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H.B. 251

             1     

SALES AND USE TAX REVISIONS

             2     
2008 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: John Dougall

             5     
Senate Sponsor: Wayne L. Niederhauser

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill amends the Sales and Use Tax Act.
             10      Highlighted Provisions:
             11          This bill:
             12          .    repeals certain dates relating to the taxation of food and food ingredients;
             13          .    modifies a sales and use tax exemption relating to sales of aircraft manufactured in
             14      the state;
             15          .    modifies requirements for calculating the use tax for purposes of a sales and use tax
             16      return filed quarterly;
             17          .    clarifies that a county, city, or town within a transit district may impose a sales and
             18      use tax of up to .25% to fund a public transportation system if within the county,
             19      city, or town a sales and use tax is also imposed under Title 59, Chapter 12, Part 15,
             20      County Option Sales and Use Tax for Highways, Fixed Guideways, or Systems for
             21      Public Transit; and
             22          .    makes technical changes.
             23      Monies Appropriated in this Bill:
             24          None
             25      Other Special Clauses:
             26          This bill provides an immediate effective date and provides for retrospective operation.
             27      Utah Code Sections Affected:


             28      AMENDS:
             29          59-12-103, as last amended by Laws of Utah 2007, Chapters 9, 101, 126, 206, and 288
             30          59-12-104, as last amended by Laws of Utah 2007, Chapters 76, 195, 214, 224, 288,
             31      295, and 329
             32          59-12-107, as last amended by Laws of Utah 2006, Chapter 253
             33          59-12-501, as last amended by Laws of Utah 2007, Chapters 202, 288, and 329
             34     
             35      Be it enacted by the Legislature of the state of Utah:
             36          Section 1. Section 59-12-103 is amended to read:
             37           59-12-103. Sales and use tax base -- Rates -- Effective dates -- Use of sales and use
             38      tax revenues.
             39          (1) A tax is imposed on the purchaser as provided in this part for amounts paid or
             40      charged for the following transactions:
             41          (a) retail sales of tangible personal property made within the state;
             42          (b) amounts paid:
             43          (i) to a:
             44          (A) telephone service provider regardless of whether the telephone service provider is
             45      municipally or privately owned; or
             46          (B) telegraph corporation:
             47          (I) as defined in Section 54-2-1 ; and
             48          (II) regardless of whether the telegraph corporation is municipally or privately owned;
             49      and
             50          (ii) for:
             51          (A) telephone service, other than mobile telecommunications service, that originates
             52      and terminates within the boundaries of this state;
             53          (B) mobile telecommunications service that originates and terminates within the
             54      boundaries of one state only to the extent permitted by the Mobile Telecommunications
             55      Sourcing Act, 4 U.S.C. Sec. 116 et seq.; or
             56          (C) telegraph service;
             57          (c) sales of the following for commercial use:
             58          (i) gas;


             59          (ii) electricity;
             60          (iii) heat;
             61          (iv) coal;
             62          (v) fuel oil; or
             63          (vi) other fuels;
             64          (d) sales of the following for residential use:
             65          (i) gas;
             66          (ii) electricity;
             67          (iii) heat;
             68          (iv) coal;
             69          (v) fuel oil; or
             70          (vi) other fuels;
             71          (e) sales of prepared food;
             72          (f) except as provided in Section 59-12-104 , amounts paid or charged as admission or
             73      user fees for theaters, movies, operas, museums, planetariums, shows of any type or nature,
             74      exhibitions, concerts, carnivals, amusement parks, amusement rides, circuses, menageries,
             75      fairs, races, contests, sporting events, dances, boxing matches, wrestling matches, closed circuit
             76      television broadcasts, billiard parlors, pool parlors, bowling lanes, golf, miniature golf, golf
             77      driving ranges, batting cages, skating rinks, ski lifts, ski runs, ski trails, snowmobile trails,
             78      tennis courts, swimming pools, water slides, river runs, jeep tours, boat tours, scenic cruises,
             79      horseback rides, sports activities, or any other amusement, entertainment, recreation,
             80      exhibition, cultural, or athletic activity;
             81          (g) amounts paid or charged for services for repairs or renovations of tangible personal
             82      property, unless Section 59-12-104 provides for an exemption from sales and use tax for:
             83          (i) the tangible personal property; and
             84          (ii) parts used in the repairs or renovations of the tangible personal property described
             85      in Subsection (1)(g)(i), whether or not any parts are actually used in the repairs or renovations
             86      of that tangible personal property;
             87          (h) except as provided in Subsection 59-12-104 (7), amounts paid or charged for
             88      assisted cleaning or washing of tangible personal property;
             89          (i) amounts paid or charged for tourist home, hotel, motel, or trailer court


