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Third Substitute H.B. 109
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4
5
6 Cosponsors:
7 Greg J. Curtis
8 Brad L. Dee
9 Craig A. Frank
10 Neil A. HansenWayne A. Harper
Kory M. Holdaway
Gregory H. Hughes
Patrick PainterAaron Tilton
Stephen H. Urquhart
Mark W. Walker
Peggy Wallace 11
12 LONG TITLE
13 General Description:
14 This bill amends the Sales and Use Tax Act relating to food and food ingredients.
15 Highlighted Provisions:
16 This bill:
17 . defines terms;
18 . reduces the state sales and use tax rate imposed on food and food ingredients under
19 certain circumstances;
20 . addresses the state sales and use tax rate imposed:
21 . on a bundled transaction involving food and food ingredients; or
22 . if a seller sells food and food ingredients and prepared food at the same
23 location;
24 . addresses the amount that a business location that collects and remits sales and use
25 taxes monthly may retain as a seller discount; and
26 . makes technical changes.
27 Monies Appropriated in this Bill:
28 This bill appropriates:
29 . $6,000,000 from the General Fund for fiscal year 2006-07 only to the State Tax
30 Commission for distribution to certain sellers to reimburse some of their costs in
31 complying with the reduced sales and use tax rate imposed on food and food
32 ingredients.
33 Other Special Clauses:
34 This bill takes effect on January 1, 2007.
35 This bill coordinates with S.B. 233 by modifying substantive amendments.
36 Utah Code Sections Affected:
37 AMENDS:
38 11-41-102, as enacted by Chapter 283, Laws of Utah 2004
39 59-12-102, as last amended by Chapters 158 and 246, Laws of Utah 2005
40 59-12-103 (Effective 07/01/06), as last amended by Chapter 1, Laws of Utah 2005,
41 First Special Session
42 59-12-108, as last amended by Chapter 255, Laws of Utah 2004
43
44 Be it enacted by the Legislature of the state of Utah:
45 Section 1. Section 11-41-102 is amended to read:
46 11-41-102. Definitions.
47 As used in this chapter:
48 (1) "Agreement" means an oral or written agreement between a:
49 (a) (i) county; or
50 (ii) municipality; and
51 (b) person.
52 (2) "Municipality" means a:
53 (a) city; or
54 (b) town.
55 (3) "Payment" includes:
56 (a) a payment;
57 (b) a rebate;
58 (c) a refund; or
59 (d) an amount similar to Subsections (3)(a) through (c).
60 (4) "Regional retail business" means a:
61 (a) retail business that occupies a floor area of more than 80,000 square feet;
62 (b) dealer as defined in Section 41-1a-102 ;
63 (c) retail shopping facility that has at least two anchor tenants if the total number of
64 anchor tenants in the shopping facility occupy a total floor area of more than 150,000 square
65 feet; or
66 (d) grocery store that occupies a floor area of more than 30,000 square feet.
67 (5) (a) "Sales and use tax" means a tax:
68 (i) imposed on transactions within a:
69 (A) county; or
70 (B) municipality; and
71 (ii) except as provided in Subsection (5)(b), authorized under Title 59, Chapter 12,
72 Sales and Use Tax Act.
73 (b) Notwithstanding Subsection (5)(a)(ii), "sales and use tax" does not include a tax
74 authorized under:
75 (i) Subsection 59-12-103 (2)(a)(i);
76 (ii) Subsection 59-12-103 (2)(b)(i)(A);
77 (iii) Subsection 59-12-103 (2)(b)(ii)(A);
78 [
79 [
80 [
81 [
82 [
83 (6) (a) "Sales and use tax incentive payment" means a payment of revenues:
84 (i) to a person;
85 (ii) by a:
86 (A) county; or
87 (B) municipality;
88 (iii) to induce the person to locate or relocate a regional retail business within the:
89 (A) county; or
90 (B) municipality; and
91 (iv) that are derived from a sales and use tax.
92 (b) "Sales and use tax incentive payment" does not include funding for public
93 infrastructure.
94 Section 2. Section 59-12-102 is amended to read:
95 59-12-102. Definitions.
96 As used in this chapter:
97 (1) (a) "Admission or user fees" includes season passes.
98 (b) "Admission or user fees" does not include annual membership dues to private
99 organizations.
100 (2) "Agreement" means the Streamlined Sales and Use Tax Agreement described in
101 Section 59-12-102.1 .
102 (3) "Agreement combined tax rate" means the sum of the tax rates:
103 (a) listed under Subsection (4); and
104 (b) that are imposed within a local taxing jurisdiction.
105 (4) "Agreement sales and use tax" means a tax imposed under:
106 (a) Subsection 59-12-103 (2)(a)(i) or (2)(b)(ii)(A);
107 (b) Section 59-12-204 ;
108 (c) Section 59-12-401 ;
109 (d) Section 59-12-402 ;
110 (e) Section 59-12-501 ;
111 (f) Section 59-12-502 ;
112 (g) Section 59-12-703 ;
113 (h) Section 59-12-802 ;
114 (i) Section 59-12-804 ;
115 (j) Section 59-12-1001 ;
116 (k) Section 59-12-1102 ;
117 (l) Section 59-12-1302 ;
118 (m) Section 59-12-1402 ; or
119 (n) Section 59-12-1503 .
120 (5) "Aircraft" is as defined in Section 72-10-102 .
121 (6) "Alcoholic beverage" means a beverage that:
122 (a) is suitable for human consumption; and
123 (b) contains .5% or more alcohol by volume.
124 (7) "Area agency on aging" is as defined in Section 62A-3-101 .
125 (8) "Authorized carrier" means:
126 (a) in the case of vehicles operated over public highways, the holder of credentials
127 indicating that the vehicle is or will be operated pursuant to both the International Registration
128 Plan and the International Fuel Tax Agreement;
129 (b) in the case of aircraft, the holder of a Federal Aviation Administration operating
130 certificate or air carrier's operating certificate; or
131 (c) in the case of locomotives, freight cars, railroad work equipment, or other rolling
132 stock, the holder of a certificate issued by the United States Surface Transportation Board.
133 (9) (a) Except as provided in Subsection (9)(b), "biomass energy" means any of the
134 following that is used as the primary source of energy to produce fuel or electricity:
135 (i) material from a plant or tree; or
136 (ii) other organic matter that is available on a renewable basis, including:
137 (A) slash and brush from forests and woodlands;
138 (B) animal waste;
139 (C) methane produced:
140 (I) at landfills; or
141 (II) as a byproduct of the treatment of wastewater residuals;
142 (D) aquatic plants; and
143 (E) agricultural products.
144 (b) "Biomass energy" does not include:
145 (i) black liquor;
146 (ii) treated woods; or
147 (iii) biomass from municipal solid waste other than methane produced:
148 (A) at landfills; or
149 (B) as a byproduct of the treatment of wastewater residuals.
150 (10) (a) "Bundled transaction" means the sale of two or more items of tangible personal
151 property if:
152 (i) one or more of the items of tangible personal property is food and food ingredients;
153 and
154 (ii) the items of tangible personal property are:
155 (A) distinct and identifiable;
156 (B) sold for one price that is not itemized; and
157 (C) not prepared food.
158 (b) "Bundled transaction" does not include the sale of tangible personal property if the
159 sales price varies, or is negotiable, on the basis of the selection by the purchaser of the items of
160 tangible personal property included in the transaction.
161 (c) For purposes of Subsection (10)(a)(ii)(A), tangible personal property that is distinct
162 and identifiable does not include:
163 (i) packaging that:
164 (A) accompanies the sale of the tangible personal property; and
165 (B) is incidental or immaterial to the sale of the tangible personal property;
166 (ii) tangible personal property provided free of charge with the purchase of another
167 item of tangible personal property; or
168 (iii) an item of tangible personal property included in the definition of "purchase
169 price."
170 (d) For purposes of Subsection (10)(c)(ii), an item of tangible personal property is
171 provided free of charge with the purchase of another item of tangible personal property if the
172 sales price of the purchased item of tangible personal property does not vary depending on the
173 inclusion of the tangible personal property provided free of charge.
174 [
175 board of the agreement in accordance with Section 59-12-102.1 that:
176 (a) calculates the agreement sales and use tax imposed within a local taxing
177 jurisdiction:
178 (i) on a transaction; and
179 (ii) in the states that are members of the agreement;
180 (b) determines the amount of agreement sales and use tax to remit to a state that is a
181 member of the agreement; and
182 (c) maintains a record of the transaction described in Subsection [
183 [
184 (a) by the governing board of the agreement in accordance with Section 59-12-102.1 ;
185 and
186 (b) to perform all of a seller's sales and use tax functions for an agreement sales and
187 use tax other than the seller's obligation under Section 59-12-107.4 to remit a tax on the seller's
188 own purchases.
