S.B. 19 Enrolled

SALES AND USE TAXES - EXEMPTION FOR
ENERGY RELATED EQUIPMENT AND
MACHINERY
2004 GENERAL SESSION
STATE OF UTAH
Sponsor: Leonard M. Blackham
Gregory S. Bell
Mike DmitrichDan R. Eastman
Ed P. MayneHoward A. Stephenson
LONG TITLE
General Description:
This bill amends the Sales and Use Tax Act to provide an exemption for certain energy
related machinery or equipment.
Highlighted Provisions:
This bill:
. provides definitions;
. provides an exemption for certain machinery or equipment used to make new or
expanding renewable production facilities operational;
. provides an exemption for certain machinery or equipment used to make new or
expanding waste energy facilities operational;
. provides an exemption for machinery or equipment installed on new or expanding
facilities that produce fuel from biomass energy; 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:

59-12-102 (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

Be it enacted by the Legislature of the state of Utah:
Section 1. 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:
(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

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(m) Section 59-12-1402 .
(5) "Alcoholic beverage" means a beverage that:
(a) is suitable for human consumption; and
(b) contains .5% or more alcohol by volume.
(6) "Area agency on aging" is as defined in Section 62A-3-101 .
(7) "Authorized carrier" means:
(a) in the case of vehicles operated over public highways, the holder of credentials
indicating that the vehicle is or will be operated pursuant to both the International Registration
Plan and the International Fuel Tax Agreement;
(b) in the case of aircraft, the holder of a Federal Aviation Administration operating
certificate or air carrier's operating certificate; or
(c) in the case of locomotives, freight cars, railroad work equipment, or other rolling
stock, the holder of a certificate issued by the United States Surface Transportation Board.
(8) (a) Except as provided in Subsection (8)(b), "biomass energy" means any of the
following that is used as the primary source of energy to produce fuel or electricity:
(i) material from a plant or tree; or
(ii) other organic matter that is available on a renewable basis, including:
(A) slash and brush from forests and woodlands;
(B) animal waste;
(C) methane produced:
(I) at landfills; or
(II) as a byproduct of the treatment of wastewater residuals;
(D) aquatic plants; and
(E) agricultural products.
(b) "Biomass energy" does not include:
(i) black liquor;
(ii) treated woods; or
(iii) biomass from municipal solid waste other than methane produced:

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(A) at landfills; or
(B) as a byproduct of the treatment of wastewater residuals.
[(8)] (9) "Certified automated system" means software certified by the governing board of
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.
[(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

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not mean a coin-operated amusement device possessing a coinage mechanism that:
(i) accepts and registers multiple denominations of coins; and
(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)] (33) 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

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(b) automatic data processing equipment to perform a task.
[(17)] (18) "Construction materials" means any tangible personal property that will be
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

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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:
(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

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a compound, substance, or preparation that is:
(i) recognized in:
(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

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(B) the state plan for medical assistance under Title XIX of the federal Social Security
Act.
(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

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(B) consumed for the substance's:
(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.
(28) "Geothermal energy" means energy contained in heat that continuously flows
outward from the earth that is used as the sole source of energy to produce electricity.
[(27)] (29) "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)] (30) (a) "Hearing aid" means:

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(i) an instrument or device having an electronic component that is designed to:
(A) (I) improve impaired human hearing; or
(II) correct impaired human hearing; and
(B) (I) be worn in the human ear; or
(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)] (30)(a)(i)(B) or [(28)] (30)(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)] (30)(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)]
(30)(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)]
(30)(b)(iii)(A)(I) through (V).
[(29)] (31) (a) "Hearing aid accessory" means a hearing aid:

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(i) component;
(ii) attachment; or
(iii) accessory.
(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)] (30)(b)(i); or
(B) assistive listening device or system described in Subsection [(28)] (30)(b)(ii) or (iii);
or
(ii) a hearing aid battery.
(32) "Hydroelectric energy" means water used as the sole source of energy to produce
electricity.
[(30)] (33) "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