             90      accommodations and services that are regularly rented for less than 30 consecutive days;
             91          (j) amounts paid or charged for laundry or dry cleaning services;
             92          (k) amounts paid or charged for leases or rentals of tangible personal property if within
             93      this state the tangible personal property is:
             94          (i) stored;
             95          (ii) used; or
             96          (iii) otherwise consumed;
             97          (l) amounts paid or charged for tangible personal property if within this state the
             98      tangible personal property is:
             99          (i) stored;
             100          (ii) used; or
             101          (iii) consumed; and
             102          (m) amounts paid or charged for prepaid telephone calling cards.
             103          (2) (a) Except as provided in Subsections (2)(b) through (e), a state tax and a local tax
             104      is imposed on a transaction described in Subsection (1) equal to the sum of:
             105          (i) a state tax imposed on the transaction at a tax rate of 4.65%; and
             106          (ii) a local tax equal to the sum of the tax rates a county, city, or town imposes on the
             107      transaction under this chapter other than this part.
             108          (b) Except as provided in Subsection (2)(d) or (e), a state tax and a local tax is imposed
             109      on a transaction described in Subsection (1)(d) equal to the sum of:
             110          (i) a state tax imposed on the transaction at a tax rate of 2%; and
             111          (ii) a local tax equal to the sum of the tax rates a county, city, or town imposes on the
             112      transaction under this chapter other than this part.
             113          (c) Except as provided in Subsection (2)(d) or (e), [beginning on January 1, 2007,] a
             114      state tax and a local tax is imposed on amounts paid or charged for food and food ingredients
             115      equal to the sum of:
             116          (i) a state tax imposed on the amounts paid or charged for food and food ingredients at
             117      a tax rate of 1.75%; and
             118          (ii) a local tax equal to the sum of the tax rates a county, city, or town imposes on the
             119      amounts paid or charged for food and food ingredients under this chapter other than this part.
             120          (d) Except as provided in Subsection (2)(e), if a seller collects a tax in accordance with


             121      Subsection 59-12-107 (1)(b) on a transaction described in Subsection (1), a state tax and a local
             122      tax is imposed on the transaction equal to the sum of:
             123          (i) a state tax imposed on the transaction at a tax rate of:
             124          (A) 4.65% for a transaction other than a transaction described in Subsection
             125      (2)(d)(i)(B) or (2)(d)(i)(C);
             126          (B) 2% for a transaction described in Subsection (1)(d); or
             127          (C) [beginning on January 1, 2007,] 1.75% on the amounts paid or charged for food
             128      and food ingredients; and
             129          (ii) a local tax imposed on the transaction at a tax rate equal to the sum of the following
             130      tax rates:
             131          (A) the tax rate authorized by Section 59-12-204 , but only if all of the counties, cities,
             132      and towns in the state impose the tax authorized by Section 59-12-204 ; and
             133          (B) the tax rate authorized by Section 59-12-1102 , but only if all of the counties in the
             134      state impose the tax authorized by Section 59-12-1102 .
             135          (e) (i) A state tax and a local tax is imposed on an entire bundled transaction as
             136      provided in this Subsection (2)(e) if the bundled transaction is attributable to food and food
             137      ingredients and tangible personal property other than food and food ingredients.
             138          (ii) If the tax on a bundled transaction described in Subsection (2)(e)(i) is collected by a
             139      seller other than a seller that collects a tax in accordance with Subsection 59-12-107 (1)(b),
             140      beginning on January 1, 2007, a state tax and a local tax is imposed on the entire bundled
             141      transaction equal to the sum of:
             142          (A) a state tax imposed on the entire bundled transaction at the tax rate described in
             143      Subsection (2)(a)(i); and
             144          (B) a local tax imposed on the entire bundled transaction at the sum of the tax rates
             145      described in Subsection (2)(a)(ii).
             146          (iii) If the tax on a bundled transaction described in Subsection (2)(e)(i) is collected by
             147      a seller in accordance with Subsection 59-12-107 (1)(b), beginning on January 1, 2007, a state
             148      tax and a local tax is imposed on the entire bundled transaction equal to the sum of:
             149          (A) a state tax imposed on the entire bundled transaction at the tax rate described in
             150      Subsection (2)(d)(i)(A); and
             151          (B) a local tax imposed on the entire bundled transaction at a tax rate equal to the sum


             152      of the following tax rates:
             153          (I) the tax rate authorized by Section 59-12-204 , but only if all of the counties, cities,
             154      and towns in the state impose the tax authorized by Section 59-12-204 ; and
             155          (II) the tax rate authorized by Section 59-12-1102 , but only if all of the counties in the
             156      state impose the tax authorized by Section 59-12-1102 .
             157          (f) Subject to Subsections (2)(g) and (h), a tax rate repeal or tax rate change for a tax
             158      rate imposed under the following shall take effect on the first day of a calendar quarter:
             159          (i) Subsection (2)(a)(i);
             160          (ii) Subsection (2)(b)(i);
             161          (iii) Subsection (2)(c)(i);
             162          (iv) Subsection (2)(d)(i);
             163          (v) Subsection (2)(e)(ii)(A); or
             164          (vi) Subsection (2)(e)(iii)(A).
             165          (g) (i) For a transaction described in Subsection (2)(g)(iii), a tax rate increase shall take
             166      effect on the first day of the first billing period that begins after the effective date of the tax rate
             167      increase if the billing period for the transaction begins before the effective date of a tax rate
             168      increase imposed under:
             169          (A) Subsection (2)(a)(i);
             170          (B) Subsection (2)(b)(i);
             171          (C) Subsection (2)(c)(i);
             172          (D) Subsection (2)(d)(i);
             173          (E) Subsection (2)(e)(ii)(A); or
             174          (F) Subsection (2)(e)(iii)(A).
             175          (ii) For a transaction described in Subsection (2)(g)(iii), the repeal of a tax or a tax rate
             176      decrease shall take effect on the first day of the last billing period that began before the
             177      effective date of the repeal of the tax or the tax rate decrease if the billing period for the
             178      transaction begins before the effective date of the repeal of the tax or the tax rate decrease
             179      imposed under:
             180          (A) Subsection (2)(a)(i);
             181          (B) Subsection (2)(b)(i);
             182          (C) Subsection (2)(c)(i);


