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S.B. 253

             1     

SALES AND USE TAX EXEMPTION FOR

             2     
RAILROAD COMMON CARRIER LOCOMOTIVE

             3     
ENGINE FUEL

             4     
2007 GENERAL SESSION

             5     
STATE OF UTAH

             6     
Chief Sponsor: Peter C. Knudson

             7     
House Sponsor: ____________

             8     
             9      LONG TITLE
             10      General Description:
             11          This bill amends the Sales and Use Tax Act to provide a sales and use tax exemption.
             12      Highlighted Provisions:
             13          This bill:
             14          .    provides a sales and use tax exemption for sales of fuel to a common carrier that is a
             15      railroad for use in a locomotive engine; 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, 2007.
             21      Utah Code Sections Affected:
             22      AMENDS:
             23          59-12-104, as last amended by Chapters 181, 182, 217, 218, 219, 220, 246, 268 and
             24      346, Laws of Utah 2006
             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) (a) subject to Subsection (7)(b), sales of cleaning or washing of tangible personal
             62      property if the cleaning or washing of the tangible personal property is not assisted cleaning or
             63      washing of tangible personal property;
             64          (b) if a seller that sells at the same business location assisted cleaning or washing of
             65      tangible personal property and cleaning or washing of tangible personal property that is not
             66      assisted cleaning or washing of tangible personal property, the exemption described in
             67      Subsection (7)(a) applies if the seller separately accounts for the sales of the assisted cleaning
             68      or washing of the tangible personal property; and
             69          (c) for purposes of Subsection (7)(b) and in accordance with Title 63, Chapter 46a,
             70      Utah Administrative Rulemaking Act, the commission may make rules:
             71          (i) governing the circumstances under which sales are at the same business location;
             72      and
             73          (ii) establishing the procedures and requirements for a seller to separately account for
             74      sales of assisted cleaning or washing of tangible personal property;
             75          (8) sales made to or by religious or charitable institutions in the conduct of their regular
             76      religious or charitable functions and activities, if the requirements of Section 59-12-104.1 are
             77      fulfilled;
             78          (9) sales of a vehicle of a type required to be registered under the motor vehicle laws of
             79      this state if the vehicle is both not:
             80          (a) registered in this state; and
             81          (b) used in this state except as necessary to transport the vehicle to the borders of this
             82      state;
             83          (10) (a) amounts paid for an item described in Subsection (10)(b) if:
             84          (i) the item is intended for human use; and
             85          (ii) (A) a prescription was issued for the item; or
             86          (B) the item was purchased by a hospital or other medical facility; and
             87          (b) (i) Subsection (10)(a) applies to:
             88          (A) a drug;
             89          (B) a syringe; or


             90          (C) a stoma supply; and
             91          (ii) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             92      commission may by rule define the terms:
             93          (A) "syringe"; or
             94          (B) "stoma supply";
             95          (11) sales or use of property, materials, or services used in the construction of or
             96      incorporated in pollution control facilities allowed by Sections 19-2-123 through 19-2-127 ;
             97          (12) (a) sales of an item described in Subsection (12)(c) served by:
             98          (i) the following if the item described in Subsection (12)(c) is not available to the
             99      general public:
             100          (A) a church; or
             101          (B) a charitable institution;
             102          (ii) an institution of higher education if:
             103          (A) the item described in Subsection (12)(c) is not available to the general public; or
             104          (B) the item described in Subsection (12)(c) is prepaid as part of a student meal plan
             105      offered by the institution of higher education; or
             106          (b) sales of an item described in Subsection (12)(c) provided for a patient by:
             107          (i) a medical facility; or
             108          (ii) a nursing facility; and
             109          (c) Subsections (12)(a) and (b) apply to:
             110          (i) food and food ingredients;
             111          (ii) prepared food; or
             112          (iii) alcoholic beverages;
             113          (13) (a) except as provided in Subsection (13)(b), the sale of tangible personal property
             114      by a person:
             115          (i) regardless of the number of transactions involving the sale of that tangible personal
             116      property by that person; and
             117          (ii) not regularly engaged in the business of selling that type of tangible personal
             118      property;
             119          (b) this Subsection (13) does not apply if:
             120          (i) the sale is one of a series of sales of a character to indicate that the person is