189 [
190 wearing apparel suitable for general use.
191 (b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
192 commission shall make rules:
193 (i) listing the items that constitute "clothing"; and
194 (ii) that are consistent with the list of items that constitute "clothing" under the
195 agreement.
196 [
197 device" means:
198 (i) a coin-operated amusement, skill, or ride device;
199 (ii) that is not controlled through seller-assisted, over-the-counter, sales of tokens; and
200 (iii) includes a music machine, pinball machine, billiard machine, video game machine,
201 arcade machine, and a mechanical or electronic skill game or ride.
202 (b) For purposes of Subsection 59-12-104 (42), "coin-operated amusement device" does
203 not mean a coin-operated amusement device possessing a coinage mechanism that:
204 (i) accepts and registers multiple denominations of coins; and
205 (ii) allows the seller to collect the sales and use tax at the time an amusement device is
206 activated and operated by a person inserting coins into the device.
207 [
208 other fuels that does not constitute industrial use under Subsection [
209 under Subsection [
210 [
211 business of transporting passengers, freight, merchandise, or other property for hire within this
212 state.
213 (b) (i) "Common carrier" does not include a person who, at the time the person is
214 traveling to or from that person's place of employment, transports a passenger to or from the
215 passenger's place of employment.
216 (ii) For purposes of Subsection [
217 46a, Utah Administrative Rulemaking Act, the commission may make rules defining what
218 constitutes a person's place of employment.
219 [
220 (a) poultry, dairy, and other livestock feed, and their components;
221 (b) baling ties and twine used in the baling of hay and straw;
222 (c) fuel used for providing temperature control of orchards and commercial
223 greenhouses doing a majority of their business in wholesale sales, and for providing power for
224 off-highway type farm machinery; and
225 (d) feed, seeds, and seedlings.
226 [
227 (a) (i) in digital form; or
228 (ii) in a form similar to digital form; and
229 (b) manipulates that information for a result based on a sequence of instructions.
230 [
231 (a) a computer to perform a task; or
232 (b) automatic data processing equipment to perform a task.
233 [
234 converted into real property.
235 [
236 than tangible storage media.
237 [
238 (i) by a seller of:
239 (A) tangible personal property; or
240 (B) services; and
241 (ii) for preparation and delivery of the tangible personal property or services described
242 in Subsection [
243 (b) "Delivery charge" includes a charge for the following:
244 (i) transportation;
245 (ii) shipping;
246 (iii) postage;
247 (iv) handling;
248 (v) crating; or
249 (vi) packing.
250 [
251 (a) is intended to supplement the diet;
252 (b) contains one or more of the following dietary ingredients:
253 (i) a vitamin;
254 (ii) a mineral;
255 (iii) an herb or other botanical;
256 (iv) an amino acid;
257 (v) a dietary substance for use by humans to supplement the diet by increasing the total
258 dietary intake; or
259 (vi) a concentrate, metabolite, constituent, extract, or combination of any ingredient
260 described in Subsections [
261 (c) (i) except as provided in Subsection [
262 (A) tablet form;
263 (B) capsule form;
264 (C) powder form;
265 (D) softgel form;
266 (E) gelcap form; or
267 (F) liquid form; or
268 (ii) notwithstanding Subsection [
269 ingestion in a form described in Subsections [
270 represented:
271 (A) as conventional food; and
272 (B) for use as a sole item of:
273 (I) a meal; or
274 (II) the diet; and
275 (d) is required to be labeled as a dietary supplement:
276 (i) identifiable by the "Supplemental Facts" box found on the label; and
277 (ii) as required by 21 C.F.R. Sec. 101.36.
278 [
279 States mail or other delivery service:
280 (i) to:
281 (A) a mass audience; or
282 (B) addressees on a mailing list provided by a purchaser of the mailing list; and
283 (ii) if the cost of the printed material is not billed directly to the recipients.
284 (b) "Direct mail" includes tangible personal property supplied directly or indirectly by a
285 purchaser to a seller of direct mail for inclusion in a package containing the printed material.
286 (c) "Direct mail" does not include multiple items of printed material delivered to a
287 single address.
288 [
289 a compound, substance, or preparation that is:
290 (i) recognized in:
291 (A) the official United States Pharmacopoeia;
292 (B) the official Homeopathic Pharmacopoeia of the United States;
293 (C) the official National Formulary; or
294 (D) a supplement to a publication listed in Subsections [
295 (C);
296 (ii) intended for use in the:
297 (A) diagnosis of disease;
298 (B) cure of disease;
299 (C) mitigation of disease;
300 (D) treatment of disease; or
301 (E) prevention of disease; or
302 (iii) intended to affect:
303 (A) the structure of the body; or
304 (B) any function of the body.
305 (b) "Drug" does not include:
306 (i) food and food ingredients;
307 (ii) a dietary supplement;
308 (iii) an alcoholic beverage; or
309 (iv) a prosthetic device.
310 [
311 equipment" means equipment that:
312 (i) can withstand repeated use;
313 (ii) is primarily and customarily used to serve a medical purpose;
314 (iii) generally is not useful to a person in the absence of illness or injury; and
315 (iv) is not worn in or on the body.
316 (b) "Durable medical equipment" includes parts used in the repair or replacement of the
317 equipment described in Subsection [
318 (c) Notwithstanding Subsection [
319 include mobility enhancing equipment.
320 [
321 (a) relating to technology; and
322 (b) having:
323 (i) electrical capabilities;
324 (ii) digital capabilities;
325 (iii) magnetic capabilities;
326 (iv) wireless capabilities;
327 (v) optical capabilities;
328 (vi) electromagnetic capabilities; or
329 (vii) capabilities similar to Subsections [
330 [
331 (i) regardless of whether the substances are in:
332 (A) liquid form;
333 (B) concentrated form;
334 (C) solid form;
335 (D) frozen form;
336 (E) dried form; or
337 (F) dehydrated form; and
338 (ii) that are:
339 (A) sold for:
340 (I) ingestion by humans; or
341 (II) chewing by humans; and
342 (B) consumed for the substance's:
343 (I) taste; or
344 (II) nutritional value.
345 (b) "Food and food ingredients" does not include:
346 (i) an alcoholic beverage;
347 (ii) tobacco; or
348 (iii) prepared food.
349 [
350 (i) (A) made by a school; or
351 (B) made by a school student;
352 (ii) that are for the purpose of raising funds for the school to purchase equipment,
353 materials, or provide transportation; and
354 (iii) that are part of an officially sanctioned school activity.
355 (b) For purposes of Subsection [
356 means a school activity:
357 (i) that is conducted in accordance with a formal policy adopted by the school or school
358 district governing the authorization and supervision of fundraising activities;
359 (ii) that does not directly or indirectly compensate an individual teacher or other
360 educational personnel by direct payment, commissions, or payment in kind; and
361 (iii) the net or gross revenues from which are deposited in a dedicated account
362 controlled by the school or school district.
363 [
364 flows outward from the earth that is used as the sole source of energy to produce electricity.
365 [
366 agreement that is:
367 (a) authorized to administer the agreement; and
368 (b) established in accordance with the agreement.
369 [
370 (i) an instrument or device having an electronic component that is designed to:
371 (A) (I) improve impaired human hearing; or
372 (II) correct impaired human hearing; and
373 (B) (I) be worn in the human ear; or
374 (II) affixed behind the human ear;
375 (ii) an instrument or device that is surgically implanted into the cochlea; or
376 (iii) a telephone amplifying device.
377 (b) "Hearing aid" does not include:
378 (i) except as provided in Subsection [
379 instrument or device having an electronic component that is designed to be worn on the body;
380 (ii) except as provided in Subsection [
381 system designed to be used by one individual, including:
382 (A) a personal amplifying system;
383 (B) a personal FM system;
384 (C) a television listening system; or
385 (D) a device or system similar to a device or system described in Subsections [
386 (32)(b)(ii)(A) through (C); or
387 (iii) an assistive listening device or system designed to be used by more than one
388 individual, including:
389 (A) a device or system installed in:
390 (I) an auditorium;
391 (II) a church;
392 (III) a conference room;
393 (IV) a synagogue; or
394 (V) a theater; or
395 (B) a device or system similar to a device or system described in Subsections [
396 (32)(b)(iii)(A)(I) through (V).
