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[Status][Bill Documents][Fiscal Note][Bills Directory]

S.B. 127

             1     

TAX, FEE, OR CHARGE AMENDMENTS

             2     
2005 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Sponsor: Lyle W. Hillyard

             5     
             6      LONG TITLE
             7      General Description:
             8          This bill modifies the Municipal Telecommunications License Tax Act and the Sales
             9      and Use Tax Act relating to taxes, fees, or charges.
             10      Highlighted Provisions:
             11          This bill:
             12          .    addresses the procedures for the State Tax Commission to administer, collect, and
             13      enforce certain taxes;
             14          .    provides and modifies definitions;
             15          .    modifies the transactions that are subject to sales and use taxes;
             16          .    provides sales and use tax exemptions for:
             17              .    amounts paid to a purchaser as a rebate from the manufacturer of a new vehicle
             18      for purchasing the new vehicle; and
             19              .    sales of certain tangible personal property to persons within the state if that
             20      tangible personal property is subsequently shipped outside the state and
             21      incorporated pursuant to contract into and becomes a part of real property
             22      located outside of this state;
             23          .    grants rulemaking authority to the State Tax Commission;    
             24          .    addresses criminal acts relating to refusing to make a return, making a false or
             25      fraudulent return or false statement on a return, evading the payment of a tax, or
             26      aiding or abetting an attempt to evade the payment of a tax;
             27          .    addresses amnesty relating to a tax, fee, or charge;


             28          .    addresses the payment of a monetary allowance to a seller that is registered under
             29      the Streamlined Sales and Use Tax Agreement or a certified service provider that is
             30      designated to be a seller's agent;
             31          .    addresses the distribution of certain sales and use tax revenues to counties, cities,
             32      and towns; and
             33          .    makes technical changes.
             34      Monies Appropriated in this Bill:
             35          None
             36      Other Special Clauses:
             37          This bill takes effect on July 1, 2005.
             38      Utah Code Sections Affected:
             39      AMENDS:
             40          10-1-405, as last amended by Chapter 255, Laws of Utah 2004
             41          59-12-102, as last amended by Chapters 1, 156, 255, 298 and 300, Laws of Utah 2004
             42          59-12-103 (Effective 07/01/05), as last amended by Chapter 1, Laws of Utah 2004,
             43      Third Special Session
             44          59-12-104, as last amended by Chapters 1, 156, 255, 298 and 320, Laws of Utah 2004
             45          59-12-117, as last amended by Chapter 312, Laws of Utah 2003
             46          59-12-121, as last amended by Chapter 1, Laws of Utah 2004, Third Special Session
             47          59-12-122, as enacted by Chapter 255, Laws of Utah 2004
             48          59-12-205 (Effective 07/01/05), as last amended by Chapter 255, Laws of Utah 2004
             49          59-12-1201, as last amended by Chapters 156 and 255, Laws of Utah 2004
             50     
             51      Be it enacted by the Legislature of the state of Utah:
             52          Section 1. Section 10-1-405 is amended to read:
             53           10-1-405. Collection of taxes by commission -- Uniform interlocal agreement --
             54      Charge for services.
             55          (1) Subject to the other provisions of this section, the commission shall collect,
             56      enforce, and administer any municipal telecommunications license tax imposed under this part
             57      pursuant to:
             58          (a) the same procedures used in the administration, collection, and enforcement of the


             59      state sales and use tax under:
             60          (i) Title 59, Chapter 1, General Taxation Policies; and
             61          (ii) Title 59, Chapter 12, Part 1, Tax Collection:
             62          (A) except for:
             63          [(I) Subsection 59-12-103 (2)(d);]
             64          [(II)] (I) Subsection 59-12-103 (2)(e);
             65          [(III)] (II) Section 59-12-104 ;
             66          [(IV)] (III) Section 59-12-104.1 ;
             67          [(V)] (IV) Section 59-12-104.2 ; and
             68          [(VI)] (V) Sections 59-12-107.1 through 59-12-107.3 ; and
             69          (B) except that for purposes of Section 59-12-110 , the term "taxpayer" may include a
             70      customer from whom a municipal telecommunications license tax is recovered in accordance
             71      with Subsection 10-1-403 (2); and
             72          (b) a uniform interlocal agreement:
             73          (i) between:
             74          (A) the municipality that imposes the municipal telecommunications license tax; and
             75          (B) the commission;
             76          (ii) that is executed under Title 11, Chapter 13, Interlocal Cooperation Act;
             77          (iii) that complies with Subsection (2)(a); and
             78          (iv) that is developed by rule in accordance with Subsection (2)(b).
             79          (2) (a) The uniform interlocal agreement described in Subsection (1) shall provide that
             80      the commission shall:
             81          (i) transmit monies collected under this part:
             82          (A) monthly; and
             83          (B) by electronic funds transfer by the commission to the municipality;
             84          (ii) conduct audits of the municipal telecommunications license tax;
             85          (iii) charge the municipality for the commission's services under this section in an
             86      amount:
             87          (A) sufficient to reimburse the commission for the cost to the commission in rendering
             88      the services; and
             89          (B) that may not exceed an amount equal to 1.5% of the municipal telecommunications


             90      license tax imposed by the ordinance of the municipality; and
             91          (iv) collect, enforce, and administer the municipal telecommunications license tax
             92      authorized under this part pursuant to the same procedures used in the administration,
             93      collection, and enforcement of the state sales and use tax as provided in Subsection (1)(a).
             94          (b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             95      commission shall develop a uniform interlocal agreement that meets the requirements of this
             96      section.
             97          (3) The administrative fee charged under Subsection (2)(a) shall be:
             98          (a) deposited in the Sales and Use Tax Administrative Fees Account; and
             99          (b) used for administration of municipal telecommunications license taxes under this
             100      part.
             101          Section 2. Section 59-12-102 is amended to read:
             102           59-12-102. Definitions.
             103          As used in this chapter:
             104          (1) (a) "Admission or user fees" includes season passes.
             105          (b) "Admission or user fees" does not include annual membership dues to private
             106      organizations.
             107          (2) "Agreement" means the Streamlined Sales and Use Tax Agreement described in
             108      Section 59-12-102.1 .
             109          (3) "Agreement combined tax rate" means the sum of the tax rates:
             110          (a) listed under Subsection (4); and
             111          (b) that are imposed within a local taxing jurisdiction.
             112          (4) "Agreement sales and use tax" means a tax imposed under:
             113          (a) Subsection 59-12-103 (2)(a)(i);
             114          (b) Section 59-12-204 ;
             115          (c) Section 59-12-401 ;
             116          (d) Section 59-12-402 ;
             117          (e) Section 59-12-501 ;
             118          (f) Section 59-12-502 ;
             119          (g) Section 59-12-703 ;
             120          (h) Section 59-12-802 ;


             121          (i) Section 59-12-804 ;
             122          (j) Section 59-12-1001 ;
             123          (k) Section 59-12-1102 ;
             124          (l) Section 59-12-1302 ;
             125          (m) Section 59-12-1402 ; or
             126          (n) Section 59-12-1503 .
             127          (5) "Aircraft" is as defined in Section 72-10-102 .
             128          (6) "Alcoholic beverage" means a beverage that:
             129          (a) is suitable for human consumption; and
             130          (b) contains .5% or more alcohol by volume.
             131          (7) "Area agency on aging" is as defined in Section 62A-3-101 .
             132          (8) "Authorized carrier" means:
             133          (a) in the case of vehicles operated over public highways, the holder of credentials
             134      indicating that the vehicle is or will be operated pursuant to both the International Registration
             135      Plan and the International Fuel Tax Agreement;
             136          (b) in the case of aircraft, the holder of a Federal Aviation Administration operating
             137      certificate or air carrier's operating certificate; or
             138          (c) in the case of locomotives, freight cars, railroad work equipment, or other rolling
             139      stock, the holder of a certificate issued by the United States Surface Transportation Board.
             140          (9) (a) Except as provided in Subsection (9)(b), "biomass energy" means any of the
             141      following that is used as the primary source of energy to produce fuel or electricity:
             142          (i) material from a plant or tree; or
             143          (ii) other organic matter that is available on a renewable basis, including:
             144          (A) slash and brush from forests and woodlands;
             145          (B) animal waste;
             146          (C) methane produced:
             147          (I) at landfills; or
             148          (II) as a byproduct of the treatment of wastewater residuals;
             149          (D) aquatic plants; and
             150          (E) agricultural products.
             151          (b) "Biomass energy" does not include:


             152          (i) black liquor;
             153          (ii) treated woods; or
             154          (iii) biomass from municipal solid waste other than methane produced:
             155          (A) at landfills; or
             156          (B) as a byproduct of the treatment of wastewater residuals.
             157          (10) "Certified automated system" means software certified by the governing board of
             158      the agreement in accordance with Section 59-12-102.1 that:
             159          (a) calculates the agreement sales and use tax imposed within a local taxing
             160      jurisdiction:
             161          (i) on a transaction; and
             162          (ii) in the states that are members of the agreement;
             163          (b) determines the amount of agreement sales and use tax to remit to a state that is a
             164      member of the agreement; and
             165          (c) maintains a record of the transaction described in Subsection (10)(a)(i).
             166          (11) "Certified service provider" means an agent certified:
             167          (a) by the governing board of the agreement in accordance with Section 59-12-102.1 ;
             168      and
             169          (b) to perform all of a seller's sales and use tax functions for an agreement sales and
             170      use tax other than the seller's obligation under Section 59-12-107.4 to remit a tax on the seller's
             171      own purchases.
             172          (12) (a) Subject to Subsection (12)(b), "clothing" means all human wearing apparel
             173      suitable for general use.
             174          (b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             175      commission shall make rules:
             176          (i) listing the items that constitute "clothing"; and
             177          (ii) that are consistent with the list of items that constitute "clothing" under the
             178      agreement.
             179          (13) (a) For purposes of Subsection 59-12-104 (42), "coin-operated amusement device"
             180      means:
             181          (i) a coin-operated amusement, skill, or ride device;
             182          (ii) that is not controlled through seller-assisted, over-the-counter, sales of tokens; and


             183          (iii) includes a music machine, pinball machine, billiard machine, video game machine,
             184      arcade machine, and a mechanical or electronic skill game or ride.
             185          (b) For purposes of Subsection 59-12-104 (42), "coin-operated amusement device" does
             186      not mean a coin-operated amusement device possessing a coinage mechanism that:
             187          (i) accepts and registers multiple denominations of coins; and
             188          (ii) allows the seller to collect the sales and use tax at the time an amusement device is
             189      activated and operated by a person inserting coins into the device.
             190          (14) "Commercial use" means the use of gas, electricity, heat, coal, fuel oil, or other
             191      fuels that does not constitute industrial use under Subsection (34) or residential use under
             192      Subsection [(63)] (66).
             193          (15) (a) "Common carrier" means a person engaged in or transacting the business of
             194      transporting passengers, freight, merchandise, or other property for hire within this state.
             195          (b) (i) "Common carrier" does not include a person who, at the time the person is
             196      traveling to or from that person's place of employment, transports a passenger to or from the
             197      passenger's place of employment.
             198          (ii) For purposes of Subsection (15)(b)(i), in accordance with Title 63, Chapter 46a,
             199      Utah Administrative Rulemaking Act, the commission may make rules defining what
             200      constitutes a person's place of employment.
             201          (16) "Component part" includes:
             202          (a) poultry, dairy, and other livestock feed, and their components;
             203          (b) baling ties and twine used in the baling of hay and straw;
             204          (c) fuel used for providing temperature control of orchards and commercial
             205      greenhouses doing a majority of their business in wholesale sales, and for providing power for
             206      off-highway type farm machinery; and
             207          (d) feed, seeds, and seedlings.
             208          (17) "Computer" means an electronic device that accepts information:
             209          (a) (i) in digital form; or
             210          (ii) in a form similar to digital form; and
             211          (b) manipulates that information for a result based on a sequence of instructions.
             212          (18) "Computer software" means a set of coded instructions designed to cause:
             213          (a) a computer to perform a task; or


             214          (b) automatic data processing equipment to perform a task.
             215          (19) "Construction materials" means any tangible personal property that will be
             216      converted into real property.
             217          (20) "Delivered electronically" means delivered to a purchaser by means other than
             218      tangible storage media.
             219          (21) (a) "Delivery charge" means a charge:
             220          (i) by a seller of:
             221          (A) tangible personal property; or
             222          (B) services; and
             223          (ii) for preparation and delivery of the tangible personal property or services described
             224      in Subsection (21)(a)(i) to a location designated by the purchaser.
             225          (b) "Delivery charge" includes a charge for the following:
             226          (i) transportation;
             227          (ii) shipping;
             228          (iii) postage;
             229          (iv) handling;
             230          (v) crating; or
             231          (vi) packing.
             232          (22) "Dietary supplement" means a product, other than tobacco, that:
             233          (a) is intended to supplement the diet;
             234          (b) contains one or more of the following dietary ingredients:
             235          (i) a vitamin;
             236          (ii) a mineral;
             237          (iii) an herb or other botanical;
             238          (iv) an amino acid;
             239          (v) a dietary substance for use by humans to supplement the diet by increasing the total
             240      dietary intake; or
             241          (vi) a concentrate, metabolite, constituent, extract, or combination of any ingredient
             242      described in Subsections (22)(b)(i) through (v);
             243          (c) (i) except as provided in Subsection (22)(c)(ii), is intended for ingestion in:
             244          (A) tablet form;


             245          (B) capsule form;
             246          (C) powder form;
             247          (D) softgel form;
             248          (E) gelcap form; or
             249          (F) liquid form; or
             250          (ii) notwithstanding Subsection (22)(c)(i), if the product is not intended for ingestion in
             251      a form described in Subsections (22)(c)(i)(A) through (F), is not represented:
             252          (A) as conventional food; and
             253          (B) for use as a sole item of:
             254          (I) a meal; or
             255          (II) the diet; and
             256          (d) is required to be labeled as a dietary supplement:
             257          (i) identifiable by the "Supplemental Facts" box found on the label; and
             258          (ii) as required by 21 C.F.R. Sec. 101.36.
             259          (23) (a) "Direct mail" means printed material delivered or distributed by United States
             260      mail or other delivery service:
             261          (i) to:
             262          (A) a mass audience; or
             263          (B) addressees on a mailing list provided by a purchaser of the mailing list; and
             264          (ii) if the cost of the printed material is not billed directly to the recipients.
             265          (b) "Direct mail" includes tangible personal property supplied directly or indirectly by a
             266      purchaser to a seller of direct mail for inclusion in a package containing the printed material.
             267          (c) "Direct mail" does not include multiple items of printed material delivered to a
             268      single address.
             269          (24) (a) "Drug" means a compound, substance, or preparation, or a component of a
             270      compound, substance, or preparation that is:
             271          (i) recognized in:
             272          (A) the official United States Pharmacopoeia;
             273          (B) the official Homeopathic Pharmacopoeia of the United States;
             274          (C) the official National Formulary; or
             275          (D) a supplement to a publication listed in Subsections (24)(a)(i)(A) through (C);