             121      regularly engaged in the business of selling that type of tangible personal property;
             122          (ii) the person holds that person out as regularly engaged in the business of selling that
             123      type of tangible personal property;
             124          (iii) the person sells an item of tangible personal property that the person purchased as
             125      a sale that is exempt under Subsection (25); or
             126          (iv) the sale is of a vehicle or vessel required to be titled or registered under the laws of
             127      this state in which case the tax is based upon:
             128          (A) the bill of sale or other written evidence of value of the vehicle or vessel being
             129      sold; or
             130          (B) in the absence of a bill of sale or other written evidence of value, the fair market
             131      value of the vehicle or vessel being sold at the time of the sale as determined by the
             132      commission; and
             133          (c) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             134      commission shall make rules establishing the circumstances under which:
             135          (i) a person is regularly engaged in the business of selling a type of tangible personal
             136      property;
             137          (ii) a sale of tangible personal property is one of a series of sales of a character to
             138      indicate that a person is regularly engaged in the business of selling that type of tangible
             139      personal property; or
             140          (iii) a person holds that person out as regularly engaged in the business of selling a type
             141      of tangible personal property;
             142          (14) (a) except as provided in Subsection (14)(b), amounts paid or charged on or after
             143      July 1, 2006, for a purchase or lease by a manufacturing facility other than a cogeneration
             144      facility, for the following:
             145          (i) machinery and equipment that:
             146          (A) is used:
             147          (I) for a manufacturing facility other than a manufacturing facility that is a scrap
             148      recycler described in Subsection 59-12-102 (45)(b):
             149          (Aa) in the manufacturing process; and
             150          (Bb) to manufacture an item sold as tangible personal property; or
             151          (II) for a manufacturing facility that is a scrap recycler described in Subsection


             152      59-12-102 (45)(b), to process an item sold as tangible personal property; and
             153          (B) has an economic life of three or more years; and
             154          (ii) normal operating repair or replacement parts that:
             155          (A) have an economic life of three or more years; and
             156          (B) are used:
             157          (I) for a manufacturing facility in the state other than a manufacturing facility that is a
             158      scrap recycler described in Subsection 59-12-102 (45)(b), in the manufacturing process; or
             159          (II) for a manufacturing facility in the state that is a scrap recycler described in
             160      Subsection 59-12-102 (45)(b), to process an item sold as tangible personal property;
             161          (b) (i) amounts paid or charged on or after July 1, 2005, for a purchase or lease by a
             162      manufacturing facility that is a cogeneration facility placed in service on or after May 1, 2006,
             163      for the following:
             164          (A) machinery and equipment that:
             165          (I) is used:
             166          (Aa) in the manufacturing process; and
             167          (Bb) to manufacture an item sold as tangible personal property; and
             168          (II) has an economic life of three or more years; and
             169          (B) normal operating repair or replacement parts that:
             170          (I) are used in the manufacturing process in a manufacturing facility in the state; and
             171          (II) have an economic life of three or more years; and
             172          (ii) for amounts paid or charged on or after July 1, 2005, but on or before June 30,
             173      2006, for a purchase or lease described in Subsection (14)(b)(i), a cogeneration facility may
             174      claim the exemption allowed by Subsection (14)(b)(i) by filing for a refund:
             175          (A) for sales and use taxes paid under this chapter on the purchase or lease payment;
             176      and
             177          (B) in accordance with Section 59-12-110 ;
             178          (c) for purposes of this Subsection (14) and in accordance with Title 63, Chapter 46a,
             179      Utah Administrative Rulemaking Act, the commission:
             180          (i) shall by rule define the term "establishment"; and
             181          (ii) may by rule define what constitutes processing an item sold as tangible personal
             182      property; and