             183          (D) Subsection (2)(d)(i);
             184          (E) Subsection (2)(e)(ii)(A); or
             185          (F) Subsection (2)(e)(iii)(A).
             186          (iii) Subsections (2)(g)(i) and (ii) apply to transactions subject to a tax under:
             187          (A) Subsection (1)(b);
             188          (B) Subsection (1)(c);
             189          (C) Subsection (1)(d);
             190          (D) Subsection (1)(e);
             191          (E) Subsection (1)(f);
             192          (F) Subsection (1)(g);
             193          (G) Subsection (1)(h);
             194          (H) Subsection (1)(i);
             195          (I) Subsection (1)(j); or
             196          (J) Subsection (1)(k).
             197          (h) (i) For a tax rate described in Subsection (2)(h)(ii), if a tax due on a catalogue sale
             198      is computed on the basis of sales and use tax rates published in the catalogue, a tax rate repeal
             199      or change in a tax rate takes effect:
             200          (A) on the first day of a calendar quarter; and
             201          (B) beginning 60 days after the effective date of the tax rate repeal or tax rate change.
             202          (ii) Subsection (2)(h)(i) applies to the tax rates described in the following:
             203          (A) Subsection (2)(a)(i);
             204          (B) Subsection (2)(b)(i);
             205          (C) Subsection (2)(c)(i);
             206          (D) Subsection (2)(d)(i);
             207          (E) Subsection (2)(e)(ii)(A); or
             208          (F) Subsection (2)(e)(iii)(A).
             209          (iii) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
             210      the commission may by rule define the term "catalogue sale."
             211          (3) (a) Except as provided in Subsections (4) through (10), the following state taxes
             212      shall be deposited into the General Fund:
             213          (i) the tax imposed by Subsection (2)(a)(i);


             214          (ii) the tax imposed by Subsection (2)(b)(i);
             215          (iii) the tax imposed by Subsection (2)(c)(i);
             216          (iv) the tax imposed by Subsection (2) (d)(i);
             217          (v) the tax imposed by Subsection (2)(e)(ii)(A); and
             218          (vi) the tax imposed by Subsection (2)(e)(iii)(A).
             219          (b) The following local taxes shall be distributed to a county, city, or town as provided
             220      in this chapter:
             221          (i) the tax imposed by Subsection (2)(a)(ii);
             222          (ii) the tax imposed by Subsection (2)(b)(ii);
             223          (iii) the tax imposed by Subsection (2)(c)(ii); and
             224          (iv) the tax imposed by Subsection (2)(e)(ii)(B).
             225          (c) (i) Notwithstanding any provision of this chapter, each county, city, or town in the
             226      state shall receive the county's, city's, or town's proportionate share of the revenues generated
             227      by the following local taxes as provided in Subsection (3)(c)(ii):
             228          (A) the local tax described in Subsection (2)(d)(ii); and
             229          (B) the local tax described in Subsection (2)(e)(iii)(B).
             230          (ii) For revenues generated by a tax described in Subsection (3)(c)(i), the commission
             231      shall determine a county's, city's, or town's proportionate share of the revenues by:
             232          (A) calculating an amount equal to the population of the unincorporated area of the
             233      county, city, or town divided by the total population of the state; and
             234          (B) multiplying the amount determined under Subsection (3)(c)(ii)(A) by the total
             235      amount of revenues generated by the taxes described in Subsection (3)(c)(i) for all counties,
             236      cities, and towns.
             237          (iii) (A) Except as provided in Subsection (3)(c)(iii)(B), population figures for
             238      purposes of this section shall be derived from the most recent official census or census estimate
             239      of the United States Census Bureau.
             240          (B) If a needed population estimate is not available from the United States Census
             241      Bureau, population figures shall be derived from the estimate from the Utah Population
             242      Estimates Committee created by executive order of the governor.
             243          (4) (a) Notwithstanding Subsection (3)(a), for a fiscal year beginning on or after July 1,
             244      2003, the lesser of the following amounts shall be used as provided in Subsections (4)(b)