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(v) other farming activities;
(c) in manufacturing tangible personal property at an establishment described in SIC
Codes 2000 to 3999 of the 1987 Standard Industrial Classification Manual of the federal
Executive Office of the President, Office of Management and Budget; or
(d) by a scrap recycler if:
(i) from a fixed location, the scrap recycler utilizes machinery or equipment to process
one or more of the following items into prepared grades of processed materials for use in new
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)] (33)(d)(i) would otherwise be made with
nonrecycled materials.
[(31)] (34) (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

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payment plan that requires the transfer of title upon completion of the required payments;
(ii) a transfer of possession or control of property under an agreement:
(A) that requires the transfer of title upon completion of required payments; and
(B) in which the payment of an option price does not exceed the greater of:
(I) $100; or
(II) 1% of the total required payments; or
(iii) providing tangible personal property along with an operator for a fixed period of time
or an indeterminate period of time if the operator is necessary for equipment to perform as
designed.
(d) For purposes of Subsection [(31)] (34)(c)(iii), an operator is necessary for equipment
to perform as designed if the operator's duties exceed the:
(i) set-up of tangible personal property;
(ii) maintenance of tangible personal property; or
(iii) inspection of tangible personal property.
[(32)] (35) "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)] (36) "Manufactured home" means any manufactured home or mobile home as
defined in Title 58, Chapter 56, Utah Uniform Building Standards Act.
[(34)] (37) 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:

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(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 [(34)] (37)(b)(i) would otherwise be made with
nonrecycled materials.
[(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:

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(i) a motor vehicle;
(ii) equipment on a motor vehicle if that equipment is normally provided by the motor
vehicle manufacturer;
(iii) durable medical equipment; or
(iv) a prosthetic device.
[(37)] (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 tax functions for agreement sales and use
taxes.
[(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.
[(40)] (43) (a) "Multi-channel video or audio service provider" means any person or
group of persons that:
(i) provides multi-channel video or audio service and directly or indirectly owns a

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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)] (44) "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.
[(42)] (45) (a) "Other fuels" means products that burn independently to produce heat or

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energy.
(b) "Other fuels" includes oxygen when it is used in the manufacturing of tangible
personal property.
[(43)] (46) "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)] (47) "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)] (48) (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)] (48)(c), food sold with an eating utensil
provided by the seller, including a:
(A) plate;
(B) knife;
(C) fork;
(D) spoon;
(E) glass;

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(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)] (48)(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)] (48)(b)(ii)(A) to prevent food borne illness.
(c) Notwithstanding Subsection [(45)] (48)(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)] (49) "Prescription" means an order, formula, or recipe that is issued:
(a) (i) orally;
(ii) in writing;
(iii) electronically; or
(iv) by any other manner of transmission; and
(b) by a licensed practitioner authorized by the laws of a state.

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[(47)] (50) (a) Except as provided in Subsection [(47)] (50)(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)] (50)(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)] (50)(a) and except as provided in Subsection
[(47)] (50)(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)] (50)(b)(iii)(A) is
designed and developed to the specifications of a specific purchaser.
(c) Notwithstanding Subsection [(47)] (50)(b)(iii), "prewritten computer software" does
not include a modification or enhancement described in Subsection [(47)] (50)(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)] (51) (a) "Prosthetic device" means a device that is:
(i) worn on or in the body to:
(A) artificially replace a missing portion of the body;
(B) prevent or correct a physical deformity or physical malfunction; or
(C) support a weak or deformed portion of the body; and

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(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)] (52) (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)] (53) (a) "Purchase price" and "sales price" mean the total amount of consideration:
(i) valued in money; and
(ii) for which tangible personal property or services are:
(A) sold;

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(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;
(B) the following from credit extended on the sale of tangible personal property or

