an area in sufficient detail so as to enable local and state resource managers to plan for and
                  accommodate growth in water use without jeopardizing the resource;
                      [(III)] (C) fund state required dam safety improvements; and
                      [(IV)] (D) protect the state's interest in interstate water compact allocations, including the
                  hiring of technical and legal staff.
                      [(vi)] (f) For a fiscal year beginning on or after July 1, 2003, 20.5% of the amount
                  described in Subsection (4)[(b)(i)](a) shall be deposited in the Utah Wastewater Loan Program
                  Subaccount created in Section 73-10c-5 for use by the Water Quality Board to fund wastewater
                  projects.
                      [(vii)] (g) For a fiscal year beginning on or after July 1, 2003, 20.5% of the amount
                  described in Subsection (4)[(b)(i)](a) shall be deposited in the Drinking Water Loan Program
                  Subaccount created in Section 73-10c-5 for use by the Division of Drinking Water to:
                      [(A)] (i) provide for the installation and repair of collection, treatment, storage, and
                  distribution facilities for any public water system, as defined in Section 19-4-102 ;
                      [(B)] (ii) develop underground sources of water, including springs and wells; and
                      [(C)] (iii) develop surface water sources.
                      [(5) (a) (i) Notwithstanding Subsection (3)(a), for fiscal year 2002-03 only, the lesser of
                  the following amounts shall be transferred or deposited as provided in Subsections (5)(a)(ii)
                  through (iv):]
                      [(A) for taxes listed under Subsection (3)(a), the amount of tax revenue generated:]

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                      [(I) by a 1/16% tax rate on the transactions described in Subsection (1); and]
                      [(II) for the fiscal year; or]
                      [(B) $18,743,000.]
                      [(ii) (A) For fiscal year 2002-03 only, $500,000 of the amount described in Subsection
                  (5)(a)(i) shall be deposited in the Transportation Corridor Preservation Revolving Loan Fund
                  created in Section 72-2-117 .]
                      [(B) At least 50% of the money deposited in the Transportation Corridor Preservation
                  Revolving Loan Fund under Subsection (5)(a)(ii)(A) shall be used to fund loan applications made
                  by the Department of Transportation at the request of local governments.]
                      [(iii) For fiscal year 2002-03 only, $500,000 of the amount described in Subsection
                  (5)(a)(i) shall be transferred as nonlapsing dedicated credits to the Department of Transportation
                  for the State Park Access Highways Improvement Program created in Section 72-3-207 .]
                      [(iv) For fiscal year 2002-03 only, the amount described in Subsection (5)(a)(i) that
                  remains after making the transfers and deposits required by Subsections (5)(a)(ii) and (iii) shall be
                  deposited in the class B and class C roads account to be expended as provided in Title 72,
                  Chapter 2, Transportation Finances Act, for the use of class B and C roads.]
                      [(b) (i)] (5) (a) Notwithstanding Subsection (3)(a), for a fiscal year beginning on or after
                  July 1, 2003, the lesser of the following amounts shall be used as provided in Subsections
                  (5)(b)[(ii)] through [(iv)] (d):
                      [(A)] (i) for taxes listed under Subsection (3)(a), the amount of tax revenue generated:
                      [(I)] (A) by a 1/16% tax rate on the transactions described in Subsection (1); and
                      [(II)] (B) for the fiscal year; or
                      [(B)] (ii) $18,743,000.
                      [(ii) (A)] (b) (i) For a fiscal year beginning on or after July 1, 2003, 3% of the amount
                  described in Subsection (5)[(b)(i)](a) shall be deposited each year in the Transportation Corridor
                  Preservation Revolving Loan Fund created in Section 72-2-117 .
                      [(B)] (ii) At least 50% of the money deposited in the Transportation Corridor
                  Preservation Revolving Loan Fund under Subsection (5)(b)[(ii)(A)](i) shall be used to fund loan

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                  applications made by the Department of Transportation at the request of local governments.
                      [(iii)] (c) For a fiscal year beginning on or after July 1, 2003, 3% of the amount described
                  in Subsection (5)[(b)(i)](a) shall be transferred each year as nonlapsing dedicated credits to the
                  Department of Transportation for the State Park Access Highways Improvement Program created
                  in Section 72-3-207 .
                      [(iv)] (d) For a fiscal year beginning on or after July 1, 2003, 94% of the amount
                  described in Subsection (5)[(b)(i)](a) shall be deposited in the class B and class C roads account
                  to be expended as provided in Title 72, Chapter 2, Transportation Finances Act, for the use of
                  class B and C roads.
                      (6) Notwithstanding Subsection (3)(a), beginning on January 1, 2000, the Division of
                  Finance shall deposit into the Centennial Highway Fund created in Section 72-2-118 a portion of
                  the taxes listed under Subsection (3)(a) equal to the revenues generated by a 1/64% tax rate on
                  the taxable transactions under Subsection (1).
                      [(7) Notwithstanding Subsection (3)(a), beginning on July 1, 1999, the commission shall
                  deposit into the Airport to University of Utah Light Rail Restricted Account created in Section
                  17A-2-1064 the portion of the sales and use tax under Section 59-12-204 that is:]
                      [(a) generated by a city or town that will have constructed within its boundaries the
                  Airport to University of Utah Light Rail described in the Transportation Equity Act for the 21st
                  Century, Pub. L. No. 105-178, Sec. 3030(c)(2)(B)(i)(II), 112 Stat. 107; and]
                      [(b) equal to the revenues generated by a 1/64% tax rate on the taxable items and services
                  under Subsection (1).]
                      [(8) (a) For purposes of amounts paid or charged as admission or user fees relating to the
                  Olympic Winter Games of 2002, the amounts are considered to be paid or charged on the day on
                  which the Salt Lake Organizing Committee for the Olympic Winter Games of 2002 or a person
                  designated by the Salt Lake Organizing Committee for the Olympic Winter Games of 2002 sends
                  a purchaser confirmation of the purchase of an admission or user fee described in Subsection
                  (1)(f).]
                      [(b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the

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                  commission shall make rules defining what constitutes sending a purchaser confirmation under
                  Subsection (8)(a).]
                      [(9) (a) For fiscal year 2002-03 only, the following amounts shall be subtracted from the
                  total amount required to be deposited or transferred in accordance with Subsection (4):]
                      [(i) $25,000 shall be subtracted from the total amount required to be transferred to the
                  Division of Water Rights in accordance with Subsection (4)(a)(iv);]
                      [(ii) $385,000 shall be subtracted from the total amount required to be deposited into the
                  Agriculture Resource Development Fund in accordance with Subsection (4)(a)(iii);]
                      [(iii) $350,000 shall be subtracted from the total amount required to be transferred to the
                  Department of Natural Resources in accordance with Subsection (4)(a)(ii);]
                      [(iv) $3,012,500 shall be subtracted from the total amount required to be deposited into
                  the Drinking Water Loan Program Subaccount in accordance with Subsection (4)(a)(vii);]
                      [(v) $3,012,500 shall be subtracted from the total amount required to be deposited into
                  the Utah Wastewater Loan Program Subaccount in accordance with Subsection (4)(a)(vi); and]
                      [(vi) $5,715,000 shall be subtracted from the total amount required to be deposited into
                  the Water Resources Conservation and Development Fund in accordance with Subsection
                  (4)(a)(v).]
                      [(b) The amounts subtracted under Subsection (9)(a) shall be deposited into the General
                  Fund.]
                      (7) (a) Notwithstanding Subsection (3)(a), for fiscal years beginning on or after fiscal year
                  2004-05, the commission shall each year on or before the September 30 immediately following the
                  last day of the fiscal year deposit the difference described in Subsection (7)(b) into the Remote
                  Sales Restricted Account created in Section 59-12-103.2 if that difference is greater than $0.
                      (b) The difference described in Subsection (7)(a) is equal to the difference between:
                      (i) the total amount of the following revenues the commission received from sellers
                  collecting a tax in accordance with Subsection 59-12-107 (1)(b) for the fiscal year immediately
                  preceding the September 30 described in Subsection (7)(a):
                      (A) revenues under Subsection (2)(a)(i); and

