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S.B. 28

             1     

SALES AND USE TAX - EXEMPTION FOR

             2     
ISOLATED OR OCCASIONAL SALES

             3     
2006 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Chief Sponsor: Lyle W. Hillyard

             6     
House Sponsor: Wayne A. Harper

             7     
             8      LONG TITLE
             9      General Description:
             10          This bill modifies the Sales and Use Tax Act relating to sales and use tax exemptions.
             11      Highlighted Provisions:
             12          This bill:
             13          .    modifies the sales and use tax exemption for isolated and occasional sales to
             14      provide the circumstances under which the exemption applies;
             15          .    grants rulemaking authority to the State Tax Commission; and
             16          .    makes technical changes.
             17      Monies Appropriated in this Bill:
             18          None
             19      Other Special Clauses:
             20          This bill takes effect on July 1, 2006.
             21      Utah Code Sections Affected:
             22      AMENDS:
             23          59-12-104, as last amended by Chapters 158, 203, 209, 240 and 246, Laws of Utah
             24      2005
             25     
             26      Be it enacted by the Legislature of the state of Utah:
             27          Section 1. Section 59-12-104 is amended to read:


             28           59-12-104. Exemptions.
             29          The following sales and uses are exempt from the taxes imposed by this chapter:
             30          (1) sales of aviation fuel, motor fuel, and special fuel subject to a Utah state excise tax
             31      under Chapter 13, Motor and Special Fuel Tax Act;
             32          (2) sales to the state, its institutions, and its political subdivisions; however, this
             33      exemption does not apply to sales of:
             34          (a) construction materials except:
             35          (i) construction materials purchased by or on behalf of institutions of the public
             36      education system as defined in Utah Constitution Article X, Section 2, provided the
             37      construction materials are clearly identified and segregated and installed or converted to real
             38      property which is owned by institutions of the public education system; and
             39          (ii) construction materials purchased by the state, its institutions, or its political
             40      subdivisions which are installed or converted to real property by employees of the state, its
             41      institutions, or its political subdivisions; or
             42          (b) tangible personal property in connection with the construction, operation,
             43      maintenance, repair, or replacement of a project, as defined in Section 11-13-103 , or facilities
             44      providing additional project capacity, as defined in Section 11-13-103 ;
             45          (3) (a) sales of an item described in Subsection (3)(b) from a vending machine if:
             46          (i) the proceeds of each sale do not exceed $1; and
             47          (ii) the seller or operator of the vending machine reports an amount equal to 150% of
             48      the cost of the item described in Subsection (3)(b) as goods consumed; and
             49          (b) Subsection (3)(a) applies to:
             50          (i) food and food ingredients; or
             51          (ii) prepared food;
             52          (4) sales of the following to a commercial airline carrier for in-flight consumption:
             53          (a) food and food ingredients;
             54          (b) prepared food; or
             55          (c) services related to Subsection (4)(a) or (b);
             56          (5) sales of parts and equipment for installation in aircraft operated by common carriers
             57      in interstate or foreign commerce;
             58          (6) sales of commercials, motion picture films, prerecorded audio program tapes or


             59      records, and prerecorded video tapes by a producer, distributor, or studio to a motion picture
             60      exhibitor, distributor, or commercial television or radio broadcaster;
             61          (7) sales of cleaning or washing of tangible personal property by a coin-operated
             62      laundry or dry cleaning machine;
             63          (8) sales made to or by religious or charitable institutions in the conduct of their regular
             64      religious or charitable functions and activities, if the requirements of Section 59-12-104.1 are
             65      fulfilled;
             66          (9) sales of vehicles of a type required to be registered under the motor vehicle laws of
             67      this state which are made to bona fide nonresidents of this state and are not afterwards
             68      registered or used in this state except as necessary to transport them to the borders of this state;
             69          (10) (a) amounts paid for an item described in Subsection (10)(b) if:
             70          (i) the item is intended for human use; and
             71          (ii) (A) a prescription was issued for the item; or
             72          (B) the item was purchased by a hospital or other medical facility; and
             73          (b) (i) Subsection (10)(a) applies to:
             74          (A) a drug;
             75          (B) a syringe; or
             76          (C) a stoma supply; and
             77          (ii) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             78      commission may by rule define the terms:
             79          (A) "syringe"; or
             80          (B) "stoma supply";
             81          (11) sales or use of property, materials, or services used in the construction of or
             82      incorporated in pollution control facilities allowed by Sections 19-2-123 through 19-2-127 ;
             83          (12) (a) sales of an item described in Subsection (12)(c) served by:
             84          (i) the following if the item described in Subsection (12)(c) is not available to the
             85      general public:
             86          (A) a church; or
             87          (B) a charitable institution;
             88          (ii) an institution of higher education if:
             89          (A) the item described in Subsection (12)(c) is not available to the general public; or