             183          (d) on or before October 1, 1991, and every five years after October 1, 1991, the
             184      commission shall:
             185          (i) review the exemptions described in this Subsection (14) and make
             186      recommendations to the Revenue and Taxation Interim Committee concerning whether the
             187      exemptions should be continued, modified, or repealed; and
             188          (ii) include in its report:
             189          (A) the cost of the exemptions;
             190          (B) the purpose and effectiveness of the exemptions; and
             191          (C) the benefits of the exemptions to the state;
             192          (15) (a) sales of the following if the requirements of Subsection (15)(b) are met:
             193          (i) tooling;
             194          (ii) special tooling;
             195          (iii) support equipment;
             196          (iv) special test equipment; or
             197          (v) parts used in the repairs or renovations of tooling or equipment described in
             198      Subsections (15)(a)(i) through (iv); and
             199          (b) sales of tooling, equipment, or parts described in Subsection (15)(a) are exempt if:
             200          (i) the tooling, equipment, or parts are used or consumed exclusively in the
             201      performance of any aerospace or electronics industry contract with the United States
             202      government or any subcontract under that contract; and
             203          (ii) under the terms of the contract or subcontract described in Subsection (15)(b)(i),
             204      title to the tooling, equipment, or parts is vested in the United States government as evidenced
             205      by:
             206          (A) a government identification tag placed on the tooling, equipment, or parts; or
             207          (B) listing on a government-approved property record if placing a government
             208      identification tag on the tooling, equipment, or parts is impractical;
             209          (16) sales of newspapers or newspaper subscriptions;
             210          (17) (a) except as provided in Subsection (17)(b), tangible personal property traded in
             211      as full or part payment of the purchase price, except that for purposes of calculating sales or use
             212      tax upon vehicles not sold by a vehicle dealer, trade-ins are limited to other vehicles only, and
             213      the tax is based upon:


             214          (i) the bill of sale or other written evidence of value of the vehicle being sold and the
             215      vehicle being traded in; or
             216          (ii) in the absence of a bill of sale or other written evidence of value, the then existing
             217      fair market value of the vehicle being sold and the vehicle being traded in, as determined by the
             218      commission; and
             219          (b) notwithstanding Subsection (17)(a), Subsection (17)(a) does not apply to the
             220      following items of tangible personal property traded in as full or part payment of the purchase
             221      price:
             222          (i) money;
             223          (ii) electricity;
             224          (iii) water;
             225          (iv) gas; or
             226          (v) steam;
             227          (18) (a) (i) except as provided in Subsection (18)(b), sales of tangible personal property
             228      used or consumed primarily and directly in farming operations, regardless of whether the
             229      tangible personal property:
             230          (A) becomes part of real estate; or
             231          (B) is installed by a:
             232          (I) farmer;
             233          (II) contractor; or
             234          (III) subcontractor; or
             235          (ii) sales of parts used in the repairs or renovations of tangible personal property if the
             236      tangible personal property is exempt under Subsection (18)(a)(i); and
             237          (b) notwithstanding Subsection (18)(a), amounts paid or charged for the following
             238      tangible personal property are subject to the taxes imposed by this chapter:
             239          (i) (A) subject to Subsection (18)(b)(i)(B), the following tangible personal property if
             240      the tangible personal property is used in a manner that is incidental to farming:
             241          (I) machinery;
             242          (II) equipment;
             243          (III) materials; or
             244          (IV) supplies; and


             245          (B) tangible personal property that is considered to be used in a manner that is
             246      incidental to farming includes:
             247          (I) hand tools; or
             248          (II) maintenance and janitorial equipment and supplies;
             249          (ii) (A) subject to Subsection (18)(b)(ii)(B), tangible personal property if the tangible
             250      personal property is used in an activity other than farming; and
             251          (B) tangible personal property that is considered to be used in an activity other than
             252      farming includes:
             253          (I) office equipment and supplies; or
             254          (II) equipment and supplies used in:
             255          (Aa) the sale or distribution of farm products;
             256          (Bb) research; or
             257          (Cc) transportation; or
             258          (iii) a vehicle required to be registered by the laws of this state during the period ending
             259      two years after the date of the vehicle's purchase;
             260          (19) sales of hay;
             261          (20) exclusive sale during the harvest season of seasonal crops, seedling plants, or
             262      garden, farm, or other agricultural produce if the seasonal crops are, seedling plants are, or
             263      garden, farm, or other agricultural produce is sold by:
             264          (a) the producer of the seasonal crops, seedling plants, or garden, farm, or other
             265      agricultural produce;
             266          (b) an employee of the producer described in Subsection (20)(a); or
             267          (c) a member of the immediate family of the producer described in Subsection (20)(a);
             268          (21) purchases made using a coupon as defined in 7 U.S.C. Sec. 2012 that is issued
             269      under the Food Stamp Program, 7 U.S.C. Sec. 2011 et seq.;
             270          (22) sales of nonreturnable containers, nonreturnable labels, nonreturnable bags,
             271      nonreturnable shipping cases, and nonreturnable casings to a manufacturer, processor,
             272      wholesaler, or retailer for use in packaging tangible personal property to be sold by that
             273      manufacturer, processor, wholesaler, or retailer;
             274          (23) property stored in the state for resale;
             275          (24) property brought into the state by a nonresident for his or her own personal use or