             245      through (g):
             246          (i) for taxes listed under Subsection (3)(a), the amount of tax revenue generated:
             247          (A) by a 1/16% tax rate on the transactions described in Subsection (1); and
             248          (B) for the fiscal year; or
             249          (ii) $17,500,000.
             250          (b) (i) For a fiscal year beginning on or after July 1, 2003, 14% of the amount
             251      described in Subsection (4)(a) shall be transferred each year as dedicated credits to the
             252      Department of Natural Resources to:
             253          (A) implement the measures described in Subsections 63-34-14 (4)(a) through (d) to
             254      protect sensitive plant and animal species; or
             255          (B) award grants, up to the amount authorized by the Legislature in an appropriations
             256      act, to political subdivisions of the state to implement the measures described in Subsections
             257      63-34-14 (4)(a) through (d) to protect sensitive plant and animal species.
             258          (ii) Money transferred to the Department of Natural Resources under Subsection
             259      (4)(b)(i) may not be used to assist the United States Fish and Wildlife Service or any other
             260      person to list or attempt to have listed a species as threatened or endangered under the
             261      Endangered Species Act of 1973, 16 U.S.C. Sec. 1531 et seq.
             262          (iii) At the end of each fiscal year:
             263          (A) 50% of any unexpended dedicated credits shall lapse to the Water Resources
             264      Conservation and Development Fund created in Section 73-10-24 ;
             265          (B) 25% of any unexpended dedicated credits shall lapse to the Utah Wastewater Loan
             266      Program Subaccount created in Section 73-10c-5 ; and
             267          (C) 25% of any unexpended dedicated credits shall lapse to the Drinking Water Loan
             268      Program Subaccount created in Section 73-10c-5 .
             269          (c) For a fiscal year beginning on or after July 1, 2003, 3% of the amount described in
             270      Subsection (4)(a) shall be deposited each year in the Agriculture Resource Development Fund
             271      created in Section 4-18-6 .
             272          (d) (i) For a fiscal year beginning on or after July 1, 2003, 1% of the amount described
             273      in Subsection (4)(a) shall be transferred each year as dedicated credits to the Division of Water
             274      Rights to cover the costs incurred in hiring legal and technical staff for the adjudication of
             275      water rights.


             276          (ii) At the end of each fiscal year:
             277          (A) 50% of any unexpended dedicated credits shall lapse to the Water Resources
             278      Conservation and Development Fund created in Section 73-10-24 ;
             279          (B) 25% of any unexpended dedicated credits shall lapse to the Utah Wastewater Loan
             280      Program Subaccount created in Section 73-10c-5 ; and
             281          (C) 25% of any unexpended dedicated credits shall lapse to the Drinking Water Loan
             282      Program Subaccount created in Section 73-10c-5 .
             283          (e) (i) For a fiscal year beginning on or after July 1, 2003, 41% of the amount described
             284      in Subsection (4)(a) shall be deposited in the Water Resources Conservation and Development
             285      Fund created in Section 73-10-24 for use by the Division of Water Resources.
             286          (ii) In addition to the uses allowed of the Water Resources Conservation and
             287      Development Fund under Section 73-10-24 , the Water Resources Conservation and
             288      Development Fund may also be used to:
             289          (A) conduct hydrologic and geotechnical investigations by the Division of Water
             290      Resources in a cooperative effort with other state, federal, or local entities, for the purpose of
             291      quantifying surface and ground water resources and describing the hydrologic systems of an
             292      area in sufficient detail so as to enable local and state resource managers to plan for and
             293      accommodate growth in water use without jeopardizing the resource;
             294          (B) fund state required dam safety improvements; and
             295          (C) protect the state's interest in interstate water compact allocations, including the
             296      hiring of technical and legal staff.
             297          (f) For a fiscal year beginning on or after July 1, 2003, 20.5% of the amount described
             298      in Subsection (4)(a) shall be deposited in the Utah Wastewater Loan Program Subaccount
             299      created in Section 73-10c-5 for use by the Water Quality Board to fund wastewater projects.
             300          (g) For a fiscal year beginning on or after July 1, 2003, 20.5% of the amount described
             301      in Subsection (4)(a) shall be deposited in the Drinking Water Loan Program Subaccount
             302      created in Section 73-10c-5 for use by the Division of Drinking Water to:
             303          (i) provide for the installation and repair of collection, treatment, storage, and
             304      distribution facilities for any public water system, as defined in Section 19-4-102 ;
             305          (ii) develop underground sources of water, including springs and wells; and
             306          (iii) develop surface water sources.