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                      (B) revenues under Subsection (2)(b)(i); and
                      (ii) $8,779,673.
                      Section 12. Section 59-12-103.2 (Effective 07/01/04) is amended to read:
                       59-12-103.2 (Effective 07/01/04). Remote Sales Restricted Account -- Creation --
                  Funding for account -- Interest -- Deposit of revenues into the General Fund.
                      (1) There is created within the General Fund a restricted account known as the "Remote
                  Sales Restricted Account."
                      [(2) On or before December 1, 2004, the Division of Finance shall deposit any revenues in
                  the Remote Sales Restricted Account into the General Fund.]
                      (2) The account shall be funded from the portion of the sales and use tax deposited by the
                  commission as provided in Section 59-12-103 .
                      (3) (a) The account shall earn interest.
                      (b) The interest described in Subsection (3)(a) shall be deposited into the account.
                      (4) The Division of Finance shall deposit any revenues in the Remote Sales Restricted
                  Account as of July 1, 2004, into the General Fund.
                      Section 13. Section 59-12-104 (Effective 07/01/04) is amended to read:
                       59-12-104 (Effective 07/01/04). Exemptions.
                      The following sales and uses are exempt from the taxes imposed by this chapter:
                      (1) sales of aviation fuel, motor fuel, and special fuel subject to a Utah state excise tax
                  under Chapter 13, Motor and Special Fuel Tax Act;
                      (2) sales to the state, its institutions, and its political subdivisions; however, this
                  exemption does not apply to sales of:
                      (a) construction materials except:
                      (i) construction materials purchased by or on behalf of institutions of the public education
                  system as defined in Utah Constitution Article X, Section 2, provided the construction materials
                  are clearly identified and segregated and installed or converted to real property which is owned by
                  institutions of the public education system; and
                      (ii) construction materials purchased by the state, its institutions, or its political

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                  subdivisions which are installed or converted to real property by employees of the state, its
                  institutions, or its political subdivisions; or
                      (b) tangible personal property in connection with the construction, operation,
                  maintenance, repair, or replacement of a project, as defined in Section 11-13-103 , or facilities
                  providing additional project capacity, as defined in Section 11-13-103 ;
                      (3) (a) sales of an item described in Subsection (3)(b) from a vending machine if:
                      (i) the proceeds of each sale do not exceed $1; and
                      (ii) the seller or operator of the vending machine reports an amount equal to 150% of the
                  cost of the item described in Subsection (3)(a) as goods consumed; and
                      (b) Subsection (3)(a) applies to:
                      (i) food and food ingredients; or
                      (ii) prepared food;
                      (4) sales of the following to a commercial airline carrier for in-flight consumption:
                      (a) food and food ingredients;
                      (b) prepared food; or
                      (c) services related to Subsection (4)(a) or (b);
                      (5) sales of parts and equipment for installation in aircraft operated by common carriers in
                  interstate or foreign commerce;
                      (6) sales of commercials, motion picture films, prerecorded audio program tapes or
                  records, and prerecorded video tapes by a producer, distributor, or studio to a motion picture
                  exhibitor, distributor, or commercial television or radio broadcaster;
                      (7) sales of cleaning or washing of tangible personal property by a coin-operated laundry
                  or dry cleaning machine;
                      (8) (a) except as provided in Subsection (8)(b), sales made to or by religious or charitable
                  institutions in the conduct of their regular religious or charitable functions and activities, if the
                  requirements of Section 59-12-104.1 are fulfilled;
                      (b) the exemption provided for in Subsection (8)(a) does not apply to the following sales,
                  uses, leases, or rentals relating to the Olympic Winter Games of 2002 made to or by an

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

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

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                      (c) Subsections (12)(a) and (b) apply to:
                      (i) food and food ingredients;
                      (ii) prepared food; or
                      (iii) alcoholic beverages;
                      (13) isolated or occasional sales by persons not regularly engaged in business, except the
                  sale of vehicles or vessels required to be titled or registered under the laws of this state in which
                  case the tax is based upon:
                      (a) the bill of sale or other written evidence of value of the vehicle or vessel being sold; or
                      (b) in the absence of a bill of sale or other written evidence of value, the then existing fair
                  market value of the vehicle or vessel being sold as determined by the commission;
                      (14) (a) the following purchases or leases by a manufacturer on or after July 1, 1995:
                      (i) machinery and equipment:
                      (A) used in the manufacturing process;
                      (B) having an economic life of three or more years; and
                      (C) used:
                      (I) to manufacture an item sold as tangible personal property; and
                      (II) in new or expanding operations in a manufacturing facility in the state; and
                      (ii) subject to the provisions of Subsection (14)(b), normal operating replacements that:
                      (A) have an economic life of three or more years;
                      (B) are used in the manufacturing process in a manufacturing facility in the state;
                      (C) are used to replace or adapt an existing machine to extend the normal estimated
                  useful life of the machine; and
                      (D) do not include repairs and maintenance;
                      (b) the rates for the exemption under Subsection (14)(a)(ii) are as follows:
                      (i) beginning July 1, 1996, through June 30, 1997, 30% of the sale or lease described in
                  Subsection (14)(a)(ii) is exempt;
                      (ii) beginning July 1, 1997, through June 30, 1998, 60% of the sale or lease described in
                  Subsection (14)(a)(ii) is exempt; and

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

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

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                  price:
                      (i) money;
                      (ii) electricity;
                      (iii) water;
                      (iv) gas; or
                      (v) steam;
                      (19) sprays and insecticides used to control insects, diseases, and weeds for commercial
                  production of fruits, vegetables, feeds, seeds, and animal products, but not those sprays and
                  insecticides used in the processing of the products;
                      (20) (a) (i) sales of tangible personal property used or consumed primarily and directly in
                  farming operations, including sales of irrigation equipment and supplies used for agricultural
                  production purposes, whether or not they become part of real estate and whether or not installed
                  by farmer, contractor, or subcontractor, but not sales of:
                      (A) machinery, equipment, materials, and supplies used in a manner that is incidental to
                  farming, such as hand tools and maintenance and janitorial equipment and supplies;
                      (B) tangible personal property used in any activities other than farming, such as office
                  equipment and supplies, equipment and supplies used in sales or distribution of farm products, in
                  research, or in transportation; or
                      (C) any vehicle required to be registered by the laws of this state, without regard to the
                  use to which the vehicle is put; or
                      (ii) sales of parts used in the repairs or renovations of tangible personal property if the
                  tangible personal property is exempt under Subsection (20)(a); or
                      (b) sales of hay;
                      (21) exclusive sale of locally grown seasonal crops, seedling plants, or garden, farm, or
                  other agricultural produce if sold by a producer during the harvest season;
                      (22) purchases made using a coupon as defined in 7 U.S.C. Sec. 2012 that is issued under
                  the Food Stamp Program, 7 U.S.C. Sec. 2011 et seq.;
                      (23) sales of nonreturnable containers, nonreturnable labels, nonreturnable bags,

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                  nonreturnable shipping cases, and nonreturnable casings to a manufacturer, processor, wholesaler,
                  or retailer for use in packaging tangible personal property to be sold by that manufacturer,
                  processor, wholesaler, or retailer;
                      (24) property stored in the state for resale;
                      (25) property brought into the state by a nonresident for his or her own personal use or
                  enjoyment while within the state, except property purchased for use in Utah by a nonresident
                  living and working in Utah at the time of purchase;
                      (26) property purchased for resale in this state, in the regular course of business, either in
                  its original form or as an ingredient or component part of a manufactured or compounded
                  product;
                      (27) property upon which a sales or use tax was paid to some other state, or one of its
                  subdivisions, except that the state shall be paid any difference between the tax paid and the tax
                  imposed by this part and Part 2, Local Sales and Use Tax Act, and no adjustment is allowed if the
                  tax paid was greater than the tax imposed by this part and Part 2, Local Sales and Use Tax Act;
                      (28) any sale of a service described in Subsections 59-12-103 (1)(b), (c), and (d) to a
                  person for use in compounding a service taxable under the subsections;
                      (29) purchases made in accordance with the special supplemental nutrition program for
                  women, infants, and children established in 42 U.S.C. Sec. 1786;
                      (30) beginning on July 1, 1999, through June 30, 2004, sales or leases of rolls, rollers,
                  refractory brick, electric motors, or other replacement parts used in the furnaces, mills, or ovens
                  of a steel mill described in SIC Code 3312 of the 1987 Standard Industrial Classification Manual
                  of the federal Executive Office of the President, Office of Management and Budget;
                      (31) sales of boats of a type required to be registered under Title 73, Chapter 18, State
                  Boating Act, boat trailers, and outboard motors which are made to bona fide nonresidents of this
                  state and are not thereafter registered or used in this state except as necessary to transport them
                  to the borders of this state;
                      (32) sales of aircraft manufactured in Utah if sold for delivery and use outside Utah where
                  a sales or use tax is not imposed, even if the title is passed in Utah;