- 22 -

services:
(I) interest charges;
(II) financing charges; or
(III) carrying charges; or
(C) a tax or fee legally imposed directly on the consumer.
[(51)] (54) "Purchaser" means a person to whom:
(a) a sale of tangible personal property is made; or
(b) a service is furnished.
[(52)] (55) "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.
(56) "Renewable energy" means:
(a) biomass energy;
(b) hydroelectric energy;
(c) geothermal energy;
(d) solar energy; or
(e) wind energy.
(57) (a) "Renewable energy production facility" means a facility that:
(i) uses renewable energy to produce electricity; and
(ii) has a production capacity of 20 kilowatts or greater.
(b) A facility is a renewable energy production facility regardless of whether the facility is:
(i) connected to an electric grid; or
(ii) located on the premises of an electricity consumer.
[(53)] (58) "Rental" is as defined in Subsection [(31)] (34).
[(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

- 23 -

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
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

- 24 -

(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.
[(60)] (65) "Sales price" is as defined in Subsection [(50)] (53).
[(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

- 25 -

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;
(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

- 26 -

(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
(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) "Solar energy" means the sun used as the sole source of energy for producing

- 27 -

electricity.
[(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:
(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;

- 28 -

(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:
(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

- 29 -

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
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.

- 30 -

(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)] (81) "Vehicle" means any aircraft, as defined in Section 72-10-102 ; any vehicle, as
defined in Section 41-1a-102 ; any off-highway vehicle, as defined in Section 41-22-2 ; and any
vessel, as defined in Section 41-1a-102 ; that is required to be titled, registered, or both.
"Vehicle," for purposes of Subsection 59-12-104 (35) only, also includes any locomotive, freight
car, railroad work equipment, or other railroad rolling stock.
[(76)] (82) "Vehicle dealer" means a person engaged in the business of buying, selling, or
exchanging vehicles as defined in Subsection [(75)] (81).
(83) (a) Except as provided in Subsection (83)(b), "waste energy facility" means a facility
that generates electricity:
(i) using as the primary source of energy waste materials that would be placed in a landfill
or refuse pit if it were not used to generate electricity, including:
(A) tires;
(B) waste coal; or
(C) oil shale; and
(ii) in amounts greater than actually required for the operation of the facility.
(b) "Waste energy facility" does not include a facility that incinerates:
(i) municipal solid waste;
(ii) hospital waste as defined in 40 C.F.R. 60.51c; or
(iii) medical/infectious waste as defined in 40 C.F.R. 60.51c.
(84) "Wind energy" means wind used as the sole source of energy to produce electricity.
Section 2. 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

- 31 -

exemption does not apply to sales of:
(a) construction materials except:
(i) construction materials purchased by or on behalf of institutions of the public education
system as defined in Utah Constitution Article X, Section 2, provided the construction materials
are clearly identified and segregated and installed or converted to real property which is owned by
institutions of the public education system; and
(ii) construction materials purchased by the state, its institutions, or its political
subdivisions which are installed or converted to real property by employees of the state, its
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 this 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;

- 32 -

(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
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:

- 33 -

(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
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) the purchaser presents a prescription for the item; and
(b) (i) Subsection (10)(a) applies to:
(A) a drug;
(B) a syringe; or
(C) a stoma supply; and
(ii) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
commission may by rule define the terms:
(A) "syringe"; or
(B) "stoma supply";
(11) sales or use of property, materials, or services used in the construction of or
incorporated in pollution control facilities allowed by Sections 19-2-123 through 19-2-127 ;
(12) (a) sales of 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:

- 34 -

(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
(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

- 35 -

(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
(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

- 36 -

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
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

- 37 -

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
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

- 38 -

(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,
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;

- 39 -

(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;
(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

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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
(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

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(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
(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);

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(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
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

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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);
(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[.];