             307          (5) (a) Notwithstanding Subsection (3)(a), for a fiscal year beginning on or after July 1,
             308      2006, the difference between the following amounts shall be expended as provided in this
             309      Subsection (5), if that difference is greater than $1:
             310          (i) for taxes listed under Subsection (3)(a), the amount of tax revenue generated for the
             311      fiscal year by a 1/16% tax rate on the transactions described in Subsection (1); and
             312          (ii) $17,500,000.
             313          (b) (i) The first $500,000 of the difference described in Subsection (5)(a) shall be:
             314          (A) transferred each fiscal year to the Department of Natural Resources as dedicated
             315      credits; and
             316          (B) expended by the Department of Natural Resources for watershed rehabilitation or
             317      restoration.
             318          (ii) At the end of each fiscal year, 100% of any unexpended dedicated credits described
             319      in Subsection (5)(b)(i) shall lapse to the Water Resources Conservation and Development Fund
             320      created in Section 73-10-24 .
             321          (c) (i) After making the transfer required by Subsection (5)(b)(i), $150,000 of the
             322      remaining difference described in Subsection (5)(a) shall be:
             323          (A) transferred each fiscal year to the Division of Water Resources as dedicated
             324      credits; and
             325          (B) expended by the Division of Water Resources for cloud-seeding projects
             326      authorized by Title 73, Chapter 15, Modification of Weather.
             327          (ii) At the end of each fiscal year, 100% of any unexpended dedicated credits described
             328      in Subsection (5)(c)(i) shall lapse to the Water Resources Conservation and Development Fund
             329      created in Section 73-10-24 .
             330          (d) After making the transfers required by Subsections (5)(b) and (c), 94% of the
             331      remaining difference described in Subsection (5)(a) shall be deposited into the Water
             332      Resources Conservation and Development Fund created in Section 73-10-24 for use by the
             333      Division of Water Resources for:
             334          (i) preconstruction costs:
             335          (A) as defined in Subsection 73-26-103 (6) for projects authorized by Title 73, Chapter
             336      26, Bear River Development Act; and
             337          (B) as defined in Subsection 73-28-103 (8) for the Lake Powell Pipeline project


             338      authorized by Title 73, Chapter 28, Lake Powell Pipeline Development Act;
             339          (ii) the cost of employing a civil engineer to oversee any project authorized by Title 73,
             340      Chapter 26, Bear River Development Act;
             341          (iii) the cost of employing a civil engineer to oversee the Lake Powell Pipeline project
             342      authorized by Title 73, Chapter 28, Lake Powell Pipeline Development Act; and
             343          (iv) other uses authorized under Sections 73-10-24 , 73-10-25.1 , 73-10-30 , and
             344      Subsection (4)(e)(ii) after funding the uses specified in Subsections (5)(d)(i) through (iii).
             345          (e) Any unexpended monies described in Subsection (5)(d) that remain in the Water
             346      Resources Conservation and Development Fund at the end of the fiscal year are nonlapsing.
             347          (f) After making the transfers required by Subsections (5)(b) and (c) and subject to
             348      Subsection (5)(g), 6% of the remaining difference described in Subsection (5)(a) shall be
             349      transferred each year as dedicated credits to the Division of Water Rights to cover the costs
             350      incurred for employing additional technical staff for the administration of water rights.
             351          (g) At the end of each fiscal year, any unexpended dedicated credits described in
             352      Subsection (5)(f) over $150,000 lapse to the Water Resources Conservation and Development
             353      Fund created in Section 73-10-24 .
             354          (6) Notwithstanding Subsection (3)(a), for a fiscal year beginning on or after July 1,
             355      2003, and for taxes listed under Subsection (3)(a), the amount of revenue generated by a 1/16%
             356      tax rate on the transactions described in Subsection (1) for the fiscal year shall be deposited in
             357      the Transportation Fund created by Section 72-2-102 .
             358          (7) (a) Notwithstanding Subsection (3)(a) and until Subsection (7)(b) applies,
             359      beginning on January 1, 2000, the Division of Finance shall deposit into the Centennial
             360      Highway Fund Restricted Account created in Section 72-2-118 a portion of the taxes listed
             361      under Subsection (3)(a) equal to the revenues generated by a 1/64% tax rate on the taxable
             362      transactions under Subsection (1).
             363          (b) Notwithstanding Subsection (3)(a), when the highway general obligation bonds
             364      have been paid off and the highway projects completed that are intended to be paid from
             365      revenues deposited in the Centennial Highway Fund Restricted Account as determined by the
             366      Executive Appropriations Committee under Subsection 72-2-118 (6)(d), the Division of
             367      Finance shall deposit into the Transportation Investment Fund of 2005 created by Section
             368      72-2-124 a portion of the taxes listed under Subsection (3)(a) equal to the revenues generated