397 [
398 (i) component;
399 (ii) attachment; or
400 (iii) accessory.
401 (b) "Hearing aid accessory" includes:
402 (i) a hearing aid neck loop;
403 (ii) a hearing aid cord;
404 (iii) a hearing aid ear mold;
405 (iv) hearing aid tubing;
406 (v) a hearing aid ear hook; or
407 (vi) a hearing aid remote control.
408 (c) "Hearing aid accessory" does not include:
409 (i) a component, attachment, or accessory designed to be used only with an:
410 (A) instrument or device described in Subsection [
411 (B) assistive listening device or system described in Subsection [
412 (iii); or
413 (ii) a hearing aid battery.
414 [
415 produce electricity.
416 [
417 or other fuels:
418 (a) in mining or extraction of minerals;
419 (b) in agricultural operations to produce an agricultural product up to the time of
420 harvest or placing the agricultural product into a storage facility, including:
421 (i) commercial greenhouses;
422 (ii) irrigation pumps;
423 (iii) farm machinery;
424 (iv) implements of husbandry as defined in Subsection 41-1a-102 (23) that are not
425 registered under Title 41, Chapter 1a, Part 2, Registration; and
426 (v) other farming activities;
427 (c) in manufacturing tangible personal property at an establishment described in SIC
428 Codes 2000 to 3999 of the 1987 Standard Industrial Classification Manual of the federal
429 Executive Office of the President, Office of Management and Budget; or
430 (d) by a scrap recycler if:
431 (i) from a fixed location, the scrap recycler utilizes machinery or equipment to process
432 one or more of the following items into prepared grades of processed materials for use in new
433 products:
434 (A) iron;
435 (B) steel;
436 (C) nonferrous metal;
437 (D) paper;
438 (E) glass;
439 (F) plastic;
440 (G) textile; or
441 (H) rubber; and
442 (ii) the new products under Subsection [
443 nonrecycled materials.
444 [
445 means a charge for installing tangible personal property.
446 (b) Notwithstanding Subsection [
447 charge for repairs or renovations of tangible personal property.
448 [
449 personal property for:
450 (i) (A) a fixed term; or
451 (B) an indeterminate term; and
452 (ii) consideration.
453 (b) "Lease" or "rental" includes an agreement covering a motor vehicle and trailer if the
454 amount of consideration may be increased or decreased by reference to the amount realized
455 upon sale or disposition of the property as defined in Section 7701(h)(1), Internal Revenue
456 Code.
457 (c) "Lease" or "rental" does not include:
458 (i) a transfer of possession or control of property under a security agreement or
459 deferred payment plan that requires the transfer of title upon completion of the required
460 payments;
461 (ii) a transfer of possession or control of property under an agreement that requires the
462 transfer of title:
463 (A) upon completion of required payments; and
464 (B) if the payment of an option price does not exceed the greater of:
465 (I) $100; or
466 (II) 1% of the total required payments; or
467 (iii) providing tangible personal property along with an operator for a fixed period of
468 time or an indeterminate period of time if the operator is necessary for equipment to perform as
469 designed.
470 (d) For purposes of Subsection [
471 equipment to perform as designed if the operator's duties exceed the:
472 (i) set-up of tangible personal property;
473 (ii) maintenance of tangible personal property; or
474 (iii) inspection of tangible personal property.
475 [
476 media if the tangible storage media is not physically transferred to the purchaser.
477 [
478 (a) county that is authorized to impose an agreement sales and use tax;
479 (b) city that is authorized to impose an agreement sales and use tax; or
480 (c) town that is authorized to impose an agreement sales and use tax.
481 [
482 [
483 (a) an establishment described in SIC Codes 2000 to 3999 of the 1987 Standard
484 Industrial Classification Manual of the federal Executive Office of the President, Office of
485 Management and Budget; or
486 (b) a scrap recycler if:
487 (i) from a fixed location, the scrap recycler utilizes machinery or equipment to process
488 one or more of the following items into prepared grades of processed materials for use in new
489 products:
490 (A) iron;
491 (B) steel;
492 (C) nonferrous metal;
493 (D) paper;
494 (E) glass;
495 (F) plastic;
496 (G) textile; or
497 (H) rubber; and
498 (ii) the new products under Subsection [
499 nonrecycled materials.
500 [
501 [
502 Telecommunications Sourcing Act, 4 U.S.C. Sec. 124.
503 [
504 equipment" means equipment that is:
505 (i) primarily and customarily used to provide or increase the ability to move from one
506 place to another;
507 (ii) appropriate for use in a:
508 (A) home; or
509 (B) motor vehicle; and
510 (iii) not generally used by persons with normal mobility.
511 (b) "Mobility enhancing equipment" includes parts used in the repair or replacement of
512 the equipment described in Subsection [
513 (c) Notwithstanding Subsection [
514 not include:
515 (i) a motor vehicle;
516 (ii) equipment on a motor vehicle if that equipment is normally provided by the motor
517 vehicle manufacturer;
518 (iii) durable medical equipment; or
519 (iv) a prosthetic device.
520 [
521 as the seller's agent to perform all of the seller's sales and use tax functions for agreement sales
522 and use taxes other than the seller's obligation under Section 59-12-107.4 to remit a tax on the
523 seller's own purchases.
524 [
525 (a) except as provided in Subsection [
526 system to perform the seller's sales tax functions for agreement sales and use taxes; and
527 (b) notwithstanding Subsection [
528 the sales tax:
529 (i) collected by the seller; and
530 (ii) to the appropriate local taxing jurisdiction.
531 [
532 has:
533 (i) sales in at least five states that are members of the agreement;
534 (ii) total annual sales revenues of at least $500,000,000;
535 (iii) a proprietary system that calculates the amount of tax:
536 (A) for an agreement sales and use tax; and
537 (B) due to each local taxing jurisdiction; and
538 (iv) entered into a performance agreement with the governing board of the agreement.
539 (b) For purposes of Subsection [
540 group of sellers using the same proprietary system.
541 [
542 [
543 [
544 energy.
545 (b) "Other fuels" includes oxygen when it is used in the manufacturing of tangible
546 personal property.
547 [
548 [
549 [
550 property attached to real property:
551 (i) the attachment of the tangible personal property to the real property:
552 (A) is essential to the use of the tangible personal property; and
553 (B) suggests that the tangible personal property will remain attached to the real
554 property in the same place over the useful life of the tangible personal property; or
555 (ii) if the tangible personal property is detached from the real property, the detachment
556 would:
557 (A) cause substantial damage to the tangible personal property; or
558 (B) require substantial alteration or repair of the real property to which the tangible
559 personal property is attached.
560 (b) "Permanently attached to real property" includes:
561 (i) the attachment of an accessory to the tangible personal property if the accessory is:
562 (A) essential to the operation of the tangible personal property; and
563 (B) attached only to facilitate the operation of the tangible personal property; or
564 (ii) a temporary detachment of tangible personal property from real property for a
565 repair or renovation if the repair or renovation is performed where the tangible personal
566 property and real property are located.
567 (c) "Permanently attached to real property" does not include:
568 (i) the attachment of portable or movable tangible personal property to real property if
569 that portable or movable tangible personal property is attached to real property only for:
570 (A) convenience;
571 (B) stability; or
572 (C) for an obvious temporary purpose; or
573 (ii) the detachment of tangible personal property from real property other than the
574 detachment described in Subsection [
575 [
576 association, corporation, estate, trust, business trust, receiver, syndicate, this state, any county,
577 city, municipality, district, or other local governmental entity of the state, or any group or
578 combination acting as a unit.
579 [
580 (a) for telephone service other than mobile telecommunications service, means the
581 street address representative of where the purchaser's use of the telephone service primarily
582 occurs, which shall be:
583 (i) the residential street address of the purchaser; or
584 (ii) the primary business street address of the purchaser; or
585 (b) for mobile telecommunications service, is as defined in the Mobile
586 Telecommunications Sourcing Act, 4 U.S.C. Sec. 124.
587 [
588 a medium described in Subsection 59-12-104 (60)(a).
589 [
590 (i) food:
591 (A) sold in a heated state; or
592 (B) heated by a seller;
593 (ii) two or more food ingredients mixed or combined by the seller for sale as a single
594 item; or
595 (iii) except as provided in Subsection [
596 provided by the seller, including a:
597 (A) plate;
598 (B) knife;
599 (C) fork;
600 (D) spoon;
601 (E) glass;
602 (F) cup;
603 (G) napkin; or
604 (H) straw.