             90          (B) the item described in Subsection (12)(c) is prepaid as part of a student meal plan
             91      offered by the institution of higher education; or
             92          (b) sales of an item described in Subsection (12)(c) provided for a patient by:
             93          (i) a medical facility; or
             94          (ii) a nursing facility; and
             95          (c) Subsections (12)(a) and (b) apply to:
             96          (i) food and food ingredients;
             97          (ii) prepared food; or
             98          (iii) alcoholic beverages;
             99          (13) (a) [isolated or occasional sales by persons not regularly engaged in business,
             100      except] except as provided in Subsection (13)(b), the sale of tangible personal property by a
             101      person:
             102          (i) regardless of the number of transactions involving the sale of that tangible personal
             103      property by that person; and
             104          (ii) not regularly engaged in the business of selling that type of tangible personal
             105      property;
             106          (b) this Subsection (13) does not apply if:
             107          (i) the sale is one of a series of sales of a character to indicate that the person is
             108      regularly engaged in the business of selling that type of tangible personal property;
             109          (ii) the person holds that person out as regularly engaged in the business of selling that
             110      type of tangible personal property;
             111          (iii) the person sells an item of tangible personal property that the person purchased as
             112      a sale that is exempt under Subsection (26); or
             113          (iv) the sale is of [vehicles] a vehicle or [vessels] vessel required to be titled or
             114      registered under the laws of this state in which case the tax is based upon:
             115          [(a)] (A) the bill of sale or other written evidence of value of the vehicle or vessel
             116      being sold; or
             117          [(b)] (B) in the absence of a bill of sale or other written evidence of value, the [then
             118      existing] fair market value of the vehicle or vessel being sold at the time of the sale as
             119      determined by the commission; and
             120          (c) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the


             121      commission shall make rules establishing the circumstances under which:
             122          (i) a person is regularly engaged in the business of selling a type of tangible personal
             123      property;
             124          (ii) a sale of tangible personal property is one of a series of sales of a character to
             125      indicate that a person is regularly engaged in the business of selling that type of tangible
             126      personal property; or
             127          (iii) a person holds that person out as regularly engaged in the business of selling a type
             128      of tangible personal property;
             129          (14) (a) the following purchases or leases by a manufacturer on or after July 1, 1995:
             130          (i) machinery and equipment:
             131          (A) used in the manufacturing process;
             132          (B) having an economic life of three or more years; and
             133          (C) used:
             134          (I) to manufacture an item sold as tangible personal property; and
             135          (II) in new or expanding operations in a manufacturing facility in the state; and
             136          (ii) subject to the provisions of Subsection (14)(b), normal operating replacements that:
             137          (A) have an economic life of three or more years;
             138          (B) are used in the manufacturing process in a manufacturing facility in the state;
             139          (C) are used to replace or adapt an existing machine to extend the normal estimated
             140      useful life of the machine; and
             141          (D) do not include repairs and maintenance;
             142          (b) the rates for the exemption under Subsection (14)(a)(ii) are as follows:
             143          (i) beginning July 1, 1996, through June 30, 1997, 30% of the sale or lease described in
             144      Subsection (14)(a)(ii) is exempt;
             145          (ii) beginning July 1, 1997, through June 30, 1998, 60% of the sale or lease described
             146      in Subsection (14)(a)(ii) is exempt; and
             147          (iii) beginning July 1, 1998, 100% of the sale or lease described in Subsection
             148      (14)(a)(ii) is exempt;
             149          (c) for purposes of this Subsection (14), the commission shall by rule define the terms
             150      "new or expanding operations" and "establishment"; and
             151          (d) on or before October 1, 1991, and every five years after October 1, 1991, the


