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Third Substitute H.B. 109

Senator Michael G. Waddoups proposes the following substitute bill:


             1     
SALES AND USE TAX - FOOD AND FOOD INGREDIENTS

             2     
2006 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Merlynn T. Newbold

             5     
Senate Sponsor: ____________

             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          [(iii)] (iv) Section 59-12-301 ;
             79          [(iv)] (v) Section 59-12-352 ;
             80          [(v)] (vi) Section 59-12-353 ;
             81          [(vi)] (vii) Section 59-12-603 ; or
             82          [(vii)] (viii) Section 59-12-1201 .
             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          [(10)] (11) "Certified automated system" means software certified by the governing
             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 [(10)] (11)(a)(i).
             183          [(11)] (12) "Certified service provider" means an agent certified:
             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          [(12)] (13) (a) Subject to Subsection [(12)] (13)(b), "clothing" means all human
             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          [(13)] (14) (a) For purposes of Subsection 59-12-104 (42), "coin-operated amusement
             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          [(14)] (15) "Commercial use" means the use of gas, electricity, heat, coal, fuel oil, or
             208      other fuels that does not constitute industrial use under Subsection [(34)] (35) or residential use
             209      under Subsection [(68)] (69).
             210          [(15)] (16) (a) "Common carrier" means a person engaged in or transacting the
             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 [(15)] (16)(b)(i), in accordance with Title 63, Chapter
             217      46a, Utah Administrative Rulemaking Act, the commission may make rules defining what
             218      constitutes a person's place of employment.
             219          [(16)] (17) "Component part" includes:
             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          [(17)] (18) "Computer" means an electronic device that accepts information:
             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          [(18)] (19) "Computer software" means a set of coded instructions designed to cause:
             231          (a) a computer to perform a task; or
             232          (b) automatic data processing equipment to perform a task.
             233          [(19)] (20) "Construction materials" means any tangible personal property that will be
             234      converted into real property.
             235          [(20)] (21) "Delivered electronically" means delivered to a purchaser by means other
             236      than tangible storage media.
             237          [(21)] (22) (a) "Delivery charge" means a charge:
             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 [(21)] (22)(a)(i) to a location designated by the purchaser.
             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          [(22)] (23) "Dietary supplement" means a product, other than tobacco, that:
             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 [(22)] (23)(b)(i) through (v);
             261          (c) (i) except as provided in Subsection [(22)] (23)(c)(ii), is intended for ingestion in:
             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 [(22)] (23)(c)(i), if the product is not intended for
             269      ingestion in a form described in Subsections [(22)] (23)(c)(i)(A) through (F), is not
             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          [(23)] (24) (a) "Direct mail" means printed material delivered or distributed by United
             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          [(24)] (25) (a) "Drug" means a compound, substance, or preparation, or a component of
             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 [(24)] (25)(a)(i)(A) through
             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          [(25)] (26) (a) Except as provided in Subsection [(25)] (26)(c), "durable medical
             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 [(25)] (26)(a).
             318          (c) Notwithstanding Subsection [(25)] (26)(a), "durable medical equipment" does not
             319      include mobility enhancing equipment.
             320          [(26)] (27) "Electronic" means:
             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 [(26)] (27)(b)(i) through (vi).
             330          [(27)] (28) (a) "Food and food ingredients" means substances:
             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          [(28)] (29) (a) "Fundraising sales" means sales:
             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 [(28)] (29)(a)(iii), "officially sanctioned school activity"
             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          [(29)] (30) "Geothermal energy" means energy contained in heat that continuously
             364      flows outward from the earth that is used as the sole source of energy to produce electricity.
             365          [(30)] (31) "Governing board of the agreement" means the governing board of the
             366      agreement that is:
             367          (a) authorized to administer the agreement; and