605 (b) "Prepared food" does not include:
606 (i) food that a seller only:
607 (A) cuts;
608 (B) repackages; or
609 (C) pasteurizes; or
610 (ii) (A) the following:
611 (I) raw egg;
612 (II) raw fish;
613 (III) raw meat;
614 (IV) raw poultry; or
615 (V) a food containing an item described in Subsections [
616 (IV); and
617 (B) if the Food and Drug Administration recommends in Chapter 3, Part 401.11 of the
618 Food and Drug Administration's Food Code that a consumer cook the items described in
619 Subsection [
620 (c) Notwithstanding Subsection [
621 seller does not include the following used to transport the food:
622 (i) a container; or
623 (ii) packaging.
624 [
625 (a) (i) orally;
626 (ii) in writing;
627 (iii) electronically; or
628 (iv) by any other manner of transmission; and
629 (b) by a licensed practitioner authorized by the laws of a state.
630 [
631 computer software" means computer software that is not designed and developed:
632 (i) by the author or other creator of the computer software; and
633 (ii) to the specifications of a specific purchaser.
634 (b) "Prewritten computer software" includes:
635 (i) a prewritten upgrade to computer software if the prewritten upgrade to the computer
636 software is not designed and developed:
637 (A) by the author or other creator of the computer software; and
638 (B) to the specifications of a specific purchaser;
639 (ii) notwithstanding Subsection [
640 developed by the author or other creator of the computer software to the specifications of a
641 specific purchaser if the computer software is sold to a person other than the purchaser; or
642 (iii) notwithstanding Subsection [
643 [
644 software:
645 (A) that is modified or enhanced to any degree; and
646 (B) if the modification or enhancement described in Subsection [
647 designed and developed to the specifications of a specific purchaser.
648 (c) Notwithstanding Subsection [
649 does not include a modification or enhancement described in Subsection [
650 the charges for the modification or enhancement are:
651 (i) reasonable; and
652 (ii) separately stated on the invoice or other statement of price provided to the
653 purchaser.
654 [
655 (i) artificially replace a missing portion of the body;
656 (ii) prevent or correct a physical deformity or physical malfunction; or
657 (iii) support a weak or deformed portion of the body.
658 (b) "Prosthetic device" includes:
659 (i) parts used in the repairs or renovation of a prosthetic device; or
660 (ii) replacement parts for a prosthetic device.
661 (c) "Prosthetic device" does not include:
662 (i) corrective eyeglasses;
663 (ii) contact lenses;
664 (iii) hearing aids; or
665 (iv) dental prostheses.
666 [
667 (i) for human wear; and
668 (ii) that is:
669 (A) designed as protection:
670 (I) to the wearer against injury or disease; or
671 (II) against damage or injury of other persons or property; and
672 (B) not suitable for general use.
673 (b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
674 commission shall make rules:
675 (i) listing the items that constitute "protective equipment"; and
676 (ii) that are consistent with the list of items that constitute "protective equipment"
677 under the agreement.
678 [
679 consideration:
680 (i) valued in money; and
681 (ii) for which tangible personal property or services are:
682 (A) sold;
683 (B) leased; or
684 (C) rented.
685 (b) "Purchase price" and "sales price" include:
686 (i) the seller's cost of the tangible personal property or services sold;
687 (ii) expenses of the seller, including:
688 (A) the cost of materials used;
689 (B) a labor cost;
690 (C) a service cost;
691 (D) interest;
692 (E) a loss;
693 (F) the cost of transportation to the seller; or
694 (G) a tax imposed on the seller; or
695 (iii) a charge by the seller for any service necessary to complete the sale.
696 (c) "Purchase price" and "sales price" do not include:
697 (i) a discount:
698 (A) in a form including:
699 (I) cash;
700 (II) term; or
701 (III) coupon;
702 (B) that is allowed by a seller;
703 (C) taken by a purchaser on a sale; and
704 (D) that is not reimbursed by a third party; or
705 (ii) the following if separately stated on an invoice, bill of sale, or similar document
706 provided to the purchaser:
707 (A) the amount of a trade-in;
708 (B) the following from credit extended on the sale of tangible personal property or
709 services:
710 (I) interest charges;
711 (II) financing charges; or
712 (III) carrying charges;
713 (C) a tax or fee legally imposed directly on the consumer;
714 (D) a delivery charge; or
715 (E) an installation charge.
716 [
717 (a) a sale of tangible personal property is made; or
718 (b) a service is furnished.
719 [
720 (a) rented to a guest for value three or more times during a calendar year; or
721 (b) advertised or held out to the public as a place that is regularly rented to guests for
722 value.
723 [
724 (a) biomass energy;
725 (b) hydroelectric energy;
726 (c) geothermal energy;
727 (d) solar energy; or
728 (e) wind energy.
729 [
730 (i) uses renewable energy to produce electricity; and
731 (ii) has a production capacity of 20 kilowatts or greater.
732 (b) A facility is a renewable energy production facility regardless of whether the
733 facility is:
734 (i) connected to an electric grid; or
735 (ii) located on the premises of an electricity consumer.
736 [
737 [
738 (a) a repair or renovation of tangible personal property that is not permanently attached
739 to real property; or
740 (b) attaching tangible personal property to other tangible personal property if the other
741 tangible personal property to which the tangible personal property is attached is not
742 permanently attached to real property.
743 [
744 sleeping quarters, and similar facilities or accommodations.
745 [
746 other than:
747 (a) resale;
748 (b) sublease; or
749 (c) subrent.
750 [
751 in tangible personal property or any other taxable transaction under Subsection 59-12-103 (1),
752 and who is selling to the user or consumer and not for resale.
753 (b) "Retailer" includes commission merchants, auctioneers, and any person regularly
754 engaged in the business of selling to users or consumers within the state.
755 [
756 otherwise, in any manner, of tangible personal property or any other taxable transaction under
757 Subsection 59-12-103 (1), for consideration.
758 (b) "Sale" includes:
759 (i) installment and credit sales;
760 (ii) any closed transaction constituting a sale;
761 (iii) any sale of electrical energy, gas, services, or entertainment taxable under this
762 chapter;
763 (iv) any transaction if the possession of property is transferred but the seller retains the
764 title as security for the payment of the price; and
765 (v) any transaction under which right to possession, operation, or use of any article of
766 tangible personal property is granted under a lease or contract and the transfer of possession
767 would be taxable if an outright sale were made.
768 [
769 [
770 personal property that is subject to a tax under this chapter is transferred:
771 (a) by a purchaser-lessee;
772 (b) to a lessor;
773 (c) for consideration; and
774 (d) if:
775 (i) the purchaser-lessee paid sales and use tax on the purchaser-lessee's initial purchase
776 of the tangible personal property;
777 (ii) the sale of the tangible personal property to the lessor is intended as a form of
778 financing:
779 (A) for the property; and
780 (B) to the purchaser-lessee; and
781 (iii) in accordance with generally accepted accounting principles, the purchaser-lessee
782 is required to:
783 (A) capitalize the property for financial reporting purposes; and
784 (B) account for the lease payments as payments made under a financing arrangement.
785 [
786 [
787 to, or amounts charged by a school:
788 (i) sales that are directly related to the school's educational functions or activities
789 including:
790 (A) the sale of:
791 (I) textbooks;
792 (II) textbook fees;
793 (III) laboratory fees;
794 (IV) laboratory supplies; or
795 (V) safety equipment;
796 (B) the sale of a uniform, protective equipment, or sports or recreational equipment
797 that:
798 (I) a student is specifically required to wear as a condition of participation in a
799 school-related event or school-related activity; and
800 (II) is not readily adaptable to general or continued usage to the extent that it takes the
801 place of ordinary clothing;
802 (C) sales of the following if the net or gross revenues generated by the sales are
803 deposited into a school district fund or school fund dedicated to school meals:
804 (I) food and food ingredients; or
805 (II) prepared food; or
806 (D) transportation charges for official school activities; or
807 (ii) amounts paid to or amounts charged by a school for admission to a school-related
808 event or school-related activity.
809 (b) "Sales relating to schools" does not include:
810 (i) bookstore sales of items that are not educational materials or supplies;
811 (ii) except as provided in Subsection [
812 (A) clothing;
813 (B) clothing accessories or equipment;
814 (C) protective equipment; or
815 (D) sports or recreational equipment; or
816 (iii) amounts paid to or amounts charged by a school for admission to a school-related
817 event or school-related activity if the amounts paid or charged are passed through to a person:
818 (A) other than a:
819 (I) school;
820 (II) nonprofit organization authorized by a school board or a governing body of a
821 private school to organize and direct a competitive secondary school activity; or
822 (III) nonprofit association authorized by a school board or a governing body of a
823 private school to organize and direct a competitive secondary school activity; and
824 (B) that is required to collect sales and use taxes under this chapter.