             276      enjoyment while within the state, except property purchased for use in Utah by a nonresident
             277      living and working in Utah at the time of purchase;
             278          (25) property purchased for resale in this state, in the regular course of business, either
             279      in its original form or as an ingredient or component part of a manufactured or compounded
             280      product;
             281          (26) property upon which a sales or use tax was paid to some other state, or one of its
             282      subdivisions, except that the state shall be paid any difference between the tax paid and the tax
             283      imposed by this part and Part 2, Local Sales and Use Tax Act, and no adjustment is allowed if
             284      the tax paid was greater than the tax imposed by this part and Part 2, Local Sales and Use Tax
             285      Act;
             286          (27) any sale of a service described in Subsections 59-12-103 (1)(b), (c), and (d) to a
             287      person for use in compounding a service taxable under the subsections;
             288          (28) purchases made in accordance with the special supplemental nutrition program for
             289      women, infants, and children established in 42 U.S.C. Sec. 1786;
             290          (29) beginning on July 1, 1999, through June 30, 2014, sales or leases of rolls, rollers,
             291      refractory brick, electric motors, or other replacement parts used in the furnaces, mills, or ovens
             292      of a steel mill described in SIC Code 3312 of the 1987 Standard Industrial Classification
             293      Manual of the federal Executive Office of the President, Office of Management and Budget;
             294          (30) sales of a boat of a type required to be registered under Title 73, Chapter 18, State
             295      Boating Act, a boat trailer, or an outboard motor if the boat, trailer, or outboard motor is both
             296      not:
             297          (a) registered in this state; and
             298          (b) used in this state except as necessary to transport the boat, boat trailer, or outboard
             299      motor to the borders of this state;
             300          (31) sales of aircraft manufactured in Utah if sold for delivery and use outside Utah
             301      where a sales or use tax is not imposed, even if the title is passed in Utah;
             302          (32) amounts paid for the purchase of telephone service for purposes of providing
             303      telephone service;
             304          (33) sales or leases of vehicles to, or use of vehicles by an authorized carrier;
             305          (34) (a) 45% of the sales price of any new manufactured home; and
             306          (b) 100% of the sales price of any used manufactured home;


             307          (35) sales relating to schools and fundraising sales;
             308          (36) sales or rentals of durable medical equipment if:
             309          (a) a person presents a prescription for the durable medical equipment; and
             310          (b) the durable medical equipment is used for home use only;
             311          (37) (a) sales to a ski resort of electricity to operate a passenger ropeway as defined in
             312      Section 72-11-102 ; and
             313          (b) the commission shall by rule determine the method for calculating sales exempt
             314      under Subsection (37)(a) that are not separately metered and accounted for in utility billings;
             315          (38) sales to a ski resort of:
             316          (a) snowmaking equipment;
             317          (b) ski slope grooming equipment;
             318          (c) passenger ropeways as defined in Section 72-11-102 ; or
             319          (d) parts used in the repairs or renovations of equipment or passenger ropeways
             320      described in Subsections (38)(a) through (c);
             321          (39) sales of natural gas, electricity, heat, coal, fuel oil, or other fuels for industrial use;
             322          (40) (a) subject to Subsection (40)(b), sales or rentals of the right to use or operate for
             323      amusement, entertainment, or recreation an unassisted amusement device as defined in Section
             324      59-12-102 ;
             325          (b) if a seller that sells or rents at the same business location the right to use or operate
             326      for amusement, entertainment, or recreation one or more unassisted amusement devices and
             327      one or more assisted amusement devices, the exemption described in Subsection (40)(a)
             328      applies if the seller separately accounts for the sales or rentals of the right to use or operate for
             329      amusement, entertainment, or recreation for the assisted amusement devices; and
             330          (c) for purposes of Subsection (40)(b) and in accordance with Title 63, Chapter 46a,
             331      Utah Administrative Rulemaking Act, the commission may make rules:
             332          (i) governing the circumstances under which sales are at the same business location;
             333      and
             334          (ii) establishing the procedures and requirements for a seller to separately account for
             335      the sales or rentals of the right to use or operate for amusement, entertainment, or recreation for
             336      assisted amusement devices;
             337          (41) sales by the state or a political subdivision of the state, except state institutions of


