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H.B. 165

             1     

SALES AND USE TAX EXEMPTIONS

             2     
RELATING TO AIRCRAFT

             3     
2008 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Chief Sponsor: Brad L. Dee

             6     
Senate Sponsor: Sheldon L. Killpack

             7     
             8      LONG TITLE
             9      General Description:
             10          This bill amends the Sales and Use Tax Act relating to sales and use tax exemptions for
             11      aircraft.
             12      Highlighted Provisions:
             13          This bill:
             14          .    addresses certain sales and use tax exemptions relating to:
             15              .    sales of parts, equipment, or supplies for aircraft; or
             16              .    sales of aircraft; and
             17          .    makes technical changes.
             18      Monies Appropriated in this Bill:
             19          None
             20      Other Special Clauses:
             21          This bill takes effect on July 1, 2008.
             22      Utah Code Sections Affected:
             23      AMENDS:
             24          59-12-104, as last amended by Laws of Utah 2007, Chapters 76, 195, 214, 224, 288,
             25      295, and 329
             26     
             27      Be it enacted by the Legislature of the state of Utah:


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


             59      commerce], including services relating to the installation of parts, equipment, or supplies in the
             60      aircraft;
             61          (b) renovation of an aircraft; or
             62          (c) repair of an aircraft;
             63          (6) sales of commercials, motion picture films, prerecorded audio program tapes or
             64      records, and prerecorded video tapes by a producer, distributor, or studio to a motion picture
             65      exhibitor, distributor, or commercial television or radio broadcaster;
             66          (7) (a) subject to Subsection (7)(b), sales of cleaning or washing of tangible personal
             67      property if the cleaning or washing of the tangible personal property is not assisted cleaning or
             68      washing of tangible personal property;
             69          (b) if a seller that sells at the same business location assisted cleaning or washing of
             70      tangible personal property and cleaning or washing of tangible personal property that is not
             71      assisted cleaning or washing of tangible personal property, the exemption described in
             72      Subsection (7)(a) applies if the seller separately accounts for the sales of the assisted cleaning
             73      or washing of the tangible personal property; and
             74          (c) for purposes of Subsection (7)(b) and in accordance with Title 63, Chapter 46a,
             75      Utah Administrative Rulemaking Act, the commission may make rules:
             76          (i) governing the circumstances under which sales are at the same business location;
             77      and
             78          (ii) establishing the procedures and requirements for a seller to separately account for
             79      sales of assisted cleaning or washing of tangible personal property;
             80          (8) sales made to or by religious or charitable institutions in the conduct of their regular
             81      religious or charitable functions and activities, if the requirements of Section 59-12-104.1 are
             82      fulfilled;
             83          (9) sales of a vehicle of a type required to be registered under the motor vehicle laws of
             84      this state if the vehicle is:
             85          (a) not registered in this state; and
             86          (b) (i) not used in this state; or
             87          (ii) used in this state:
             88          (A) if the vehicle is not used to conduct business, for a time period that does not
             89      exceed the longer of:


             90          (I) 30 days in any calendar year; or
             91          (II) the time period necessary to transport the vehicle to the borders of this state; or
             92          (B) if the vehicle is used to conduct business, for the time period necessary to transport
             93      the vehicle to the borders of this state;
             94          (10) (a) amounts paid for an item described in Subsection (10)(b) if:
             95          (i) the item is intended for human use; and
             96          (ii) (A) a prescription was issued for the item; or
             97          (B) the item was purchased by a hospital or other medical facility; and
             98          (b) (i) Subsection (10)(a) applies to:
             99          (A) a drug;
             100          (B) a syringe; or
             101          (C) a stoma supply; and
             102          (ii) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             103      commission may by rule define the terms:
             104          (A) "syringe"; or
             105          (B) "stoma supply";
             106          (11) sales or use of property, materials, or services used in the construction of or
             107      incorporated in pollution control facilities allowed by Sections 19-2-123 through 19-2-127 ;
             108          (12) (a) sales of an item described in Subsection (12)(c) served by:
             109          (i) the following if the item described in Subsection (12)(c) is not available to the
             110      general public:
             111          (A) a church; or
             112          (B) a charitable institution;
             113          (ii) an institution of higher education if:
             114          (A) the item described in Subsection (12)(c) is not available to the general public; or
             115          (B) the item described in Subsection (12)(c) is prepaid as part of a student meal plan
             116      offered by the institution of higher education; or
             117          (b) sales of an item described in Subsection (12)(c) provided for a patient by:
             118          (i) a medical facility; or
             119          (ii) a nursing facility; and
             120          (c) Subsections (12)(a) and (b) apply to:


             121          (i) food and food ingredients;
             122          (ii) prepared food; or
             123          (iii) alcoholic beverages;
             124          (13) (a) except as provided in Subsection (13)(b), the sale of tangible personal property
             125      by a person:
             126          (i) regardless of the number of transactions involving the sale of that tangible personal
             127      property by that person; and
             128          (ii) not regularly engaged in the business of selling that type of tangible personal
             129      property;
             130          (b) this Subsection (13) does not apply if:
             131          (i) the sale is one of a series of sales of a character to indicate that the person is
             132      regularly engaged in the business of selling that type of tangible personal property;
             133          (ii) the person holds that person out as regularly engaged in the business of selling that
             134      type of tangible personal property;
             135          (iii) the person sells an item of tangible personal property that the person purchased as
             136      a sale that is exempt under Subsection (25); or
             137          (iv) the sale is of a vehicle or vessel required to be titled or registered under the laws of
             138      this state in which case the tax is based upon:
             139          (A) the bill of sale or other written evidence of value of the vehicle or vessel being
             140      sold; or
             141          (B) in the absence of a bill of sale or other written evidence of value, the fair market
             142      value of the vehicle or vessel being sold at the time of the sale as determined by the
             143      commission; and
             144          (c) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             145      commission shall make rules establishing the circumstances under which:
             146          (i) a person is regularly engaged in the business of selling a type of tangible personal
             147      property;
             148          (ii) a sale of tangible personal property is one of a series of sales of a character to
             149      indicate that a person is regularly engaged in the business of selling that type of tangible
             150      personal property; or
             151          (iii) a person holds that person out as regularly engaged in the business of selling a type


             152      of tangible personal property;
             153          (14) (a) except as provided in Subsection (14)(b), amounts paid or charged on or after
             154      July 1, 2006, for a purchase or lease by a manufacturing facility other than a cogeneration
             155      facility, for the following:
             156          (i) machinery and equipment that:
             157          (A) is used:
             158          (I) for a manufacturing facility other than a manufacturing facility that is a scrap
             159      recycler described in Subsection 59-12-102 (48)(b):
             160          (Aa) in the manufacturing process; and
             161          (Bb) to manufacture an item sold as tangible personal property; or
             162          (II) for a manufacturing facility that is a scrap recycler described in Subsection
             163      59-12-102 (48)(b), to process an item sold as tangible personal property; and
             164          (B) has an economic life of three or more years; and
             165          (ii) normal operating repair or replacement parts that:
             166          (A) have an economic life of three or more years; and
             167          (B) are used:
             168          (I) for a manufacturing facility in the state other than a manufacturing facility that is a
             169      scrap recycler described in Subsection 59-12-102 (48)(b), in the manufacturing process; or
             170          (II) for a manufacturing facility in the state that is a scrap recycler described in
             171      Subsection 59-12-102 (48)(b), to process an item sold as tangible personal property;
             172          (b) (i) amounts paid or charged on or after July 1, 2005, for a purchase or lease by a
             173      manufacturing facility that is a cogeneration facility placed in service on or after May 1, 2006,
             174      for the following:
             175          (A) machinery and equipment that:
             176          (I) is used:
             177          (Aa) in the manufacturing process; and
             178          (Bb) to manufacture an item sold as tangible personal property; and
             179          (II) has an economic life of three or more years; and
             180          (B) normal operating repair or replacement parts that:
             181          (I) are used in the manufacturing process in a manufacturing facility in the state; and
             182          (II) have an economic life of three or more years; and


             183          (ii) for amounts paid or charged on or after July 1, 2005, but on or before June 30,
             184      2006, for a purchase or lease described in Subsection (14)(b)(i), a cogeneration facility may
             185      claim the exemption allowed by Subsection (14)(b)(i) by filing for a refund:
             186          (A) for sales and use taxes paid under this chapter on the purchase or lease payment;
             187      and
             188          (B) in accordance with Section 59-12-110 ;
             189          (c) amounts paid or charged for a purchase or lease made on or after January 1, 2008,
             190      by an establishment described in NAICS Subsector 212, Mining (except Oil and Gas), or
             191      NAICS Code 213113, Support Activities for Coal Mining, 213114, Support Activities for
             192      Metal Mining, or 213115, Support Activities for Nonmetallic Minerals (except Fuels) Mining,
             193      of the 2002 North American Industry Classification System of the federal Executive Office of
             194      the President, Office of Management and Budget:
             195          (i) machinery and equipment that:
             196          (A) are used in:
             197          (I) the production process, other than the production of real property; or
             198          (II) research and development; and
             199          (B) have an economic life of three or more years; and
             200          (ii) normal operating repair or replacement parts that:
             201          (A) have an economic life of three or more years; and
             202          (B) are used in:
             203          (I) the production process, other than the production of real property, in an
             204      establishment described in this Subsection (14)(c) in the state; or
             205          (II) research and development in an establishment described in this Subsection (14)(c)
             206      in the state;
             207          (d) for purposes of this Subsection (14) and in accordance with Title 63, Chapter 46a,
             208      Utah Administrative Rulemaking Act, the commission:
             209          (i) shall by rule define the term "establishment"; and
             210          (ii) may by rule define what constitutes:
             211          (A) processing an item sold as tangible personal property;
             212          (B) the production process, other than the production of real property; or
             213          (C) research and development; and