             368          (b) established in accordance with the agreement.
             369          [(31)] (32) (a) "Hearing aid" means:
             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 [(31)] (32)(a)(i)(B) or [(31)] (32)(a)(ii), an
             379      instrument or device having an electronic component that is designed to be worn on the body;
             380          (ii) except as provided in Subsection [(31)] (32)(a)(iii), an assistive listening device or
             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 [(31)]
             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 [(31)]
             396      (32)(b)(iii)(A)(I) through (V).
             397          [(32)] (33) (a) "Hearing aid accessory" means a hearing aid:
             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 [(31)] (32)(b)(i); or
             411          (B) assistive listening device or system described in Subsection [(31)] (32)(b)(ii) or
             412      (iii); or
             413          (ii) a hearing aid battery.
             414          [(33)] (34) "Hydroelectric energy" means water used as the sole source of energy to
             415      produce electricity.
             416          [(34)] (35) "Industrial use" means the use of natural gas, electricity, heat, coal, fuel oil,
             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 [(34)] (35)(d)(i) would otherwise be made with
             443      nonrecycled materials.
             444          [(35)] (36) (a) Except as provided in Subsection [(35)] (36)(b), "installation charge"
             445      means a charge for installing tangible personal property.
             446          (b) Notwithstanding Subsection [(35)] (36)(a), "installation charge" does not include a
             447      charge for repairs or renovations of tangible personal property.
             448          [(36)] (37) (a) "Lease" or "rental" means a transfer of possession or control of tangible
             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 [(36)] (37)(c)(iii), an operator is necessary for
             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          [(37)] (38) "Load and leave" means delivery to a purchaser by use of a tangible storage
             476      media if the tangible storage media is not physically transferred to the purchaser.
             477          [(38)] (39) "Local taxing jurisdiction" means a:
             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          [(39)] (40) "Manufactured home" is as defined in Section 58-56-3 .
             482          [(40)] (41) For purposes of Subsection 59-12-104 (14), "manufacturing facility" means:
             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 [(40)] (41)(b)(i) would otherwise be made with
             499      nonrecycled materials.
             500          [(41)] (42) "Mobile home" is as defined in Section 58-56-3 .
             501          [(42)] (43) "Mobile telecommunications service" is as defined in the Mobile
             502      Telecommunications Sourcing Act, 4 U.S.C. Sec. 124.
             503          [(43)] (44) (a) Except as provided in Subsection [(43)] (44)(c), "mobility enhancing
             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 [(43)] (44)(a).
             513          (c) Notwithstanding Subsection [(43)] (44)(a), "mobility enhancing equipment" does
             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          [(44)] (45) "Model 1 seller" means a seller that has selected a certified service provider
             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          [(45)] (46) "Model 2 seller" means a seller that:
             525          (a) except as provided in Subsection [(45)] (46)(b), has selected a certified automated
             526      system to perform the seller's sales tax functions for agreement sales and use taxes; and
             527          (b) notwithstanding Subsection [(45)] (46)(a), retains responsibility for remitting all of
             528      the sales tax:
             529          (i) collected by the seller; and
             530          (ii) to the appropriate local taxing jurisdiction.
             531          [(46)] (47) (a) Subject to Subsection [(46)] (47)(b), "model 3 seller" means a seller that
             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 [(46)] (47)(a), "model 3 seller" includes an affiliated
             540      group of sellers using the same proprietary system.
             541          [(47)] (48) "Modular home" means a modular unit as defined in Section 58-56-3 .
             542          [(48)] (49) "Motor vehicle" is as defined in Section 41-1a-102 .
             543          [(49)] (50) (a) "Other fuels" means products that burn independently to produce heat or
             544      energy.
             545          (b) "Other fuels" includes oxygen when it is used in the manufacturing of tangible
             546      personal property.
             547          [(50)] (51) "Pawnbroker" is as defined in Section 13-32a-102 .
             548          [(51)] (52) "Pawn transaction" is as defined in Section 13-32a-102 .
             549          [(52)] (53) (a) "Permanently attached to real property" means that for tangible personal
             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 [(52)] (53)(b)(ii).
             575          [(53)] (54) "Person" includes any individual, firm, partnership, joint venture,
             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          [(54)] (55) "Place of primary use":
             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          [(55)] (56) "Postproduction" means an activity related to the finishing or duplication of
             588      a medium described in Subsection 59-12-104 (60)(a).
             589          [(56)] (57) (a) "Prepared food" means:
             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 [(56)] (57)(c), food sold with an eating utensil
             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 [(56)] (57)(b)(ii)(A)(I) through


             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 [(56)] (57)(b)(ii)(A) to prevent food borne illness.
             620          (c) Notwithstanding Subsection [(56)] (57)(a)(iii), an eating utensil provided by the
             621      seller does not include the following used to transport the food:
             622          (i) a container; or
             623          (ii) packaging.
             624          [(57)] (58) "Prescription" means an order, formula, or recipe that is issued:
             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          [(58)] (59) (a) Except as provided in Subsection [(58)] (59)(b)(ii) or (iii), "prewritten
             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 [(58)] (59)(a), computer software designed and
             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 [(58)] (59)(a) and except as provided in Subsection
             643      [(58)] (59)(c), prewritten computer software or a prewritten portion of prewritten computer
             644      software:
             645          (A) that is modified or enhanced to any degree; and
             646          (B) if the modification or enhancement described in Subsection [(58)] (59)(b)(iii)(A) is