             276          (ii) intended for use in the:
             277          (A) diagnosis of disease;
             278          (B) cure of disease;
             279          (C) mitigation of disease;
             280          (D) treatment of disease; or
             281          (E) prevention of disease; or
             282          (iii) intended to affect:
             283          (A) the structure of the body; or
             284          (B) any function of the body.
             285          (b) "Drug" does not include:
             286          (i) food and food ingredients;
             287          (ii) a dietary supplement;
             288          (iii) an alcoholic beverage; or
             289          (iv) a prosthetic device.
             290          (25) (a) Except as provided in Subsection (25)(c), "durable medical equipment" means
             291      equipment that:
             292          (i) can withstand repeated use;
             293          (ii) is primarily and customarily used to serve a medical purpose;
             294          (iii) generally is not useful to a person in the absence of illness or injury; and
             295          (iv) is not worn in or on the body[;].
             296          [(v) is listed as eligible for payment under:]
             297          [(A) Title XVIII of the federal Social Security Act; or]
             298          [(B) the state plan for medical assistance under Title XIX of the federal Social Security
             299      Act; and]
             300          [(vi) is used for home use only.]
             301          (b) "Durable medical equipment" includes parts used in the repair or replacement of the
             302      equipment described in Subsection (25)(a).
             303          (c) Notwithstanding Subsection (25)(a), "durable medical equipment" does not include
             304      mobility enhancing equipment.
             305          (26) "Electronic" means:
             306          (a) relating to technology; and


             307          (b) having:
             308          (i) electrical capabilities;
             309          (ii) digital capabilities;
             310          (iii) magnetic capabilities;
             311          (iv) wireless capabilities;
             312          (v) optical capabilities;
             313          (vi) electromagnetic capabilities; or
             314          (vii) capabilities similar to Subsections (26)(b)(i) through (vi).
             315          (27) (a) "Food and food ingredients" means substances:
             316          (i) regardless of whether the substances are in:
             317          (A) liquid form;
             318          (B) concentrated form;
             319          (C) solid form;
             320          (D) frozen form;
             321          (E) dried form; or
             322          (F) dehydrated form; and
             323          (ii) that are:
             324          (A) sold for:
             325          (I) ingestion by humans; or
             326          (II) chewing by humans; and
             327          (B) consumed for the substance's:
             328          (I) taste; or
             329          (II) nutritional value.
             330          (b) "Food and food ingredients" does not include:
             331          (i) an alcoholic beverage;
             332          (ii) tobacco; or
             333          (iii) prepared food.
             334          (28) (a) "Fundraising sales" means sales:
             335          (i) (A) made by a school; or
             336          (B) made by a school student;
             337          (ii) that are for the purpose of raising funds for the school to purchase equipment,


             338      materials, or provide transportation; and
             339          (iii) that are part of an officially sanctioned school activity.
             340          (b) For purposes of Subsection (28)(a)(iii), "officially sanctioned school activity"
             341      means a school activity:
             342          (i) that is conducted in accordance with a formal policy adopted by the school or school
             343      district governing the authorization and supervision of fundraising activities;
             344          (ii) that does not directly or indirectly compensate an individual teacher or other
             345      educational personnel by direct payment, commissions, or payment in kind; and
             346          (iii) the net or gross revenues from which are deposited in a dedicated account
             347      controlled by the school or school district.
             348          (29) "Geothermal energy" means energy contained in heat that continuously flows
             349      outward from the earth that is used as the sole source of energy to produce electricity.
             350          (30) "Governing board of the agreement" means the governing board of the agreement
             351      that is:
             352          (a) authorized to administer the agreement; and
             353          (b) established in accordance with the agreement.
             354          (31) (a) "Hearing aid" means:
             355          (i) an instrument or device having an electronic component that is designed to:
             356          (A) (I) improve impaired human hearing; or
             357          (II) correct impaired human hearing; and
             358          (B) (I) be worn in the human ear; or
             359          (II) affixed behind the human ear;
             360          (ii) an instrument or device that is surgically implanted into the cochlea; or
             361          (iii) a telephone amplifying device.
             362          (b) "Hearing aid" does not include:
             363          (i) except as provided in Subsection (31)(a)(i)(B) or (31)(a)(ii), an instrument or device
             364      having an electronic component that is designed to be worn on the body;
             365          (ii) except as provided in Subsection (31)(a)(iii), an assistive listening device or system
             366      designed to be used by one individual, including:
             367          (A) a personal amplifying system;
             368          (B) a personal FM system;


             369          (C) a television listening system; or
             370          (D) a device or system similar to a device or system described in Subsections
             371      (31)(b)(ii)(A) through (C); or
             372          (iii) an assistive listening device or system designed to be used by more than one
             373      individual, including:
             374          (A) a device or system installed in:
             375          (I) an auditorium;
             376          (II) a church;
             377          (III) a conference room;
             378          (IV) a synagogue; or
             379          (V) a theater; or
             380          (B) a device or system similar to a device or system described in Subsections
             381      (31)(b)(iii)(A)(I) through (V).
             382          (32) (a) "Hearing aid accessory" means a hearing aid:
             383          (i) component;
             384          (ii) attachment; or
             385          (iii) accessory.
             386          (b) "Hearing aid accessory" includes:
             387          (i) a hearing aid neck loop;
             388          (ii) a hearing aid cord;
             389          (iii) a hearing aid ear mold;
             390          (iv) hearing aid tubing;
             391          (v) a hearing aid ear hook; or
             392          (vi) a hearing aid remote control.
             393          (c) "Hearing aid accessory" does not include:
             394          (i) a component, attachment, or accessory designed to be used only with an:
             395          (A) instrument or device described in Subsection (31)(b)(i); or
             396          (B) assistive listening device or system described in Subsection (31)(b)(ii) or (iii); or
             397          (ii) a hearing aid battery.
             398          (33) "Hydroelectric energy" means water used as the sole source of energy to produce
             399      electricity.


             400          (34) "Industrial use" means the use of natural gas, electricity, heat, coal, fuel oil, or
             401      other fuels:
             402          (a) in mining or extraction of minerals;
             403          (b) in agricultural operations to produce an agricultural product up to the time of
             404      harvest or placing the agricultural product into a storage facility, including:
             405          (i) commercial greenhouses;
             406          (ii) irrigation pumps;
             407          (iii) farm machinery;
             408          (iv) implements of husbandry as defined in Subsection 41-1a-102 (23) that are not
             409      registered under Title 41, Chapter 1a, Part 2, Registration; and
             410          (v) other farming activities;
             411          (c) in manufacturing tangible personal property at an establishment described in SIC
             412      Codes 2000 to 3999 of the 1987 Standard Industrial Classification Manual of the federal
             413      Executive Office of the President, Office of Management and Budget; or
             414          (d) by a scrap recycler if:
             415          (i) from a fixed location, the scrap recycler utilizes machinery or equipment to process
             416      one or more of the following items into prepared grades of processed materials for use in new
             417      products:
             418          (A) iron;
             419          (B) steel;
             420          (C) nonferrous metal;
             421          (D) paper;
             422          (E) glass;
             423          (F) plastic;
             424          (G) textile; or
             425          (H) rubber; and
             426          (ii) the new products under Subsection (34)(d)(i) would otherwise be made with
             427      nonrecycled materials.
             428          (35) (a) Except as provided in Subsection (35)(b), "installation charge" means a charge
             429      for installing tangible personal property.
             430          (b) Notwithstanding Subsection (35)(a), "installation charge" does not include a charge


             431      for repairs or renovations of tangible personal property.
             432          [(35)] (36) (a) "Lease" or "rental" means a transfer of possession or control of tangible
             433      personal property for:
             434          (i) (A) a fixed term; or
             435          (B) an indeterminate term; and
             436          (ii) consideration.
             437          (b) "Lease" or "rental" includes an agreement covering a motor vehicle and trailer if the
             438      amount of consideration may be increased or decreased by reference to the amount realized
             439      upon sale or disposition of the property as defined in Section 7701(h)(1), Internal Revenue
             440      Code.
             441          (c) "Lease" or "rental" does not include:
             442          (i) a transfer of possession or control of property under a security agreement or
             443      deferred payment plan that requires the transfer of title upon completion of the required
             444      payments;
             445          (ii) a transfer of possession or control of property under an agreement[: (A)] that
             446      requires the transfer of title:
             447          (A) upon completion of required payments; and
             448          (B) [in which] if the payment of an option price does not exceed the greater of:
             449          (I) $100; or
             450          (II) 1% of the total required payments; or
             451          (iii) providing tangible personal property along with an operator for a fixed period of
             452      time or an indeterminate period of time if the operator is necessary for equipment to perform as
             453      designed.
             454          (d) For purposes of Subsection [(35)] (36)(c)(iii), an operator is necessary for
             455      equipment to perform as designed if the operator's duties exceed the:
             456          (i) set-up of tangible personal property;
             457          (ii) maintenance of tangible personal property; or
             458          (iii) inspection of tangible personal property.
             459          [(36)] (37) "Load and leave" means delivery to a purchaser by use of a tangible storage
             460      media if the tangible storage media is not physically transferred to the purchaser.
             461          [(37)] (38) "Local taxing jurisdiction" means a:


             462          (a) county that is authorized to impose an agreement sales and use tax;
             463          (b) city that is authorized to impose an agreement sales and use tax; or
             464          (c) town that is authorized to impose an agreement sales and use tax.
             465          [(38)] (39) "Manufactured home" is as defined in Section 58-56-3 .
             466          [(39)] (40) For purposes of Subsection 59-12-104 (14), "manufacturing facility" means:
             467          (a) an establishment described in SIC Codes 2000 to 3999 of the 1987 Standard
             468      Industrial Classification Manual of the federal Executive Office of the President, Office of
             469      Management and Budget; or
             470          (b) a scrap recycler if:
             471          (i) from a fixed location, the scrap recycler utilizes machinery or equipment to process
             472      one or more of the following items into prepared grades of processed materials for use in new
             473      products:
             474          (A) iron;
             475          (B) steel;
             476          (C) nonferrous metal;
             477          (D) paper;
             478          (E) glass;
             479          (F) plastic;
             480          (G) textile; or
             481          (H) rubber; and
             482          (ii) the new products under Subsection [(39)] (40)(b)(i) would otherwise be made with
             483      nonrecycled materials.
             484          [(40)] (41) "Mobile home" is as defined in Section 58-56-3 .
             485          [(41)] (42) "Mobile telecommunications service" is as defined in the Mobile
             486      Telecommunications Sourcing Act, 4 U.S.C. Sec. 124.
             487          [(42)] (43) (a) Except as provided in Subsection [(42)] (43)(c), "mobility enhancing
             488      equipment" means equipment that is:
             489          (i) primarily and customarily used to provide or increase the ability to move from one
             490      place to another;
             491          (ii) appropriate for use in a:
             492          (A) home; or


             493          (B) motor vehicle; and
             494          (iii) not generally used by persons with normal mobility[; and].
             495          [(iv) listed as eligible for payment under:]
             496          [(A) Title XVIII of the federal Social Security Act; or]
             497          [(B) the state plan for medical assistance under Title XIX of the federal Social Security
             498      Act].
             499          (b) "Mobility enhancing equipment" includes parts used in the repair or replacement of
             500      the equipment described in Subsection [(42)] (43)(a).
             501          (c) Notwithstanding Subsection [(42)] (43)(a), "mobility enhancing equipment" does
             502      not include:
             503          (i) a motor vehicle;
             504          (ii) equipment on a motor vehicle if that equipment is normally provided by the motor
             505      vehicle manufacturer;
             506          (iii) durable medical equipment; or
             507          (iv) a prosthetic device.
             508          [(43)] (44) "Model 1 seller" means a seller that has selected a certified service provider
             509      as the seller's agent to perform all of the seller's sales and use tax functions for agreement sales
             510      and use taxes other than the seller's obligation under Section 59-12-107.4 to remit a tax on the
             511      seller's own purchases.
             512          [(44)] (45) "Model 2 seller" means a seller that:
             513          (a) except as provided in Subsection [(44)] (45)(b), has selected a certified automated
             514      system to perform the seller's sales tax functions for agreement sales and use taxes; and
             515          (b) notwithstanding Subsection [(44)] (45)(a), retains responsibility for remitting all of
             516      the sales tax:
             517          (i) collected by the seller; and
             518          (ii) to the appropriate local taxing jurisdiction.
             519          [(45)] (46) (a) Subject to Subsection [(45)] (46)(b), "model 3 seller" means a seller that
             520      has:
             521          (i) sales in at least five states that are members of the agreement;
             522          (ii) total annual sales revenues of at least $500,000,000;
             523          (iii) a proprietary system that calculates the amount of tax:


             524          (A) for an agreement sales and use tax; and
             525          (B) due to each local taxing jurisdiction; and
             526          (iv) entered into a performance agreement with the governing board of the agreement.
             527          (b) For purposes of Subsection [(45)] (46)(a), "model 3 seller" includes an affiliated
             528      group of sellers using the same proprietary system.
             529          [(46)] (47) "Modular home" means a modular unit as defined in Section 58-56-3 .
             530          [(47)] (48) "Motor vehicle" is as defined in Section 41-1a-102 .
             531          [(48)] (49) (a) "Other fuels" means products that burn independently to produce heat or
             532      energy.
             533          (b) "Other fuels" includes oxygen when it is used in the manufacturing of tangible
             534      personal property.
             535          (50) (a) "Permanently attached to real property" means that for tangible personal
             536      property attached to real property:
             537          (i) the attachment of the tangible personal property to the real property:
             538          (A) is essential to the use of the tangible personal property; and
             539          (B) suggests that the tangible personal property will remain attached to the real
             540      property in the same place over the useful life of the tangible personal property; or
             541          (ii) if the tangible personal property is detached from the real property, the detachment
             542      would:
             543          (A) cause substantial damage to the tangible personal property; or
             544          (B) require substantial alteration or repair of the real property to which the tangible
             545      personal property is attached.
             546          (b) "Permanently attached to real property" includes:
             547          (i) the attachment of an accessory to the tangible personal property if the accessory is:
             548          (A) essential to the operation of the tangible personal property; and
             549          (B) attached only to facilitate the operation of the tangible personal property; or
             550          (ii) a temporary detachment of tangible personal property from real property for a
             551      repair or renovation if the repair or renovation is performed where the tangible personal
             552      property and real property are located.
             553          (c) "Permanently attached to real property" does not include:
             554          (i) the attachment of portable or movable tangible personal property to real property if