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                      (33) amounts paid for the purchase of telephone service for purposes of providing
                  telephone service;
                      (34) fares charged to persons transported directly by a public transit district created under
                  the authority of Title 17A, Chapter 2, Part 10, Utah Public Transit District Act;
                      (35) sales or leases of vehicles to, or use of vehicles by an authorized carrier;
                      (36) (a) 45% of the sales price of any new manufactured home; and
                      (b) 100% of the sales price of any used manufactured home;
                      (37) sales relating to schools and fundraising sales;
                      (38) sales or rentals of durable medical equipment if a person presents a prescription for
                  the durable medical equipment;
                      (39) (a) sales to a ski resort of electricity to operate a passenger ropeway as defined in
                  Section 72-11-102 ; and
                      (b) the commission shall by rule determine the method for calculating sales exempt under
                  Subsection (39)(a) that are not separately metered and accounted for in utility billings;
                      (40) sales to a ski resort of:
                      (a) snowmaking equipment;
                      (b) ski slope grooming equipment;
                      (c) passenger ropeways as defined in Section 72-11-102 ; or
                      (d) parts used in the repairs or renovations of equipment or passenger ropeways described
                  in Subsections (40)(a) through (c);
                      (41) sales of natural gas, electricity, heat, coal, fuel oil, or other fuels for industrial use;
                      (42) sales or rentals of the right to use or operate for amusement, entertainment, or
                  recreation a coin-operated amusement device as defined in Section 59-12-102 ;
                      (43) sales of cleaning or washing of tangible personal property by a coin-operated car
                  wash machine;
                      (44) sales by the state or a political subdivision of the state, except state institutions of
                  higher education as defined in Section 53B-3-102 , of:
                      (a) photocopies; or

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                      (b) other copies of records held or maintained by the state or a political subdivision of the
                  state;
                      (45) (a) amounts paid:
                      (i) to a person providing intrastate transportation to an employer's employee to or from
                  the employee's primary place of employment;
                      (ii) by an:
                      (A) employee; or
                      (B) employer; and
                      (iii) pursuant to a written contract between:
                      (A) the employer; and
                      (B) (I) the employee; or
                      (II) a person providing transportation to the employer's employee; and
                      (b) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
                  commission may for purposes of Subsection (45)(a) make rules defining what constitutes an
                  employee's primary place of employment;
                      (46) amounts paid for admission to an athletic event at an institution of higher education
                  that is subject to the provisions of Title IX of the Education Amendments of 1972, 20 U.S.C. Sec.
                  1681 et seq.;
                      (47) sales of telephone service charged to a prepaid telephone calling card;
                      (48) (a) sales of:
                      (i) hearing aids;
                      (ii) hearing aid accessories; or
                      (iii) except as provided in Subsection (48)(b), parts used in the repairs or renovations of
                  hearing aids or hearing aid accessories; and
                      (b) for purposes of this Subsection (48), notwithstanding Subsection (48)(a)(iii), "parts"
                  does not include batteries;
                      (49) (a) sales made to or by:
                      (i) an area agency on aging; or

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                      (ii) a senior citizen center owned by a county, city, or town; or
                      (b) sales made by a senior citizen center that contracts with an area agency on aging;
                      (50) (a) beginning on July 1, 2000, through June 30, 2002, amounts paid or charged as
                  admission or user fees described in Subsection 59-12-103 (1)(f) relating to the Olympic Winter
                  Games of 2002 if the amounts paid or charged are established by the Salt Lake Organizing
                  Committee for the Olympic Winter Games of 2002 in accordance with requirements of the
                  International Olympic Committee; and
                      (b) the State Olympic Officer and the Salt Lake Organizing Committee for the Olympic
                  Winter Games of 2002 shall make at least two reports during the 2000 interim:
                      (i) to the:
                      (A) Olympic Coordination Committee; and
                      (B) Revenue and Taxation Interim Committee; and
                      (ii) regarding the status of:
                      (A) agreements relating to the funding of public safety services for the Olympic Winter
                  Games of 2002;
                      (B) agreements relating to the funding of services, other than public safety services, for
                  the Olympic Winter Games of 2002;
                      (C) other agreements relating to the Olympic Winter Games of 2002 as requested by the
                  Olympic Coordination Committee or the Revenue and Taxation Interim Committee;
                      (D) other issues as requested by the Olympic Coordination Committee or the Revenue
                  and Taxation Interim Committee; or
                      (E) a combination of Subsections (50)(b)(ii)(A) through (D);
                      (51) (a) beginning on July 1, 2001, through June 30, 2007, and subject to Subsection
                  (51)(b), a sale or lease of semiconductor fabricating or processing materials regardless of whether
                  the semiconductor fabricating or processing materials:
                      (i) actually come into contact with a semiconductor; or
                      (ii) ultimately become incorporated into real property;
                      (b) (i) beginning on July 1, 2001, through June 30, 2002, 10% of the sale or lease

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                  described in Subsection (51)(a) is exempt;
                      (ii) beginning on July 1, 2002, through June 30, 2003, 50% of the sale or lease described
                  in Subsection (51)(a) is exempt; and
                      (iii) beginning on July 1, 2003, through June 30, 2007, the entire amount of the sale or
                  lease described in Subsection (51)(a) is exempt; and
                      (c) each year on or before the November interim meeting, the Revenue and Taxation
                  Interim Committee shall:
                      (i) review the exemption described in this Subsection (51) and make recommendations
                  concerning whether the exemption should be continued, modified, or repealed; and
                      (ii) include in the review under this Subsection (51)(c):
                      (A) the cost of the exemption;
                      (B) the purpose and effectiveness of the exemption; and
                      (C) the benefits of the exemption to the state;
                      (52) an amount paid by or charged to a purchaser for accommodations and services
                  described in Subsection 59-12-103 (1)(i) to the extent the amount is exempt under Section
                  59-12-104.2 ;
                      (53) beginning on September 1, 2001, the lease or use of a vehicle issued a temporary
                  sports event registration certificate in accordance with Section 41-3-306 for the event period
                  specified on the temporary sports event registration certificate;
                      (54) sales or uses of electricity, if the sales or uses are:
                      (a) made under a tariff adopted by the Public Service Commission of Utah only for
                  purchase of electricity produced from a new wind, geothermal, biomass, or solar power energy
                  source, as designated in the tariff by the Public Service Commission of Utah; and
                      (b) for an amount of electricity that is:
                      (i) unrelated to the amount of electricity used by the person purchasing the electricity
                  under the tariff described in Subsection (54)(a); and
                      (ii) equivalent to the number of kilowatthours specified in the tariff described in
                  Subsection (54)(a) that may be purchased under the tariff described in Subsection (54)(a);

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                      (55) sales or rentals of mobility enhancing equipment if a person presents a prescription
                  for the mobility enhancing equipment;
                      (56) sales of water in a:
                      (a) pipe;
                      (b) conduit;
                      (c) ditch; or
                      (d) reservoir;
                      (57) sales of currency or coinage that constitute legal tender of the United States or of a
                  foreign nation;
                      (58) (a) sales of an item described in Subsection (58)(b) if the item:
                      (i) does not constitute legal tender of any nation; and
                      (ii) has a gold, silver, or platinum content of 80% or more; and
                      (b) Subsection (58)(a) applies to a gold, silver, or platinum:
                      (i) ingot;
                      (ii) bar;
                      (iii) medallion; or
                      (iv) decorative coin;
                      (59) amounts paid on a sale-leaseback transaction; and
                      (60) sales of a prosthetic device:
                      (a) for use on or in a human;
                      (b) for which a prescription is issued; and
                      (c) to a person that presents a prescription for the prosthetic device.
                      Section 14. Section 59-12-105 (Effective 07/01/04) is amended to read:
                       59-12-105 (Effective 07/01/04). Certain exempt sales to be reported -- Report by
                  seller that files a simplified electronic return -- Penalties.
                      (1) [(a)] An owner or purchaser shall report to the commission the amount of sales or
                  uses exempt under Subsection 59-12-104 (14)[, (39), (40),] or (51).
                      (2) (a) A seller that files a simplified electronic return with the commission shall file a

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                  report containing the information described in Subsection (2)(b).
                      (b) The report required by Subsection (2)(a) shall contain the following amounts:
                      (i) for each store location that the seller has within the state:
                      (A) the total amount of sales;
                      (B) the total amount of sales that are exempt from a tax imposed by this chapter; and
                      (C) the difference between the amount described in Subsection (2)(b)(i)(A) and the
                  amount described in Subsection (2)(b)(i)(B);
                      (ii) for the total amount of sales that the seller makes from a location in the state other
                  than a fixed place of business in the state:
                      (A) the total amount of sales;
                      (B) the total amount of sales that are exempt from a tax imposed by this chapter; and
                      (C) the difference between the amount described in Subsection (2)(b)(ii)(A) and the
                  amount described in Subsection (2)(b)(ii)(B); and
                      (iii) for the total amount of sales that the seller makes where inventory is shipped from a
                  location outside the state:
                      (A) the total amount of sales;
                      (B) the total amount of sales that are exempt from a tax imposed by this chapter; and
                      (C) the difference between the amount described in Subsection (2)(b)(iii)(A) and the
                  amount described in Subsection (2)(b)(iii)(B).
                      [(b) The] (3) (a) A report required by Subsection (1)[(a)] or (2) shall be filed:
                      (i) with the commission; and
                      (ii) on a form prescribed by the commission.
                      (b) A report required by Subsection (2) shall be filed electronically.
                      (c) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
                  commission shall make rules providing:
                      (i) the information required to be included in the [report] reports described in
                  [Subsection] Subsections (1)[(a)] and (2); and
                      (ii) one or more due dates for filing the [report] reports described in:

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                      (A) Subsection (1)[(a).]; and
                      (B) Subsection (2).
                      [(2) Except] (4) (a) Notwithstanding Section 59-1-401 , and except as provided in
                  Subsections [(3)] (4)(b) and [(4)] (6), if the owner or purchaser fails to report the full amount of
                  the exemptions granted under Subsection 59-12-104 (14)[, (39), (40),] or (51) on the report
                  required by Subsection (1)[(a)], the commission shall impose a penalty equal to the lesser of:
                      [(a)] (i) 10% of the sales and use tax that would have been imposed if the exemption had
                  not applied; or
                      [(b)] (ii) $1,000.
                      [(3)] (b) Notwithstanding Subsection [(2)] (4)(a)(i), the commission may not impose a
                  penalty under Subsection [(2)] (4)(a)(i) if the owner or purchaser files an amended report:
                      [(a)] (i) containing the amount of the exemption; and
                      [(b)] (ii) before the owner or purchaser receives a notice of audit from the commission.
                      (5) Notwithstanding Section 59-1-401 , and except as provided in Subsection (6), if a
                  seller fails to report the amounts required by Subsection (2), the commission shall impose a
                  penalty of $1,000.
                      [(4)] (6) (a) Notwithstanding Subsection [(2)] (4)(a) or (5), the commission may waive,
                  reduce, or compromise a penalty imposed under this section if the commission finds there are
                  reasonable grounds for the waiver, reduction, or compromise.
                      (b) If the commission waives, reduces, or compromises a penalty under Subsection [(4)]
                  (6)(a), the commission shall make a record of the grounds for waiving, reducing, or compromising
                  the penalty.
                      Section 15. Section 59-12-107 (Effective 07/01/04) is amended to read:
                       59-12-107 (Effective 07/01/04). Collection, remittance, and payment of tax by
                  sellers or other persons -- Collection of tax by a seller registered under the agreement may
                  not be used as a factor in determining whether the seller is required to pay certain taxes,
                  fees, or charges -- Returns -- Direct payment by purchaser of vehicle -- Other liability for
                  collection -- Rulemaking authority -- Credits -- Treatment of bad debt -- Deposit and sale

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                  of security -- Penalties.
                      (1) (a) Except as provided in Subsection (1)(e) or Sections 59-12-107.1 through
                  [ 59-12-107.3 ] 59-12-107.4 and subject to Subsection (1)(f), each seller shall pay or collect and
                  remit the sales and use taxes imposed by this chapter if within this state the seller:
                      (i) has or utilizes:
                      (A) an office;
                      (B) a distribution house;
                      (C) a sales house;
                      (D) a warehouse;
                      (E) a service enterprise; or
                      (F) a place of business similar to Subsections (1)(a)(i)(A) through (E);
                      (ii) maintains a stock of goods;
                      (iii) regularly solicits orders, regardless of whether or not the orders are accepted in the
                  state, unless the seller's only activity in the state is:
                      (A) advertising; or
                      (B) solicitation by:
                      (I) direct mail;
                      (II) electronic mail;
                      (III) the Internet;
                      (IV) telephone; or
                      (V) a means similar to Subsections (1)(a)(iii)(A) or (B);
                      (iv) regularly engages in the delivery of property in the state other than by:
                      (A) common carrier; or
                      (B) United States mail; or
                      (v) regularly engages in an activity directly related to the leasing or servicing of property
                  located within the state.
                      (b) [If a] A seller that does not meet one or more of the criteria provided for in
                  Subsection (1)(a)[, the seller]:

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

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                  is located at the premises of a printer's facility with which the retailer has contracted for printing
                  and that consists of the final printed product, property that becomes a part of the final printed
                  product, or copy from which the printed product is produced, shall not result in the retailer being
                  considered to have or maintain an office, distribution house, sales house, warehouse, service
                  enterprise, or other place of business, or to maintain a stock of goods, within this state.
                      (f) (i) As used in this Subsection (1)(f):
                      (A) "affiliated group" is as defined in Section 59-7-101 , except that "affiliated group"
                  includes a corporation that is qualified to do business but is not otherwise doing business in this
                  state;
                      (B) "common ownership" is as defined in Section 59-7-101 ;
                      (C) "related seller" means a seller that:
                      (I) is not required to pay or collect and remit sales and use taxes under Subsection (1)(a)
                  or Section 59-12-103.1 ;
                      (II) is:
                      (Aa) related to a seller that is required to pay or collect and remit sales and use taxes
                  under Subsection (1)(a) as part of an affiliated group or because of common ownership; or
                      (Bb) a limited liability company owned by the parent corporation of an affiliated group if
                  that parent corporation of the affiliated group is required to pay or collect and remit sales and use
                  taxes under Subsection (1)(a); and
                      (III) does not voluntarily collect and remit a tax under Subsection (1)(b)(i).
                      (ii) A seller is not required to pay or collect and remit sales and use taxes under
                  Subsection (1)(a):
                      (A) if the seller is a related seller;
                      (B) if the seller to which the related seller is related does not engage in any of the
                  following activities on behalf of the related seller:
                      (I) advertising;
                      (II) marketing;
                      (III) sales; or

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                      (IV) other services; and
                      (C) if the seller to which the related seller is related accepts the return of an item sold by
                  the related seller, the seller to which the related seller is related accepts the return of that item:
                      (I) sold by a seller that is not a related seller; and
                      (II) on the same terms as the return of an item sold by that seller to which the related
                  seller is related.
                      (2) (a) Except as provided in Sections 59-12-107.1 through [ 59-12-107.3 ] 59-12-107.4 ,
                  [a seller shall collect] a tax under this chapter shall be collected from a purchaser.
                      (b) A seller may not collect as tax an amount, without regard to fractional parts of one
                  cent, in excess of the tax computed at the rates prescribed by this chapter.
                      (c) (i) Each seller shall:
                      (A) give the purchaser a receipt for the [use] tax collected; or
                      (B) bill the [use] tax as a separate item and declare the name of this state and the seller's
                  sales and use tax license number on the invoice for the sale.
                      (ii) The receipt or invoice is prima facie evidence that the seller has collected the [use] tax
                  and relieves the purchaser of the liability for reporting the [use] tax to the commission as a
                  consumer.
                      (d) A seller is not required to maintain a separate account for the tax collected, but is
                  considered to be a person charged with receipt, safekeeping, and transfer of public moneys.
                      (e) Taxes collected by a seller pursuant to this chapter shall be held in trust for the benefit
                  of the state and for payment to the commission in the manner and at the time provided for in this
                  chapter.
                      (f) If any seller, during any reporting period, collects as a tax an amount in excess of the
                  lawful state and local percentage of total taxable sales allowed under this chapter, the seller shall
                  remit to the commission the full amount of the tax imposed under this chapter, plus any excess.
                      (g) If the accounting methods regularly employed by the seller in the transaction of the
                  seller's business are such that reports of sales made during a calendar month or quarterly period
                  will impose unnecessary hardships, the commission may accept reports at intervals that will, in the

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                  commission's opinion, better suit the convenience of the taxpayer or seller and will not jeopardize
                  collection of the tax.
                      (3) (a) Except as provided in Subsections (4) [and (5)] through (6) and in Section
                  59-12-108 , the sales or use tax imposed by this chapter is due and payable to the commission
                  quarterly on or before the last day of the month next succeeding each calendar quarterly period.
                      (b) (i) Each seller shall, on or before the last day of the month next succeeding each
                  calendar quarterly period, file with the commission a return for the preceding quarterly period.
                      (ii) The seller shall remit with the return under Subsection (3)(b)(i) the amount of the tax
                  required under this chapter to be collected or paid for the period covered by the return.
                      (c) (i) [Each] Except as provided in Subsections (3)(c)(ii) and (4)(b)(i)(C), each return
                  shall contain information and be in a form the commission prescribes by rule.
                      (ii) Notwithstanding Subsection (3)(c)(i), a seller described in Subsection (1)(b) that is
                  registered under the agreement shall file a return required by this section electronically.
                      (d) The sales tax as computed in the return shall be based upon the total nonexempt sales
                  made during the period, including both cash and charge sales.
                      (e) The use tax as computed in the return shall be based upon the total amount of sales
                  and purchases for storage, use, or other consumption in this state made during the period,
                  including both by cash and by charge.
                      (f) [The] (i) Subject to Subsection (3)(f)(ii) and in accordance with Title 63, Chapter
                  46a, Utah Administrative Rulemaking Act, the commission may by rule extend the time for
                  making returns and paying the taxes. [No]
                      (ii) An extension under Subsection (3)(f)(i) may not be for more than 90 days.
                      (g) The commission may require returns and payment of the tax to be made for other than
                  quarterly periods if the commission considers it necessary in order to ensure the payment of the
                  tax imposed by this chapter.
                      [(h) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
                  commission may make rules requiring a seller to file an information return:]
                      [(i) for information required by this chapter that is not included in any sales and use tax