825 (c) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
826 commission may make rules defining the term "passed through."
827 [
828 (a) an elementary school or a secondary school that:
829 (i) is a:
830 (A) public school; or
831 (B) private school; and
832 (ii) provides instruction for one or more grades kindergarten through 12; or
833 (b) a public school district.
834 [
835 (a) tangible personal property; or
836 (b) a service.
837 [
838 personal property:
839 (i) used primarily in the process of:
840 (A) (I) manufacturing a semiconductor; or
841 (II) fabricating a semiconductor; or
842 (B) maintaining an environment suitable for a semiconductor; or
843 (ii) consumed primarily in the process of:
844 (A) (I) manufacturing a semiconductor; or
845 (II) fabricating a semiconductor; or
846 (B) maintaining an environment suitable for a semiconductor.
847 (b) "Semiconductor fabricating or processing materials" includes:
848 (i) parts used in the repairs or renovations of tangible personal property described in
849 Subsection [
850 (ii) a chemical, catalyst, or other material used to:
851 (A) produce or induce in a semiconductor a:
852 (I) chemical change; or
853 (II) physical change;
854 (B) remove impurities from a semiconductor; or
855 (C) improve the marketable condition of a semiconductor.
856 [
857 providing services to the aged as defined in Section 62A-3-101 .
858 [
859 (a) described in Section 318(C) of the agreement; and
860 (b) approved by the governing board of the agreement.
861 [
862 producing electricity.
863 [
864 (i) designed for human use; and
865 (ii) that is:
866 (A) worn in conjunction with:
867 (I) an athletic activity; or
868 (II) a recreational activity; and
869 (B) not suitable for general use.
870 (b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
871 commission shall make rules:
872 (i) listing the items that constitute "sports or recreational equipment"; and
873 (ii) that are consistent with the list of items that constitute "sports or recreational
874 equipment" under the agreement.
875 [
876 [
877 any other taxable transaction under Subsection 59-12-103 (1), in this state for any purpose
878 except sale in the regular course of business.
879 [
880 (i) may be:
881 (A) seen;
882 (B) weighed;
883 (C) measured;
884 (D) felt; or
885 (E) touched; or
886 (ii) is in any manner perceptible to the senses.
887 (b) "Tangible personal property" includes:
888 (i) electricity;
889 (ii) water;
890 (iii) gas;
891 (iv) steam; or
892 (v) prewritten computer software.
893 [
894 (i) by:
895 (A) wire;
896 (B) radio;
897 (C) lightwave; or
898 (D) other electromagnetic means; and
899 (ii) of one or more of the following:
900 (A) a sign;
901 (B) a signal;
902 (C) writing;
903 (D) an image;
904 (E) sound;
905 (F) a message;
906 (G) data; or
907 (H) other information of any nature.
908 (b) "Telephone service" includes:
909 (i) mobile telecommunications service;
910 (ii) private communications service; or
911 (iii) automated digital telephone answering service.
912 (c) "Telephone service" does not include a service or a transaction that a state or a
913 political subdivision of a state is prohibited from taxing as of July 1, 2001, under the Internet
914 Tax Freedom Act, Pub. L. No. 105-277.
915 [
916 means:
917 (a) if the location described in this Subsection [
918 the telephone service equipment:
919 (i) to which a call is charged; and
920 (ii) from which the call originates or terminates;
921 (b) if the location described in Subsection [
922 described in this Subsection [
923 signal of the telephone service first identified by:
924 (i) the telecommunications system of the seller; or
925 (ii) if the system used to transport the signal is not that of the seller, information
926 received by the seller from its service provider; or
927 (c) if the locations described in Subsection [
928 location of a purchaser's primary place of use.
929 [
930 (i) owns, controls, operates, or manages a telephone service; and
931 (ii) engages in an activity described in Subsection [
932 with or resale to any person of the telephone service.
933 (b) A person described in Subsection [
934 whether or not the Public Service Commission of Utah regulates:
935 (i) that person; or
936 (ii) the telephone service that the person owns, controls, operates, or manages.
937 [
938 (a) a cigarette;
939 (b) a cigar;
940 (c) chewing tobacco;
941 (d) pipe tobacco; or
942 (e) any other item that contains tobacco.
943 [
944 property under Subsection 59-12-103 (1), incident to the ownership or the leasing of that
945 property, item, or service.
946 (b) "Use" does not include the sale, display, demonstration, or trial of that property in
947 the regular course of business and held for resale.
948 [
949 are required to be titled, registered, or titled and registered:
950 (i) an aircraft as defined in Section 72-10-102 ;
951 (ii) a vehicle as defined in Section 41-1a-102 ;
952 (iii) an off-highway vehicle as defined in Section 41-22-2 ; or
953 (iv) a vessel as defined in Section 41-1a-102 .
954 (b) For purposes of Subsection 59-12-104 (35) only, "vehicle" includes:
955 (i) a vehicle described in Subsection [
956 (ii) (A) a locomotive;
957 (B) a freight car;
958 (C) railroad work equipment; or
959 (D) other railroad rolling stock.
960 [
961 or exchanging a vehicle as defined in Subsection [
962 [
963 means a facility that generates electricity:
964 (i) using as the primary source of energy waste materials that would be placed in a
965 landfill or refuse pit if it were not used to generate electricity, including:
966 (A) tires;
967 (B) waste coal; or
968 (C) oil shale; and
969 (ii) in amounts greater than actually required for the operation of the facility.
970 (b) "Waste energy facility" does not include a facility that incinerates:
971 (i) municipal solid waste;
972 (ii) hospital waste as defined in 40 C.F.R. 60.51c; or
973 (iii) medical/infectious waste as defined in 40 C.F.R. 60.51c.
974 [
975 [
976 electricity.
977 [
978 geographic location by the United States Postal Service.
979 Section 3. Section 59-12-103 (Effective 07/01/06) is amended to read:
980 59-12-103 (Effective 07/01/06). Sales and use tax base -- Rates -- Effective dates --
981 Use of sales and use tax revenues.
982 (1) A tax is imposed on the purchaser as provided in this part for amounts paid or
983 charged for the following transactions:
984 (a) retail sales of tangible personal property made within the state;
985 (b) amounts paid:
986 (i) (A) to a common carrier; or
987 (B) whether the following are municipally or privately owned, to a:
988 (I) telephone service provider; or
989 (II) telegraph corporation as defined in Section 54-2-1 ; and
990 (ii) for:
991 (A) all transportation;
992 (B) telephone service, other than mobile telecommunications service, that originates
993 and terminates within the boundaries of this state;
994 (C) mobile telecommunications service that originates and terminates within the
995 boundaries of one state only to the extent permitted by the Mobile Telecommunications
996 Sourcing Act, 4 U.S.C. Sec. 116 et seq.; or
997 (D) telegraph service;
998 (c) sales of the following for commercial use:
999 (i) gas;
1000 (ii) electricity;
1001 (iii) heat;
1002 (iv) coal;
1003 (v) fuel oil; or
1004 (vi) other fuels;
1005 (d) sales of the following for residential use:
1006 (i) gas;
1007 (ii) electricity;
1008 (iii) heat;
1009 (iv) coal;
1010 (v) fuel oil; or
1011 (vi) other fuels;
1012 (e) sales of prepared food;
1013 (f) except as provided in Section 59-12-104 , amounts paid or charged as admission or
1014 user fees for theaters, movies, operas, museums, planetariums, shows of any type or nature,
1015 exhibitions, concerts, carnivals, amusement parks, amusement rides, circuses, menageries,
1016 fairs, races, contests, sporting events, dances, boxing matches, wrestling matches, closed circuit
1017 television broadcasts, billiard parlors, pool parlors, bowling lanes, golf, miniature golf, golf
1018 driving ranges, batting cages, skating rinks, ski lifts, ski runs, ski trails, snowmobile trails,
1019 tennis courts, swimming pools, water slides, river runs, jeep tours, boat tours, scenic cruises,
1020 horseback rides, sports activities, or any other amusement, entertainment, recreation,
1021 exhibition, cultural, or athletic activity;
1022 (g) amounts paid or charged for services for repairs or renovations of tangible personal
1023 property, unless Section 59-12-104 provides for an exemption from sales and use tax for:
1024 (i) the tangible personal property; and
1025 (ii) parts used in the repairs or renovations of the tangible personal property described
1026 in Subsection (1)(g)(i), whether or not any parts are actually used in the repairs or renovations
1027 of that tangible personal property;
1028 (h) except as provided in Subsection 59-12-104 (7), amounts paid or charged for
1029 cleaning or washing of tangible personal property;
1030 (i) amounts paid or charged for tourist home, hotel, motel, or trailer court
1031 accommodations and services that are regularly rented for less than 30 consecutive days;
1032 (j) amounts paid or charged for laundry or dry cleaning services;
1033 (k) amounts paid or charged for leases or rentals of tangible personal property if within
1034 this state the tangible personal property is:
1035 (i) stored;
1036 (ii) used; or
1037 (iii) otherwise consumed;
1038 (l) amounts paid or charged for tangible personal property if within this state the
1039 tangible personal property is:
1040 (i) stored;
1041 (ii) used; or
1042 (iii) consumed; and
1043 (m) amounts paid or charged for prepaid telephone calling cards.