             152      commission shall:
             153          (i) review the exemptions described in Subsection (14)(a) and make recommendations
             154      to the Revenue and Taxation Interim Committee concerning whether the exemptions should be
             155      continued, modified, or repealed; and
             156          (ii) include in its report:
             157          (A) the cost of the exemptions;
             158          (B) the purpose and effectiveness of the exemptions; and
             159          (C) the benefits of the exemptions to the state;
             160          (15) (a) sales of the following if the requirements of Subsection (15)(b) are met:
             161          (i) tooling;
             162          (ii) special tooling;
             163          (iii) support equipment;
             164          (iv) special test equipment; or
             165          (v) parts used in the repairs or renovations of tooling or equipment described in
             166      Subsections (15)(a)(i) through (iv); and
             167          (b) sales of tooling, equipment, or parts described in Subsection (15)(a) are exempt if:
             168          (i) the tooling, equipment, or parts are used or consumed exclusively in the
             169      performance of any aerospace or electronics industry contract with the United States
             170      government or any subcontract under that contract; and
             171          (ii) under the terms of the contract or subcontract described in Subsection (15)(b)(i),
             172      title to the tooling, equipment, or parts is vested in the United States government as evidenced
             173      by:
             174          (A) a government identification tag placed on the tooling, equipment, or parts; or
             175          (B) listing on a government-approved property record if placing a government
             176      identification tag on the tooling, equipment, or parts is impractical;
             177          (16) intrastate movements of:
             178          (a) freight by common carriers; or
             179          (b) passengers:
             180          (i) by taxicabs as described in SIC Code 4121 of the 1987 Standard Industrial
             181      Classification Manual of the federal Executive Office of the President, Office of Management
             182      and Budget;


             183          (ii) transported by an establishment described in SIC Code 4111 of the 1987 Standard
             184      Industrial Classification Manual of the federal Executive Office of the President, Office of
             185      Management and Budget, if the transportation originates and terminates within a county of the
             186      first, second, or third class; or
             187          (iii) transported by the following described in SIC Code 4789 of the 1987 Standard
             188      Industrial Classification Manual of the federal Executive Office of the President, Office of
             189      Management and Budget:
             190          (A) a horse-drawn cab; or
             191          (B) a horse-drawn carriage;
             192          (17) sales of newspapers or newspaper subscriptions;
             193          (18) (a) except as provided in Subsection (18)(b), tangible personal property traded in
             194      as full or part payment of the purchase price, except that for purposes of calculating sales or use
             195      tax upon vehicles not sold by a vehicle dealer, trade-ins are limited to other vehicles only, and
             196      the tax is based upon:
             197          (i) the bill of sale or other written evidence of value of the vehicle being sold and the
             198      vehicle being traded in; or
             199          (ii) in the absence of a bill of sale or other written evidence of value, the then existing
             200      fair market value of the vehicle being sold and the vehicle being traded in, as determined by the
             201      commission; and
             202          (b) notwithstanding Subsection (18)(a), Subsection (18)(a) does not apply to the
             203      following items of tangible personal property traded in as full or part payment of the purchase
             204      price:
             205          (i) money;
             206          (ii) electricity;
             207          (iii) water;
             208          (iv) gas; or
             209          (v) steam;
             210          (19) (a) (i) except as provided in Subsection (19)(b), sales of tangible personal property
             211      used or consumed primarily and directly in farming operations, regardless of whether the
             212      tangible personal property:
             213          (A) becomes part of real estate; or