             555      that portable or movable tangible personal property is attached to real property only for:
             556          (A) convenience;
             557          (B) stability; or
             558          (C) for an obvious temporary purpose; or
             559          (ii) the detachment of tangible personal property from real property other than the
             560      detachment described in Subsection (50)(b)(ii).
             561          [(49)] (51) "Person" includes any individual, firm, partnership, joint venture,
             562      association, corporation, estate, trust, business trust, receiver, syndicate, this state, any county,
             563      city, municipality, district, or other local governmental entity of the state, or any group or
             564      combination acting as a unit.
             565          [(50)] (52) "Place of primary use":
             566          (a) for telephone service other than mobile telecommunications service, means the
             567      street address representative of where the purchaser's use of the telephone service primarily
             568      occurs, which shall be:
             569          (i) the residential street address of the purchaser; or
             570          (ii) the primary business street address of the purchaser; or
             571          (b) for mobile telecommunications service, is as defined in the Mobile
             572      Telecommunications Sourcing Act, 4 U.S.C. Sec. 124.
             573          [(51)] (53) "Postproduction" means an activity related to the finishing or duplication of
             574      a medium described in Subsection 59-12-104 (60)(a).
             575          [(52)] (54) (a) "Prepared food" means:
             576          (i) food:
             577          (A) sold in a heated state; or
             578          (B) heated by a seller;
             579          (ii) two or more food ingredients mixed or combined by the seller for sale as a single
             580      item; or
             581          (iii) except as provided in Subsection [(52)] (54)(c), food sold with an eating utensil
             582      provided by the seller, including a:
             583          (A) plate;
             584          (B) knife;
             585          (C) fork;


             586          (D) spoon;
             587          (E) glass;
             588          (F) cup;
             589          (G) napkin; or
             590          (H) straw.
             591          (b) "Prepared food" does not include:
             592          (i) food that a seller only:
             593          (A) cuts;
             594          (B) repackages; or
             595          (C) pasteurizes; or
             596          (ii) (A) the following:
             597          (I) raw egg;
             598          (II) raw fish;
             599          (III) raw meat;
             600          (IV) raw poultry; or
             601          (V) a food containing an item described in Subsections [(52)] (54)(b)(ii)(A)(I) through
             602      (IV); and
             603          (B) if the Food and Drug Administration recommends in Chapter 3, Part 401.11 of the
             604      Food and Drug Administration's Food Code that a consumer cook the items described in
             605      Subsection [(52)] (54)(b)(ii)(A) to prevent food borne illness.
             606          (c) Notwithstanding Subsection [(52)] (54)(a)(iii), an eating utensil provided by the
             607      seller does not include the following used to transport the food:
             608          (i) a container; or
             609          (ii) packaging.
             610          [(53)] (55) "Prescription" means an order, formula, or recipe that is issued:
             611          (a) (i) orally;
             612          (ii) in writing;
             613          (iii) electronically; or
             614          (iv) by any other manner of transmission; and
             615          (b) by a licensed practitioner authorized by the laws of a state.
             616          [(54)] (56) (a) Except as provided in Subsection [(54)] (56)(b)(ii) or (iii), "prewritten


             617      computer software" means computer software that is not designed and developed:
             618          (i) by the author or other creator of the computer software; and
             619          (ii) to the specifications of a specific purchaser.
             620          (b) "Prewritten computer software" includes:
             621          (i) a prewritten upgrade to computer software if the prewritten upgrade to the computer
             622      software is not designed and developed:
             623          (A) by the author or other creator of the computer software; and
             624          (B) to the specifications of a specific purchaser;
             625          (ii) notwithstanding Subsection [(54)] (56)(a), computer software designed and
             626      developed by the author or other creator of the computer software to the specifications of a
             627      specific purchaser if the computer software is sold to a person other than the purchaser; or
             628          (iii) notwithstanding Subsection [(54)] (56)(a) and except as provided in Subsection
             629      [(54)] (56)(c), prewritten computer software or a prewritten portion of prewritten computer
             630      software:
             631          (A) that is modified or enhanced to any degree; and
             632          (B) if the modification or enhancement described in Subsection [(54)] (56)(b)(iii)(A) is
             633      designed and developed to the specifications of a specific purchaser.
             634          (c) Notwithstanding Subsection [(54)] (56)(b)(iii), "prewritten computer software"
             635      does not include a modification or enhancement described in Subsection [(54)] (56)(b)(iii) if
             636      the charges for the modification or enhancement are:
             637          (i) reasonable; and
             638          (ii) separately stated on the invoice or other statement of price provided to the
             639      purchaser.
             640          [(55)] (57) (a) "Prosthetic device" means a device that is[: (i)] worn on or in the body
             641      to:
             642          [(A)] (i) artificially replace a missing portion of the body;
             643          [(B)] (ii) prevent or correct a physical deformity or physical malfunction; or
             644          [(C)] (iii) support a weak or deformed portion of the body[; and].
             645          [(ii) listed as eligible for payment under:]
             646          [(A) Title XVIII of the federal Social Security Act; or]
             647          [(B) the state plan for medical assistance under Title XIX of the federal Social Security


             648      Act.]
             649          (b) "Prosthetic device" includes:
             650          (i) parts used in the repairs or renovation of a prosthetic device; or
             651          (ii) replacement parts for a prosthetic device.
             652          (c) "Prosthetic device" does not include:
             653          (i) corrective eyeglasses;
             654          (ii) contact lenses;
             655          (iii) hearing aids; or
             656          (iv) dental prostheses.
             657          [(56)] (58) (a) "Protective equipment" means an item:
             658          (i) for human wear; and
             659          (ii) that is:
             660          (A) designed as protection:
             661          (I) to the wearer against injury or disease; or
             662          (II) against damage or injury of other persons or property; and
             663          (B) not suitable for general use.
             664          (b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             665      commission shall make rules:
             666          (i) listing the items that constitute "protective equipment"; and
             667          (ii) that are consistent with the list of items that constitute "protective equipment"
             668      under the agreement.
             669          [(57)] (59) (a) "Purchase price" and "sales price" mean the total amount of
             670      consideration:
             671          (i) valued in money; and
             672          (ii) for which tangible personal property or services are:
             673          (A) sold;
             674          (B) leased; or
             675          (C) rented.
             676          (b) "Purchase price" and "sales price" include:
             677          (i) the seller's cost of the tangible personal property or services sold;
             678          (ii) expenses of the seller, including:


             679          (A) the cost of materials used;
             680          (B) a labor cost;
             681          (C) a service cost;
             682          (D) interest;
             683          (E) a loss;
             684          (F) the cost of transportation to the seller; or
             685          (G) a tax imposed on the seller; or
             686          (iii) a charge by the seller for any service necessary to complete the sale[;].
             687          [(iv) a delivery charge; or]
             688          [(v) an installation charge.]
             689          (c) "Purchase price" and "sales price" do not include:
             690          (i) a discount:
             691          (A) in a form including:
             692          (I) cash;
             693          (II) term; or
             694          (III) coupon;
             695          (B) that is allowed by a seller;
             696          (C) taken by a purchaser on a sale; and
             697          (D) that is not reimbursed by a third party; or
             698          (ii) the following if separately stated on an invoice, bill of sale, or similar document
             699      provided to the purchaser:
             700          (A) the amount of a trade-in;
             701          (B) the following from credit extended on the sale of tangible personal property or
             702      services:
             703          (I) interest charges;
             704          (II) financing charges; or
             705          (III) carrying charges; [or]
             706          (C) a tax or fee legally imposed directly on the consumer[.];
             707          (D) a delivery charge; or
             708          (E) an installation charge.
             709          [(58)] (60) "Purchaser" means a person to whom:


             710          (a) a sale of tangible personal property is made; or
             711          (b) a service is furnished.
             712          [(59)] (61) "Regularly rented" means:
             713          (a) rented to a guest for value three or more times during a calendar year; or
             714          (b) advertised or held out to the public as a place that is regularly rented to guests for
             715      value.
             716          [(60)] (62) "Renewable energy" means:
             717          (a) biomass energy;
             718          (b) hydroelectric energy;
             719          (c) geothermal energy;
             720          (d) solar energy; or
             721          (e) wind energy.
             722          [(61)] (63) (a) "Renewable energy production facility" means a facility that:
             723          (i) uses renewable energy to produce electricity; and
             724          (ii) has a production capacity of 20 kilowatts or greater.
             725          (b) A facility is a renewable energy production facility regardless of whether the
             726      facility is:
             727          (i) connected to an electric grid; or
             728          (ii) located on the premises of an electricity consumer.
             729          [(62)] (64) "Rental" is as defined in Subsection [(35)] (36).
             730          (65) "Repairs or renovations of tangible personal property" means:
             731          (a) a repair or renovation of tangible personal property that is not permanently attached
             732      to real property; or
             733          (b) attaching tangible personal property to other tangible personal property if the other
             734      tangible personal property to which the tangible personal property is attached is not
             735      permanently attached to real property.
             736          [(63)] (66) "Residential use" means the use in or around a home, apartment building,
             737      sleeping quarters, and similar facilities or accommodations.
             738          [(64)] (67) "Retail sale" or "sale at retail" means a sale, lease, or rental for a purpose
             739      other than:
             740          (a) resale;


             741          (b) sublease; or
             742          (c) subrent.
             743          [(65)] (68) (a) "Retailer" means any person engaged in a regularly organized business
             744      in tangible personal property or any other taxable transaction under Subsection 59-12-103 (1),
             745      and who is selling to the user or consumer and not for resale.
             746          (b) "Retailer" includes commission merchants, auctioneers, and any person regularly
             747      engaged in the business of selling to users or consumers within the state.
             748          [(66)] (69) (a) "Sale" means any transfer of title, exchange, or barter, conditional or
             749      otherwise, in any manner, of tangible personal property or any other taxable transaction under
             750      Subsection 59-12-103 (1), for consideration.
             751          (b) "Sale" includes:
             752          (i) installment and credit sales;
             753          (ii) any closed transaction constituting a sale;
             754          (iii) any sale of electrical energy, gas, services, or entertainment taxable under this
             755      chapter;
             756          (iv) any transaction if the possession of property is transferred but the seller retains the
             757      title as security for the payment of the price; and
             758          (v) any transaction under which right to possession, operation, or use of any article of
             759      tangible personal property is granted under a lease or contract and the transfer of possession
             760      would be taxable if an outright sale were made.
             761          [(67)] (70) "Sale at retail" is as defined in Subsection [(64)] (67).
             762          [(68)] (71) "Sale-leaseback transaction" means a transaction by which title to tangible
             763      personal property that is subject to a tax under this chapter is transferred:
             764          (a) by a purchaser-lessee;
             765          (b) to a lessor;
             766          (c) for consideration; and
             767          (d) if:
             768          (i) the purchaser-lessee paid sales and use tax on the purchaser-lessee's initial purchase
             769      of the tangible personal property;
             770          (ii) the sale of the tangible personal property to the lessor is intended as a form of
             771      financing:


             772          (A) for the property; and
             773          (B) to the purchaser-lessee; and
             774          (iii) in accordance with generally accepted accounting principles, the purchaser-lessee
             775      is required to:
             776          (A) capitalize the property for financial reporting purposes; and
             777          (B) account for the lease payments as payments made under a financing arrangement.
             778          [(69)] (72) "Sales price" is as defined in Subsection [(57)] (59).
             779          [(70)] (73) (a) "Sales relating to schools" means the following sales by, amounts paid
             780      to, or amounts charged by a school:
             781          (i) sales that are directly related to the school's educational functions or activities
             782      including:
             783          (A) the sale of:
             784          (I) textbooks;
             785          (II) textbook fees;
             786          (III) laboratory fees;
             787          (IV) laboratory supplies; or
             788          (V) safety equipment;
             789          (B) the sale of a uniform, protective equipment, or sports or recreational equipment
             790      that:
             791          (I) a student is specifically required to wear as a condition of participation in a
             792      school-related event or school-related activity; and
             793          (II) is not readily adaptable to general or continued usage to the extent that it takes the
             794      place of ordinary clothing;
             795          (C) sales of the following if the net or gross revenues generated by the sales are
             796      deposited into a school district fund or school fund dedicated to school meals:
             797          (I) food and food ingredients; or
             798          (II) prepared food; or
             799          (D) transportation charges for official school activities; or
             800          (ii) amounts paid to or amounts charged by a school for admission to a school-related
             801      event or school-related activity.
             802          (b) "Sales relating to schools" does not include:


             803          (i) bookstore sales of items that are not educational materials or supplies;
             804          (ii) except as provided in Subsection [(70)] (73)(a)(i)(B):
             805          (A) clothing;
             806          (B) clothing accessories or equipment;
             807          (C) protective equipment; or
             808          (D) sports or recreational equipment; or
             809          (iii) amounts paid to or amounts charged by a school for admission to a school-related
             810      event or school-related activity if the amounts paid or charged are passed through to a person:
             811          (A) other than a:
             812          (I) school;
             813          (II) nonprofit organization authorized by a school board or a governing body of a
             814      private school to organize and direct a competitive secondary school activity; or
             815          (III) nonprofit association authorized by a school board or a governing body of a
             816      private school to organize and direct a competitive secondary school activity; and
             817          (B) that is required to collect sales and use taxes under this chapter.
             818          (c) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             819      commission may make rules defining the term "passed through."
             820          [(71)] (74) For purposes of this section and Section 59-12-104 , "school" means:
             821          (a) an elementary school or a secondary school that:
             822          (i) is a:
             823          (A) public school; or
             824          (B) private school; and
             825          (ii) provides instruction for one or more grades kindergarten through 12; or
             826          (b) a public school district.
             827          [(72)] (75) "Seller" means a person that makes a sale, lease, or rental of:
             828          (a) tangible personal property; or
             829          (b) a service.
             830          [(73)] (76) (a) "Semiconductor fabricating or processing materials" means tangible
             831      personal property:
             832          (i) used primarily in the process of:
             833          (A) (I) manufacturing a semiconductor; or