1044 (2) (a) Except as provided in Subsection (2)(b) or (f), [
1045 state tax and a local tax is imposed on a transaction described in Subsection (1) equal to the
1046 sum of:
1047 (i) a state tax imposed on the transaction at a rate of 4.75%; and
1048 (ii) a local tax equal to the sum of the tax rates a county, city, or town imposes on the
1049 transaction under this chapter other than this part.
1050 (b) (i) [
1051 and a local tax is imposed on a transaction described in Subsection (1)(d) equal to the sum of:
1052 [
1053 [
1054 the transaction under this chapter other than this part.
1055 (ii) Except as provided in Subsection (2)(f), beginning on January 1, 2007, a state tax
1056 and a local tax is imposed on amounts paid or charged for food and food ingredients equal to
1057 the sum of:
1058 (A) a state tax imposed on the amounts paid or charged for food and food ingredients
1059 at a rate of 2.75%; and
1060 (B) a local tax equal to the sum of the tax rates a county, city, or town imposes on the
1061 amounts paid or charged for food and food ingredients under this chapter other than this part.
1062 (c) Subject to Subsections (2)(d) and (e), a tax rate repeal or tax rate change for a tax
1063 rate imposed under the following shall take effect on the first day of a calendar quarter:
1064 (i) Subsection (2)(a)(i); [
1065 (ii) Subsection (2)(b)(i)[
1066 (iii) Subsection (2)(b)(ii)(A).
1067 (d) (i) For a transaction described in Subsection (2)(d)(iii), a tax rate increase shall take
1068 effect on the first day of the first billing period:
1069 (A) that begins after the effective date of the tax rate increase; and
1070 (B) if the billing period for the transaction begins before the effective date of a tax rate
1071 increase imposed under:
1072 (I) Subsection (2)(a)(i); or
1073 (II) Subsection (2)(b)(i)(A).
1074 (ii) For a transaction described in Subsection (2)(d)(iii), the repeal of a tax or a tax rate
1075 decrease shall take effect on the first day of the last billing period:
1076 (A) that began before the effective date of the repeal of the tax or the tax rate decrease;
1077 and
1078 (B) if the billing period for the transaction begins before the effective date of the repeal
1079 of the tax or the tax rate decrease imposed under:
1080 (I) Subsection (2)(a)(i); or
1081 (II) Subsection (2)(b)(i)(A).
1082 (iii) Subsections (2)(d)(i) and (ii) apply to transactions subject to a tax under:
1083 (A) Subsection (1)(b);
1084 (B) Subsection (1)(c);
1085 (C) Subsection (1)(d);
1086 (D) Subsection (1)(e);
1087 (E) Subsection (1)(f);
1088 (F) Subsection (1)(g);
1089 (G) Subsection (1)(h);
1090 (H) Subsection (1)(i);
1091 (I) Subsection (1)(j); or
1092 (J) Subsection (1)(k).
1093 (e) (i) If a tax due under Subsection (2)(a)(i) on a catalogue sale is computed on the
1094 basis of sales and use tax rates published in the catalogue, a tax rate repeal or change in a tax
1095 rate imposed under Subsection (2)(a)(i) takes effect:
1096 (A) on the first day of a calendar quarter; and
1097 (B) beginning 60 days after the effective date of the tax rate repeal or tax rate change
1098 under Subsection (2)(a)(i).
1099 (ii) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
1100 the commission may by rule define the term "catalogue sale."
1101 (f) (i) If the price of a bundled transaction is attributable to items of tangible personal
1102 property and food and food ingredients, the tax imposed on the entire bundled transaction is the
1103 sum of the tax rates described in Subsection (2)(a).
1104 (ii) For a seller that sells food and food ingredients and prepared food at the same
1105 location:
1106 (A) if the location at which the food and food ingredients and prepared food is sold is a
1107 restaurant as defined in Section 59-12-602 , the tax imposed on the food and food ingredients
1108 and prepared food is the sum of the tax rates described in Subsection (2)(a); or
1109 (B) if the location at which the food and food ingredients and prepared food is sold is
1110 not a restaurant as defined in Section 59-12-602 , the tax imposed on the food and food
1111 ingredients and prepared food is the sum of the tax rates described in Subsection (2)(b)(ii).
1112 (3) (a) Except as provided in Subsections (4) through (7), the following state taxes
1113 shall be deposited into the General Fund:
1114 (i) the tax imposed by Subsection (2)(a)(i); [
1115 (ii) the tax imposed by Subsection (2)(b)(i)[
1116 (iii) the tax imposed by Subsection (2)(b)(ii)(A).
1117 (b) The local taxes described in Subsections (2)(a)(ii), (2)(b)(i)(B), and (2)(b)(ii)(B)
1118 shall be distributed to a county, city, or town as provided in this chapter.
1119 (4) (a) Notwithstanding Subsection (3)(a), for a fiscal year beginning on or after July 1,
1120 2003, the lesser of the following amounts shall be used as provided in Subsections (4)(b)
1121 through (g):
1122 (i) for taxes listed under Subsection (3)(a), the amount of tax revenue generated:
1123 (A) by a 1/16% tax rate on the transactions described in Subsection (1); and
1124 (B) for the fiscal year; or
1125 (ii) $17,500,000.
1126 (b) (i) For a fiscal year beginning on or after July 1, 2003, 14% of the amount
1127 described in Subsection (4)(a) shall be transferred each year as dedicated credits to the
1128 Department of Natural Resources to:
1129 (A) implement the measures described in Subsections 63-34-14 (4)(a) through (d) to
1130 protect sensitive plant and animal species; or
1131 (B) award grants, up to the amount authorized by the Legislature in an appropriations
1132 act, to political subdivisions of the state to implement the measures described in Subsections
1133 63-34-14 (4)(a) through (d) to protect sensitive plant and animal species.
1134 (ii) Money transferred to the Department of Natural Resources under Subsection
1135 (4)(b)(i) may not be used to assist the United States Fish and Wildlife Service or any other
1136 person to list or attempt to have listed a species as threatened or endangered under the
1137 Endangered Species Act of 1973, 16 U.S.C. Sec. 1531 et seq.
1138 (iii) At the end of each fiscal year:
1139 (A) 50% of any unexpended dedicated credits shall lapse to the Water Resources
1140 Conservation and Development Fund created in Section 73-10-24 ;
1141 (B) 25% of any unexpended dedicated credits shall lapse to the Utah Wastewater Loan
1142 Program Subaccount created in Section 73-10c-5 ; and
1143 (C) 25% of any unexpended dedicated credits shall lapse to the Drinking Water Loan
1144 Program Subaccount created in Section 73-10c-5 .
1145 (c) For a fiscal year beginning on or after July 1, 2003, 3% of the amount described in
1146 Subsection (4)(b)(i) shall be deposited each year in the Agriculture Resource Development
1147 Fund created in Section 4-18-6 .
1148 (d) (i) For a fiscal year beginning on or after July 1, 2003, 1% of the amount described
1149 in Subsection (4)(a) shall be transferred each year as dedicated credits to the Division of Water
1150 Rights to cover the costs incurred in hiring legal and technical staff for the adjudication of
1151 water rights.