             214          (e) on or before October 1, 2011, and every five years after October 1, 2011, the
             215      commission shall:
             216          (i) review the exemptions described in this Subsection (14) and make
             217      recommendations to the Revenue and Taxation Interim Committee concerning whether the
             218      exemptions should be continued, modified, or repealed; and
             219          (ii) include in its report:
             220          (A) the cost of the exemptions;
             221          (B) the purpose and effectiveness of the exemptions; and
             222          (C) the benefits of the exemptions to the state;
             223          (15) (a) sales of the following if the requirements of Subsection (15)(b) are met:
             224          (i) tooling;
             225          (ii) special tooling;
             226          (iii) support equipment;
             227          (iv) special test equipment; or
             228          (v) parts used in the repairs or renovations of tooling or equipment described in
             229      Subsections (15)(a)(i) through (iv); and
             230          (b) sales of tooling, equipment, or parts described in Subsection (15)(a) are exempt if:
             231          (i) the tooling, equipment, or parts are used or consumed exclusively in the
             232      performance of any aerospace or electronics industry contract with the United States
             233      government or any subcontract under that contract; and
             234          (ii) under the terms of the contract or subcontract described in Subsection (15)(b)(i),
             235      title to the tooling, equipment, or parts is vested in the United States government as evidenced
             236      by:
             237          (A) a government identification tag placed on the tooling, equipment, or parts; or
             238          (B) listing on a government-approved property record if placing a government
             239      identification tag on the tooling, equipment, or parts is impractical;
             240          (16) sales of newspapers or newspaper subscriptions;
             241          (17) (a) except as provided in Subsection (17)(b), tangible personal property traded in
             242      as full or part payment of the purchase price, except that for purposes of calculating sales or use
             243      tax upon vehicles not sold by a vehicle dealer, trade-ins are limited to other vehicles only, and
             244      the tax is based upon:


             245          (i) the bill of sale or other written evidence of value of the vehicle being sold and the
             246      vehicle being traded in; or
             247          (ii) in the absence of a bill of sale or other written evidence of value, the then existing
             248      fair market value of the vehicle being sold and the vehicle being traded in, as determined by the
             249      commission; and
             250          (b) notwithstanding Subsection (17)(a), Subsection (17)(a) does not apply to the
             251      following items of tangible personal property traded in as full or part payment of the purchase
             252      price:
             253          (i) money;
             254          (ii) electricity;
             255          (iii) water;
             256          (iv) gas; or
             257          (v) steam;
             258          (18) (a) (i) except as provided in Subsection (18)(b), sales of tangible personal property
             259      used or consumed primarily and directly in farming operations, regardless of whether the
             260      tangible personal property:
             261          (A) becomes part of real estate; or
             262          (B) is installed by a:
             263          (I) farmer;
             264          (II) contractor; or
             265          (III) subcontractor; or
             266          (ii) sales of parts used in the repairs or renovations of tangible personal property if the
             267      tangible personal property is exempt under Subsection (18)(a)(i); and
             268          (b) notwithstanding Subsection (18)(a), amounts paid or charged for the following
             269      tangible personal property are subject to the taxes imposed by this chapter:
             270          (i) (A) subject to Subsection (18)(b)(i)(B), the following tangible personal property if
             271      the tangible personal property is used in a manner that is incidental to farming:
             272          (I) machinery;
             273          (II) equipment;
             274          (III) materials; or
             275          (IV) supplies; and