             834          (II) fabricating a semiconductor; or
             835          (B) maintaining an environment suitable for a semiconductor; or
             836          (ii) consumed primarily in the process of:
             837          (A) (I) manufacturing a semiconductor; or
             838          (II) fabricating a semiconductor; or
             839          (B) maintaining an environment suitable for a semiconductor.
             840          (b) "Semiconductor fabricating or processing materials" includes:
             841          (i) parts used in the repairs or renovations of tangible personal property described in
             842      Subsection [(73)] (76)(a); or
             843          (ii) a chemical, catalyst, or other material used to:
             844          (A) produce or induce in a semiconductor a:
             845          (I) chemical change; or
             846          (II) physical change;
             847          (B) remove impurities from a semiconductor; or
             848          (C) improve the marketable condition of a semiconductor.
             849          [(74)] (77) "Senior citizen center" means a facility having the primary purpose of
             850      providing services to the aged as defined in Section 62A-3-101 .
             851          [(75)] (78) "Simplified electronic return" means the electronic return:
             852          (a) described in Section 318(C) of the agreement; and
             853          (b) approved by the governing board of the agreement.
             854          [(76)] (79) "Solar energy" means the sun used as the sole source of energy for
             855      producing electricity.
             856          [(77)] (80) (a) "Sports or recreational equipment" means an item:
             857          (i) designed for human use; and
             858          (ii) that is:
             859          (A) worn in conjunction with:
             860          (I) an athletic activity; or
             861          (II) a recreational activity; and
             862          (B) not suitable for general use.
             863          (b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             864      commission shall make rules:


             865          (i) listing the items that constitute "sports or recreational equipment"; and
             866          (ii) that are consistent with the list of items that constitute "sports or recreational
             867      equipment" under the agreement.
             868          [(78)] (81) "State" means the state of Utah, its departments, and agencies.
             869          [(79)] (82) "Storage" means any keeping or retention of tangible personal property or
             870      any other taxable transaction under Subsection 59-12-103 (1), in this state for any purpose
             871      except sale in the regular course of business.
             872          [(80)] (83) (a) "Tangible personal property" means personal property that:
             873          (i) may be:
             874          (A) seen;
             875          (B) weighed;
             876          (C) measured;
             877          (D) felt; or
             878          (E) touched; or
             879          (ii) is in any manner perceptible to the senses.
             880          (b) "Tangible personal property" includes:
             881          (i) electricity;
             882          (ii) water;
             883          (iii) gas;
             884          (iv) steam; or
             885          (v) prewritten computer software.
             886          [(81)] (84) (a) "Telephone service" means a two-way transmission:
             887          (i) by:
             888          (A) wire;
             889          (B) radio;
             890          (C) lightwave; or
             891          (D) other electromagnetic means; and
             892          (ii) of one or more of the following:
             893          (A) a sign;
             894          (B) a signal;
             895          (C) writing;


             896          (D) an image;
             897          (E) sound;
             898          (F) a message;
             899          (G) data; or
             900          (H) other information of any nature.
             901          (b) "Telephone service" includes:
             902          (i) mobile telecommunications service;
             903          (ii) private communications service; or
             904          (iii) automated digital telephone answering service.
             905          (c) "Telephone service" does not include a service or a transaction that a state or a
             906      political subdivision of a state is prohibited from taxing as of July 1, 2001, under the Internet
             907      Tax Freedom Act, Pub. L. No. 105-277.
             908          [(82)] (85) Notwithstanding where a call is billed or paid, "telephone service address"
             909      means:
             910          (a) if the location described in this Subsection [(82)] (85)(a) is known, the location of
             911      the telephone service equipment:
             912          (i) to which a call is charged; and
             913          (ii) from which the call originates or terminates;
             914          (b) if the location described in Subsection [(82)] (85)(a) is not known but the location
             915      described in this Subsection [(82)] (85)(b) is known, the location of the origination point of the
             916      signal of the telephone service first identified by:
             917          (i) the telecommunications system of the seller; or
             918          (ii) if the system used to transport the signal is not that of the seller, information
             919      received by the seller from its service provider; or
             920          (c) if the locations described in Subsection [(82)] (85)(a) or (b) are not known, the
             921      location of a purchaser's primary place of use.
             922          [(83)] (86) (a) "Telephone service provider" means a person that:
             923          (i) owns, controls, operates, or manages a telephone service; and
             924          (ii) engages in an activity described in Subsection [(83)] (86)(a)(i) for the shared use
             925      with or resale to any person of the telephone service.
             926          (b) A person described in Subsection [(83)] (86)(a) is a telephone service provider


             927      whether or not the Public Service Commission of Utah regulates:
             928          (i) that person; or
             929          (ii) the telephone service that the person owns, controls, operates, or manages.
             930          [(84)] (87) "Tobacco" means:
             931          (a) a cigarette;
             932          (b) a cigar;
             933          (c) chewing tobacco;
             934          (d) pipe tobacco; or
             935          (e) any other item that contains tobacco.
             936          [(85)] (88) (a) "Use" means the exercise of any right or power over tangible personal
             937      property under Subsection 59-12-103 (1), incident to the ownership or the leasing of that
             938      property, item, or service.
             939          (b) "Use" does not include the sale, display, demonstration, or trial of that property in
             940      the regular course of business and held for resale.
             941          [(86)] (89) (a) Subject to Subsection [(86)] (89)(b), "vehicle" means the following that
             942      are required to be titled, registered, or titled and registered:
             943          (i) an aircraft as defined in Section 72-10-102 ;
             944          (ii) a vehicle as defined in Section 41-1a-102 ;
             945          (iii) an off-highway vehicle as defined in Section 41-22-2 ; or
             946          (iv) a vessel as defined in Section 41-1a-102 .
             947          (b) For purposes of Subsection 59-12-104 (35) only, "vehicle" includes:
             948          (i) a vehicle described in Subsection [(86)] (89)(a); or
             949          (ii) (A) a locomotive;
             950          (B) a freight car;
             951          (C) railroad work equipment; or
             952          (D) other railroad rolling stock.
             953          [(87)] (90) "Vehicle dealer" means a person engaged in the business of buying, selling,
             954      or exchanging a vehicle as defined in Subsection [(86)] (89).
             955          [(88)] (91) (a) Except as provided in Subsection [(88)] (91)(b), "waste energy facility"
             956      means a facility that generates electricity:
             957          (i) using as the primary source of energy waste materials that would be placed in a


             958      landfill or refuse pit if it were not used to generate electricity, including:
             959          (A) tires;
             960          (B) waste coal; or
             961          (C) oil shale; and
             962          (ii) in amounts greater than actually required for the operation of the facility.
             963          (b) "Waste energy facility" does not include a facility that incinerates:
             964          (i) municipal solid waste;
             965          (ii) hospital waste as defined in 40 C.F.R. 60.51c; or
             966          (iii) medical/infectious waste as defined in 40 C.F.R. 60.51c.
             967          [(89)] (92) "Watercraft" means a vessel as defined in Section 73-18-2 .
             968          [(90)] (93) "Wind energy" means wind used as the sole source of energy to produce
             969      electricity.
             970          [(91)] (94) "ZIP Code" means a Zoning Improvement Plan Code assigned to a
             971      geographic location by the United States Postal Service.
             972          Section 3. Section 59-12-103 (Effective 07/01/05) is amended to read:
             973           59-12-103 (Effective 07/01/05). Sales and use tax base -- Rates -- Effective dates --
             974      Use of sales and use tax revenues.
             975          (1) A tax is imposed on the purchaser as provided in this part for amounts paid or
             976      charged for the following transactions:
             977          (a) retail sales of tangible personal property made within the state;
             978          (b) amounts paid:
             979          (i) (A) to a common carrier; or
             980          (B) whether the following are municipally or privately owned, to a:
             981          (I) telephone service provider; or
             982          (II) telegraph corporation as defined in Section 54-2-1 ; and
             983          (ii) for:
             984          (A) all transportation;
             985          (B) telephone service, other than mobile telecommunications service, that originates
             986      and terminates within the boundaries of this state;
             987          (C) mobile telecommunications service that originates and terminates within the
             988      boundaries of one state only to the extent permitted by the Mobile Telecommunications


             989      Sourcing Act, 4 U.S.C. Sec.116 et seq.; or
             990          (D) telegraph service;
             991          (c) sales of the following for commercial use:
             992          (i) gas;
             993          (ii) electricity;
             994          (iii) heat;
             995          (iv) coal;
             996          (v) fuel oil; or
             997          (vi) other fuels;
             998          (d) sales of the following for residential use:
             999          (i) gas;
             1000          (ii) electricity;
             1001          (iii) heat;
             1002          (iv) coal;
             1003          (v) fuel oil; or
             1004          (vi) other fuels;
             1005          (e) sales of prepared food;
             1006          (f) except as provided in Section 59-12-104 , amounts paid or charged as admission or
             1007      user fees for theaters, movies, operas, museums, planetariums, shows of any type or nature,
             1008      exhibitions, concerts, carnivals, amusement parks, amusement rides, circuses, menageries,
             1009      fairs, races, contests, sporting events, dances, boxing matches, wrestling matches, closed circuit
             1010      television broadcasts, billiard parlors, pool parlors, bowling lanes, golf, miniature golf, golf
             1011      driving ranges, batting cages, skating rinks, ski lifts, ski runs, ski trails, snowmobile trails,
             1012      tennis courts, swimming pools, water slides, river runs, jeep tours, boat tours, scenic cruises,
             1013      horseback rides, sports activities, or any other amusement, entertainment, recreation,
             1014      exhibition, cultural, or athletic activity;
             1015          (g) amounts paid or charged for services[: (i)] for repairs or renovations of tangible
             1016      personal property, unless Section 59-12-104 provides for an exemption from sales and use tax
             1017      for:
             1018          [(A)] (i) the tangible personal property; and
             1019          [(B)] (ii) parts used in the repairs or renovations of the tangible personal property


             1020      described in Subsection (1)(g)(i)[(A)], whether or not any parts are actually used in the repairs
             1021      or renovations of that tangible personal property; [or]
             1022          [(ii) to install tangible personal property in connection with other tangible personal
             1023      property, unless the tangible personal property being installed is exempt from sales and use tax
             1024      under Section 59-12-104 ;]
             1025          (h) except as provided in Subsection 59-12-104 (7), amounts paid or charged for
             1026      cleaning or washing of tangible personal property;
             1027          (i) amounts paid or charged for tourist home, hotel, motel, or trailer court
             1028      accommodations and services that are regularly rented for less than 30 consecutive days;
             1029          (j) amounts paid or charged for laundry or dry cleaning services;
             1030          (k) amounts paid or charged for leases or rentals of tangible personal property if[: (i)
             1031      the tangible personal property's situs is in this state; (ii) the lessee took possession of the
             1032      tangible personal property in this state; or (iii)] within this state the tangible personal property
             1033      is:
             1034          [(A)] (i) stored;
             1035          [(B)] (ii) used; or
             1036          [(C)] (iii) otherwise consumed;
             1037          (l) amounts paid or charged for tangible personal property if within this state the
             1038      tangible personal property is:
             1039          (i) stored;
             1040          (ii) used; or
             1041          (iii) consumed; and
             1042          (m) amounts paid or charged for prepaid telephone calling cards.
             1043          (2) (a) Except as provided in Subsection (2)(b), beginning on July 1, 2001, a state tax
             1044      and a local tax is imposed on a transaction described in Subsection (1) equal to the sum of:
             1045          (i) a state tax imposed on the transaction at a rate of 4.75%; and
             1046          (ii) a local tax equal to the sum of the tax rates a county, city, or town imposes on the
             1047      transaction under this chapter other than this part.
             1048          (b) Notwithstanding Subsection (2)(a), beginning on July 1, 2001, a state tax and a
             1049      local tax is imposed on a transaction described in Subsection (1)(d) equal to the sum of:
             1050          (i) a state tax imposed on the transaction at a rate of 2%; and


             1051          (ii) a local tax equal to the sum of the tax rates a county, city, or town imposes on the
             1052      transaction under this chapter other than this part.
             1053          (c) Subject to Subsections (2)(d) and (e), a tax rate repeal or tax rate change for a tax
             1054      rate imposed under the following shall take effect on the first day of a calendar quarter:
             1055          (i) Subsection (2)(a)(i); or
             1056          (ii) Subsection (2)(b)(i).
             1057          (d) (i) For a transaction described in Subsection (2)(d)(iii), a tax rate increase shall take
             1058      effect on the first day of the first billing period:
             1059          (A) that begins after the effective date of the tax rate increase; and
             1060          (B) if the billing period for the transaction begins before the effective date of a tax rate
             1061      increase imposed under:
             1062          (I) Subsection (2)(a)(i); or
             1063          (II) Subsection (2)(b)(i).
             1064          (ii) For a transaction described in Subsection (2)(d)(iii), the repeal of a tax or a tax rate
             1065      decrease shall take effect on the first day of the last billing period:
             1066          (A) that began before the effective date of the repeal of the tax or the tax rate decrease;
             1067      and
             1068          (B) if the billing period for the transaction begins before the effective date of the repeal
             1069      of the tax or the tax rate decrease imposed under:
             1070          (I) Subsection (2)(a)(i); or
             1071          (II) Subsection (2)(b)(i).
             1072          (iii) Subsections (2)(d)(i) and (ii) apply to transactions subject to a tax under:
             1073          (A) Subsection (1)(b);
             1074          (B) Subsection (1)(c);
             1075          (C) Subsection (1)(d);
             1076          (D) Subsection (1)(e);
             1077          (E) Subsection (1)(f);
             1078          (F) Subsection (1)(g);
             1079          (G) Subsection (1)(h);
             1080          (H) Subsection (1)(i);
             1081          (I) Subsection (1)(j); or