             338      higher education as defined in Section 53B-3-102 , of:
             339          (a) photocopies; or
             340          (b) other copies of records held or maintained by the state or a political subdivision of
             341      the state;
             342          (42) amounts paid for admission to an athletic event at an institution of higher
             343      education that is subject to the provisions of Title IX of the Education Amendments of 1972,
             344      20 U.S.C. Sec. 1681 et seq.;
             345          (43) sales of telephone service charged to a prepaid telephone calling card;
             346          (44) (a) sales of:
             347          (i) hearing aids;
             348          (ii) hearing aid accessories; or
             349          (iii) except as provided in Subsection (44)(b), parts used in the repairs or renovations
             350      of hearing aids or hearing aid accessories; and
             351          (b) for purposes of this Subsection (44), notwithstanding Subsection (44)(a)(iii),
             352      "parts" does not include batteries;
             353          (45) (a) sales made to or by:
             354          (i) an area agency on aging; or
             355          (ii) a senior citizen center owned by a county, city, or town; or
             356          (b) sales made by a senior citizen center that contracts with an area agency on aging;
             357          (46) sales or leases of semiconductor fabricating, processing, research, or development
             358      materials regardless of whether the semiconductor fabricating, processing, research, or
             359      development materials:
             360          (a) actually come into contact with a semiconductor; or
             361          (b) ultimately become incorporated into real property;
             362          (47) an amount paid by or charged to a purchaser for accommodations and services
             363      described in Subsection 59-12-103 (1)(i) to the extent the amount is exempt under Section
             364      59-12-104.2 ;
             365          (48) beginning on September 1, 2001, the lease or use of a vehicle issued a temporary
             366      sports event registration certificate in accordance with Section 41-3-306 for the event period
             367      specified on the temporary sports event registration certificate;
             368          (49) sales or uses of electricity, if the sales or uses are:


             369          (a) made under a tariff adopted by the Public Service Commission of Utah only for
             370      purchase of electricity produced from a new wind, geothermal, biomass, or solar power energy
             371      source, as designated in the tariff by the Public Service Commission of Utah; and
             372          (b) for an amount of electricity that is:
             373          (i) unrelated to the amount of electricity used by the person purchasing the electricity
             374      under the tariff described in Subsection (49)(a); and
             375          (ii) equivalent to the number of kilowatthours specified in the tariff described in
             376      Subsection (49)(a) that may be purchased under the tariff described in Subsection (49)(a);
             377          (50) sales or rentals of mobility enhancing equipment if a person presents a
             378      prescription for the mobility enhancing equipment;
             379          (51) sales of water in a:
             380          (a) pipe;
             381          (b) conduit;
             382          (c) ditch; or
             383          (d) reservoir;
             384          (52) sales of currency or coinage that constitute legal tender of the United States or of a
             385      foreign nation;
             386          (53) (a) sales of an item described in Subsection (53)(b) if the item:
             387          (i) does not constitute legal tender of any nation; and
             388          (ii) has a gold, silver, or platinum content of 80% or more; and
             389          (b) Subsection (53)(a) applies to a gold, silver, or platinum:
             390          (i) ingot;
             391          (ii) bar;
             392          (iii) medallion; or
             393          (iv) decorative coin;
             394          (54) amounts paid on a sale-leaseback transaction;
             395          (55) sales of a prosthetic device:
             396          (a) for use on or in a human;
             397          (b) for which a prescription is issued; and
             398          (c) to a person that presents a prescription for the prosthetic device;
             399          (56) (a) except as provided in Subsection (56)(b), purchases, leases, or rentals of