             276          (B) tangible personal property that is considered to be used in a manner that is
             277      incidental to farming includes:
             278          (I) hand tools; or
             279          (II) maintenance and janitorial equipment and supplies;
             280          (ii) (A) subject to Subsection (18)(b)(ii)(B), tangible personal property if the tangible
             281      personal property is used in an activity other than farming; and
             282          (B) tangible personal property that is considered to be used in an activity other than
             283      farming includes:
             284          (I) office equipment and supplies; or
             285          (II) equipment and supplies used in:
             286          (Aa) the sale or distribution of farm products;
             287          (Bb) research; or
             288          (Cc) transportation; or
             289          (iii) a vehicle required to be registered by the laws of this state during the period
             290      ending two years after the date of the vehicle's purchase;
             291          (19) sales of hay;
             292          (20) exclusive sale during the harvest season of seasonal crops, seedling plants, or
             293      garden, farm, or other agricultural produce if the seasonal crops are, seedling plants are, or
             294      garden, farm, or other agricultural produce is sold by:
             295          (a) the producer of the seasonal crops, seedling plants, or garden, farm, or other
             296      agricultural produce;
             297          (b) an employee of the producer described in Subsection (20)(a); or
             298          (c) a member of the immediate family of the producer described in Subsection (20)(a);
             299          (21) purchases made using a coupon as defined in 7 U.S.C. Sec. 2012 that is issued
             300      under the Food Stamp Program, 7 U.S.C. Sec. 2011 et seq.;
             301          (22) sales of nonreturnable containers, nonreturnable labels, nonreturnable bags,
             302      nonreturnable shipping cases, and nonreturnable casings to a manufacturer, processor,
             303      wholesaler, or retailer for use in packaging tangible personal property to be sold by that
             304      manufacturer, processor, wholesaler, or retailer;
             305          (23) property stored in the state for resale;
             306          (24) (a) purchases of property if:


             307          (i) the property is:
             308          (A) purchased outside of this state;
             309          (B) brought into this state:
             310          (I) at any time after the purchase described in Subsection (24)(a)(i)(A); and
             311          (II) by a nonresident person who is not living or working in this state at the time of the
             312      purchase;
             313          (C) used for the personal use or enjoyment of the nonresident person described in
             314      Subsection (24)(a)(i)(B)(II) while that nonresident person is within the state; and
             315          (D) not used in conducting business in this state; and
             316          (ii) for:
             317          (A) property other than the property described in Subsection (24)(a)(ii)(B), the first use
             318      of the property for a purpose for which the property is designed occurs outside of this state;
             319          (B) a boat, the boat is registered outside of this state; or
             320          (C) a vehicle other than a vehicle sold to an authorized carrier, the vehicle is registered
             321      outside of this state;
             322          (b) the exemption provided for in Subsection (24)(a) does not apply to:
             323          (i) a lease or rental of property; or
             324          (ii) a sale of a vehicle exempt under Subsection (33); and
             325          (c) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, for
             326      purposes of Subsection (24)(a), the commission may by rule define what constitutes the
             327      following:
             328          (i) conducting business in this state if that phrase has the same meaning in this
             329      Subsection (24) as in Subsection (66);
             330          (ii) the first use of property if that phrase has the same meaning in this Subsection (24)
             331      as in Subsection (66); or
             332          (iii) a purpose for which property is designed if that phrase has the same meaning in
             333      this Subsection (24) as in Subsection (66);
             334          (25) property purchased for resale in this state, in the regular course of business, either
             335      in its original form or as an ingredient or component part of a manufactured or compounded
             336      product;
             337          (26) property upon which a sales or use tax was paid to some other state, or one of its


             338      subdivisions, except that the state shall be paid any difference between the tax paid and the tax
             339      imposed by this part and Part 2, Local Sales and Use Tax Act, and no adjustment is allowed if
             340      the tax paid was greater than the tax imposed by this part and Part 2, Local Sales and Use Tax
             341      Act;
             342          (27) any sale of a service described in Subsections 59-12-103 (1)(b), (c), and (d) to a
             343      person for use in compounding a service taxable under the subsections;
             344          (28) purchases made in accordance with the special supplemental nutrition program for
             345      women, infants, and children established in 42 U.S.C. Sec. 1786;
             346          (29) beginning on July 1, 1999, through June 30, 2014, sales or leases of rolls, rollers,
             347      refractory brick, electric motors, or other replacement parts used in the furnaces, mills, or ovens
             348      of a steel mill described in SIC Code 3312 of the 1987 Standard Industrial Classification
             349      Manual of the federal Executive Office of the President, Office of Management and Budget;
             350          (30) sales of a boat of a type required to be registered under Title 73, Chapter 18, State
             351      Boating Act, a boat trailer, or an outboard motor if the boat, boat trailer, or outboard motor is:
             352          (a) not registered in this state; and
             353          (b) (i) not used in this state; or
             354          (ii) used in this state:
             355          (A) if the boat, boat trailer, or outboard motor is not used to conduct business, for a
             356      time period that does not exceed the longer of:
             357          (I) 30 days in any calendar year; or
             358          (II) the time period necessary to transport the boat, boat trailer, or outboard motor to
             359      the borders of this state; or
             360          (B) if the boat, boat trailer, or outboard motor is used to conduct business, for the time
             361      period necessary to transport the boat, boat trailer, or outboard motor to the borders of this
             362      state;
             363          (31) sales of aircraft [manufactured in Utah if sold for delivery and use outside Utah
             364      where a sales or use tax is not imposed, even if the title is passed in Utah];
             365          (32) amounts paid for the purchase of telephone service for purposes of providing
             366      telephone service;
             367          (33) sales, leases, or uses of the following:
             368          (a) a vehicle by an authorized carrier; or