             1082          (J) Subsection (1)(k).
             1083          (e) (i) If a tax due under Subsection (2)(a)(i) on a catalogue sale is computed on the
             1084      basis of sales and use tax rates published in the catalogue, a tax rate repeal or change in a tax
             1085      rate imposed under Subsection (2)(a)(i) takes effect:
             1086          (A) on the first day of a calendar quarter; and
             1087          (B) beginning 60 days after the effective date of the tax rate repeal or tax rate change
             1088      under Subsection (2)(a)(i).
             1089          (ii) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
             1090      the commission may by rule define the term "catalogue sale."
             1091          (3) (a) Except as provided in Subsections (4) through (7), the following state taxes
             1092      shall be deposited into the General Fund:
             1093          (i) the tax imposed by Subsection (2)(a)(i); or
             1094          (ii) the tax imposed by Subsection (2)(b)(i).
             1095          (b) The local taxes described in Subsections (2)(a)(ii) and (2)(b)(ii) shall be distributed
             1096      to a county, city, or town as provided in this chapter.
             1097          (4) (a) Notwithstanding Subsection (3)(a), for a fiscal year beginning on or after July 1,
             1098      2003, the lesser of the following amounts shall be used as provided in Subsections (4)(b)
             1099      through (g):
             1100          (i) for taxes listed under Subsection (3)(a), the amount of tax revenue generated:
             1101          (A) by a 1/16% tax rate on the transactions described in Subsection (1); and
             1102          (B) for the fiscal year; or
             1103          (ii) $17,500,000.
             1104          (b) (i) For a fiscal year beginning on or after July 1, 2003, 14% of the amount
             1105      described in Subsection (4)(a) shall be transferred each year as dedicated credits to the
             1106      Department of Natural Resources to:
             1107          (A) implement the measures described in Subsections 63-34-14 (4)(a) through (d) to
             1108      protect sensitive plant and animal species; or
             1109          (B) award grants, up to the amount authorized by the Legislature in an appropriations
             1110      act, to political subdivisions of the state to implement the measures described in Subsections
             1111      63-34-14 (4)(a) through (d) to protect sensitive plant and animal species.
             1112          (ii) Money transferred to the Department of Natural Resources under Subsection


             1113      (4)(b)(i) may not be used to assist the United States Fish and Wildlife Service or any other
             1114      person to list or attempt to have listed a species as threatened or endangered under the
             1115      Endangered Species Act of 1973, 16 U.S.C. Sec. 1531 et seq.
             1116          (iii) At the end of each fiscal year:
             1117          (A) 50% of any unexpended dedicated credits shall lapse to the Water Resources
             1118      Conservation and Development Fund created in Section 73-10-24 ;
             1119          (B) 25% of any unexpended dedicated credits shall lapse to the Utah Wastewater Loan
             1120      Program Subaccount created in Section 73-10c-5 ; and
             1121          (C) 25% of any unexpended dedicated credits shall lapse to the Drinking Water Loan
             1122      Program Subaccount created in Section 73-10c-5 .
             1123          (c) For a fiscal year beginning on or after July 1, 2003, 3% of the amount described in
             1124      Subsection (4)(b)(i) shall be deposited each year in the Agriculture Resource Development
             1125      Fund created in Section 4-18-6 .
             1126          (d) (i) For a fiscal year beginning on or after July 1, 2003, 1% of the amount described
             1127      in Subsection (4)(a) shall be transferred each year as dedicated credits to the Division of Water
             1128      Rights to cover the costs incurred in hiring legal and technical staff for the adjudication of
             1129      water rights.
             1130          (ii) At the end of each fiscal year:
             1131          (A) 50% of any unexpended dedicated credits shall lapse to the Water Resources
             1132      Conservation and Development Fund created in Section 73-10-24 ;
             1133          (B) 25% of any unexpended dedicated credits shall lapse to the Utah Wastewater Loan
             1134      Program Subaccount created in Section 73-10c-5 ; and
             1135          (C) 25% of any unexpended dedicated credits shall lapse to the Drinking Water Loan
             1136      Program Subaccount created in Section 73-10c-5 .
             1137          (e) (i) For a fiscal year beginning on or after July 1, 2003, 41% of the amount described
             1138      in Subsection (4)(a) shall be deposited in the Water Resources Conservation and Development
             1139      Fund created in Section 73-10-24 for use by the Division of Water Resources.
             1140          (ii) In addition to the uses allowed of the Water Resources Conservation and
             1141      Development Fund under Section 73-10-24 , the Water Resources Conservation and
             1142      Development Fund may also be used to:
             1143          (A) provide a portion of the local cost share, not to exceed in any fiscal year 50% of the


             1144      funds made available to the Division of Water Resources under this section, of potential project
             1145      features of the Central Utah Project;
             1146          (B) conduct hydrologic and geotechnical investigations by the Department of Natural
             1147      Resources in a cooperative effort with other state, federal, or local entities, for the purpose of
             1148      quantifying surface and ground water resources and describing the hydrologic systems of an
             1149      area in sufficient detail so as to enable local and state resource managers to plan for and
             1150      accommodate growth in water use without jeopardizing the resource;
             1151          (C) fund state required dam safety improvements; and
             1152          (D) protect the state's interest in interstate water compact allocations, including the
             1153      hiring of technical and legal staff.
             1154          (f) For a fiscal year beginning on or after July 1, 2003, 20.5% of the amount described
             1155      in Subsection (4)(a) shall be deposited in the Utah Wastewater Loan Program Subaccount
             1156      created in Section 73-10c-5 for use by the Water Quality Board to fund wastewater projects.
             1157          (g) For a fiscal year beginning on or after July 1, 2003, 20.5% of the amount described
             1158      in Subsection (4)(a) shall be deposited in the Drinking Water Loan Program Subaccount
             1159      created in Section 73-10c-5 for use by the Division of Drinking Water to:
             1160          (i) provide for the installation and repair of collection, treatment, storage, and
             1161      distribution facilities for any public water system, as defined in Section 19-4-102 ;
             1162          (ii) develop underground sources of water, including springs and wells; and
             1163          (iii) develop surface water sources.
             1164          (5) (a) Notwithstanding Subsection (3)(a), for a fiscal year beginning on or after July 1,
             1165      2003, the lesser of the following amounts shall be used as provided in Subsections (5)(b)
             1166      through (d):
             1167          (i) for taxes listed under Subsection (3)(a), the amount of tax revenue generated:
             1168          (A) by a 1/16% tax rate on the transactions described in Subsection (1); and
             1169          (B) for the fiscal year; or
             1170          (ii) $18,743,000.
             1171          (b) (i) For a fiscal year beginning on or after July 1, 2003, 3% of the amount described
             1172      in Subsection (5)(a) shall be deposited each year in the Transportation Corridor Preservation
             1173      Revolving Loan Fund created in Section 72-2-117 .
             1174          (ii) At least 50% of the money deposited in the Transportation Corridor Preservation


             1175      Revolving Loan Fund under Subsection (5)(b)(i) shall be used to fund loan applications made
             1176      by the Department of Transportation at the request of local governments.
             1177          (c) For a fiscal year beginning on or after July 1, 2003, 3% of the amount described in
             1178      Subsection (5)(a) shall be transferred each year as nonlapsing dedicated credits to the
             1179      Department of Transportation for the State Park Access Highways Improvement Program
             1180      created in Section 72-3-207 .
             1181          (d) For a fiscal year beginning on or after July 1, 2003, 94% of the amount described in
             1182      Subsection (5)(a) shall be deposited in the class B and class C roads account to be expended as
             1183      provided in Title 72, Chapter 2, Transportation Finances Act, for the use of class B and C
             1184      roads.
             1185          (6) Notwithstanding Subsection (3)(a), beginning on January 1, 2000, the Division of
             1186      Finance shall deposit into the Centennial Highway Fund created in Section 72-2-118 a portion
             1187      of the taxes listed under Subsection (3)(a) equal to the revenues generated by a 1/64% tax rate
             1188      on the taxable transactions under Subsection (1).
             1189          (7) (a) Notwithstanding Subsection (3)(a), for fiscal years beginning on or after fiscal
             1190      year 2004-05, the commission shall each year on or before the September 30 immediately
             1191      following the last day of the fiscal year deposit the difference described in Subsection (7)(b)
             1192      into the Remote Sales Restricted Account created in Section 59-12-103.2 if that difference is
             1193      greater than $0.
             1194          (b) The difference described in Subsection (7)(a) is equal to the difference between:
             1195          (i) the total amount of the following revenues the commission received from sellers
             1196      collecting a tax in accordance with Subsection 59-12-107 (1)(b) for the fiscal year immediately
             1197      preceding the September 30 described in Subsection (7)(a):
             1198          (A) revenues under Subsection (2)(a)(i); and
             1199          (B) revenues under Subsection (2)(b)(i); and
             1200          (ii) $7,279,673.
             1201          Section 4. Section 59-12-104 is amended to read:
             1202           59-12-104. Exemptions.
             1203          The following sales and uses are exempt from the taxes imposed by this chapter:
             1204          (1) sales of aviation fuel, motor fuel, and special fuel subject to a Utah state excise tax
             1205      under Chapter 13, Motor and Special Fuel Tax Act;


             1206          (2) sales to the state, its institutions, and its political subdivisions; however, this
             1207      exemption does not apply to sales of:
             1208          (a) construction materials except:
             1209          (i) construction materials purchased by or on behalf of institutions of the public
             1210      education system as defined in Utah Constitution Article X, Section 2, provided the
             1211      construction materials are clearly identified and segregated and installed or converted to real
             1212      property which is owned by institutions of the public education system; and
             1213          (ii) construction materials purchased by the state, its institutions, or its political
             1214      subdivisions which are installed or converted to real property by employees of the state, its
             1215      institutions, or its political subdivisions; or
             1216          (b) tangible personal property in connection with the construction, operation,
             1217      maintenance, repair, or replacement of a project, as defined in Section 11-13-103 , or facilities
             1218      providing additional project capacity, as defined in Section 11-13-103 ;
             1219          (3) (a) sales of an item described in Subsection (3)(b) from a vending machine if:
             1220          (i) the proceeds of each sale do not exceed $1; and
             1221          (ii) the seller or operator of the vending machine reports an amount equal to 150% of
             1222      the cost of the item described in Subsection (3)[(a)](b) as goods consumed; and
             1223          (b) Subsection (3)(a) applies to:
             1224          (i) food and food ingredients; or
             1225          (ii) prepared food;
             1226          (4) sales of the following to a commercial airline carrier for in-flight consumption:
             1227          (a) food and food ingredients;
             1228          (b) prepared food; or
             1229          (c) services related to Subsection (4)(a) or (b);
             1230          (5) sales of parts and equipment for installation in aircraft operated by common carriers
             1231      in interstate or foreign commerce;
             1232          (6) sales of commercials, motion picture films, prerecorded audio program tapes or
             1233      records, and prerecorded video tapes by a producer, distributor, or studio to a motion picture
             1234      exhibitor, distributor, or commercial television or radio broadcaster;
             1235          (7) sales of cleaning or washing of tangible personal property by a coin-operated
             1236      laundry or dry cleaning machine;


             1237          (8) sales made to or by religious or charitable institutions in the conduct of their regular
             1238      religious or charitable functions and activities, if the requirements of Section 59-12-104.1 are
             1239      fulfilled;
             1240          (9) sales of vehicles of a type required to be registered under the motor vehicle laws of
             1241      this state which are made to bona fide nonresidents of this state and are not afterwards
             1242      registered or used in this state except as necessary to transport them to the borders of this state;
             1243          (10) (a) amounts paid for an item described in Subsection (10)(b) if:
             1244          (i) the item is intended for human use; and
             1245          (ii) (A) a prescription was issued for the item; or
             1246          (B) the item was purchased by a hospital or other medical facility; and
             1247          (b) (i) Subsection (10)(a) applies to:
             1248          (A) a drug;
             1249          (B) a syringe; or
             1250          (C) a stoma supply; and
             1251          (ii) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             1252      commission may by rule define the terms:
             1253          (A) "syringe"; or
             1254          (B) "stoma supply";
             1255          (11) sales or use of property, materials, or services used in the construction of or
             1256      incorporated in pollution control facilities allowed by Sections 19-2-123 through 19-2-127 ;
             1257          (12) (a) sales of an item described in Subsection (12)(c) served by:
             1258          (i) the following if the item described in Subsection (12)(c) is not available to the
             1259      general public:
             1260          (A) a church; or
             1261          (B) a charitable institution;
             1262          (ii) an institution of higher education if:
             1263          (A) the item described in Subsection (12)(c) is not available to the general public; or
             1264          (B) the item described in Subsection (12)(c) is prepaid as part of a student meal plan
             1265      offered by the institution of higher education; or
             1266          (b) sales of an item described in Subsection (12)(c) provided for a patient at:
             1267          (i) a medical facility; or


             1268          (ii) a nursing facility; and
             1269          (c) Subsections (12)(a) and (b) apply to:
             1270          (i) food and food ingredients;
             1271          (ii) prepared food; or
             1272          (iii) alcoholic beverages;
             1273          (13) isolated or occasional sales by persons not regularly engaged in business, except
             1274      the sale of vehicles or vessels required to be titled or registered under the laws of this state in
             1275      which case the tax is based upon:
             1276          (a) the bill of sale or other written evidence of value of the vehicle or vessel being sold;
             1277      or
             1278          (b) in the absence of a bill of sale or other written evidence of value, the then existing
             1279      fair market value of the vehicle or vessel being sold as determined by the commission;
             1280          (14) (a) the following purchases or leases by a manufacturer on or after July 1, 1995:
             1281          (i) machinery and equipment:
             1282          (A) used in the manufacturing process;
             1283          (B) having an economic life of three or more years; and
             1284          (C) used:
             1285          (I) to manufacture an item sold as tangible personal property; and
             1286          (II) in new or expanding operations in a manufacturing facility in the state; and
             1287          (ii) subject to the provisions of Subsection (14)(b), normal operating replacements that:
             1288          (A) have an economic life of three or more years;
             1289          (B) are used in the manufacturing process in a manufacturing facility in the state;
             1290          (C) are used to replace or adapt an existing machine to extend the normal estimated
             1291      useful life of the machine; and
             1292          (D) do not include repairs and maintenance;
             1293          (b) the rates for the exemption under Subsection (14)(a)(ii) are as follows:
             1294          (i) beginning July 1, 1996, through June 30, 1997, 30% of the sale or lease described in
             1295      Subsection (14)(a)(ii) is exempt;
             1296          (ii) beginning July 1, 1997, through June 30, 1998, 60% of the sale or lease described
             1297      in Subsection (14)(a)(ii) is exempt; and
             1298          (iii) beginning July 1, 1998, 100% of the sale or lease described in Subsection