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

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                  transactions described in Subsection 59-12-103 (1) conducted by a seller described in Subsection
                  (4)(d), including:
                      (i) a cash transaction; and
                      (ii) a charge transaction.
                      (d) This Subsection (4) applies to a seller that is:
                      (i) registered under the agreement;
                      [(ii) does not meet one or more of the criteria provided for in Subsection (1)(a) to be
                  required to collect a tax under this chapter; and]
                      (ii) described in Subsection (1)(b); and
                      (iii) not a:
                      (A) model 1 seller;
                      (B) model 2 seller; or
                      (C) model 3 seller.
                      (5) (a) Notwithstanding Subsection (3) and except as provided in Subsection (5)(b), a tax
                  collected in accordance with this chapter by a seller that files a simplified electronic return shall be
                  due and payable:
                      (i) monthly on or before the last day of the month immediately following the month for
                  which the seller collects a tax under this chapter; and
                      (ii) for the month for which the seller collects a tax under this chapter.
                      (b) Notwithstanding Subsection (5)(a), a tax collected in accordance with Subsection
                  (1)(b) by a seller described in Subsection (4)(d) that files a simplified electronic return, shall be
                  due and payable as provided in Subsection (4)(a).
                      [(5)] (6) (a) Notwithstanding Subsection (3), on each vehicle sale made by other than a
                  regular licensed vehicle dealer, the purchaser shall pay the sales or use tax directly to the
                  commission if the vehicle is subject to titling or registration under the laws of this state.
                      (b) The commission shall collect the tax described in Subsection [(5)] (6)(a) when the
                  vehicle is titled or registered.
                      [(6)] (7) If any sale of tangible personal property or any other taxable transaction under

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                  Subsection 59-12-103 (1), is made by a wholesaler to a retailer, the wholesaler is not responsible
                  for the collection or payment of the tax imposed on the sale and the retailer is responsible for the
                  collection or payment of the tax imposed on the sale if:
                      (a) the retailer represents that the personal property is purchased by the retailer for resale;
                  and
                      (b) the personal property is not subsequently resold.
                      [(7)] (8) If any sale of property or service subject to the tax is made to a person prepaying
                  sales or use tax in accordance with Title 63, Chapter 51, Resource Development, or to a
                  contractor or subcontractor of that person, the person to whom such payment or consideration is
                  payable is not responsible for the collection or payment of the sales or use tax and the person
                  prepaying the sales or use tax is responsible for the collection or payment of the sales or use tax if
                  the person prepaying the sales or use tax represents that the amount prepaid as sales or use tax
                  has not been fully credited against sales or use tax due and payable under the rules promulgated
                  by the commission.
                      [(8)] (9) (a) For purposes of this Subsection [(8)] (9):
                      (i) Except as provided in Subsection [(8)] (9)(a)(ii), "bad debt" is as defined in Section
                  166, Internal Revenue Code.
                      (ii) Notwithstanding Subsection [(8)] (9)(a)(i), "bad debt" does not include:
                      (A) an amount included in the purchase price of tangible personal property or a service
                  that is:
                      (I) not a transaction described in Subsection 59-12-103 (1); or
                      (II) exempt under Section 59-12-104 ;
                      (B) a financing charge;
                      (C) interest;
                      (D) a tax imposed under this chapter on the purchase price of tangible personal property
                  or a service;
                      (E) an uncollectible amount on tangible personal property that:
                      (I) is subject to a tax under this chapter; and

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                      (II) remains in the possession of a seller until the full purchase price is paid;
                      (F) an expense incurred in attempting to collect any debt; or
                      (G) an amount that a seller does not collect on repossessed property.
                      (b) A seller may deduct bad debt from the total amount from which a tax under this
                  chapter is calculated on a return.
                      (c) A seller may file a refund claim with the commission if:
                      (i) the amount of bad debt for the time period described in Subsection [(8)] (9)(e) exceeds
                  the amount of the seller's sales that are subject to a tax under this chapter for that same time
                  period; and
                      (ii) as provided in Section 59-12-110 .
                      (d) A bad debt deduction under this section may not include interest.
                      (e) A bad debt may be deducted under this Subsection [(8)] (9) on a return for the time
                  period during which the bad debt:
                      (i) is written off as uncollectible in the seller's books and records; and
                      (ii) would be eligible for a bad debt deduction:
                      (A) for federal income tax purposes; and
                      (B) if the seller were required to file a federal income tax return.
                      (f) If a seller recovers any portion of bad debt for which the seller makes a deduction or
                  claims a refund under this Subsection [(8)] (9), the seller shall report and remit a tax under this
                  chapter:
                      (i) on the portion of the bad debt the seller recovers; and
                      (ii) on a return filed for the time period for which the portion of the bad debt is recovered.
                      (g) For purposes of reporting a recovery of a portion of bad debt under Subsection [(8)]
                  (9)(f), a seller shall apply amounts received on the bad debt in the following order:
                      [(A)] (i) in a proportional amount:
                      [(I)] (A) to the purchase price of the tangible personal property or service; and
                      [(II)] (B) to the tax due under this chapter on the tangible personal property or service;
                  and

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

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                  as required by this chapter, shall pay, in addition to the tax, penalties and interest as provided in
                  Section 59-12-110 .
                      (d) For purposes of prosecution under this section, each quarterly tax period in which a
                  seller, with intent to evade any tax, collects a tax and fails to timely remit the full amount of the
                  tax required to be remitted, constitutes a separate offense.
                      Section 16. Section 59-12-107.1 (Effective 07/01/04) is amended to read:
                       59-12-107.1 (Effective 07/01/04). Direct payment permit.
                      (1) The commission may issue a direct payment permit to a seller that:
                      (a) obtains a license under Section 59-12-106 ;
                      (b) is required to remit taxes under this chapter by electronic funds transfer in accordance
                  with [Section] Subsection 59-12-108 (1);
                      (c) has a record of timely payment of taxes under this chapter as determined by the
                  commission; and
                      (d) demonstrates to the commission that the seller has the ability to determine the
                  appropriate location of a transaction:
                      (i) under:
                      (A) Section 59-12-205 ;
                      (B) Section 59-12-207.1 ; and
                      (C) Section 59-12-207.3 ; and
                      (ii) for each transaction for which the seller makes a purchase using the direct payment
                  permit.
                      (2) A direct payment permit may not be used in connection with the following
                  transactions:
                      (a) a purchase of the following purchased in the same transaction:
                      (i) prepared food; and
                      (ii) food and food ingredients;
                      (b) amounts paid or charged for accommodations and services described in Subsection
                  59-12-103 (1)(i);

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

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                      (A) under:
                      (I) Section 59-12-205 ;
                      (II) Section 59-12-207.1 ; or
                      (III) Section 59-12-207.3 ; and
                      (B) for each transaction for which a purchase is made using the direct payment permit;
                  and
                      (ii) necessary to determine the amount described in Subsection (3)(c) for each transaction
                  for which the holder of the direct payment permit uses the direct payment permit.
                      (4) A seller that is presented evidence of a direct payment permit at the time of a
                  transaction:
                      (a) notwithstanding Section 59-12-107 , may not collect agreement sales and use tax on
                  the transaction;
                      (b) shall, for a period of three years from the date the seller files a return with the
                  commission reporting the transaction, retain records to verify that the transaction was made using
                  a direct payment permit; and
                      (c) notwithstanding Section 59-12-107 , is not liable for agreement sales and use tax on
                  the transaction.
                      (5) The holder of a direct payment permit may calculate the amount the holder of the
                  direct payment permit may retain under Section 59-12-108 on the amount described in Subsection
                  (3)(c):
                      (a) for each transaction for which the holder of the direct payment permit uses the direct
                  payment permit; and
                      (b) that the holder of the direct payment permit remits to the commission under this
                  section.
                      (6) The commission may revoke a direct payment permit issued under this section at any
                  time if the holder of the direct payment permit fails to comply with any provision of this chapter.
                      (7) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
                  commission may make rules to administer this section.

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                      Section 17. Section 59-12-107.2 (Effective 07/01/04) is amended to read:
                       59-12-107.2 (Effective 07/01/04). Services, computer software, or digital goods
                  concurrently available for use in more than one location.
                      (1) (a) Notwithstanding Section 59-12-107 and except as provided in Subsection (4), if a
                  purchaser of a good or service described in Subsection (1)(b) that is not the holder of a direct
                  payment permit under Section 59-12-107.1 knows at the time of purchase that the good or
                  service described in Subsection (1)(b) will be concurrently available for use in more than one
                  location, the purchaser shall:
                      (i) provide to the seller at the time of purchase a form:
                      (A) prescribed by the commission; and
                      (B) indicating that the good or service described in Subsection (1)(b) will be concurrently
                  available for use in more than one location;
                      (ii) apportion the purchase price of the good or service described in Subsection (1)(b)
                  among the locations determined in accordance with Section 59-12-205 and Subsection
                  59-12-207.1 [(9)](10);
                      (iii) determine the agreement sales and use tax for each location determined in accordance
                  with Section 59-12-205 and Subsection 59-12-207.1 [(9)](10) by calculating the product of:
                      (A) the tax rate for the location determined in accordance with Section 59-12-205 and
                  Subsection 59-12-207.1 [(9)](10); and
                      (B) the amount of the purchase price apportioned to that location under Subsection
                  (1)(a)(ii); and
                      (iv) remit to the commission the agreement sales and use tax calculated under Subsection
                  (1)(a)(iii) for each location determined in accordance with Section 59-12-205 and Subsection
                  59-12-207.1 [(9)](10).
                      (b) Subsection (1)(a) applies to:
                      (i) a service;
                      (ii) prewritten computer software delivered electronically; or
                      (iii) a digital good.