             214          (B) is installed by a:
             215          (I) farmer;
             216          (II) contractor; or
             217          (III) subcontractor; or
             218          (ii) sales of parts used in the repairs or renovations of tangible personal property if the
             219      tangible personal property is exempt under Subsection (19)(a)(i); and
             220          (b) notwithstanding Subsection (19)(a), amounts paid or charged for the following
             221      tangible personal property are subject to the taxes imposed by this chapter:
             222          (i) (A) subject to Subsection (19)(b)(i)(B), the following tangible personal property if
             223      the tangible personal property is used in a manner that is incidental to farming:
             224          (I) machinery;
             225          (II) equipment;
             226          (III) materials; or
             227          (IV) supplies; and
             228          (B) tangible personal property that is considered to be used in a manner that is
             229      incidental to farming includes:
             230          (I) hand tools; or
             231          (II) maintenance and janitorial equipment and supplies;
             232          (ii) (A) subject to Subsection (19)(b)(ii)(B), tangible personal property if the tangible
             233      personal property is used in an activity other than farming; and
             234          (B) tangible personal property that is considered to be used in an activity other than
             235      farming includes:
             236          (I) office equipment and supplies; or
             237          (II) equipment and supplies used in:
             238          (Aa) the sale or distribution of farm products;
             239          (Bb) research; or
             240          (Cc) transportation; or
             241          (iii) a vehicle required to be registered by the laws of this state during the period ending
             242      two years after the date of the vehicle's purchase;
             243          (20) sales of hay;
             244          (21) exclusive sale of locally grown seasonal crops, seedling plants, or garden, farm, or


             245      other agricultural produce if sold by a producer during the harvest season;
             246          (22) purchases made using a coupon as defined in 7 U.S.C. Sec. 2012 that is issued
             247      under the Food Stamp Program, 7 U.S.C. Sec. 2011 et seq.;
             248          (23) sales of nonreturnable containers, nonreturnable labels, nonreturnable bags,
             249      nonreturnable shipping cases, and nonreturnable casings to a manufacturer, processor,
             250      wholesaler, or retailer for use in packaging tangible personal property to be sold by that
             251      manufacturer, processor, wholesaler, or retailer;
             252          (24) property stored in the state for resale;
             253          (25) property brought into the state by a nonresident for his or her own personal use or
             254      enjoyment while within the state, except property purchased for use in Utah by a nonresident
             255      living and working in Utah at the time of purchase;
             256          (26) property purchased for resale in this state, in the regular course of business, either
             257      in its original form or as an ingredient or component part of a manufactured or compounded
             258      product;
             259          (27) property upon which a sales or use tax was paid to some other state, or one of its
             260      subdivisions, except that the state shall be paid any difference between the tax paid and the tax
             261      imposed by this part and Part 2, Local Sales and Use Tax Act, and no adjustment is allowed if
             262      the tax paid was greater than the tax imposed by this part and Part 2, Local Sales and Use Tax
             263      Act;
             264          (28) any sale of a service described in Subsections 59-12-103 (1)(b), (c), and (d) to a
             265      person for use in compounding a service taxable under the subsections;
             266          (29) purchases made in accordance with the special supplemental nutrition program for
             267      women, infants, and children established in 42 U.S.C. Sec. 1786;
             268          (30) beginning on July 1, 1999, through June 30, 2014, sales or leases of rolls, rollers,
             269      refractory brick, electric motors, or other replacement parts used in the furnaces, mills, or ovens
             270      of a steel mill described in SIC Code 3312 of the 1987 Standard Industrial Classification
             271      Manual of the federal Executive Office of the President, Office of Management and Budget;
             272          (31) sales of boats of a type required to be registered under Title 73, Chapter 18, State
             273      Boating Act, boat trailers, and outboard motors which are made to bona fide nonresidents of
             274      this state and are not thereafter registered or used in this state except as necessary to transport
             275      them to the borders of this state;