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(61) (a) leases of seven or more years or purchases made on or after July 1, 2004 but on
or before June 30, 2009, of machinery or equipment that:
(i) is leased or purchased for or by a facility that:
(A) is a renewable energy production facility;
(B) is located in the state; and
(C) (I) becomes operational on or after July 1, 2004; or
(II) has its generation capacity increased by one or more megawatts on or after July 1,
2004 as a result of the use of the machinery or equipment;
(ii) has an economic life of five or more years; and
(iii) is used to make the facility or the increase in capacity of the facility described in
Subsection (61)(a)(i) operational up to the point of interconnection with an existing transmission
grid including:
(A) a wind turbine;
(B) generating equipment;
(C) a control and monitoring system;
(D) a power line;
(E) substation equipment;
(F) lighting;
(G) fencing;
(H) pipes; or
(I) other equipment used for locating a power line or pole; and
(b) this Subsection (61) does not apply to:
(i) machinery or equipment used in construction of:
(A) a new renewable energy production facility; or
(B) the increase in the capacity of a renewable energy production facility;
(ii) contracted services required for construction and routine maintenance activities; and
(iii) unless the machinery or equipment is used or acquired for an increase in capacity of
the facility described in Subsection (61)(a)(i)(C)(II), machinery or equipment used or acquired

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after:
(A) the renewable energy production facility described in Subsection (61)(a)(i) is
operational as described in Subsection (61)(a)(iii); or
(B) the increased capacity described in Subsection (61)(a)(i) is operational as described in
Subsection (61)(a)(iii);
(62) (a) leases of seven or more years or purchases made on or after July 1, 2004 but on
or before June 30, 2009, of machinery or equipment that:
(i) is leased or purchased for or by a facility that:
(A) is a waste energy production facility;
(B) is located in the state; and
(C) (I) becomes operational on or after July 1, 2004; or
(II) has its generation capacity increased by one or more megawatts on or after July 1,
2004 as a result of the use of the machinery or equipment;
(ii) has an economic life of five or more years; and
(iii) is used to make the facility or the increase in capacity of the facility described in
Subsection (62)(a)(i) operational up to the point of interconnection with an existing transmission
grid including:
(A) generating equipment;
(B) a control and monitoring system;
(C) a power line;
(D) substation equipment;
(E) lighting;
(F) fencing;
(G) pipes; or
(H) other equipment used for locating a power line or pole; and
(b) this Subsection (62) does not apply to:
(i) machinery or equipment used in construction of:
(A) a new waste energy facility; or

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(B) the increase in the capacity of a waste energy facility;
(ii) contracted services required for construction and routine maintenance activities; and
(iii) unless the machinery or equipment is used or acquired for an increase in capacity
described in Subsection (62)(a)(i)(C)(II), machinery or equipment used or acquired after:
(A) the waste energy facility described in Subsection (62)(a)(i) is operational as
described in Subsection (62)(a)(iii); or
(B) the increased capacity described in Subsection (62)(a)(i) is operational as described in
Subsection (62)(a)(iii); and
(63) (a) leases of five or more years or purchases made on or after July 1, 2004 but on or
before June 30, 2009, of machinery or equipment that:
(i) is leased or purchased for or by a facility that:
(A) is located in the state;
(B) produces fuel from biomass energy including:
(I) methanol; or
(II) ethanol; and
(C) (I) becomes operational on or after July 1, 2004; or
(II) has its capacity to produce fuel increase by 25% or more on or after July 1, 2004 as a
result of the installation of the machinery or equipment;
(ii) has an economic life of five or more years; and
(iii) is installed on the facility described in Subsection (63)(a)(i);
(b) this Subsection (63) does not apply to:
(i) machinery or equipment used in construction of:
(A) a new facility described in Subsection (63)(a)(i); or
(B) the increase in capacity of the facility described in Subsection (63)(a)(i); or
(ii) contracted services required for construction and routine maintenance activities; and
(iii) unless the machinery or equipment is used or acquired for an increase in capacity
described in Subsection (63)(a)(i)(C)(II), machinery or equipment used or acquired after:
(A) the facility described in Subsection (63)(a)(i) is operational; or

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(B) the increased capacity described in Subsection (63)(a)(i) is operational.
Section 3. Effective date.
This bill takes effect on July 1, 2004.

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