             1299      (14)(a)(ii) is exempt;
             1300          (c) for purposes of this Subsection (14), the commission shall by rule define the terms
             1301      "new or expanding operations" and "establishment"; and
             1302          (d) on or before October 1, 1991, and every five years after October 1, 1991, the
             1303      commission shall:
             1304          (i) review the exemptions described in Subsection (14)(a) and make recommendations
             1305      to the Revenue and Taxation Interim Committee concerning whether the exemptions should be
             1306      continued, modified, or repealed; and
             1307          (ii) include in its report:
             1308          (A) the cost of the exemptions;
             1309          (B) the purpose and effectiveness of the exemptions; and
             1310          (C) the benefits of the exemptions to the state;
             1311          (15) (a) sales of the following if the requirements of Subsection (15)(b) are met:
             1312          (i) tooling;
             1313          (ii) special tooling;
             1314          (iii) support equipment;
             1315          (iv) special test equipment; or
             1316          (v) parts used in the repairs or renovations of tooling or equipment described in
             1317      Subsections (15)(a)(i) through (iv); and
             1318          (b) sales of tooling, equipment, or parts described in Subsection (15)(a) are exempt if:
             1319          (i) the tooling, equipment, or parts are used or consumed exclusively in the
             1320      performance of any aerospace or electronics industry contract with the United States
             1321      government or any subcontract under that contract; and
             1322          (ii) under the terms of the contract or subcontract described in Subsection (15)(b)(i),
             1323      title to the tooling, equipment, or parts is vested in the United States government as evidenced
             1324      by:
             1325          (A) a government identification tag placed on the tooling, equipment, or parts; or
             1326          (B) listing on a government-approved property record if placing a government
             1327      identification tag on the tooling, equipment, or parts is impractical;
             1328          (16) intrastate movements of:
             1329          (a) freight by common carriers; or


             1330          (b) passengers:
             1331          (i) by taxicabs as described in SIC Code 4121 of the 1987 Standard Industrial
             1332      Classification Manual of the federal Executive Office of the President, Office of Management
             1333      and Budget;
             1334          (ii) transported by an establishment described in SIC Code 4111 of the 1987 Standard
             1335      Industrial Classification Manual of the federal Executive Office of the President, Office of
             1336      Management and Budget, if the transportation originates and terminates within a county of the
             1337      first, second, or third class; or
             1338          (iii) transported by the following described in SIC Code 4789 of the 1987 Standard
             1339      Industrial Classification Manual of the federal Executive Office of the President, Office of
             1340      Management and Budget:
             1341          (A) a horse-drawn cab; or
             1342          (B) a horse-drawn carriage;
             1343          (17) sales of newspapers or newspaper subscriptions;
             1344          (18) (a) except as provided in Subsection (18)(b), tangible personal property traded in
             1345      as full or part payment of the purchase price, except that for purposes of calculating sales or use
             1346      tax upon vehicles not sold by a vehicle dealer, trade-ins are limited to other vehicles only, and
             1347      the tax is based upon:
             1348          (i) the bill of sale or other written evidence of value of the vehicle being sold and the
             1349      vehicle being traded in; or
             1350          (ii) in the absence of a bill of sale or other written evidence of value, the then existing
             1351      fair market value of the vehicle being sold and the vehicle being traded in, as determined by the
             1352      commission; and
             1353          (b) notwithstanding Subsection (18)(a), Subsection (18)(a) does not apply to the
             1354      following items of tangible personal property traded in as full or part payment of the purchase
             1355      price:
             1356          (i) money;
             1357          (ii) electricity;
             1358          (iii) water;
             1359          (iv) gas; or
             1360          (v) steam;


             1361          (19) sprays and insecticides used to control insects, diseases, and weeds for
             1362      commercial production of fruits, vegetables, feeds, seeds, and animal products, but not those
             1363      sprays and insecticides used in the processing of the products;
             1364          (20) (a) (i) sales of tangible personal property used or consumed primarily and directly
             1365      in farming operations, including sales of irrigation equipment and supplies used for agricultural
             1366      production purposes, whether or not they become part of real estate and whether or not
             1367      installed by farmer, contractor, or subcontractor, but not sales of:
             1368          (A) machinery, equipment, materials, and supplies used in a manner that is incidental
             1369      to farming, such as hand tools and maintenance and janitorial equipment and supplies;
             1370          (B) tangible personal property used in any activities other than farming, such as office
             1371      equipment and supplies, equipment and supplies used in sales or distribution of farm products,
             1372      in research, or in transportation; or
             1373          (C) any vehicle required to be registered by the laws of this state, without regard to the
             1374      use to which the vehicle is put; or
             1375          (ii) sales of parts used in the repairs or renovations of tangible personal property if the
             1376      tangible personal property is exempt under Subsection (20)(a); or
             1377          (b) sales of hay;
             1378          (21) exclusive sale of locally grown seasonal crops, seedling plants, or garden, farm, or
             1379      other agricultural produce if sold by a producer during the harvest season;
             1380          (22) purchases made using a coupon as defined in 7 U.S.C. Sec. 2012 that is issued
             1381      under the Food Stamp Program, 7 U.S.C. Sec. 2011 et seq.;
             1382          (23) sales of nonreturnable containers, nonreturnable labels, nonreturnable bags,
             1383      nonreturnable shipping cases, and nonreturnable casings to a manufacturer, processor,
             1384      wholesaler, or retailer for use in packaging tangible personal property to be sold by that
             1385      manufacturer, processor, wholesaler, or retailer;
             1386          (24) property stored in the state for resale;
             1387          (25) property brought into the state by a nonresident for his or her own personal use or
             1388      enjoyment while within the state, except property purchased for use in Utah by a nonresident
             1389      living and working in Utah at the time of purchase;
             1390          (26) property purchased for resale in this state, in the regular course of business, either
             1391      in its original form or as an ingredient or component part of a manufactured or compounded


             1392      product;
             1393          (27) property upon which a sales or use tax was paid to some other state, or one of its
             1394      subdivisions, except that the state shall be paid any difference between the tax paid and the tax
             1395      imposed by this part and Part 2, Local Sales and Use Tax Act, and no adjustment is allowed if
             1396      the tax paid was greater than the tax imposed by this part and Part 2, Local Sales and Use Tax
             1397      Act;
             1398          (28) any sale of a service described in Subsections 59-12-103 (1)(b), (c), and (d) to a
             1399      person for use in compounding a service taxable under the subsections;
             1400          (29) purchases made in accordance with the special supplemental nutrition program for
             1401      women, infants, and children established in 42 U.S.C. Sec. 1786;
             1402          (30) beginning on July 1, 1999, through June 30, 2014, sales or leases of rolls, rollers,
             1403      refractory brick, electric motors, or other replacement parts used in the furnaces, mills, or ovens
             1404      of a steel mill described in SIC Code 3312 of the 1987 Standard Industrial Classification
             1405      Manual of the federal Executive Office of the President, Office of Management and Budget;
             1406          (31) sales of boats of a type required to be registered under Title 73, Chapter 18, State
             1407      Boating Act, boat trailers, and outboard motors which are made to bona fide nonresidents of
             1408      this state and are not thereafter registered or used in this state except as necessary to transport
             1409      them to the borders of this state;
             1410          (32) sales of aircraft manufactured in Utah if sold for delivery and use outside Utah
             1411      where a sales or use tax is not imposed, even if the title is passed in Utah;
             1412          (33) amounts paid for the purchase of telephone service for purposes of providing
             1413      telephone service;
             1414          (34) fares charged to persons transported directly by a public transit district created
             1415      under the authority of Title 17A, Chapter 2, Part 10, Utah Public Transit District Act;
             1416          (35) sales or leases of vehicles to, or use of vehicles by an authorized carrier;
             1417          (36) (a) 45% of the sales price of any new manufactured home; and
             1418          (b) 100% of the sales price of any used manufactured home;
             1419          (37) sales relating to schools and fundraising sales;
             1420          (38) sales or rentals of durable medical equipment if:
             1421          (a) a person presents a prescription for the durable medical equipment; and
             1422          (b) the durable medical equipment is used for home use only;


             1423          (39) (a) sales to a ski resort of electricity to operate a passenger ropeway as defined in
             1424      Section 72-11-102 ; and
             1425          (b) the commission shall by rule determine the method for calculating sales exempt
             1426      under Subsection (39)(a) that are not separately metered and accounted for in utility billings;
             1427          (40) sales to a ski resort of:
             1428          (a) snowmaking equipment;
             1429          (b) ski slope grooming equipment;
             1430          (c) passenger ropeways as defined in Section 72-11-102 ; or
             1431          (d) parts used in the repairs or renovations of equipment or passenger ropeways
             1432      described in Subsections (40)(a) through (c);
             1433          (41) sales of natural gas, electricity, heat, coal, fuel oil, or other fuels for industrial use;
             1434          (42) sales or rentals of the right to use or operate for amusement, entertainment, or
             1435      recreation a coin-operated amusement device as defined in Section 59-12-102 ;
             1436          (43) sales of cleaning or washing of tangible personal property by a coin-operated car
             1437      wash machine;
             1438          (44) sales by the state or a political subdivision of the state, except state institutions of
             1439      higher education as defined in Section 53B-3-102 , of:
             1440          (a) photocopies; or
             1441          (b) other copies of records held or maintained by the state or a political subdivision of
             1442      the state;
             1443          (45) (a) amounts paid:
             1444          (i) to a person providing intrastate transportation to an employer's employee to or from
             1445      the employee's primary place of employment;
             1446          (ii) by an:
             1447          (A) employee; or
             1448          (B) employer; and
             1449          (iii) pursuant to a written contract between:
             1450          (A) the employer; and
             1451          (B) (I) the employee; or
             1452          (II) a person providing transportation to the employer's employee; and
             1453          (b) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the


             1454      commission may for purposes of Subsection (45)(a) make rules defining what constitutes an
             1455      employee's primary place of employment;
             1456          (46) amounts paid for admission to an athletic event at an institution of higher
             1457      education that is subject to the provisions of Title IX of the Education Amendments of 1972,
             1458      20 U.S.C. Sec. 1681 et seq.;
             1459          (47) sales of telephone service charged to a prepaid telephone calling card;
             1460          (48) (a) sales of:
             1461          (i) hearing aids;
             1462          (ii) hearing aid accessories; or
             1463          (iii) except as provided in Subsection (48)(b), parts used in the repairs or renovations
             1464      of hearing aids or hearing aid accessories; and
             1465          (b) for purposes of this Subsection (48), notwithstanding Subsection (48)(a)(iii),
             1466      "parts" does not include batteries;
             1467          (49) (a) sales made to or by:
             1468          (i) an area agency on aging; or
             1469          (ii) a senior citizen center owned by a county, city, or town; or
             1470          (b) sales made by a senior citizen center that contracts with an area agency on aging;
             1471          (50) (a) beginning on July 1, 2001, through June 30, 2007, and subject to Subsection
             1472      (50)(b), a sale or lease of semiconductor fabricating or processing materials regardless of
             1473      whether the semiconductor fabricating or processing materials:
             1474          (i) actually come into contact with a semiconductor; or
             1475          (ii) ultimately become incorporated into real property;
             1476          (b) (i) beginning on July 1, 2001, through June 30, 2002, 10% of the sale or lease
             1477      described in Subsection (50)(a) is exempt;
             1478          (ii) beginning on July 1, 2002, through June 30, 2003, 50% of the sale or lease
             1479      described in Subsection (50)(a) is exempt; and
             1480          (iii) beginning on July 1, 2003, through June 30, 2007, the entire amount of the sale or
             1481      lease described in Subsection (50)(a) is exempt; and
             1482          (c) each year on or before the November interim meeting, the Revenue and Taxation
             1483      Interim Committee shall:
             1484          (i) review the exemption described in this Subsection (50) and make recommendations


             1485      concerning whether the exemption should be continued, modified, or repealed; and
             1486          (ii) include in the review under this Subsection (50)(c):
             1487          (A) the cost of the exemption;
             1488          (B) the purpose and effectiveness of the exemption; and
             1489          (C) the benefits of the exemption to the state;
             1490          (51) an amount paid by or charged to a purchaser for accommodations and services
             1491      described in Subsection 59-12-103 (1)(i) to the extent the amount is exempt under Section
             1492      59-12-104.2 ;
             1493          (52) beginning on September 1, 2001, the lease or use of a vehicle issued a temporary
             1494      sports event registration certificate in accordance with Section 41-3-306 for the event period
             1495      specified on the temporary sports event registration certificate;
             1496          (53) sales or uses of electricity, if the sales or uses are:
             1497          (a) made under a tariff adopted by the Public Service Commission of Utah only for
             1498      purchase of electricity produced from a new wind, geothermal, biomass, or solar power energy
             1499      source, as designated in the tariff by the Public Service Commission of Utah; and
             1500          (b) for an amount of electricity that is:
             1501          (i) unrelated to the amount of electricity used by the person purchasing the electricity
             1502      under the tariff described in Subsection (53)(a); and
             1503          (ii) equivalent to the number of kilowatthours specified in the tariff described in
             1504      Subsection (53)(a) that may be purchased under the tariff described in Subsection (53)(a);
             1505          (54) sales or rentals of mobility enhancing equipment if a person presents a
             1506      prescription for the mobility enhancing equipment;
             1507          (55) sales of water in a:
             1508          (a) pipe;
             1509          (b) conduit;
             1510          (c) ditch; or
             1511          (d) reservoir;
             1512          (56) sales of currency or coinage that constitute legal tender of the United States or of a
             1513      foreign nation;
             1514          (57) (a) sales of an item described in Subsection (57)(b) if the item:
             1515          (i) does not constitute legal tender of any nation; and


             1516          (ii) has a gold, silver, or platinum content of 80% or more; and
             1517          (b) Subsection (57)(a) applies to a gold, silver, or platinum:
             1518          (i) ingot;
             1519          (ii) bar;
             1520          (iii) medallion; or
             1521          (iv) decorative coin;
             1522          (58) amounts paid on a sale-leaseback transaction;
             1523          (59) sales of a prosthetic device:
             1524          (a) for use on or in a human;
             1525          (b) for which a prescription is issued; and
             1526          (c) to a person that presents a prescription for the prosthetic device;
             1527          (60) (a) except as provided in Subsection (60)(b), purchases, leases, or rentals of
             1528      machinery or equipment by an establishment described in Subsection (60)(c) if the machinery
             1529      or equipment is primarily used in the production or postproduction of the following media for
             1530      commercial distribution:
             1531          (i) a motion picture;
             1532          (ii) a television program;
             1533          (iii) a movie made for television;
             1534          (iv) a music video;
             1535          (v) a commercial;
             1536          (vi) a documentary; or
             1537          (vii) a medium similar to Subsections (60)(a)(i) through (vi) as determined by the
             1538      commission by administrative rule made in accordance with Subsection (60)(d); or
             1539          (b) notwithstanding Subsection (60)(a), purchases, leases, or rentals of machinery or
             1540      equipment by an establishment described in Subsection (60)(c) that is used for the production
             1541      or postproduction of the following are subject to the taxes imposed by this chapter:
             1542          (i) a live musical performance;
             1543          (ii) a live news program; or
             1544          (iii) a live sporting event;
             1545          (c) the following establishments listed in the 1997 North American Industry
             1546      Classification System of the federal Executive Office of the President, Office of Management