             276          (32) sales of aircraft manufactured in Utah if sold for delivery and use outside Utah
             277      where a sales or use tax is not imposed, even if the title is passed in Utah;
             278          (33) amounts paid for the purchase of telephone service for purposes of providing
             279      telephone service;
             280          (34) fares charged to persons transported directly by a public transit district created
             281      under the authority of Title 17A, Chapter 2, Part 10, Utah Public Transit District Act;
             282          (35) sales or leases of vehicles to, or use of vehicles by an authorized carrier;
             283          (36) (a) 45% of the sales price of any new manufactured home; and
             284          (b) 100% of the sales price of any used manufactured home;
             285          (37) sales relating to schools and fundraising sales;
             286          (38) sales or rentals of durable medical equipment if:
             287          (a) a person presents a prescription for the durable medical equipment; and
             288          (b) the durable medical equipment is used for home use only;
             289          (39) (a) sales to a ski resort of electricity to operate a passenger ropeway as defined in
             290      Section 72-11-102 ; and
             291          (b) the commission shall by rule determine the method for calculating sales exempt
             292      under Subsection (39)(a) that are not separately metered and accounted for in utility billings;
             293          (40) sales to a ski resort of:
             294          (a) snowmaking equipment;
             295          (b) ski slope grooming equipment;
             296          (c) passenger ropeways as defined in Section 72-11-102 ; or
             297          (d) parts used in the repairs or renovations of equipment or passenger ropeways
             298      described in Subsections (40)(a) through (c);
             299          (41) sales of natural gas, electricity, heat, coal, fuel oil, or other fuels for industrial use;
             300          (42) sales or rentals of the right to use or operate for amusement, entertainment, or
             301      recreation a coin-operated amusement device as defined in Section 59-12-102 ;
             302          (43) sales of cleaning or washing of tangible personal property by a coin-operated car
             303      wash machine;
             304          (44) sales by the state or a political subdivision of the state, except state institutions of
             305      higher education as defined in Section 53B-3-102 , of:
             306          (a) photocopies; or


             307          (b) other copies of records held or maintained by the state or a political subdivision of
             308      the state;
             309          (45) (a) amounts paid:
             310          (i) to a person providing intrastate transportation to an employer's employee to or from
             311      the employee's primary place of employment;
             312          (ii) by an:
             313          (A) employee; or
             314          (B) employer; and
             315          (iii) pursuant to a written contract between:
             316          (A) the employer; and
             317          (B) (I) the employee; or
             318          (II) a person providing transportation to the employer's employee; and
             319          (b) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             320      commission may for purposes of Subsection (45)(a) make rules defining what constitutes an
             321      employee's primary place of employment;
             322          (46) amounts paid for admission to an athletic event at an institution of higher
             323      education that is subject to the provisions of Title IX of the Education Amendments of 1972,
             324      20 U.S.C. Sec. 1681 et seq.;
             325          (47) sales of telephone service charged to a prepaid telephone calling card;
             326          (48) (a) sales of:
             327          (i) hearing aids;
             328          (ii) hearing aid accessories; or
             329          (iii) except as provided in Subsection (48)(b), parts used in the repairs or renovations
             330      of hearing aids or hearing aid accessories; and
             331          (b) for purposes of this Subsection (48), notwithstanding Subsection (48)(a)(iii),
             332      "parts" does not include batteries;
             333          (49) (a) sales made to or by:
             334          (i) an area agency on aging; or
             335          (ii) a senior citizen center owned by a county, city, or town; or
             336          (b) sales made by a senior citizen center that contracts with an area agency on aging;
             337          (50) (a) beginning on July 1, 2001, through June 30, 2007, and subject to Subsection