             369          (b) tangible personal property that is installed on a vehicle:
             370          (i) sold or leased to or used by an authorized carrier; and
             371          (ii) before the vehicle is placed in service for the first time;
             372          (34) (a) 45% of the sales price of any new manufactured home; and
             373          (b) 100% of the sales price of any used manufactured home;
             374          (35) sales relating to schools and fundraising sales;
             375          (36) sales or rentals of durable medical equipment if:
             376          (a) a person presents a prescription for the durable medical equipment; and
             377          (b) the durable medical equipment is used for home use only;
             378          (37) (a) sales to a ski resort of electricity to operate a passenger ropeway as defined in
             379      Section 72-11-102 ; and
             380          (b) the commission shall by rule determine the method for calculating sales exempt
             381      under Subsection (37)(a) that are not separately metered and accounted for in utility billings;
             382          (38) sales to a ski resort of:
             383          (a) snowmaking equipment;
             384          (b) ski slope grooming equipment;
             385          (c) passenger ropeways as defined in Section 72-11-102 ; or
             386          (d) parts used in the repairs or renovations of equipment or passenger ropeways
             387      described in Subsections (38)(a) through (c);
             388          (39) sales of natural gas, electricity, heat, coal, fuel oil, or other fuels for industrial use;
             389          (40) (a) subject to Subsection (40)(b), sales or rentals of the right to use or operate for
             390      amusement, entertainment, or recreation an unassisted amusement device as defined in Section
             391      59-12-102 ;
             392          (b) if a seller that sells or rents at the same business location the right to use or operate
             393      for amusement, entertainment, or recreation one or more unassisted amusement devices and
             394      one or more assisted amusement devices, the exemption described in Subsection (40)(a)
             395      applies if the seller separately accounts for the sales or rentals of the right to use or operate for
             396      amusement, entertainment, or recreation for the assisted amusement devices; and
             397          (c) for purposes of Subsection (40)(b) and in accordance with Title 63, Chapter 46a,
             398      Utah Administrative Rulemaking Act, the commission may make rules:
             399          (i) governing the circumstances under which sales are at the same business location;


             400      and
             401          (ii) establishing the procedures and requirements for a seller to separately account for
             402      the sales or rentals of the right to use or operate for amusement, entertainment, or recreation for
             403      assisted amusement devices;
             404          (41) (a) sales of photocopies by:
             405          (i) a governmental entity; or
             406          (ii) an entity within the state system of public education, including:
             407          (A) a school; or
             408          (B) the State Board of Education; or
             409          (b) sales of publications by a governmental entity;
             410          (42) amounts paid for admission to an athletic event at an institution of higher
             411      education that is subject to the provisions of Title IX of the Education Amendments of 1972,
             412      20 U.S.C. Sec. 1681 et seq.;
             413          (43) sales of telephone service charged to a prepaid telephone calling card;
             414          (44) (a) sales of:
             415          (i) hearing aids;
             416          (ii) hearing aid accessories; or
             417          (iii) except as provided in Subsection (44)(b), parts used in the repairs or renovations
             418      of hearing aids or hearing aid accessories; and
             419          (b) for purposes of this Subsection (44), notwithstanding Subsection (44)(a)(iii),
             420      "parts" does not include batteries;
             421          (45) (a) sales made to or by:
             422          (i) an area agency on aging; or
             423          (ii) a senior citizen center owned by a county, city, or town; or
             424          (b) sales made by a senior citizen center that contracts with an area agency on aging;
             425          (46) sales or leases of semiconductor fabricating, processing, research, or development
             426      materials regardless of whether the semiconductor fabricating, processing, research, or
             427      development materials:
             428          (a) actually come into contact with a semiconductor; or
             429          (b) ultimately become incorporated into real property;
             430          (47) an amount paid by or charged to a purchaser for accommodations and services