             369      by a 1/64% tax rate on the taxable transactions under Subsection (1).
             370          (8) (a) Notwithstanding Subsection (3)(a), for fiscal years beginning on or after fiscal
             371      year 2004-05, the commission shall each year on or before the September 30 immediately
             372      following the last day of the fiscal year deposit the difference described in Subsection (8)(b)
             373      into the Remote Sales Restricted Account created in Section 59-12-103.2 if that difference is
             374      greater than $0.
             375          (b) The difference described in Subsection (8)(a) is equal to the difference between:
             376          (i) the total amount of the revenues the commission received from sellers collecting the
             377      taxes described in Subsections (2)(d)(i) and (2)(e)(iii)(A) for the fiscal year immediately
             378      preceding the September 30 described in Subsection (8)(a); and
             379          (ii) $7,279,673.
             380          (9) (a) Notwithstanding Subsection (3)(a), in addition to the amount deposited in
             381      Subsection (7)(a), and until Subsection (9)(b) applies, for a fiscal year beginning on or after
             382      July 1, 2007, the Division of Finance shall deposit into the Centennial Highway Fund
             383      Restricted Account created by Section 72-2-118 a portion of the taxes listed under Subsection
             384      (3)(a) equal to 8.3% of the revenues collected from the following taxes, which represents a
             385      portion of the approximately 17% of sales and use tax revenues generated annually by the sales
             386      and use tax on vehicles and vehicle-related products:
             387          (i) the tax imposed by Subsection (2)(a)(i);
             388          (ii) the tax imposed by Subsection (2)(b)(i);
             389          (iii) the tax imposed by Subsection (2)(c)(i); and
             390          (iv) the tax imposed by Subsection (2)(e)(ii)(A).
             391          (b) Notwithstanding Subsection (3)(a) and in addition to the amounts deposited under
             392      Subsection (7)(b), when the highway general obligation bonds have been paid off and the
             393      highway projects completed that are intended to be paid from revenues deposited in the
             394      Centennial Highway Fund Restricted Account as determined by the Executive Appropriations
             395      Committee under Subsection 72-2-118 (6)(d), the Division of Finance shall deposit into the
             396      Transportation Investment Fund of 2005 created by Section 72-2-124 a portion of the taxes
             397      listed under Subsection (3)(a) equal to 8.3% of the revenues collected from the following taxes,
             398      which represents a portion of the approximately 17% of sales and use tax revenues generated
             399      annually by the sales and use tax on vehicles and vehicle-related products:


             400          (i) the tax imposed by Subsection (2)(a)(i);
             401          (ii) the tax imposed by Subsection (2)(b)(i);
             402          (iii) the tax imposed by Subsection (2)(c)(i); and
             403          (iv) the tax imposed by Subsection (2)(e)(ii)(A).
             404          (10) (a) Notwithstanding Subsection (3)(a) and until Subsection (10)(b) applies, the
             405      Division of Finance shall annually deposit $90,000,000 of the revenues generated by the taxes
             406      listed under Subsection (3)(a) into the Critical Highway Needs Fund created by Section
             407      72-2-125 .
             408          (b) Notwithstanding Subsection (3)(a) and in addition to any amounts deposited under
             409      Subsections (7) and (9), when the general obligation bonds authorized by Section 63B-16-101
             410      have been paid off and the highway projects completed that are included in the prioritized
             411      project list under Subsection 72-2-125 (4) as determined in accordance with Subsection
             412      72-2-125 (6), the Division of Finance shall annually deposit $90,000,000 of the revenues
             413      generated by the taxes listed under Subsection (3)(a) into the Transportation Investment Fund
             414      of 2005 created by Section 72-2-124 .
             415          Section 2. Section 59-12-104 is amended to read:
             416           59-12-104. Exemptions.
             417          The following sales and uses are exempt from the taxes imposed by this chapter:
             418          (1) sales of aviation fuel, motor fuel, and special fuel subject to a Utah state excise tax
             419      under Chapter 13, Motor and Special Fuel Tax Act;
             420          (2) sales to the state, its institutions, and its political subdivisions; however, this
             421      exemption does not apply to sales of:
             422          (a) construction materials except:
             423          (i) construction materials purchased by or on behalf of institutions of the public
             424      education system as defined in Utah Constitution Article X, Section 2, provided the
             425      construction materials are clearly identified and segregated and installed or converted to real
             426      property which is owned by institutions of the public education system; and
             427          (ii) construction materials purchased by the state, its institutions, or its political
             428      subdivisions which are installed or converted to real property by employees of the state, its
             429      institutions, or its political subdivisions; or
             430          (b) tangible personal property in connection with the construction, operation,


             431      maintenance, repair, or replacement of a project, as defined in Section 11-13-103 , or facilities
             432      providing additional project capacity, as defined in Section 11-13-103 ;
             433          (3) (a) sales of an item described in Subsection (3)(b) from a vending machine if:
             434          (i) the proceeds of each sale do not exceed $1; and
             435          (ii) the seller or operator of the vending machine reports an amount equal to 150% of
             436      the cost of the item described in Subsection (3)(b) as goods consumed; and
             437          (b) Subsection (3)(a) applies to:
             438          (i) food and food ingredients; or
             439          (ii) prepared food;
             440          (4) sales of the following to a commercial airline carrier for in-flight consumption:
             441          (a) food and food ingredients;
             442          (b) prepared food; or
             443          (c) services related to Subsection (4)(a) or (b);
             444          (5) sales of parts and equipment for installation in aircraft operated by common carriers
             445      in interstate or foreign commerce;
             446          (6) sales of commercials, motion picture films, prerecorded audio program tapes or
             447      records, and prerecorded video tapes by a producer, distributor, or studio to a motion picture
             448      exhibitor, distributor, or commercial television or radio broadcaster;
             449          (7) (a) subject to Subsection (7)(b), sales of cleaning or washing of tangible personal
             450      property if the cleaning or washing of the tangible personal property is not assisted cleaning or
             451      washing of tangible personal property;
             452          (b) if a seller that sells at the same business location assisted cleaning or washing of
             453      tangible personal property and cleaning or washing of tangible personal property that is not
             454      assisted cleaning or washing of tangible personal property, the exemption described in
             455      Subsection (7)(a) applies if the seller separately accounts for the sales of the assisted cleaning
             456      or washing of the tangible personal property; and
             457          (c) for purposes of Subsection (7)(b) and in accordance with Title 63, Chapter 46a,
             458      Utah Administrative Rulemaking Act, the commission may make rules:
             459          (i) governing the circumstances under which sales are at the same business location;
             460      and
             461          (ii) establishing the procedures and requirements for a seller to separately account for