             338      (50)(b), a sale or lease of semiconductor fabricating or processing materials regardless of
             339      whether the semiconductor fabricating or processing materials:
             340          (i) actually come into contact with a semiconductor; or
             341          (ii) ultimately become incorporated into real property;
             342          (b) (i) beginning on July 1, 2001, through June 30, 2002, 10% of the sale or lease
             343      described in Subsection (50)(a) is exempt;
             344          (ii) beginning on July 1, 2002, through June 30, 2003, 50% of the sale or lease
             345      described in Subsection (50)(a) is exempt; and
             346          (iii) beginning on July 1, 2003, through June 30, 2007, the entire amount of the sale or
             347      lease described in Subsection (50)(a) is exempt; and
             348          (c) each year on or before the November interim meeting, the Revenue and Taxation
             349      Interim Committee shall:
             350          (i) review the exemption described in this Subsection (50) and make recommendations
             351      concerning whether the exemption should be continued, modified, or repealed; and
             352          (ii) include in the review under this Subsection (50)(c):
             353          (A) the cost of the exemption;
             354          (B) the purpose and effectiveness of the exemption; and
             355          (C) the benefits of the exemption to the state;
             356          (51) an amount paid by or charged to a purchaser for accommodations and services
             357      described in Subsection 59-12-103 (1)(i) to the extent the amount is exempt under Section
             358      59-12-104.2 ;
             359          (52) beginning on September 1, 2001, the lease or use of a vehicle issued a temporary
             360      sports event registration certificate in accordance with Section 41-3-306 for the event period
             361      specified on the temporary sports event registration certificate;
             362          (53) sales or uses of electricity, if the sales or uses are:
             363          (a) made under a tariff adopted by the Public Service Commission of Utah only for
             364      purchase of electricity produced from a new wind, geothermal, biomass, or solar power energy
             365      source, as designated in the tariff by the Public Service Commission of Utah; and
             366          (b) for an amount of electricity that is:
             367          (i) unrelated to the amount of electricity used by the person purchasing the electricity
             368      under the tariff described in Subsection (53)(a); and


             369          (ii) equivalent to the number of kilowatthours specified in the tariff described in
             370      Subsection (53)(a) that may be purchased under the tariff described in Subsection (53)(a);
             371          (54) sales or rentals of mobility enhancing equipment if a person presents a
             372      prescription for the mobility enhancing equipment;
             373          (55) sales of water in a:
             374          (a) pipe;
             375          (b) conduit;
             376          (c) ditch; or
             377          (d) reservoir;
             378          (56) sales of currency or coinage that constitute legal tender of the United States or of a
             379      foreign nation;
             380          (57) (a) sales of an item described in Subsection (57)(b) if the item:
             381          (i) does not constitute legal tender of any nation; and
             382          (ii) has a gold, silver, or platinum content of 80% or more; and
             383          (b) Subsection (57)(a) applies to a gold, silver, or platinum:
             384          (i) ingot;
             385          (ii) bar;
             386          (iii) medallion; or
             387          (iv) decorative coin;
             388          (58) amounts paid on a sale-leaseback transaction;
             389          (59) sales of a prosthetic device:
             390          (a) for use on or in a human;
             391          (b) for which a prescription is issued; and
             392          (c) to a person that presents a prescription for the prosthetic device;
             393          (60) (a) except as provided in Subsection (60)(b), purchases, leases, or rentals of
             394      machinery or equipment by an establishment described in Subsection (60)(c) if the machinery
             395      or equipment is primarily used in the production or postproduction of the following media for
             396      commercial distribution:
             397          (i) a motion picture;
             398          (ii) a television program;
             399          (iii) a movie made for television;