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                      (2) The method a purchaser may use to make the apportionment required by Subsection
                  (1) shall be:
                      (a) reasonable;
                      (b) uniform;
                      (c) consistent; and
                      (d) supported by the purchaser's business records as those business records exist at the
                  time of the transaction.
                      (3) Upon receipt of the form described in Subsection (1)(a)(i):
                      (a) a seller:
                      (i) is not liable to collect or remit agreement sales and use tax for that transaction; and
                      (ii) shall keep a record of the form described in Subsection (1)(a)(i) for three years from
                  the date the seller files a return with the commission reporting that transaction; and
                      (b) the form shall remain in effect:
                      (i) for all future transactions between the seller described in Subsection (3)(a) and the
                  purchaser; and
                      (ii) until the form is revoked in writing by the purchaser.
                      (4) (a) Notwithstanding Subsection (1), a purchaser of a good or service described in
                  Subsection (1)(b) is not required to provide to a seller the form described in Subsection (1)(a)(i) if
                  the purchaser:
                      (i) knows at the time of purchase that the good or service described in Subsection (1)(b)
                  will be concurrently available for use in more than one location; and
                      (ii) is the holder of a direct payment permit under Section 59-12-107.1 .
                      (b) A purchaser described in Subsection (4)(a) is subject to Subsection (2) in determining
                  the apportionment of agreement sales and use tax due on the good or service described in
                  Subsection (1)(b).
                      Section 18. Section 59-12-107.4 is enacted to read:
                      59-12-107.4. Certified service provider liability.
                      (1) Notwithstanding Section 59-12-107 and except as provided in Subsection (2), if a

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                  model 1 seller selects a certified service provider as the model 1 seller's agent:
                      (a) the certified service provider shall collect and remit agreement sales and use taxes to
                  the commission:
                      (i) that the model 1 seller would otherwise be required to remit to the commission under
                  this chapter; and
                      (ii) as provided in this chapter; and
                      (b) the model 1 seller is not liable for the certified service provider's failure to collect and
                  remit any agreement sales and use taxes to the commission that the model 1 seller would
                  otherwise be required to remit to the commission under this chapter.
                      (2) Notwithstanding Subsection (1), the model 1 seller described in Subsection (1):
                      (a) shall remit to the commission any sales and use taxes imposed by this chapter:
                      (i) on the model 1 seller's purchases; and
                      (ii) as provided in this chapter; and
                      (b) is liable for any sales and use tax liability arising from the model 1 seller's fraud.
                      Section 19. Section 59-12-107.5 is enacted to read:
                      59-12-107.5. Seller or certified service provider reliance on commission information
                  or certain systems.
                      A seller or certified service provider is not liable for failing to collect and remit a tax at a
                  tax rate imposed under this part if:
                      (1) the tax rate at which the seller or certified service provider collected the tax was
                  derived from a database created by the commission containing tax rates;
                      (2) the failure to collect and remit the tax is as a result of the seller's or certified service
                  provider's reliance on incorrect data provided by the commission in the taxability matrix required
                  by Section 328 of the agreement;
                      (3) for a model 2 seller, the failure to collect and remit the tax:
                      (a) is due to an error in the certified automated system used by the model 2 seller; and
                      (b) occurs prior to an audit of the certified automated system that reveals the error in the
                  certified automated system; or

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                      (4) for a model 3 seller, the failure to collect and remit the tax:
                      (a) is due to an error in the proprietary system used by the model 3 seller; and
                      (b) occurs prior to an audit of the proprietary system that reveals the error in the
                  proprietary system.
                      Section 20. Section 59-12-108 (Effective 07/01/04) is amended to read:
                       59-12-108 (Effective 07/01/04). Monthly payment -- Penalty -- Amount of tax a
                  seller may retain -- Certain amounts allocated to local taxing jurisdictions.
                      (1) (a) Notwithstanding Section 59-12-107 , a seller that has a tax liability under this
                  chapter of $50,000 or more for the previous calendar year shall:
                      (i) file a return with the commission:
                      (A) monthly on or before the last day of the month immediately following the month for
                  which the seller collects a tax under this chapter; and
                      (B) for the month for which the seller collects a tax under this chapter; and
                      (ii) (A) except as provided in Subsection (1)(a)(ii)(B) or (1)(c), remit with the return
                  required by Subsection (1)(a)(i) the amount the person is required to remit to the commission for
                  each tax, fee, or charge described in Subsection (1)(b):
                      [(A)] (I) if that seller's tax liability under this chapter for the previous calendar year is less
                  than $96,000, by any method permitted by the commission; or
                      [(B)] (II) if that seller's tax liability under this chapter for the previous calendar year is
                  $96,000 or more, by electronic funds transfer[.]; or
                      (B) notwithstanding Subsection (1)(a)(ii)(A), a seller shall remit electronically with the
                  return required by Subsection (1)(a)(i) the amount the person is required to remit to the
                  commission for each tax, fee, or charge described in Subsection (1)(b) if that seller:
                      (I) is required by Section 59-12-107 to file the return electronically; or
                      (II) (Aa) is required to collect and remit a tax under Subsection 59-12-107 (1)(a); and
                      (Bb) files a simplified electronic return.
                      (b) Subsections (1)(a)(i) and (ii) apply to the following taxes, fees, or charges:
                      (i) a tax under Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;

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

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                  taxes monthly in accordance with Subsection (1) may not retain any amount under Subsection
                  (2)(a).
                      (3) A seller that has a tax liability under this chapter for the previous calendar year of less
                  than $50,000 may:
                      (a) voluntarily meet the requirements of Subsection (1); and
                      (b) if the seller voluntarily meets the requirements of Subsection (1), retain the amounts
                  allowed by Subsection (2)(a).
                      (4) Penalties for late payment shall be as provided in Section 59-1-401 .
                      (5) (a) For any amounts required to be remitted to the commission under this part, the
                  commission shall each month calculate an amount equal to the difference between:
                      (i) the total amount retained for that month by all sellers had the percentage listed under
                  Subsection (2)(a)(i) been 1.5%; and
                      (ii) the total amount retained for that month by all sellers at the percentage listed under
                  Subsection (2)(a)(i).
                      (b) The commission shall each month allocate the amount calculated under Subsection
                  (5)(a) to each local taxing jurisdiction on the basis of the proportion of agreement sales and use
                  tax that the commission distributes to each local taxing jurisdiction for that month compared to
                  the total agreement sales and use tax that the commission distributes for that month to all local
                  taxing jurisdictions.
                      Section 21. Section 59-12-110 (Effective 07/01/04) is amended to read:
                       59-12-110 (Effective 07/01/04). Overpayments, deficiencies, and refunds
                  procedures.
                      (1) (a) As soon as practicable after a return is filed, the commission shall examine the
                  return.
                      (b) If the commission determines that the correct amount of tax to be remitted is greater
                  or less than the amount shown to be due on the return, the commission shall recompute the tax.
                      (c) If the amount paid exceeds the amount due, the excess, plus interest as provided in
                  Section 59-1-402 , shall be credited or refunded to the taxpayer as provided in Subsection (2).