             431      described in Subsection 59-12-103 (1)(i) to the extent the amount is exempt under Section
             432      59-12-104.2 ;
             433          (48) beginning on September 1, 2001, the lease or use of a vehicle issued a temporary
             434      sports event registration certificate in accordance with Section 41-3-306 for the event period
             435      specified on the temporary sports event registration certificate;
             436          (49) sales or uses of electricity, if the sales or uses are:
             437          (a) made under a tariff adopted by the Public Service Commission of Utah only for
             438      purchase of electricity produced from a new wind, geothermal, biomass, or solar power energy
             439      source, as designated in the tariff by the Public Service Commission of Utah; and
             440          (b) for an amount of electricity that is:
             441          (i) unrelated to the amount of electricity used by the person purchasing the electricity
             442      under the tariff described in Subsection (49)(a); and
             443          (ii) equivalent to the number of kilowatthours specified in the tariff described in
             444      Subsection (49)(a) that may be purchased under the tariff described in Subsection (49)(a);
             445          (50) sales or rentals of mobility enhancing equipment if a person presents a
             446      prescription for the mobility enhancing equipment;
             447          (51) sales of water in a:
             448          (a) pipe;
             449          (b) conduit;
             450          (c) ditch; or
             451          (d) reservoir;
             452          (52) sales of currency or coinage that constitute legal tender of the United States or of a
             453      foreign nation;
             454          (53) (a) sales of an item described in Subsection (53)(b) if the item:
             455          (i) does not constitute legal tender of any nation; and
             456          (ii) has a gold, silver, or platinum content of 80% or more; and
             457          (b) Subsection (53)(a) applies to a gold, silver, or platinum:
             458          (i) ingot;
             459          (ii) bar;
             460          (iii) medallion; or
             461          (iv) decorative coin;


             462          (54) amounts paid on a sale-leaseback transaction;
             463          (55) sales of a prosthetic device:
             464          (a) for use on or in a human;
             465          (b) for which a prescription is issued; and
             466          (c) to a person that presents a prescription for the prosthetic device;
             467          (56) (a) except as provided in Subsection (56)(b), purchases, leases, or rentals of
             468      machinery or equipment by an establishment described in Subsection (56)(c) if the machinery
             469      or equipment is primarily used in the production or postproduction of the following media for
             470      commercial distribution:
             471          (i) a motion picture;
             472          (ii) a television program;
             473          (iii) a movie made for television;
             474          (iv) a music video;
             475          (v) a commercial;
             476          (vi) a documentary; or
             477          (vii) a medium similar to Subsections (56)(a)(i) through (vi) as determined by the
             478      commission by administrative rule made in accordance with Subsection (56)(d); or
             479          (b) notwithstanding Subsection (56)(a), purchases, leases, or rentals of machinery or
             480      equipment by an establishment described in Subsection (56)(c) that is used for the production
             481      or postproduction of the following are subject to the taxes imposed by this chapter:
             482          (i) a live musical performance;
             483          (ii) a live news program; or
             484          (iii) a live sporting event;
             485          (c) the following establishments listed in the 1997 North American Industry
             486      Classification System of the federal Executive Office of the President, Office of Management
             487      and Budget, apply to Subsections (56)(a) and (b):
             488          (i) NAICS Code 512110; or
             489          (ii) NAICS Code 51219; and
             490          (d) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             491      commission may by rule:
             492          (i) prescribe what constitutes a medium similar to Subsections (56)(a)(i) through (vi);


             493      or
             494          (ii) define:
             495          (A) "commercial distribution";
             496          (B) "live musical performance";
             497          (C) "live news program"; or
             498          (D) "live sporting event";
             499          (57) (a) leases of seven or more years or purchases made on or after July 1, 2004 but on
             500      or before June 30, 2009, of machinery or equipment that:
             501          (i) is leased or purchased for or by a facility that:
             502          (A) is a renewable energy production facility;
             503          (B) is located in the state; and
             504          (C) (I) becomes operational on or after July 1, 2004; or
             505          (II) has its generation capacity increased by one or more megawatts on or after July 1,
             506      2004 as a result of the use of the machinery or equipment;
             507          (ii) has an economic life of five or more years; and
             508          (iii) is used to make the facility or the increase in capacity of the facility described in
             509      Subsection (57)(a)(i) operational up to the point of interconnection with an existing
             510      transmission grid including:
             511          (A) a wind turbine;
             512          (B) generating equipment;
             513          (C) a control and monitoring system;
             514          (D) a power line;
             515          (E) substation equipment;
             516          (F) lighting;
             517          (G) fencing;
             518          (H) pipes; or
             519          (I) other equipment used for locating a power line or pole; and
             520          (b) this Subsection (57) does not apply to:
             521          (i) machinery or equipment used in construction of:
             522          (A) a new renewable energy production facility; or
             523          (B) the increase in the capacity of a renewable energy production facility;