             1547      and Budget, apply to Subsections (60)(a) and (b):
             1548          (i) NAICS Code 512110; or
             1549          (ii) NAICS Code 51219; and
             1550          (d) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             1551      commission may by rule:
             1552          (i) prescribe what constitutes a medium similar to Subsections (60)(a)(i) through (vi);
             1553      or
             1554          (ii) define:
             1555          (A) "commercial distribution";
             1556          (B) "live musical performance";
             1557          (C) "live news program"; or
             1558          (D) "live sporting event";
             1559          (61) (a) leases of seven or more years or purchases made on or after July 1, 2004 but on
             1560      or before June 30, 2009, of machinery or equipment that:
             1561          (i) is leased or purchased for or by a facility that:
             1562          (A) is a renewable energy production facility;
             1563          (B) is located in the state; and
             1564          (C) (I) becomes operational on or after July 1, 2004; or
             1565          (II) has its generation capacity increased by one or more megawatts on or after July 1,
             1566      2004 as a result of the use of the machinery or equipment;
             1567          (ii) has an economic life of five or more years; and
             1568          (iii) is used to make the facility or the increase in capacity of the facility described in
             1569      Subsection (61)(a)(i) operational up to the point of interconnection with an existing
             1570      transmission grid including:
             1571          (A) a wind turbine;
             1572          (B) generating equipment;
             1573          (C) a control and monitoring system;
             1574          (D) a power line;
             1575          (E) substation equipment;
             1576          (F) lighting;
             1577          (G) fencing;


             1578          (H) pipes; or
             1579          (I) other equipment used for locating a power line or pole; and
             1580          (b) this Subsection (61) does not apply to:
             1581          (i) machinery or equipment used in construction of:
             1582          (A) a new renewable energy production facility; or
             1583          (B) the increase in the capacity of a renewable energy production facility;
             1584          (ii) contracted services required for construction and routine maintenance activities;
             1585      and
             1586          (iii) unless the machinery or equipment is used or acquired for an increase in capacity
             1587      of the facility described in Subsection (61)(a)(i)(C)(II), machinery or equipment used or
             1588      acquired after:
             1589          (A) the renewable energy production facility described in Subsection (61)(a)(i) is
             1590      operational as described in Subsection (61)(a)(iii); or
             1591          (B) the increased capacity described in Subsection (61)(a)(i) is operational as described
             1592      in Subsection (61)(a)(iii);
             1593          (62) (a) leases of seven or more years or purchases made on or after July 1, 2004 but on
             1594      or before June 30, 2009, of machinery or equipment that:
             1595          (i) is leased or purchased for or by a facility that:
             1596          (A) is a waste energy production facility;
             1597          (B) is located in the state; and
             1598          (C) (I) becomes operational on or after July 1, 2004; or
             1599          (II) has its generation capacity increased by one or more megawatts on or after July 1,
             1600      2004 as a result of the use of the machinery or equipment;
             1601          (ii) has an economic life of five or more years; and
             1602          (iii) is used to make the facility or the increase in capacity of the facility described in
             1603      Subsection (62)(a)(i) operational up to the point of interconnection with an existing
             1604      transmission grid including:
             1605          (A) generating equipment;
             1606          (B) a control and monitoring system;
             1607          (C) a power line;
             1608          (D) substation equipment;


             1609          (E) lighting;
             1610          (F) fencing;
             1611          (G) pipes; or
             1612          (H) other equipment used for locating a power line or pole; and
             1613          (b) this Subsection (62) does not apply to:
             1614          (i) machinery or equipment used in construction of:
             1615          (A) a new waste energy facility; or
             1616          (B) the increase in the capacity of a waste energy facility;
             1617          (ii) contracted services required for construction and routine maintenance activities;
             1618      and
             1619          (iii) unless the machinery or equipment is used or acquired for an increase in capacity
             1620      described in Subsection (62)(a)(i)(C)(II), machinery or equipment used or acquired after:
             1621          (A) the waste energy facility described in Subsection (62)(a)(i) is operational as
             1622      described in Subsection (62)(a)(iii); or
             1623          (B) the increased capacity described in Subsection (62)(a)(i) is operational as described
             1624      in Subsection (62)(a)(iii); [and]
             1625          (63) (a) leases of five or more years or purchases made on or after July 1, 2004 but on
             1626      or before June 30, 2009, of machinery or equipment that:
             1627          (i) is leased or purchased for or by a facility that:
             1628          (A) is located in the state;
             1629          (B) produces fuel from biomass energy including:
             1630          (I) methanol; or
             1631          (II) ethanol; and
             1632          (C) (I) becomes operational on or after July 1, 2004; or
             1633          (II) has its capacity to produce fuel increase by 25% or more on or after July 1, 2004 as
             1634      a result of the installation of the machinery or equipment;
             1635          (ii) has an economic life of five or more years; and
             1636          (iii) is installed on the facility described in Subsection (63)(a)(i);
             1637          (b) this Subsection (63) does not apply to:
             1638          (i) machinery or equipment used in construction of:
             1639          (A) a new facility described in Subsection (63)(a)(i); or


             1640          (B) the increase in capacity of the facility described in Subsection (63)(a)(i); or
             1641          (ii) contracted services required for construction and routine maintenance activities;
             1642      and
             1643          (iii) unless the machinery or equipment is used or acquired for an increase in capacity
             1644      described in Subsection (63)(a)(i)(C)(II), machinery or equipment used or acquired after:
             1645          (A) the facility described in Subsection (63)(a)(i) is operational; or
             1646          (B) the increased capacity described in Subsection (63)(a)(i) is operational[.];
             1647          (64) amounts paid to a purchaser as a rebate from the manufacturer of a new vehicle
             1648      for purchasing the new vehicle; and
             1649          (65) (a) subject to Subsection (65)(b), sales of tangible personal property to persons
             1650      within this state that is subsequently shipped outside the state and incorporated pursuant to
             1651      contract into and becomes a part of real property located outside of this state, except to the
             1652      extent that the other state or political entity imposes a sales, use, gross receipts, or other similar
             1653      transaction excise tax on it against which the other state or political entity allows a credit for
             1654      taxes imposed by this chapter; and
             1655          (b) the exemption provided for in Subsection (65)(a):
             1656          (i) is allowed only if the exemption is applied:
             1657          (A) in calculating the purchase price of the tangible personal property; and
             1658          (B) to a written contract that is in effect on July 1, 2004; and
             1659          (ii) (A) does not apply beginning on the day on which the contract described in
             1660      Subsection (65)(b)(i):
             1661          (I) is substantially modified; or
             1662          (II) terminates; and
             1663          (B) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
             1664      the commission may by rule prescribe the circumstances under which a contract is substantially
             1665      modified.
             1666          Section 5. Section 59-12-117 is amended to read:
             1667           59-12-117. Refusal to make or falsifying returns -- Evasion of payment of a tax --
             1668      Aiding or abetting an attempt to evade the payment of a tax -- Penalties -- Criminal
             1669      violations.
             1670          (1) It is unlawful for any seller to [refuse to]:


             1671          (a) refuse to make any return required to be made under this chapter;
             1672          (b) make any false or fraudulent return or false statement on any return;
             1673          (c) evade the payment of a tax, or any part of a tax imposed by this chapter; or
             1674          (d) aid or abet another in any attempt to evade the payment of the tax or any part
             1675      imposed by this chapter.
             1676          (2) Any person violating any of the provisions of this chapter, except as provided in
             1677      Section 59-12-107 , is guilty of a criminal violation as provided in Section 59-1-401 .
             1678          (3) In addition to the penalties described in Subsection (2), any person who knowingly
             1679      swears to or verifies any false or fraudulent return, or any return containing any false or
             1680      fraudulent statement is guilty of the offense of perjury and on conviction of perjury shall be
             1681      punished in the manner provided by law.
             1682          (4) Any company making a false return or a return containing a false statement is guilty
             1683      of a criminal violation as provided in Section 59-1-401 .
             1684          (5) Any person failing or refusing to furnish any return required to be made, failing or
             1685      refusing to furnish a supplemental return or other data required by the commission, or
             1686      rendering a false or fraudulent return is guilty of a criminal violation as provided in Section
             1687      59-1-401 for each offense.
             1688          (6) Any person required to make, render, sign, or verify any report under this chapter,
             1689      who makes any false or fraudulent return with intent to defeat or evade the assessment or
             1690      determination of amount due required by law to be made is guilty of a criminal violation as
             1691      provided in Section 59-1-401 for each offense.
             1692          (7) Any violation of the provisions of this chapter, except as otherwise provided, shall
             1693      be a criminal violation as provided in Section 59-1-401 .
             1694          Section 6. Section 59-12-121 is amended to read:
             1695           59-12-121. Amnesty.
             1696          (1) As used in this section, "amnesty" means that a seller is not required to pay the
             1697      following amounts that the seller would otherwise be required to pay:
             1698          (a) a tax, fee, or charge under:
             1699          (i) Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;
             1700          (ii) Title 10, Chapter 1, Part 4, Municipal Telecommunications License Tax Act;
             1701          [(ii)] (iii) Section 19-6-714 ;


             1702          [(iii)] (iv) Section 19-6-805 ;
             1703          (v) this chapter;
             1704          [(iv)] (vi) Section 69-2-5.5 ; or
             1705          [(v) this chapter ;]
             1706          (vii) Section 69-2-5.6 ;
             1707          (b) a penalty on a tax, fee, or charge described in Subsection (1)(a); or
             1708          (c) interest on a tax, fee, or charge described in Subsection (1)(a).
             1709          (2) The commission shall grant a seller amnesty under this section if:
             1710          (a) (i) (A) the seller was not licensed under Section 59-12-106 at any time during the
             1711      12-month period prior to July 1, 2005; and
             1712          [(b)] (B) the seller obtains a license under Section 59-12-106 within a 12-month period
             1713      beginning on July 1, 2005; [and] or
             1714          (ii) the seller has been granted amnesty in:
             1715          (A) accordance with the agreement; and
             1716          (B) a state other than this state that is a member of the agreement; and
             1717          [(c)] (b) the seller is registered under the agreement within a 12-month period
             1718      beginning on July 1, 2005.
             1719          (3) A seller may not receive amnesty under this section for a tax, fee, or charge:
             1720          (a) collected by the seller;
             1721          (b) remitted to the commission by the seller;
             1722          (c) that the seller is required to remit to the commission on the seller's purchases; or
             1723          (d) arising from a transaction that occurred within a time period that is under audit by
             1724      the commission if:
             1725          (i) the seller has received notice of the commencement of an audit prior to obtaining a
             1726      license under Section 59-12-106 ; and
             1727          (ii) (A) the audit described in Subsection (3)(d)(i) has not been completed; or
             1728          (B) the seller has not exhausted all administrative and judicial remedies in connection
             1729      with the audit described in Subsection (3)(d)(i).
             1730          (4) (a) Except as provided in Subsection (4)(b), amnesty granted to a seller by the
             1731      commission under this section:
             1732          (i) applies to the time period during which a seller was not licensed under Section


             1733      59-12-106 ; and
             1734          (ii) remains in effect if, for a period of three years, the seller:
             1735          (A) remains registered under the agreement;
             1736          (B) collects a tax, fee, or charge on a transaction subject to a tax, fee, or charge
             1737      described in Subsection (1)(a); and
             1738          (C) remits to the commission all taxes, fees, or charges described in Subsection
             1739      (4)(a)(ii).
             1740          (b) Notwithstanding Subsection (4)(a), a seller may not be granted amnesty under this
             1741      section if with respect to a tax, fee, or charge for which the seller would otherwise be granted
             1742      amnesty under this section, the seller commits:
             1743          (i) fraud; or
             1744          (ii) an intentional misrepresentation of a material fact.
             1745          (5) (a) If a seller does not meet the requirements of Subsection (4)(a)(ii), the
             1746      commission shall require the seller to pay the amounts described in Subsection (1) that the
             1747      seller would have otherwise been required to pay.
             1748          (b) Notwithstanding Section 59-12-110 , and for purposes of requiring a seller to pay an
             1749      amount described in Subsection (5)(a), the time period for the commission to make an
             1750      assessment under Section 59-12-110 shall be extended for an additional three years.
             1751          Section 7. Section 59-12-122 is amended to read:
             1752           59-12-122. Monetary allowance for a seller registered under the agreement.
             1753          (1) A [seller that is registered under the agreement] person described in Subsection (2)
             1754      shall receive the monetary allowance determined:
             1755          [(1)] (a) by the governing board of the agreement; and
             1756          [(2)] (b) in accordance with Article VI, Monetary Allowances for New Technological
             1757      Models for Sales Tax Collection, of the agreement.
             1758          (2) For purposes of Subsection (1), the person that shall receive the monetary
             1759      allowance described in Subsection (1) is:
             1760          (a) if a seller that is registered under the agreement has not designated a certified
             1761      service provider to be the seller's agent, the seller; or
             1762          (b) if a seller that is registered under the agreement has designated a certified service
             1763      provider to be the seller's agent, the certified service provider.