1152 (ii) At the end of each fiscal year:
1153 (A) 50% of any unexpended dedicated credits shall lapse to the Water Resources
1154 Conservation and Development Fund created in Section 73-10-24 ;
1155 (B) 25% of any unexpended dedicated credits shall lapse to the Utah Wastewater Loan
1156 Program Subaccount created in Section 73-10c-5 ; and
1157 (C) 25% of any unexpended dedicated credits shall lapse to the Drinking Water Loan
1158 Program Subaccount created in Section 73-10c-5 .
1159 (e) (i) For a fiscal year beginning on or after July 1, 2003, 41% of the amount described
1160 in Subsection (4)(a) shall be deposited in the Water Resources Conservation and Development
1161 Fund created in Section 73-10-24 for use by the Division of Water Resources.
1162 (ii) In addition to the uses allowed of the Water Resources Conservation and
1163 Development Fund under Section 73-10-24 , the Water Resources Conservation and
1164 Development Fund may also be used to:
1165 (A) provide a portion of the local cost share, not to exceed in any fiscal year 50% of the
1166 funds made available to the Division of Water Resources under this section, of potential project
1167 features of the Central Utah Project;
1168 (B) conduct hydrologic and geotechnical investigations by the Department of Natural
1169 Resources in a cooperative effort with other state, federal, or local entities, for the purpose of
1170 quantifying surface and ground water resources and describing the hydrologic systems of an
1171 area in sufficient detail so as to enable local and state resource managers to plan for and
1172 accommodate growth in water use without jeopardizing the resource;
1173 (C) fund state required dam safety improvements; and
1174 (D) protect the state's interest in interstate water compact allocations, including the
1175 hiring of technical and legal staff.
1176 (f) For a fiscal year beginning on or after July 1, 2003, 20.5% of the amount described
1177 in Subsection (4)(a) shall be deposited in the Utah Wastewater Loan Program Subaccount
1178 created in Section 73-10c-5 for use by the Water Quality Board to fund wastewater projects.
1179 (g) For a fiscal year beginning on or after July 1, 2003, 20.5% of the amount described
1180 in Subsection (4)(a) shall be deposited in the Drinking Water Loan Program Subaccount
1181 created in Section 73-10c-5 for use by the Division of Drinking Water to:
1182 (i) provide for the installation and repair of collection, treatment, storage, and
1183 distribution facilities for any public water system, as defined in Section 19-4-102 ;
1184 (ii) develop underground sources of water, including springs and wells; and
1185 (iii) develop surface water sources.
1186 (5) (a) Notwithstanding Subsection (3)(a), for a fiscal year beginning on or after July 1,
1187 2003, the lesser of the following amounts shall be used as provided in Subsections (5)(b)
1188 through (d):
1189 (i) for taxes listed under Subsection (3)(a), the amount of tax revenue generated:
1190 (A) by a 1/16% tax rate on the transactions described in Subsection (1); and
1191 (B) for the fiscal year; or
1192 (ii) $18,743,000.
1193 (b) (i) For a fiscal year beginning on or after July 1, 2003, 3% of the amount described
1194 in Subsection (5)(a) shall be deposited each year in the Transportation Corridor Preservation
1195 Revolving Loan Fund created in Section 72-2-117 .
1196 (ii) At least 50% of the money deposited in the Transportation Corridor Preservation
1197 Revolving Loan Fund under Subsection (5)(b)(i) shall be used to fund loan applications made
1198 by the Department of Transportation at the request of local governments.
1199 (c) For a fiscal year beginning on or after July 1, 2003, 3% of the amount described in
1200 Subsection (5)(a) shall be transferred each year as nonlapsing dedicated credits to the
1201 Department of Transportation for the State Park Access Highways Improvement Program
1202 created in Section 72-3-207 .
1203 (d) For a fiscal year beginning on or after July 1, 2003, 94% of the amount described in
1204 Subsection (5)(a) shall be deposited in the class B and class C roads account to be expended as
1205 provided in Title 72, Chapter 2, Transportation Finances Act, for the use of class B and C
1206 roads.
1207 (6) (a) Notwithstanding Subsection (3)(a) and until Subsection (6)(b) applies,
1208 beginning on January 1, 2000, the Division of Finance shall deposit into the Centennial
1209 Highway Fund Restricted Account created in Section 72-2-118 a portion of the taxes listed
1210 under Subsection (3)(a) equal to the revenues generated by a 1/64% tax rate on the taxable
1211 transactions under Subsection (1).
1212 (b) Notwithstanding Subsection (3)(a), when the highway general obligation bonds
1213 have been paid off and the highway projects completed that are intended to be paid from
1214 revenues deposited in the Centennial Highway Fund Restricted Account as determined by the
1215 Executive Appropriations Committee under Subsection 72-2-118 (6)(d), the Division of
1216 Finance shall deposit into the Transportation Investment Fund of 2005 created by Section
1217 72-2-124 a portion of the taxes listed under Subsection (3)(a) equal to the revenues generated
1218 by a 1/64% tax rate on the taxable transactions under Subsection (1).
1219 (7) (a) Notwithstanding Subsection (3)(a), for fiscal years beginning on or after fiscal
1220 year 2004-05, the commission shall each year on or before the September 30 immediately
1221 following the last day of the fiscal year deposit the difference described in Subsection (7)(b)
1222 into the Remote Sales Restricted Account created in Section 59-12-103.2 if that difference is
1223 greater than $0.
1224 (b) The difference described in Subsection (7)(a) is equal to the difference between:
1225 (i) the total amount of the following revenues the commission received from sellers
1226 collecting a tax in accordance with Subsection 59-12-107 (1)(b) for the fiscal year immediately
1227 preceding the September 30 described in Subsection (7)(a):
1228 (A) revenues under Subsection (2)(a)(i); [
1229 (B) revenues under Subsection (2)(b)(i)(A); and
1230 (C) revenues under Subsection (2)(b)(ii)(A); and
1231 (ii) $7,279,673.
1232 (8) (a) Notwithstanding Subsection (3)(a), in addition to the amount deposited in
1233 Subsection (6)(a), and until Subsection (8)(b) applies, for a fiscal year beginning on or after
1234 July 1, 2005, the Division of Finance shall deposit $59,594,700 of the revenues generated by
1235 the taxes described in Subsections (2)(a)(i) [
1236 Centennial Highway Fund Restricted Account created by Section 72-2-118 .
1237 (b) Notwithstanding Subsection (3)(a) and in addition to the amounts deposited under
1238 Subsection (6)(b), when the highway general obligation bonds have been paid off and the
1239 highway projects completed that are intended to be paid from revenues deposited in the
1240 Centennial Highway Fund Restricted Account as determined by the Executive Appropriations
1241 Committee under Subsection 72-2-118 (6)(d), the Division of Finance shall deposit
1242 $59,594,700 of the revenues generated by the taxes described in Subsections (2)(a)(i) [
1243 (2)(b)(i)(A), and (2)(b)(ii)(A) into the Transportation Investment Fund of 2005 created by
1244 Section 72-2-124 .
1245 Section 4. Section 59-12-108 is amended to read:
1246 59-12-108. Monthly payment -- Penalty -- Amount of tax a seller may retain --
1247 Certain amounts allocated to local taxing jurisdictions.
1248 (1) (a) Notwithstanding Section 59-12-107 , a seller that has a tax liability under this
1249 chapter of $50,000 or more for the previous calendar year shall:
1250 (i) file a return with the commission:
1251 (A) monthly on or before the last day of the month immediately following the month
1252 for which the seller collects a tax under this chapter; and
1253 (B) for the month for which the seller collects a tax under this chapter; and
1254 (ii) (A) except as provided in Subsection (1)(a)(ii)(B) or (1)(c), remit with the return
1255 required by Subsection (1)(a)(i) the amount the person is required to remit to the commission
1256 for each tax, fee, or charge described in Subsection (1)(b):
1257 (I) if that seller's tax liability under this chapter for the previous calendar year is less
1258 than $96,000, by any method permitted by the commission; or
1259 (II) if that seller's tax liability under this chapter for the previous calendar year is
1260 $96,000 or more, by electronic funds transfer; or
1261 (B) notwithstanding Subsection (1)(a)(ii)(A), a seller shall remit electronically with the
1262 return required by Subsection (1)(a)(i) the amount the person is required to remit to the
1263 commission for each tax, fee, or charge described in Subsection (1)(b) if that seller:
1264 (I) is required by Section 59-12-107 to file the return electronically; or
1265 (II) (Aa) is required to collect and remit a tax under Subsection 59-12-107 (1)(a); and
1266 (Bb) files a simplified electronic return.
1267 (b) Subsections (1)(a)(i) and (ii) apply to the following taxes, fees, or charges:
1268 (i) a tax under Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;
1269 (ii) a fee under Section 19-6-716 ;
1270 (iii) a fee under Section 19-6-805 ;
1271 (iv) a charge under Section 69-2-5.5 ; or
1272 (v) a tax under this chapter.