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                      (d) The commission may not credit or refund to the taxpayer interest on an overpayment
                  under Subsection (1)(c) if the commission determines that the overpayment was made for the
                  purpose of investment.
                      (2) (a) If a taxpayer pays a tax, penalty, or interest more than once or the commission
                  erroneously receives, collects, or computes any tax, penalty, or interest, including an overpayment
                  described in Subsection (1)(c), the commission shall:
                      (i) credit the amount of tax, penalty, or interest paid by the taxpayer against any amounts
                  of tax, penalties, or interest the taxpayer owes; and
                      (ii) refund any balance to the taxpayer or the taxpayer's successors, administrators,
                  executors, or assigns.
                      (b) Except as provided in Subsections (2)(c) and (d) or Section 19-2-124 , a taxpayer shall
                  file a claim with the commission to obtain a refund or credit under this Subsection (2) within three
                  years from the day on which the taxpayer overpaid the tax, penalty, or interest.
                      (c) Notwithstanding Subsection (2)(b), beginning on July 1, 1998, the commission shall
                  extend the period for a taxpayer to file a claim under Subsection (2)(b) if:
                      (i) the three-year period under Subsection (2)(b) has not expired; and
                      (ii) the commission and the taxpayer sign a written agreement:
                      (A) authorizing the extension; and
                      (B) providing for the length of the extension.
                      (d) Notwithstanding Subsection (2)(b), a seller that files a claim for a refund under
                  Subsection 59-12-107 [(8)] (9)(c) for bad debt shall file the claim with the commission within
                  three years from the date on which the seller could first claim the refund for the bad debt.
                      (e) A taxpayer may file a claim to obtain a refund or credit under this Subsection (2)
                  regardless of whether the taxpayer received or objected to a notice of deficiency or a notice of
                  assessment as provided in Subsection 59-12-114 (1).
                      (f) A taxpayer may obtain a refund under this Subsection (2) of a tax paid under this
                  chapter on a transaction that is taxable under Section 59-12-103 if:
                      (i) the sale or use was exempt from sales and use taxes under Section 59-12-104 on the

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                  date of purchase; and
                      (ii) except as provided in Subsection (2)(c), the taxpayer files a claim for a refund with
                  the commission as provided in Subsections (2)(b) through (e).
                      (g) If the commission denies a claim for a refund or credit under this Subsection (2), the
                  taxpayer may request a redetermination of the denial by filing a petition or request for agency
                  action with the commission as provided in Title 63, Chapter 46b, Administrative Procedures Act.
                      (3) If the commission erroneously determines an amount to be due from a taxpayer, the
                  commission shall authorize the amounts to be cancelled upon its records.
                      (4) (a) Subject to the provisions of Subsection (4)(b), the commission may impose on a
                  deficiency under this section:
                      (i) a penalty as provided in Section 59-1-401 ; and
                      (ii) interest as provided in Section 59-1-402 .
                      (b) The commission may impose a penalty and interest on the entire deficiency if any part
                  of the deficiency is due to:
                      (i) negligence;
                      (ii) intentional disregard of law or rule; or
                      (iii) fraud with intent to evade the tax.
                      (5) (a) Except as provided in Subsection (5)(b), a taxpayer shall pay a tax deficiency,
                  including penalties or interest under this section, within ten days after the commission provides
                  the taxpayer notice and demand of the deficiency, penalty, or interest.
                      (b) Notwithstanding Subsection (5)(a), a taxpayer may pay a tax deficiency, penalty, or
                  interest within 30 days after the commission provides the taxpayer notice and demand of the
                  deficiency, penalty, or interest if the commission determines:
                      (i) that a greater amount was due than was shown on the return; and
                      (ii) the tax is not in jeopardy.
                      (6) (a) Except as provided in Subsections (6)(c) through (f), the commission shall assess
                  the amount of taxes imposed by this chapter, and any penalties and interest, within three years
                  after a taxpayer files a return.

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                      (b) Except as provided in Subsections (6)(c) through (f), if the commission does not make
                  an assessment under Subsection (6)(a) within three years, the commission may not commence a
                  proceeding for the collection of the taxes after the expiration of the three-year period.
                      (c) Notwithstanding Subsections (6)(a) and (b), the commission may make an assessment
                  or commence a proceeding to collect a tax at any time if a deficiency is due to:
                      (i) fraud; or
                      (ii) failure to file a return.
                      (d) Notwithstanding Subsections (6)(a) and (b), beginning on July 1, 1998, the
                  commission may extend the period to make an assessment or to commence a proceeding to
                  collect the tax under this chapter if:
                      (i) the three-year period under this Subsection (6) has not expired; and
                      (ii) the commission and the taxpayer sign a written agreement:
                      (A) authorizing the extension; and
                      (B) providing for the length of the extension.
                      (e) If the commission delays an audit at the request of a taxpayer, the commission may
                  make an assessment as provided in Subsection (6)(f) if:
                      (i) the taxpayer subsequently refuses to agree to an extension request by the commission;
                  and
                      (ii) the three-year period under this Subsection (6) expires before the commission
                  completes the audit.
                      (f) An assessment under Subsection (6)(e) shall be:
                      (i) for the time period for which the commission could not make an assessment because of
                  the expiration of the three-year period; and
                      (ii) in an amount equal to the difference between:
                      (A) the commission's estimate of the amount of taxes the taxpayer would have been
                  assessed for the time period described in Subsection (6)(f)(i); and
                      (B) the amount of taxes the taxpayer actually paid for the time period described in
                  Subsection (6)(f)(i).

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                      Section 22. Section 59-12-110.1 (Effective 07/01/04) is amended to read:
                       59-12-110.1 (Effective 07/01/04). Refund or credit for taxes overpaid by a
                  purchaser -- Presumption of reasonable business practice.
                      (1) Subject to the other provisions of this section, a purchaser may request from a seller a
                  refund or credit of any amount that:
                      (a) the purchaser overpaid in taxes under this chapter; and
                      (b) was collected by the seller.
                      (2) (a) Except as provided in Subsection (2)(b), the procedure described in Subsection (1)
                  is in addition to the process for a taxpayer to file a claim for a refund or credit with the
                  commission under Section 59-12-110 .
                      (b) Notwithstanding Subsection (2)(a):
                      (i) the commission is not required to make a refund or credit of an amount for which as of
                  the date the refund or credit is to be given the purchaser has requested or received a refund or
                  credit from the seller; and
                      (ii) a seller is not required to refund or credit an amount for which as of the date the
                  refund is to be given the purchaser has requested or received a refund or credit from the
                  commission.
                      (3) A purchaser may not bring a cause of action against a seller for a refund or credit
                  described in Subsection (1):
                      (a) unless the purchaser provided the seller written notice that:
                      (i) the purchaser requests the refund or credit described in Subsection (1); and
                      (ii) contains the information necessary for the seller to determine the validity of the
                  request; and
                      (b) sooner than 60 days after the day on which the seller receives the written notice
                  described in Subsection (3)(a).
                      (4) A seller that has collected a tax under this chapter that exceeds the amount the seller
                  is required to collect under this chapter is presumed to have a reasonable business practice if the
                  seller:

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                      (a) collected a tax under this chapter that exceeds the amount the seller is required to
                  collect under this chapter through the use of:
                      (i) a provider certified by the state; or
                      (ii) a system certified by the state, including a proprietary system certified by the state;
                  and
                      (b) has remitted to the commission all taxes that the seller is required to remit to the
                  commission under this chapter.
                      Section 23. Section 59-12-122 is enacted to read:
                      59-12-122. Monetary allowance for a seller registered under the agreement.
                      A seller that is registered under the agreement shall receive the monetary allowance
                  determined:
                      (1) by the governing board of the agreement; and
                      (2) in accordance with Article VI, Monetary Allowances for New Technological Models
                  for Sales Tax Collection, of the agreement.
                      Section 24. Section 59-12-205 (Effective 07/01/04) is amended to read:
                       59-12-205 (Effective 07/01/04). Ordinances to conform with statutory amendments
                  -- Distribution of tax revenues -- Rulemaking authority -- Determination of population.
                      (1) Each county, city, and town, in order to maintain in effect sales and use tax
                  ordinances adopted pursuant to Section 59-12-204 , shall, within 30 days of any amendment of
                  any applicable provisions of Part 1, Tax Collection, adopt amendments of their respective sales
                  and use tax ordinances to conform with the amendments to Part 1, Tax Collection, insofar as they
                  relate to sales and use taxes.
                      (2) [(a)] Except as provided in Subsection [(3)] (7):
                      [(i)] (a) 50% of each dollar collected from the sales and use tax authorized by this part
                  shall be paid to each county, city, and town on the basis of the percentage that the population of
                  the county, city, or town bears to the total population of all counties, cities, and towns in the
                  state; and
                      [(ii)] (b) notwithstanding Sections 59-12-207.1 through 59-12-207.4 , 50% of each dollar

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                  collected from the sales and use tax authorized by this part shall be paid to each county, city, and
                  town on the basis of the location where the transaction is consummated [under Subsection (2)(b)]
                  as determined under this section.
                      [(b)] (3) For purposes of Subsection (2)[(a)](b), the location where a transaction is
                  consummated is determined [as follows:] in accordance with Subsections (4) through (6).
                      (4) (a) For a transaction that is reported to the commission on a return other than a
                  simplified electronic return, the location where the transaction is consummated is determined in
                  accordance with Subsections (4)(b) through (h).
                      [(i)] (b) (i) [except] Except as provided in Subsections [(2)(b)(ii)] (4)(c) through [(iv)]
                  (h), for a transaction described in Subsection (4)(b)(ii), the location where [a] the transaction is
                  consummated is the place of business of the seller[;].
                      (ii) Subsection (4)(b)(i) applies to a transaction other than a transaction described in:
                      (A) Subsection (4)(c)(ii);
                      (B) Subsection (4)(d)(ii);
                      (C) Subsection (4)(e)(ii);
                      (D) Subsection (4)(f)(ii);
                      (E) Subsection (4)(g)(ii); or
                      (F) Subsection (4)(h).
                      [(ii)] (c) (i) [notwithstanding] Notwithstanding Subsection [(2)(b)(i), if tangible personal
                  property is shipped from outside the state] (4)(b), for a transaction described in Subsection
                  (4)(c)(ii), the location where the transaction is consummated [is the same as the location of the
                  transaction determined under] is determined by allocating the total revenues remitted to the
                  commission each month that are generated by the tax imposed under this section on the
                  transactions described in Subsection (4)(c)(ii):
                      (A) to each local taxing jurisdiction; and
                      (B) on the basis of the population of each local taxing jurisdiction as compared to the
                  population of the state.
                      [(A) Section 59-12-207.1 ;]