             1764          Section 8. Section 59-12-205 (Effective 07/01/05) is amended to read:
             1765           59-12-205 (Effective 07/01/05). Ordinances to conform with statutory
             1766      amendments -- Distribution of tax revenues -- Rulemaking authority -- Determination of
             1767      population.
             1768          (1) Each county, city, and town, in order to maintain in effect sales and use tax
             1769      ordinances adopted pursuant to Section 59-12-204 , shall, within 30 days of any amendment of
             1770      any applicable provisions of Part 1, Tax Collection, adopt amendments of their respective sales
             1771      and use tax ordinances to conform with the amendments to Part 1, Tax Collection, insofar as
             1772      they relate to sales and use taxes.
             1773          (2) Except as provided in Subsection (7):
             1774          (a) 50% of each dollar collected from the sales and use tax authorized by this part shall
             1775      be paid to each county, city, and town on the basis of the percentage that the population of the
             1776      county, city, or town bears to the total population of all counties, cities, and towns in the state;
             1777      and
             1778          (b) notwithstanding Sections 59-12-207.1 through [ 59-12-207.4 ] 59-12-207.3 , 50% of
             1779      each dollar collected from the sales and use tax authorized by this part shall be paid to each
             1780      county, city, and town on the basis of the location where the transaction is consummated as
             1781      determined under this section.
             1782          (3) For purposes of Subsection (2)(b), the location where a transaction is consummated
             1783      is determined in accordance with Subsections (4) through (6).
             1784          (4) (a) For a transaction that is reported to the commission on a return other than a
             1785      simplified electronic return, the location where the transaction is consummated is determined
             1786      in accordance with Subsections (4)(b) through (h).
             1787          (b) (i) Except as provided in Subsections (4)(c) through (h), for a transaction described
             1788      in Subsection (4)(b)(ii), the location where the transaction is consummated is the place of
             1789      business of the seller.
             1790          (ii) Subsection (4)(b)(i) applies to a transaction other than a transaction described in:
             1791          (A) Subsection (4)(c)(ii);
             1792          (B) Subsection (4)(d)(ii);
             1793          (C) Subsection (4)(e)(ii);
             1794          (D) Subsection (4)(f)(ii);


             1795          (E) Subsection (4)(g)(ii); or
             1796          (F) Subsection (4)(h).
             1797          (c) (i) Notwithstanding Subsection (4)(b), for a transaction described in Subsection
             1798      (4)(c)(ii), the location where the transaction is consummated is determined by allocating the
             1799      total revenues remitted to the commission each month that are generated by the tax imposed
             1800      under this section on the transactions described in Subsection (4)(c)(ii):
             1801          (A) to each local taxing jurisdiction; and
             1802          (B) on the basis of the population of each local taxing jurisdiction as compared to the
             1803      population of the state.
             1804          (ii) Subsection (4)(c)(i) applies to a transaction:
             1805          (A) made by a seller described in Subsection 59-12-107 (1)(b); and
             1806          (B) involving tangible personal property that is shipped from outside the state.
             1807          (d) (i) Notwithstanding Subsection (4)(b), for a transaction described in Subsection
             1808      (4)(d)(ii), the location where the transaction is consummated is determined by allocating the
             1809      total revenues reported to the commission each month that are generated by the tax imposed
             1810      under this section on the transactions described in Subsection (4)(d)(ii):
             1811          (A) to local taxing jurisdictions within a county; and
             1812          (B) on the basis of the proportion of total revenues generated by the transactions
             1813      described in Subsection (4)(b)(ii) that are reported to the commission for that month within a
             1814      local taxing jurisdiction within that county as compared to the total revenues generated by the
             1815      transactions described in Subsection (4)(b)(ii) that are reported to the commission for that
             1816      month within all local taxing jurisdictions within that county.
             1817          (ii) Subsection (4)(d)(i) applies to a transaction:
             1818          (A) made from a location in the state other than a fixed place of business in the state;
             1819      or
             1820          (B) (I) made by a seller described in Subsection 59-12-107 (1)(a); and
             1821          (II) involving tangible personal property that is shipped from outside the state.
             1822          (e) (i) Notwithstanding Subsection (4)(b), for a transaction described in Subsection
             1823      (4)(e)(ii), the location where the transaction is consummated is determined by allocating the
             1824      total revenues reported to the commission each month that are generated by the tax imposed
             1825      under this section on the transactions described in Subsection (4)(e)(ii):


             1826          (A) to local taxing jurisdictions; and
             1827          (B) on the basis of the proportion of the total revenues generated by the transactions
             1828      described in Subsection (4)(b)(ii) that are reported to the commission for that month within
             1829      each local taxing jurisdiction as compared to the total revenues generated by the transactions
             1830      described in Subsection (4)(b)(ii) that are reported to the commission for that month within the
             1831      state.
             1832          (ii) Subsection (4)(e)(i) applies to a transaction involving tangible personal property
             1833      purchased with a direct payment permit in accordance with Section 59-12-107.1 .
             1834          (f) (i) Notwithstanding Subsection (4)(b), for a transaction described in Subsection
             1835      (4)(f)(ii), the location where the transaction is consummated is each location where the good or
             1836      service described in Subsection 59-12-107.2 (1)(b) is used.
             1837          (ii) Subsection (4)(f)(i) applies to a transaction involving a good or service:
             1838          (A) described in Subsection 59-12-107.2 (1)(b);
             1839          (B) that is concurrently available for use in more than one location; and
             1840          (C) is purchased using the form described in Section 59-12-107.2 .
             1841          (g) (i) Notwithstanding Subsection (4)(b), for a transaction described in Subsection
             1842      (4)(g)(ii), the location where the transaction is consummated is determined by allocating the
             1843      total revenues reported to the commission each month that are generated by the tax imposed
             1844      under this section on the transactions described in Subsection (4)(g)(ii):
             1845          (A) to local taxing jurisdictions; and
             1846          (B) on the basis of the proportion of the total revenues generated by the transactions
             1847      described in Subsection (4)(b)(ii) that are reported to the commission for that month within
             1848      each local taxing jurisdiction as compared to the total revenues generated by the transactions
             1849      described in Subsection (4)(b)(ii) that are reported to the commission for that month within the
             1850      state.
             1851          (ii) Subsection (4)(g)(i) applies to a transaction involving a purchase of direct mail if
             1852      the purchaser of the direct mail provides to the seller the form described in Subsection
             1853      59-12-107.3 (1)(a) at the time of the purchase of the direct mail.
             1854          (h) Notwithstanding Subsection (4)(b), for a transaction involving the sale of a
             1855      [telephone] service described in Section 59-12-207.4 , the location where the transaction is
             1856      consummated is the same as the location of the transaction determined under Section


             1857      59-12-207.4 .
             1858          (5) (a) For a transaction that is reported to the commission on a simplified electronic
             1859      return, the location where the transaction is consummated is determined in accordance with
             1860      Subsections (5)(b) through (e).
             1861          (b) (i) Except as provided in Subsections (5)(c) through (e), the location where a
             1862      transaction is consummated is determined by allocating the total revenues reported to the
             1863      commission each month on the simplified electronic return:
             1864          (A) to local taxing jurisdictions; and
             1865          (B) on the basis of the proportion of the total revenues generated by the transactions
             1866      described in Subsection (4)(b)(ii) that are reported to the commission in accordance with
             1867      Subsection (5)(b)(ii) for that month within each local taxing jurisdiction as compared to the
             1868      total revenues generated by the transactions described in Subsection (4)(b)(ii) that are reported
             1869      to the commission in accordance with Subsection (5)(b)(ii) for that month within the state.
             1870          (ii) In making the allocations required by Subsection (5)(b)(i), the commission shall
             1871      use the total revenues generated by the transactions described in Subsection (4)(b)(ii) reported
             1872      to the commission:
             1873          (A) in the report required by Subsection 59-12-105 (2); and
             1874          (B) if a local taxing jurisdiction reports revenues to the commission in accordance with
             1875      Subsection (5)(b)(iii), in the report made in accordance with Subsection (5)(b)(iii).
             1876          (iii) (A) For purposes of this Subsection (5)(b), a local taxing jurisdiction may report to
             1877      the commission the revenues generated by a tax imposed by this chapter within the local taxing
             1878      jurisdiction if a seller:
             1879          (I) opens an additional place of business within the local taxing jurisdiction after the
             1880      seller makes an initial application for a license under Section 59-12-106 ; and
             1881          (II) estimates that the additional place of business will increase by 5% or more the
             1882      revenues generated by a tax imposed by this chapter within the local taxing jurisdiction.
             1883          (B) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
             1884      the commission may make rules providing procedures and requirements for making the report
             1885      described in this Subsection (5)(b).
             1886          (c) (i) Notwithstanding Subsection (5)(b), for a transaction described in Subsection
             1887      (5)(c)(ii), the location where the transaction is consummated is determined by allocating the


             1888      total revenues reported to the commission each month that are generated by the tax imposed
             1889      under this section on the transactions described in Subsection (5)(c)(ii):
             1890          (A) to local taxing jurisdictions within a county; and
             1891          (B) on the basis of the proportion of the total revenues generated by the transactions
             1892      described in Subsection (4)(b)(ii) that are reported to the commission for that month within a
             1893      local taxing jurisdiction within that county as compared to the total revenues generated by the
             1894      transactions described in Subsection (4)(b)(ii) that are reported to the commission for that
             1895      month within all local taxing jurisdictions within that county.
             1896          (ii) Subsection (5)(c)(i) applies to a transaction:
             1897          (A) made from a location in the state other than a fixed place of business in the state;
             1898      or
             1899          (B) (I) made by a seller described in Subsection 59-12-107 (1)(a); and
             1900          (II) involving tangible personal property that is shipped from outside the state.
             1901          (d) Notwithstanding Subsection (5)(b), for a transaction made by a seller described in
             1902      Subsection 59-12-107 (1)(b), the location where the transaction is consummated is determined
             1903      by allocating the total revenues remitted to the commission each month that are generated by
             1904      the tax imposed under this section on the transactions made by a seller described in Subsection
             1905      59-12-107 (1)(b):
             1906          (i) to each local taxing jurisdiction; and
             1907          (ii) on the basis of the population of each local taxing jurisdiction as compared to the
             1908      population of the state.
             1909          (e) (i) Notwithstanding Subsection (5)(b), for a transaction described in Subsection
             1910      (5)(e)(ii), the location where the transaction is consummated is determined by allocating the
             1911      total revenues reported to the commission each month that are generated by the tax imposed
             1912      under this section on the transactions described in Subsection (5)(e)(ii):
             1913          (A) to local taxing jurisdictions; and
             1914          (B) on the basis of the proportion of the total revenues generated by the transactions
             1915      described in Subsection (4)(b)(ii) that are reported to the commission for that month within
             1916      each local taxing jurisdiction as compared to the total revenues generated by the transactions
             1917      described in Subsection (4)(b)(ii) that are reported to the commission for that month within the
             1918      state.


             1919          (ii) Subsection (5)(e)(i) applies to a transaction involving tangible personal property
             1920      purchased with a direct payment permit in accordance with Section 59-12-107.1 .
             1921          (6) For purposes of Subsections (4) and (5) and in accordance with Title 63, Chapter
             1922      46a, Utah Administrative Rulemaking Act, the commission may make rules defining what
             1923      constitutes a fixed place of business in the state.
             1924          (7) (a) Notwithstanding Subsection (2), a county, city, or town may not receive a tax
             1925      revenue distribution less than .75% of the taxable sales within the boundaries of the county,
             1926      city, or town.
             1927          (b) The commission shall proportionally reduce quarterly distributions to any county,
             1928      city, or town that, but for the reduction, would receive a distribution in excess of 1% of the
             1929      sales and use tax revenue collected within the boundaries of the county, city, or town.
             1930          (8) (a) Population figures for purposes of this section shall be based on the most recent
             1931      official census or census estimate of the United States Census Bureau.
             1932          (b) If a needed population estimate is not available from the United States Census
             1933      Bureau, population figures shall be derived from the estimate from the Utah Population
             1934      Estimates Committee created by executive order of the governor.
             1935          (9) The population of a county for purposes of this section shall be determined solely
             1936      from the unincorporated area of the county.
             1937          Section 9. Section 59-12-1201 is amended to read:
             1938           59-12-1201. Motor vehicle rental tax -- Rate -- Exemptions -- Administration,
             1939      collection, and enforcement of tax -- Deposits -- Effective dates.
             1940          (1) (a) Except as provided in Subsection (3), there is imposed a tax of 2.5% on all
             1941      short-term leases and rentals of motor vehicles not exceeding 30 days.
             1942          (b) The tax imposed in this section is in addition to all other state, county, or municipal
             1943      fees and taxes imposed on rentals of motor vehicles.
             1944          (2) (a) Subject to Subsection (2)(b), a tax rate repeal or tax rate change for the tax
             1945      imposed under Subsection (1) shall take effect on the first day of a calendar quarter.
             1946          (b) (i) For a transaction subject to a tax under Subsection (1), a tax rate increase shall
             1947      take effect on the first day of the first billing period:
             1948          (A) that begins after the effective date of the tax rate increase; and
             1949          (B) if the billing period for the transaction begins before the effective date of a tax rate


             1950      increase imposed under Subsection (1).
             1951          (ii) For a transaction subject to a tax under Subsection (1), the repeal of a tax or a tax
             1952      rate decrease shall take effect on the first day of the last billing period:
             1953          (A) that began before the effective date of the repeal of the tax or the tax rate decrease;
             1954      and
             1955          (B) if the billing period for the transaction begins before the effective date of the repeal
             1956      of the tax or the tax rate decrease imposed under Subsection (1).
             1957          (3) A motor vehicle is exempt from the tax imposed under Subsection (1) if:
             1958          (a) the motor vehicle is registered for a gross laden weight of 12,001 or more pounds;
             1959          (b) the motor vehicle is rented as a personal household goods moving van; or
             1960          (c) the lease or rental of the motor vehicle is made for the purpose of temporarily
             1961      replacing a person's motor vehicle that is being repaired pursuant to a repair agreement or an
             1962      insurance agreement.
             1963          (4) (a) (i) Except as provided in Subsection (4)(a)(ii), the tax authorized under this
             1964      section shall be administered, collected, and enforced in accordance with:
             1965          (A) the same procedures used to administer, collect, and enforce the tax under[: (I)]
             1966      Part 1, Tax Collection; [or] and
             1967          [(II) Part 2, Local Sales and Use Tax Act; and]
             1968          (B) Chapter 1, General Taxation Policies.
             1969          (ii) Notwithstanding Subsection (4)(a)(i), a tax under this part is not subject to:
             1970          (A) Subsections 59-12-103 (4) through (7); or
             1971          (B) Sections 59-12-107.1 through 59-12-107.3 [;].
             1972          [(C) Subsections 59-12-205 (2) through (9); or]
             1973          [(D) Sections 59-12-207.1 through 59-12-207.4 .]
             1974          (b) The commission may retain a maximum of 1-1/2% of the tax collected under this
             1975      section for the costs of rendering its services under this section.
             1976          (c) Except as provided under Subsection (4)(b), all revenue received by the
             1977      commission under this section shall be deposited daily with the state treasurer and credited
             1978      monthly to the Transportation Corridor Preservation Revolving Loan Fund under Section
             1979      72-2-117 .
             1980          Section 10. Effective date.


             1981          This bill takes effect on July 1, 2005.




Legislative Review Note
    as of 1-18-05 3:00 PM


Based on a limited legal review, this legislation has not been determined to have a high
probability of being held unconstitutional.

Office of Legislative Research and General Counsel


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