             524          (ii) contracted services required for construction and routine maintenance activities;
             525      and
             526          (iii) unless the machinery or equipment is used or acquired for an increase in capacity
             527      of the facility described in Subsection (57)(a)(i)(C)(II), machinery or equipment used or
             528      acquired after:
             529          (A) the renewable energy production facility described in Subsection (57)(a)(i) is
             530      operational as described in Subsection (57)(a)(iii); or
             531          (B) the increased capacity described in Subsection (57)(a)(i) is operational as described
             532      in Subsection (57)(a)(iii);
             533          (58) (a) leases of seven or more years or purchases made on or after July 1, 2004 but on
             534      or before June 30, 2009, of machinery or equipment that:
             535          (i) is leased or purchased for or by a facility that:
             536          (A) is a waste energy production facility;
             537          (B) is located in the state; and
             538          (C) (I) becomes operational on or after July 1, 2004; or
             539          (II) has its generation capacity increased by one or more megawatts on or after July 1,
             540      2004 as a result of the use of the machinery or equipment;
             541          (ii) has an economic life of five or more years; and
             542          (iii) is used to make the facility or the increase in capacity of the facility described in
             543      Subsection (58)(a)(i) operational up to the point of interconnection with an existing
             544      transmission grid including:
             545          (A) generating equipment;
             546          (B) a control and monitoring system;
             547          (C) a power line;
             548          (D) substation equipment;
             549          (E) lighting;
             550          (F) fencing;
             551          (G) pipes; or
             552          (H) other equipment used for locating a power line or pole; and
             553          (b) this Subsection (58) does not apply to:
             554          (i) machinery or equipment used in construction of:


             555          (A) a new waste energy facility; or
             556          (B) the increase in the capacity of a waste energy facility;
             557          (ii) contracted services required for construction and routine maintenance activities;
             558      and
             559          (iii) unless the machinery or equipment is used or acquired for an increase in capacity
             560      described in Subsection (58)(a)(i)(C)(II), machinery or equipment used or acquired after:
             561          (A) the waste energy facility described in Subsection (58)(a)(i) is operational as
             562      described in Subsection (58)(a)(iii); or
             563          (B) the increased capacity described in Subsection (58)(a)(i) is operational as described
             564      in Subsection (58)(a)(iii);
             565          (59) (a) leases of five or more years or purchases made on or after July 1, 2004 but on
             566      or before June 30, 2009, of machinery or equipment that:
             567          (i) is leased or purchased for or by a facility that:
             568          (A) is located in the state;
             569          (B) produces fuel from biomass energy including:
             570          (I) methanol; or
             571          (II) ethanol; and
             572          (C) (I) becomes operational on or after July 1, 2004; or
             573          (II) has its capacity to produce fuel increase by 25% or more on or after July 1, 2004 as
             574      a result of the installation of the machinery or equipment;
             575          (ii) has an economic life of five or more years; and
             576          (iii) is installed on the facility described in Subsection (59)(a)(i);
             577          (b) this Subsection (59) does not apply to:
             578          (i) machinery or equipment used in construction of:
             579          (A) a new facility described in Subsection (59)(a)(i); or
             580          (B) the increase in capacity of the facility described in Subsection (59)(a)(i); or
             581          (ii) contracted services required for construction and routine maintenance activities;
             582      and
             583          (iii) unless the machinery or equipment is used or acquired for an increase in capacity
             584      described in Subsection (59)(a)(i)(C)(II), machinery or equipment used or acquired after:
             585          (A) the facility described in Subsection (59)(a)(i) is operational; or