             400      machinery or equipment by an establishment described in Subsection (56)(c) if the machinery
             401      or equipment is primarily used in the production or postproduction of the following media for
             402      commercial distribution:
             403          (i) a motion picture;
             404          (ii) a television program;
             405          (iii) a movie made for television;
             406          (iv) a music video;
             407          (v) a commercial;
             408          (vi) a documentary; or
             409          (vii) a medium similar to Subsections (56)(a)(i) through (vi) as determined by the
             410      commission by administrative rule made in accordance with Subsection (56)(d); or
             411          (b) notwithstanding Subsection (56)(a), purchases, leases, or rentals of machinery or
             412      equipment by an establishment described in Subsection (56)(c) that is used for the production
             413      or postproduction of the following are subject to the taxes imposed by this chapter:
             414          (i) a live musical performance;
             415          (ii) a live news program; or
             416          (iii) a live sporting event;
             417          (c) the following establishments listed in the 1997 North American Industry
             418      Classification System of the federal Executive Office of the President, Office of Management
             419      and Budget, apply to Subsections (56)(a) and (b):
             420          (i) NAICS Code 512110; or
             421          (ii) NAICS Code 51219; and
             422          (d) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             423      commission may by rule:
             424          (i) prescribe what constitutes a medium similar to Subsections (56)(a)(i) through (vi);
             425      or
             426          (ii) define:
             427          (A) "commercial distribution";
             428          (B) "live musical performance";
             429          (C) "live news program"; or
             430          (D) "live sporting event";


             431          (57) (a) leases of seven or more years or purchases made on or after July 1, 2004 but on
             432      or before June 30, 2009, of machinery or equipment that:
             433          (i) is leased or purchased for or by a facility that:
             434          (A) is a renewable energy production facility;
             435          (B) is located in the state; and
             436          (C) (I) becomes operational on or after July 1, 2004; or
             437          (II) has its generation capacity increased by one or more megawatts on or after July 1,
             438      2004 as a result of the use of the machinery or equipment;
             439          (ii) has an economic life of five or more years; and
             440          (iii) is used to make the facility or the increase in capacity of the facility described in
             441      Subsection (57)(a)(i) operational up to the point of interconnection with an existing
             442      transmission grid including:
             443          (A) a wind turbine;
             444          (B) generating equipment;
             445          (C) a control and monitoring system;
             446          (D) a power line;
             447          (E) substation equipment;
             448          (F) lighting;
             449          (G) fencing;
             450          (H) pipes; or
             451          (I) other equipment used for locating a power line or pole; and
             452          (b) this Subsection (57) does not apply to:
             453          (i) machinery or equipment used in construction of:
             454          (A) a new renewable energy production facility; or
             455          (B) the increase in the capacity of a renewable energy production facility;
             456          (ii) contracted services required for construction and routine maintenance activities;
             457      and
             458          (iii) unless the machinery or equipment is used or acquired for an increase in capacity
             459      of the facility described in Subsection (57)(a)(i)(C)(II), machinery or equipment used or
             460      acquired after:
             461          (A) the renewable energy production facility described in Subsection (57)(a)(i) is


             462      operational as described in Subsection (57)(a)(iii); or
             463          (B) the increased capacity described in Subsection (57)(a)(i) is operational as described
             464      in Subsection (57)(a)(iii);
             465          (58) (a) leases of seven or more years or purchases made on or after July 1, 2004 but on
             466      or before June 30, 2009, of machinery or equipment that:
             467          (i) is leased or purchased for or by a facility that:
             468          (A) is a waste energy production facility;
             469          (B) is located in the state; and
             470          (C) (I) becomes operational on or after July 1, 2004; or
             471          (II) has its generation capacity increased by one or more megawatts on or after July 1,
             472      2004 as a result of the use of the machinery or equipment;
             473          (ii) has an economic life of five or more years; and
             474          (iii) is used to make the facility or the increase in capacity of the facility described in
             475      Subsection (58)(a)(i) operational up to the point of interconnection with an existing
             476      transmission grid including:
             477          (A) generating equipment;
             478          (B) a control and monitoring system;
             479          (C) a power line;
             480          (D) substation equipment;
             481          (E) lighting;
             482          (F) fencing;
             483          (G) pipes; or
             484          (H) other equipment used for locating a power line or pole; and
             485          (b) this Subsection (58) does not apply to:
             486          (i) machinery or equipment used in construction of:
             487          (A) a new waste energy facility; or
             488          (B) the increase in the capacity of a waste energy facility;
             489          (ii) contracted services required for construction and routine maintenance activities;
             490      and
             491          (iii) unless the machinery or equipment is used or acquired for an increase in capacity
             492      described in Subsection (58)(a)(i)(C)(II), machinery or equipment used or acquired after:


             493          (A) the waste energy facility described in Subsection (58)(a)(i) is operational as
             494      described in Subsection (58)(a)(iii); or
             495          (B) the increased capacity described in Subsection (58)(a)(i) is operational as described
             496      in Subsection (58)(a)(iii);
             497          (59) (a) leases of five or more years or purchases made on or after July 1, 2004 but on
             498      or before June 30, 2009, of machinery or equipment that:
             499          (i) is leased or purchased for or by a facility that:
             500          (A) is located in the state;
             501          (B) produces fuel from biomass energy including:
             502          (I) methanol; or
             503          (II) ethanol; and
             504          (C) (I) becomes operational on or after July 1, 2004; or
             505          (II) has its capacity to produce fuel increase by 25% or more on or after July 1, 2004 as
             506      a result of the installation of the machinery or equipment;
             507          (ii) has an economic life of five or more years; and
             508          (iii) is installed on the facility described in Subsection (59)(a)(i);
             509          (b) this Subsection (59) does not apply to:
             510          (i) machinery or equipment used in construction of:
             511          (A) a new facility described in Subsection (59)(a)(i); or
             512          (B) the increase in capacity of the facility described in Subsection (59)(a)(i); or
             513          (ii) contracted services required for construction and routine maintenance activities;
             514      and
             515          (iii) unless the machinery or equipment is used or acquired for an increase in capacity
             516      described in Subsection (59)(a)(i)(C)(II), machinery or equipment used or acquired after:
             517          (A) the facility described in Subsection (59)(a)(i) is operational; or
             518          (B) the increased capacity described in Subsection (59)(a)(i) is operational;
             519          (60) amounts paid to a purchaser as a rebate from the manufacturer of a new vehicle
             520      for purchasing the new vehicle;
             521          (61) (a) subject to Subsection (61)(b), sales of tangible personal property to persons
             522      within this state that is subsequently shipped outside the state and incorporated pursuant to
             523      contract into and becomes a part of real property located outside of this state, except to the


             524      extent that the other state or political entity imposes a sales, use, gross receipts, or other similar
             525      transaction excise tax on it against which the other state or political entity allows a credit for
             526      taxes imposed by this chapter; and
             527          (b) the exemption provided for in Subsection (61)(a):
             528          (i) is allowed only if the exemption is applied:
             529          (A) in calculating the purchase price of the tangible personal property; and
             530          (B) to a written contract that is in effect on July 1, 2004; and
             531          (ii) (A) does not apply beginning on the day on which the contract described in
             532      Subsection (61)(b)(i):
             533          (I) is substantially modified; or
             534          (II) terminates; and
             535          (B) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
             536      the commission may by rule prescribe the circumstances under which a contract is substantially
             537      modified;
             538          (62) purchases:
             539          (a) of one or more of the following items in printed or electronic format:
             540          (i) a list containing information that includes one or more:
             541          (A) names; or
             542          (B) addresses; or
             543          (ii) a database containing information that includes one or more:
             544          (A) names; or
             545          (B) addresses; and
             546          (b) used to send direct mail;
             547          (63) redemptions or repurchases of property by a person if that property was:
             548          (a) delivered to a pawnbroker as part of a pawn transaction; and
             549          (b) redeemed or repurchased within the time period established in a written agreement
             550      between the person and the pawnbroker for redeeming or repurchasing the property;
             551          (64) (a) purchases or leases of an item described in Subsection (64)(b) if the item:
             552          (i) is purchased or leased by, or on behalf of, a telephone service provider; and
             553          (ii) has a useful economic life of one or more years; and
             554          (b) the following apply to Subsection (64)(a):


             555          (i) telecommunications enabling or facilitating equipment, machinery, or software;
             556          (ii) telecommunications equipment, machinery, or software required for 911 service;
             557          (iii) telecommunications maintenance or repair equipment, machinery, or software;
             558          (iv) telecommunications switching or routing equipment, machinery, or software; or
             559          (v) telecommunications transmission equipment, machinery, or software; [and]
             560          (65) (a) beginning on July 1, 2006 and ending on June 30, 2016, purchases of tangible
             561      personal property used in the research and development of coal-to-liquids, oil shale, or tar
             562      sands technology; and
             563          (b) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             564      commission may, for purposes of Subsection (65)(a), make rules defining what constitutes
             565      tangible personal property used in the research and development of coal-to-liquids, oil shale,
             566      and tar sands technology[.]; and
             567          (66) sales of fuel to a common carrier that is a railroad for use in a locomotive engine.
             568          Section 2. Effective date.
             569          This bill takes effect on July 1, 2007.




Legislative Review Note
    as of 2-6-07 9:38 AM


Office of Legislative Research and General Counsel


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