             462      sales of assisted cleaning or washing of tangible personal property;
             463          (8) sales made to or by religious or charitable institutions in the conduct of their regular
             464      religious or charitable functions and activities, if the requirements of Section 59-12-104.1 are
             465      fulfilled;
             466          (9) sales of a vehicle of a type required to be registered under the motor vehicle laws of
             467      this state if the vehicle is:
             468          (a) not registered in this state; and
             469          (b) (i) not used in this state; or
             470          (ii) used in this state:
             471          (A) if the vehicle is not used to conduct business, for a time period that does not
             472      exceed the longer of:
             473          (I) 30 days in any calendar year; or
             474          (II) the time period necessary to transport the vehicle to the borders of this state; or
             475          (B) if the vehicle is used to conduct business, for the time period necessary to transport
             476      the vehicle to the borders of this state;
             477          (10) (a) amounts paid for an item described in Subsection (10)(b) if:
             478          (i) the item is intended for human use; and
             479          (ii) (A) a prescription was issued for the item; or
             480          (B) the item was purchased by a hospital or other medical facility; and
             481          (b) (i) Subsection (10)(a) applies to:
             482          (A) a drug;
             483          (B) a syringe; or
             484          (C) a stoma supply; and
             485          (ii) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             486      commission may by rule define the terms:
             487          (A) "syringe"; or
             488          (B) "stoma supply";
             489          (11) sales or use of property, materials, or services used in the construction of or
             490      incorporated in pollution control facilities allowed by Sections 19-2-123 through 19-2-127 ;
             491          (12) (a) sales of an item described in Subsection (12)(c) served by:
             492          (i) the following if the item described in Subsection (12)(c) is not available to the


             493      general public:
             494          (A) a church; or
             495          (B) a charitable institution;
             496          (ii) an institution of higher education if:
             497          (A) the item described in Subsection (12)(c) is not available to the general public; or
             498          (B) the item described in Subsection (12)(c) is prepaid as part of a student meal plan
             499      offered by the institution of higher education; or
             500          (b) sales of an item described in Subsection (12)(c) provided for a patient by:
             501          (i) a medical facility; or
             502          (ii) a nursing facility; and
             503          (c) Subsections (12)(a) and (b) apply to:
             504          (i) food and food ingredients;
             505          (ii) prepared food; or
             506          (iii) alcoholic beverages;
             507          (13) (a) except as provided in Subsection (13)(b), the sale of tangible personal property
             508      by a person:
             509          (i) regardless of the number of transactions involving the sale of that tangible personal
             510      property by that person; and
             511          (ii) not regularly engaged in the business of selling that type of tangible personal
             512      property;
             513          (b) this Subsection (13) does not apply if:
             514          (i) the sale is one of a series of sales of a character to indicate that the person is
             515      regularly engaged in the business of selling that type of tangible personal property;
             516          (ii) the person holds that person out as regularly engaged in the business of selling that
             517      type of tangible personal property;
             518          (iii) the person sells an item of tangible personal property that the person purchased as
             519      a sale that is exempt under Subsection (25); or
             520          (iv) the sale is of a vehicle or vessel required to be titled or registered under the laws of
             521      this state in which case the tax is based upon:
             522          (A) the bill of sale or other written evidence of value of the vehicle or vessel being
             523      sold; or


             524          (B) in the absence of a bill of sale or other written evidence of value, the fair market
             525      value of the vehicle or vessel being sold at the time of the sale as determined by the
             526      commission; and
             527          (c) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             528      commission shall make rules establishing the circumstances under which:
             529          (i) a person is regularly engaged in the business of selling a type of tangible personal
             530      property;
             531          (ii) a sale of tangible personal property is one of a series of sales of a character to
             532      indicate that a person is regularly engaged in the business of selling that type of tangible
             533      personal property; or
             534          (iii) a person holds that person out as regularly engaged in the business of selling a type
             535      of tangible personal property;
             536          (14) (a) except as provided in Subsection (14)(b), amounts paid or charged on or after
             537      July 1, 2006, for a purchase or lease by a manufacturing facility other than a cogeneration
             538      facility, for the following:
             539          (i) machinery and equipment that:
             540          (A) is used:
             541          (I) for a manufacturing facility other than a manufacturing facility that is a scrap
             542      recycler described in Subsection 59-12-102 (48)(b):
             543          (Aa) in the manufacturing process; and
             544          (Bb) to manufacture an item sold as tangible personal property; or
             545          (II) for a manufacturing facility that is a scrap recycler described in Subsection
             546      59-12-102 (48)(b), to process an item sold as tangible personal property; and
             547          (B) has an economic life of three or more years; and
             548          (ii) normal operating repair or replacement parts that:
             549          (A) have an economic life of three or more years; and
             550          (B) are used:
             551          (I) for a manufacturing facility in the state other than a manufacturing facility that is a
             552      scrap recycler described in Subsection 59-12-102 (48)(b), in the manufacturing process; or
             553          (II) for a manufacturing facility in the state that is a scrap recycler described in
             554      Subsection 59-12-102 (48)(b), to process an item sold as tangible personal property;