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                      [(B) Section 59-12-207.2 ;]
                      [(C) Section 59-12-207.3 ; or]
                      [(D) Section 59-12-207.4 ;]
                      (ii) Subsection (4)(c)(i) applies to a transaction:
                      (A) made by a seller described in Subsection 59-12-107 (1)(b); and
                      (B) involving tangible personal property that is shipped from outside the state.
                      [(iii)] (d) (i) [notwithstanding] Notwithstanding Subsection [(2)(b)(i) and subject to
                  Subsection (2)(c), if the transaction is made from a location in the state other than a fixed place of
                  business in the state] (4)(b), for a transaction described in Subsection (4)(d)(ii), the location
                  where the transaction is consummated is [the same as the location of the transaction determined
                  under] determined by allocating the total revenues reported to the commission each month that
                  are generated by the tax imposed under this section on the transactions described in Subsection
                  (4)(d)(ii):
                      (A) to local taxing jurisdictions within a county; and
                      (B) on the basis of the proportion of total revenues generated by the transactions
                  described in Subsection (4)(b)(ii) that are reported to the commission for that month within a
                  local taxing jurisdiction within that county as compared to the total revenues generated by the
                  transactions described in Subsection (4)(b)(ii) that are reported to the commission for that month
                  within all local taxing jurisdictions within that county.
                      [(A) Section 59-12-207.1 ;]
                      [(B) Section 59-12-207.2 ;]
                      [(C) Section 59-12-207.3 ; or]
                      [(D) Section 59-12-207.4 ; or]
                      (ii) Subsection (4)(d)(i) applies to a transaction:
                      (A) made from a location in the state other than a fixed place of business in the state; or
                      (B) (I) made by a seller described in Subsection 59-12-107 (1)(a); and
                      (II) involving tangible personal property that is shipped from outside the state.
                      (e) (i) Notwithstanding Subsection (4)(b), for a transaction described in Subsection

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                  (4)(e)(ii), the location where the transaction is consummated is determined by allocating the total
                  revenues reported to the commission each month that are generated by the tax imposed under this
                  section on the transactions described in Subsection (4)(e)(ii):
                      (A) to local taxing jurisdictions; and
                      (B) on the basis of the proportion of the total revenues generated by the transactions
                  described in Subsection (4)(b)(ii) that are reported to the commission for that month within each
                  local taxing jurisdiction as compared to the total revenues generated by the transactions described
                  in Subsection (4)(b)(ii) that are reported to the commission for that month within the state.
                      (ii) Subsection (4)(e)(i) applies to a transaction involving tangible personal property
                  purchased with a direct payment permit in accordance with Section 59-12-107.1 .
                      (f) (i) Notwithstanding Subsection (4)(b), for a transaction described in Subsection
                  (4)(f)(ii), the location where the transaction is consummated is each location where the good or
                  service described in Subsection 59-12-107.2 (1)(b) is used.
                      (ii) Subsection (4)(f)(i) applies to a transaction involving a good or service:
                      (A) described in Subsection 59-12-107.2 (1)(b);
                      (B) that is concurrently available for use in more than one location; and
                      (C) is purchased using the form described in Section 59-12-107.2 .
                      (g) (i) Notwithstanding Subsection (4)(b), for a transaction described in Subsection
                  (4)(g)(ii), the location where the transaction is consummated is determined by allocating the total
                  revenues reported to the commission each month that are generated by the tax imposed under
                  this section on the transactions described in Subsection (4)(g)(ii):
                      (A) to local taxing jurisdictions; and
                      (B) on the basis of the proportion of the total revenues generated by the transactions
                  described in Subsection (4)(b)(ii) that are reported to the commission for that month within each
                  local taxing jurisdiction as compared to the total revenues generated by the transactions described
                  in Subsection (4)(b)(ii) that are reported to the commission for that month within the state.
                      (ii) Subsection (4)(g)(i) applies to a transaction involving a purchase of direct mail if the
                  purchaser of the direct mail provides to the seller the form described in Subsection

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                  59-12-107.3 (1)(a) at the time of the purchase of the direct mail.
                      [(iv)] (h) [if the transaction involves] Notwithstanding Subsection (4)(b), for a transaction
                  involving the sale of a telephone service, the location where the transaction is consummated is the
                  same as the location of the transaction determined under Section 59-12-207.4 .
                      (5) (a) For a transaction that is reported to the commission on a simplified electronic
                  return, the location where the transaction is consummated is determined in accordance with
                  Subsections (5)(b) through (e).
                      (b) (i) Except as provided in Subsections (5)(c) through (e), the location where a
                  transaction is consummated is determined by allocating the total revenues reported to the
                  commission each month on the simplified electronic return:
                      (A) to local taxing jurisdictions; and
                      (B) on the basis of the proportion of the total revenues generated by the transactions
                  described in Subsection (4)(b)(ii) that are reported to the commission in accordance with
                  Subsection (5)(b)(ii) for that month within each local taxing jurisdiction as compared to the total
                  revenues generated by the transactions described in Subsection (4)(b)(ii) that are reported to the
                  commission in accordance with Subsection (5)(b)(ii) for that month within the state.
                      (ii) In making the allocations required by Subsection (5)(b)(i), the commission shall use
                  the total revenues generated by the transactions described in Subsection (4)(b)(ii) reported to the
                  commission:
                      (A) in the report required by Subsection 59-12-105 (2); and
                      (B) if a local taxing jurisdiction reports revenues to the commission in accordance with
                  Subsection (5)(b)(iii), in the report made in accordance with Subsection (5)(b)(iii).
                      (iii) (A) For purposes of this Subsection (5)(b), a local taxing jurisdiction may report to
                  the commission the revenues generated by a tax imposed by this chapter within the local taxing
                  jurisdiction if a seller:
                      (I) opens an additional place of business within the local taxing jurisdiction after the seller
                  makes an initial application for a license under Section 59-12-106 ; and
                      (II) estimates that the additional place of business will increase by 5% or more the

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                  revenues generated by a tax imposed by this chapter within the local taxing jurisdiction.
                      (B) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
                  commission may make rules providing procedures and requirements for making the report
                  described in this Subsection (5)(b).
                      (c) (i) Notwithstanding Subsection (5)(b), for a transaction described in Subsection
                  (5)(c)(ii), the location where the transaction is consummated is determined by allocating the total
                  revenues reported to the commission each month that are generated by the tax imposed under this
                  section on the transactions described in Subsection (5)(c)(ii):
                      (A) to local taxing jurisdictions within a county; and
                      (B) on the basis of the proportion of the total revenues generated by the transactions
                  described in Subsection (4)(b)(ii) that are reported to the commission for that month within a
                  local taxing jurisdiction within that county as compared to the total revenues generated by the
                  transactions described in Subsection (4)(b)(ii) that are reported to the commission for that month
                  within all local taxing jurisdictions within that county.
                      (ii) Subsection (5)(c)(i) applies to a transaction:
                      (A) made from a location in the state other than a fixed place of business in the state; or
                      (B) (I) made by a seller described in Subsection 59-12-107 (1)(a); and
                      (II) involving tangible personal property that is shipped from outside the state.
                      (d) Notwithstanding Subsection (5)(b), for a transaction made by a seller described in
                  Subsection 59-12-107 (1)(b), the location where the transaction is consummated is determined by
                  allocating the total revenues remitted to the commission each month that are generated by the tax
                  imposed under this section on the transactions made by a seller described in Subsection
                  59-12-107 (1)(b):
                      (i) to each local taxing jurisdiction; and
                      (ii) on the basis of the population of each local taxing jurisdiction as compared to the
                  population of the state.
                      (e) (i) Notwithstanding Subsection (5)(b), for a transaction described in Subsection
                  (5)(e)(ii), the location where the transaction is consummated is determined by allocating the total

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                  revenues reported to the commission each month that are generated by the tax imposed under this
                  section on the transactions described in Subsection (5)(e)(ii):
                      (A) to local taxing jurisdictions; and
                      (B) on the basis of the proportion of the total revenues generated by the transactions
                  described in Subsection (4)(b)(ii) that are reported to the commission for that month within each
                  local taxing jurisdiction as compared to the total revenues generated by the transactions described