             586          (B) the increased capacity described in Subsection (59)(a)(i) is operational;
             587          (60) amounts paid to a purchaser as a rebate from the manufacturer of a new vehicle
             588      for purchasing the new vehicle;
             589          (61) (a) subject to Subsection (61)(b), sales of tangible personal property to persons
             590      within this state that is subsequently shipped outside the state and incorporated pursuant to
             591      contract into and becomes a part of real property located outside of this state, except to the
             592      extent that the other state or political entity imposes a sales, use, gross receipts, or other similar
             593      transaction excise tax on it against which the other state or political entity allows a credit for
             594      taxes imposed by this chapter; and
             595          (b) the exemption provided for in Subsection (61)(a):
             596          (i) is allowed only if the exemption is applied:
             597          (A) in calculating the purchase price of the tangible personal property; and
             598          (B) to a written contract that is in effect on July 1, 2004; and
             599          (ii) (A) does not apply beginning on the day on which the contract described in
             600      Subsection (61)(b)(i):
             601          (I) is substantially modified; or
             602          (II) terminates; and
             603          (B) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
             604      the commission may by rule prescribe the circumstances under which a contract is substantially
             605      modified;
             606          (62) purchases:
             607          (a) of one or more of the following items in printed or electronic format:
             608          (i) a list containing information that includes one or more:
             609          (A) names; or
             610          (B) addresses; or
             611          (ii) a database containing information that includes one or more:
             612          (A) names; or
             613          (B) addresses; and
             614          (b) used to send direct mail;
             615          (63) redemptions or repurchases of property by a person if that property was:
             616          (a) delivered to a pawnbroker as part of a pawn transaction; and


             617          (b) redeemed or repurchased within the time period established in a written agreement
             618      between the person and the pawnbroker for redeeming or repurchasing the property;
             619          (64) (a) purchases or leases of an item described in Subsection (64)(b) if the item:
             620          (i) is purchased or leased by, or on behalf of, a telephone service provider; and
             621          (ii) has a useful economic life of one or more years; and
             622          (b) the following apply to Subsection (64)(a):
             623          (i) telecommunications enabling or facilitating equipment, machinery, or software;
             624          (ii) telecommunications equipment, machinery, or software required for 911 service;
             625          (iii) telecommunications maintenance or repair equipment, machinery, or software;
             626          (iv) telecommunications switching or routing equipment, machinery, or software; or
             627          (v) telecommunications transmission equipment, machinery, or software;
             628          (65) (a) beginning on July 1, 2006, and ending on June 30, 2016, purchases of tangible
             629      personal property used in the research and development of coal-to-liquids, oil shale, or tar
             630      sands technology; and
             631          (b) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             632      commission may, for purposes of Subsection (65)(a), make rules defining what constitutes
             633      tangible personal property used in the research and development of coal-to-liquids, oil shale,
             634      and tar sands technology;
             635          (66) (a) purchases of property if:
             636          (i) the property is:
             637          (A) purchased outside of this state;
             638          (B) brought into this state at any time after the purchase described in Subsection
             639      (66)(a)(i)(A); and
             640          (C) used in conducting business in this state; and
             641          (ii) for:
             642          (A) property other than the property described in Subsection (66)(a)(ii)(B), the first use
             643      of the property for a purpose for which the property is designed occurs outside of this state; or
             644          (B) a vehicle other than a vehicle sold to an authorized carrier, the vehicle is registered
             645      outside of this state;
             646          (b) the exemption provided for in Subsection (66)(a) does not apply to:
             647          (i) a lease or rental of property; or


             648          (ii) a sale of a vehicle exempt under Subsection (33); and
             649          (c) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, for
             650      purposes of Subsection (66)(a), the commission may by rule define what constitutes the
             651      following:
             652          (i) conducting business in this state if that phrase has the same meaning in this
             653      Subsection (66) as in Subsection (24);
             654          (ii) the first use of property if that phrase has the same meaning in this Subsection (66)
             655      as in Subsection (24); or
             656          (iii) a purpose for which property is designed if that phrase has the same meaning in
             657      this Subsection (66) as in Subsection (24);
             658          (67) sales of disposable home medical equipment or supplies if:
             659          (a) a person presents a prescription for the disposable home medical equipment or
             660      supplies;
             661          (b) the disposable home medical equipment or supplies are used exclusively by the
             662      person to whom the prescription described in Subsection (67)(a) is issued; and
             663          (c) the disposable home medical equipment and supplies are listed as eligible for
             664      payment under:
             665          (i) Title XVIII, federal Social Security Act; or
             666          (ii) the state plan for medical assistance under Title XIX, federal Social Security Act;
             667      and
             668          (68) sales to a public transit district under Title 17B, Chapter 2a, Part 8, Public Transit
             669      District Act, or to a subcontractor of a public transit district, including sales of construction
             670      materials that are to be installed or converted to real property owned by the public transit
             671      district.
             672          Section 2. Effective date.
             673          This bill takes effect on July 1, 2008.




Legislative Review Note
    as of 1-25-08 1:56 PM


Office of Legislative Research and General Counsel


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