             647      designed and developed to the specifications of a specific purchaser.
             648          (c) Notwithstanding Subsection [(58)] (59)(b)(iii), "prewritten computer software"
             649      does not include a modification or enhancement described in Subsection [(58)] (59)(b)(iii) if
             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          [(59)] (60) (a) "Prosthetic device" means a device that is worn on or in the body to:
             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          [(60)] (61) (a) "Protective equipment" means an item:
             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          [(61)] (62) (a) "Purchase price" and "sales price" mean the total amount of
             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          [(62)] (63) "Purchaser" means a person to whom:
             717          (a) a sale of tangible personal property is made; or
             718          (b) a service is furnished.
             719          [(63)] (64) "Regularly rented" means:
             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          [(64)] (65) "Renewable energy" means:
             724          (a) biomass energy;
             725          (b) hydroelectric energy;
             726          (c) geothermal energy;
             727          (d) solar energy; or
             728          (e) wind energy.
             729          [(65)] (66) (a) "Renewable energy production facility" means a facility that:
             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          [(66)] (67) "Rental" is as defined in Subsection [(36)] (37).
             737          [(67)] (68) "Repairs or renovations of tangible personal property" means:
             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          [(68)] (69) "Residential use" means the use in or around a home, apartment building,
             744      sleeping quarters, and similar facilities or accommodations.
             745          [(69)] (70) "Retail sale" or "sale at retail" means a sale, lease, or rental for a purpose
             746      other than:
             747          (a) resale;
             748          (b) sublease; or
             749          (c) subrent.
             750          [(70)] (71) (a) "Retailer" means any person engaged in a regularly organized business
             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          [(71)] (72) (a) "Sale" means any transfer of title, exchange, or barter, conditional or
             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          [(72)] (73) "Sale at retail" is as defined in Subsection [(69)] (70).
             769          [(73)] (74) "Sale-leaseback transaction" means a transaction by which title to tangible
             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          [(74)] (75) "Sales price" is as defined in Subsection [(61)] (62).
             786          [(75)] (76) (a) "Sales relating to schools" means the following sales by, amounts paid
             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 [(75)] (76)(a)(i)(B):
             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          [(76)] (77) For purposes of this section and Section 59-12-104 , "school" means:
             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          [(77)] (78) "Seller" means a person that makes a sale, lease, or rental of:
             835          (a) tangible personal property; or
             836          (b) a service.
             837          [(78)] (79) (a) "Semiconductor fabricating or processing materials" means tangible
             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 [(78)] (79)(a); or
             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          [(79)] (80) "Senior citizen center" means a facility having the primary purpose of
             857      providing services to the aged as defined in Section 62A-3-101 .
             858          [(80)] (81) "Simplified electronic return" means the electronic return:
             859          (a) described in Section 318(C) of the agreement; and
             860          (b) approved by the governing board of the agreement.
             861          [(81)] (82) "Solar energy" means the sun used as the sole source of energy for
             862      producing electricity.
             863          [(82)] (83) (a) "Sports or recreational equipment" means an item:


             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          [(83)] (84) "State" means the state of Utah, its departments, and agencies.
             876          [(84)] (85) "Storage" means any keeping or retention of tangible personal property or
             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          [(85)] (86) (a) "Tangible personal property" means personal property that:
             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          [(86)] (87) (a) "Telephone service" means a two-way transmission:
             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          [(87)] (88) Notwithstanding where a call is billed or paid, "telephone service address"
             916      means:
             917          (a) if the location described in this Subsection [(87)] (88)(a) is known, the location of
             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 [(87)] (88)(a) is not known but the location
             922      described in this Subsection [(87)] (88)(b) is known, the location of the origination point of the
             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 [(87)] (88)(a) or (b) are not known, the
             928      location of a purchaser's primary place of use.
             929          [(88)] (89) (a) "Telephone service provider" means a person that:
             930          (i) owns, controls, operates, or manages a telephone service; and
             931          (ii) engages in an activity described in Subsection [(88)] (89)(a)(i) for the shared use
             932      with or resale to any person of the telephone service.
             933          (b) A person described in Subsection [(88)] (89)(a) is a telephone service provider
             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          [(89)] (90) "Tobacco" means:
             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          [(90)] (91) (a) "Use" means the exercise of any right or power over tangible personal
             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          [(91)] (92) (a) Subject to Subsection [(91)] (92)(b), "vehicle" means the following that
             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 [(91)] (92)(a); or
             956          (ii) (A) a locomotive;


             957          (B) a freight car;
             958          (C) railroad work equipment; or
             959          (D) other railroad rolling stock.
             960          [(92)] (93) "Vehicle dealer" means a person engaged in the business of buying, selling,
             961      or exchanging a vehicle as defined in Subsection [(91)] (92).
             962          [(93)] (94) (a) Except as provided in Subsection [(93)] (94)(b), "waste energy facility"
             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          [(94)] (95) "Watercraft" means a vessel as defined in Section 73-18-2 .
             975          [(95)] (96) "Wind energy" means wind used as the sole source of energy to produce
             976      electricity.
             977          [(96)] (97) "ZIP Code" means a Zoning Improvement Plan Code assigned to a
             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), [beginning on July 1, 2001,] a
             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) [Notwithstanding Subsection (2)(a), beginning on July 1, 2001, a] A state tax
             1051      and a local tax is imposed on a transaction described in Subsection (1)(d) equal to the sum of:
             1052          [(i)] (A) a state tax imposed on the transaction at a rate of 2%; and
             1053          [(ii)] (B) a local tax equal to the sum of the tax rates a county, city, or town imposes on
             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); [or]
             1065          (ii) Subsection (2)(b)(i)[.](A); or
             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); [or]
             1115          (ii) the tax imposed by Subsection (2)(b)(i)[.](A); or
             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); [and]
             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) [and], (2)(b)(i)(A), and (2)(b)(ii)(A) into the


             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) [and],
             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          [(ii)] (iii) 1% of any amounts the seller is required to remit to the commission:
             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          [(b) Notwithstanding Subsection (2)(a), a] (c) A state government entity that is
             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 [percentage]
             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 [percentage]
             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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