             400          (iv) a music video;
             401          (v) a commercial;
             402          (vi) a documentary; or
             403          (vii) a medium similar to Subsections (60)(a)(i) through (vi) as determined by the
             404      commission by administrative rule made in accordance with Subsection (60)(d); or
             405          (b) notwithstanding Subsection (60)(a), purchases, leases, or rentals of machinery or
             406      equipment by an establishment described in Subsection (60)(c) that is used for the production
             407      or postproduction of the following are subject to the taxes imposed by this chapter:
             408          (i) a live musical performance;
             409          (ii) a live news program; or
             410          (iii) a live sporting event;
             411          (c) the following establishments listed in the 1997 North American Industry
             412      Classification System of the federal Executive Office of the President, Office of Management
             413      and Budget, apply to Subsections (60)(a) and (b):
             414          (i) NAICS Code 512110; or
             415          (ii) NAICS Code 51219; and
             416          (d) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             417      commission may by rule:
             418          (i) prescribe what constitutes a medium similar to Subsections (60)(a)(i) through (vi);
             419      or
             420          (ii) define:
             421          (A) "commercial distribution";
             422          (B) "live musical performance";
             423          (C) "live news program"; or
             424          (D) "live sporting event";
             425          (61) (a) leases of seven or more years or purchases made on or after July 1, 2004 but on
             426      or before June 30, 2009, of machinery or equipment that:
             427          (i) is leased or purchased for or by a facility that:
             428          (A) is a renewable energy production facility;
             429          (B) is located in the state; and
             430          (C) (I) becomes operational on or after July 1, 2004; or


             431          (II) has its generation capacity increased by one or more megawatts on or after July 1,
             432      2004 as a result of the use of the machinery or equipment;
             433          (ii) has an economic life of five or more years; and
             434          (iii) is used to make the facility or the increase in capacity of the facility described in
             435      Subsection (61)(a)(i) operational up to the point of interconnection with an existing
             436      transmission grid including:
             437          (A) a wind turbine;
             438          (B) generating equipment;
             439          (C) a control and monitoring system;
             440          (D) a power line;
             441          (E) substation equipment;
             442          (F) lighting;
             443          (G) fencing;
             444          (H) pipes; or
             445          (I) other equipment used for locating a power line or pole; and
             446          (b) this Subsection (61) does not apply to:
             447          (i) machinery or equipment used in construction of:
             448          (A) a new renewable energy production facility; or
             449          (B) the increase in the capacity of a renewable energy production facility;
             450          (ii) contracted services required for construction and routine maintenance activities;
             451      and
             452          (iii) unless the machinery or equipment is used or acquired for an increase in capacity
             453      of the facility described in Subsection (61)(a)(i)(C)(II), machinery or equipment used or
             454      acquired after:
             455          (A) the renewable energy production facility described in Subsection (61)(a)(i) is
             456      operational as described in Subsection (61)(a)(iii); or
             457          (B) the increased capacity described in Subsection (61)(a)(i) is operational as described
             458      in Subsection (61)(a)(iii);
             459          (62) (a) leases of seven or more years or purchases made on or after July 1, 2004 but on
             460      or before June 30, 2009, of machinery or equipment that:
             461          (i) is leased or purchased for or by a facility that:


             462          (A) is a waste energy production facility;
             463          (B) is located in the state; and
             464          (C) (I) becomes operational on or after July 1, 2004; or
             465          (II) has its generation capacity increased by one or more megawatts on or after July 1,
             466      2004 as a result of the use of the machinery or equipment;
             467          (ii) has an economic life of five or more years; and
             468          (iii) is used to make the facility or the increase in capacity of the facility described in
             469      Subsection (62)(a)(i) operational up to the point of interconnection with an existing
             470      transmission grid including:
             471          (A) generating equipment;
             472          (B) a control and monitoring system;
             473          (C) a power line;
             474          (D) substation equipment;
             475          (E) lighting;
             476          (F) fencing;
             477          (G) pipes; or
             478          (H) other equipment used for locating a power line or pole; and
             479          (b) this Subsection (62) does not apply to:
             480          (i) machinery or equipment used in construction of:
             481          (A) a new waste energy facility; or
             482          (B) the increase in the capacity of a waste energy facility;
             483          (ii) contracted services required for construction and routine maintenance activities;
             484      and
             485          (iii) unless the machinery or equipment is used or acquired for an increase in capacity
             486      described in Subsection (62)(a)(i)(C)(II), machinery or equipment used or acquired after:
             487          (A) the waste energy facility described in Subsection (62)(a)(i) is operational as
             488      described in Subsection (62)(a)(iii); or
             489          (B) the increased capacity described in Subsection (62)(a)(i) is operational as described
             490      in Subsection (62)(a)(iii);
             491          (63) (a) leases of five or more years or purchases made on or after July 1, 2004 but on
             492      or before June 30, 2009, of machinery or equipment that:


             493          (i) is leased or purchased for or by a facility that:
             494          (A) is located in the state;
             495          (B) produces fuel from biomass energy including:
             496          (I) methanol; or
             497          (II) ethanol; and
             498          (C) (I) becomes operational on or after July 1, 2004; or
             499          (II) has its capacity to produce fuel increase by 25% or more on or after July 1, 2004 as
             500      a result of the installation of the machinery or equipment;
             501          (ii) has an economic life of five or more years; and
             502          (iii) is installed on the facility described in Subsection (63)(a)(i);
             503          (b) this Subsection (63) does not apply to:
             504          (i) machinery or equipment used in construction of:
             505          (A) a new facility described in Subsection (63)(a)(i); or
             506          (B) the increase in capacity of the facility described in Subsection (63)(a)(i); or
             507          (ii) contracted services required for construction and routine maintenance activities;
             508      and
             509          (iii) unless the machinery or equipment is used or acquired for an increase in capacity
             510      described in Subsection (63)(a)(i)(C)(II), machinery or equipment used or acquired after:
             511          (A) the facility described in Subsection (63)(a)(i) is operational; or
             512          (B) the increased capacity described in Subsection (63)(a)(i) is operational;
             513          (64) amounts paid to a purchaser as a rebate from the manufacturer of a new vehicle
             514      for purchasing the new vehicle;
             515          (65) (a) subject to Subsection (65)(b), sales of tangible personal property to persons
             516      within this state that is subsequently shipped outside the state and incorporated pursuant to
             517      contract into and becomes a part of real property located outside of this state, except to the
             518      extent that the other state or political entity imposes a sales, use, gross receipts, or other similar
             519      transaction excise tax on it against which the other state or political entity allows a credit for
             520      taxes imposed by this chapter; and
             521          (b) the exemption provided for in Subsection (65)(a):
             522          (i) is allowed only if the exemption is applied:
             523          (A) in calculating the purchase price of the tangible personal property; and


             524          (B) to a written contract that is in effect on July 1, 2004; and
             525          (ii) (A) does not apply beginning on the day on which the contract described in
             526      Subsection (65)(b)(i):
             527          (I) is substantially modified; or
             528          (II) terminates; and
             529          (B) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
             530      the commission may by rule prescribe the circumstances under which a contract is substantially
             531      modified;
             532          (66) purchases:
             533          (a) of one or more of the following items in printed or electronic format:
             534          (i) a list containing information that includes one or more:
             535          (A) names; or
             536          (B) addresses; or
             537          (ii) a database containing information that includes one or more:
             538          (A) names; or
             539          (B) addresses; and
             540          (b) used to send direct mail; and
             541          (67) redemptions or repurchases of property by a person if that property was:
             542          (a) delivered to a pawnbroker as part of a pawn transaction; and
             543          (b) redeemed or repurchased within the time period established in a written agreement
             544      between the person and the pawnbroker for redeeming or repurchasing the property.
             545          Section 2. Effective date.
             546          This bill takes effect on July 1, 2006.




Legislative Review Note
    as of 11-16-05 6:58 AM


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

Office of Legislative Research and General Counsel


Interim Committee Note


    as of 12-20-05 12:55 PM


The Revenue and Taxation Interim Committee recommended this bill.

Mixed Membership Committee Note
    as of 12-20-05 12:55 PM


The Tax Reform Task Force recommended this bill.
    Membership:        13 legislators    2 non-legislators
    Legislative Vote:    8 voting for    0 voting against    5 absent


Mixed Membership Committee Note
    as of 12-20-05 12:55 PM


The Tax Review Commission recommended this bill.
    Membership:        4 legislators    10 non-legislators
    Legislative Vote:    3 voting for    0 voting against    1 absent


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