1273 (c) Notwithstanding Subsection (1)(a)(ii) and in accordance with Title 63, Chapter 46a,
1274 Utah Administrative Rulemaking Act, the commission shall make rules providing for a method
1275 for making same-day payments other than by electronic funds transfer if making payments by
1276 electronic funds transfer fails.
1277 (d) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
1278 commission shall establish by rule procedures and requirements for determining the amount a
1279 seller is required to remit to the commission under this Subsection (1).
1280 (2) (a) Except as provided in Subsection (2)(b) or (c), a seller subject to Subsection (1)
1281 or a seller described in Subsection (3) may retain each month an amount not to exceed:
1282 (i) 1.31% of any amounts the seller is required to remit to the commission for:
1283 (A) for a transaction described in Subsection 59-12-103 (1) that is subject to the sum of
1284 the tax rates described in Subsection 59-12-103 (2)(a), the month for which the seller is filing a
1285 return in accordance with Subsection (1); and
1286 (B) an agreement sales and use tax; and
1287 (ii) for a transaction described in Subsection 59-12-103 (1) that is subject to the sum of
1288 the tax rates described in Subsection 59-12-103 (2)(b)(ii), the sum of:
1289 (A) 1.31% of any amounts the seller is required to remit to the commission in
1290 accordance with Subsection 59-12-103 (2)(b)(ii) for:
1291 (I) the month for which the seller is filing a return in accordance with Subsection (1);
1292 and
1293 (II) an agreement sales and use tax; and
1294 (B) 1.31% of the difference between:
1295 (I) the amounts the seller would have been required to remit to the commission:
1296 (Aa) in accordance with Subsection 59-12-103 (2)(a) if the transaction had been subject
1297 to the sum of the tax rates described in Subsection 59-12-103 (2)(a);
1298 (Bb) for the month for which the seller is filing a return in accordance with Subsection
1299 (1); and
1300 (Cc) for an agreement sales and use tax; and
1301 (II) the amounts the seller is required to remit to the commission:
1302 (Aa) in accordance with Subsection 59-12-103 (2)(b)(ii);
1303 (Bb) for the month for which the seller is filing a return in accordance with Subsection
1304 (1); and
1305 (Cc) for an agreement sales and use tax; and
1306 [
1307 (A) for the month for which the seller is filing a return in accordance with Subsection
1308 (1); and
1309 (B) under:
1310 (I) Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act;
1311 (II) Subsection 59-12-603 (1)(a)(i); or
1312 (III) Subsection 59-12-603 (1)(a)(ii).
1313 [
1314 required to remit taxes monthly in accordance with Subsection (1) may not retain any amount
1315 under Subsection (2)(a).
1316 (3) A seller that has a tax liability under this chapter for the previous calendar year of
1317 less than $50,000 may:
1318 (a) voluntarily meet the requirements of Subsection (1); and
1319 (b) if the seller voluntarily meets the requirements of Subsection (1), retain the
1320 amounts allowed by Subsection (2)(a).
1321 (4) Penalties for late payment shall be as provided in Section 59-1-401 .
1322 (5) (a) For any amounts required to be remitted to the commission under this part, the
1323 commission shall each month calculate an amount equal to the difference between:
1324 (i) the total amount retained for that month by all sellers had the [
1325 percentages listed under Subsection (2)(a)(i) and (ii) been 1.5%; and
1326 (ii) the total amount retained for that month by all sellers at the [
1327 percentages listed under Subsection (2)(a)(i) and (ii).
1328 (b) The commission shall each month allocate the amount calculated under Subsection
1329 (5)(a) to each local taxing jurisdiction on the basis of the proportion of agreement sales and use
1330 tax that the commission distributes to each local taxing jurisdiction for that month compared to
1331 the total agreement sales and use tax that the commission distributes for that month to all local
1332 taxing jurisdictions.
1333 Section 5. Appropriation.
1334 (1) Subject to Subsection (2), there is appropriated from the General Fund, for fiscal
1335 year 2006-07 only, $6,000,000 to the State Tax Commission for distribution to certain business
1336 locations to reimburse some of the business location's costs in complying with the reduced
1337 sales and use tax rate imposed on food and food ingredients.
1338 (2) The Legislature intends that the State Tax Commission may expend up to 2% of the
1339 amount appropriated for administrative costs.
1340 (3) The Legislature intends that, to the extent funds are available, the State Tax
1341 Commission distribute these monies as provided in Subsections (4) and (5).
1342 (4) (a) Except as provided in Subsection (4)(b), the State Tax Commission shall
1343 reimburse a business location:
1344 (i) that:
1345 (A) in 2005, remitted taxes imposed by Title 59, Chapter 12, Sales and Use Tax Act, in
1346 an amount greater than or equal to $15,000 but less than or equal to $500,000;
1347 (B) remitted sales and use taxes on food and food ingredients as defined in Section
1348 59-12-102 to the State Tax Commission before March 1, 2006; and
1349 (C) submits a request for reimbursement to the State Tax Commission postmarked
1350 before January 1, 2007;
1351 (ii) for the verifiable amounts that the business location actually expended:
1352 (A) after May 1, 2006, but on or before December 31, 2006; and
1353 (B) to purchase computer hardware and software to account for sales under the reduced
1354 sales and use tax rate imposed on food and food ingredients; and
1355 (iii) in an amount that does not exceed the lesser of:
1356 (A) 50% of the verifiable amounts described in Subsection (4)(a)(ii); or
1357 (B) $10,000.
1358 (b) If the total amount of requests for reimbursement under Subsection (4)(a) exceed
1359 the monies that are available for reimbursement, the State Tax Commission shall reduce each
1360 claim by a pro rata share.
1361 (5) (a) Except as provided in Subsection (5)(b), if, after the State Tax Commission
1362 makes the reimbursements required by Subsection (4), monies described in Subsection (1)
1363 remain for reimbursement, the State Tax Commission shall reimburse a business location:
1364 (i) that:
1365 (A) in 2005, remitted taxes imposed by Title 59, Chapter 12, Sales and Use Tax Act, in
1366 an amount greater than or equal to $15,000;
1367 (B) remitted sales and use taxes on food and food ingredients as defined in Section
1368 59-12-102 to the State Tax Commission before March 1, 2006; and
1369 (C) submits a request for reimbursement to the State Tax Commission postmarked
1370 before January 1, 2007;
1371 (ii) for the verifiable amounts that the business location actually expended:
1372 (A) after May 1, 2006, but on or before December 31, 2006; and
1373 (B) for a business location that, in 2005, remitted taxes imposed by Title 59, Chapter
1374 12, Sales and Use Tax Act:
1375 (I) in an amount greater than or equal to $15,000 but less than or equal to $500,000, for
1376 amounts expended to purchase computer hardware, software, or programming:
1377 (Aa) to account for sales under the reduced sales and use tax rate imposed on food and
1378 food ingredients; and
1379 (Bb) that were not reimbursed in accordance with Subsection (4); or
1380 (II) in an amount greater than $500,000, for amounts expended to purchase computer
1381 hardware, software, or programming to account for sales under the reduced sales and use tax
1382 rate imposed on food and food ingredients; and
1383 (iii) in an amount that does not exceed 50% of the verifiable amounts described in
1384 Subsection (5)(a)(ii).
1385 (b) If the total amount of requests for reimbursement under Subsection (5)(a) exceed
1386 the monies that are available for reimbursement, the State Tax Commission shall reduce each
1387 claim by a pro rata share.
1388 Section 6. Effective date.
1389 This bill takes effect on January 1, 2007.
1390 Section 7. Coordinating H.B. 109 with S.B. 233 by modifying substantive
1391 language.
1392 If this H.B. 109 and S.B. 233, Sales and Use Tax Revisions, both pass, and S.B. 233
1393 repeals the definition of "agreement sales and use tax" and enacts the definition of "combined
1394 sales and use tax" in Section 59-12-102 , it is the intent of the Legislature that the Utah Code
1395 database prepared for publication by the Office of Legislative Research and General Counsel
1396 shall provide that:
1397 (1) the amendments made by H.B. 109 to the definition of "agreement sales and use
1398 tax" in Section 59-12-102 not be given effect;
1399 (2) any reference to "agreement sales and use tax" enacted by H.B. 109 be changed to
1400 "combined sales and use tax"; and
1401 (3) the definition of "combined sales and use tax" in S.B. 233 be amended so that it
1402 includes a citation to "Subsection 59-12-103 (2)(a)(i) or (2)(b)(ii)(A)".
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