             555          (b) (i) amounts paid or charged on or after July 1, 2005, for a purchase or lease by a
             556      manufacturing facility that is a cogeneration facility placed in service on or after May 1, 2006,
             557      for the following:
             558          (A) machinery and equipment that:
             559          (I) is used:
             560          (Aa) in the manufacturing process; and
             561          (Bb) to manufacture an item sold as tangible personal property; and
             562          (II) has an economic life of three or more years; and
             563          (B) normal operating repair or replacement parts that:
             564          (I) are used in the manufacturing process in a manufacturing facility in the state; and
             565          (II) have an economic life of three or more years; and
             566          (ii) for amounts paid or charged on or after July 1, 2005, but on or before June 30,
             567      2006, for a purchase or lease described in Subsection (14)(b)(i), a cogeneration facility may
             568      claim the exemption allowed by Subsection (14)(b)(i) by filing for a refund:
             569          (A) for sales and use taxes paid under this chapter on the purchase or lease payment;
             570      and
             571          (B) in accordance with Section 59-12-110 ;
             572          (c) amounts paid or charged for a purchase or lease made on or after January 1, 2008,
             573      by an establishment described in NAICS Subsector 212, Mining (except Oil and Gas), or
             574      NAICS Code 213113, Support Activities for Coal Mining, 213114, Support Activities for
             575      Metal Mining, or 213115, Support Activities for Nonmetallic Minerals (except Fuels) Mining,
             576      of the 2002 North American Industry Classification System of the federal Executive Office of
             577      the President, Office of Management and Budget:
             578          (i) machinery and equipment that:
             579          (A) are used in:
             580          (I) the production process, other than the production of real property; or
             581          (II) research and development; and
             582          (B) have an economic life of three or more years; and
             583          (ii) normal operating repair or replacement parts that:
             584          (A) have an economic life of three or more years; and
             585          (B) are used in:


             586          (I) the production process, other than the production of real property, in an
             587      establishment described in this Subsection (14)(c) in the state; or
             588          (II) research and development in an establishment described in this Subsection (14)(c)
             589      in the state;
             590          (d) for purposes of this Subsection (14) and in accordance with Title 63, Chapter 46a,
             591      Utah Administrative Rulemaking Act, the commission:
             592          (i) shall by rule define the term "establishment"; and
             593          (ii) may by rule define what constitutes:
             594          (A) processing an item sold as tangible personal property;
             595          (B) the production process, other than the production of real property; or
             596          (C) research and development; and
             597          (e) on or before October 1, 2011, and every five years after October 1, 2011, the
             598      commission shall:
             599          (i) review the exemptions described in this Subsection (14) and make
             600      recommendations to the Revenue and Taxation Interim Committee concerning whether the
             601      exemptions should be continued, modified, or repealed; and
             602          (ii) include in its report:
             603          (A) the cost of the exemptions;
             604          (B) the purpose and effectiveness of the exemptions; and
             605          (C) the benefits of the exemptions to the state;
             606          (15) (a) sales of the following if the requirements of Subsection (15)(b) are met:
             607          (i) tooling;
             608          (ii) special tooling;
             609          (iii) support equipment;
             610          (iv) special test equipment; or
             611          (v) parts used in the repairs or renovations of tooling or equipment described in
             612      Subsections (15)(a)(i) through (iv); and
             613          (b) sales of tooling, equipment, or parts described in Subsection (15)(a) are exempt if:
             614          (i) the tooling, equipment, or parts are used or consumed exclusively in the
             615      performance of any aerospace or electronics industry contract with the United States
             616      government or any subcontract under that contract; and


             617          (ii) under the terms of the contract or subcontract described in Subsection (15)(b)(i),
             618      title to the tooling, equipment, or parts is vested in the United States government as evidenced
             619      by:
             620          (A) a government identification tag placed on the tooling, equipment, or parts; or
             621          (B) listing on a government-approved property record if placing a government
             622      identification tag on the tooling, equipment, or parts is impractical;
             623          (16) sales of newspapers or newspaper subscriptions;
             624          (17) (a) except as provided in Subsection (17)(b), tangible personal property traded in
             625      as full or part payment of the purchase price, except that for purposes of calculating sales or use
             626      tax upon vehicles not sold by a vehicle dealer, trade-ins are limited to other vehicles only, and
             627      the tax is based upon:
             628          (i) the bill of sale or other written evidence of value of the vehicle being sold and the
             629      vehicle being traded in; or
             630          (ii) in the absence of a bill of sale or other written evidence of value, the then existing
             631      fair market value of the vehicle being sold and the vehicle being traded in, as determined by the
             632      commission; and
             633          (b) notwithstanding Subsection (17)(a), Subsection (17)(a) does not apply to the
             634      following items of tangible personal property traded in as full or part payment of the purchase
             635      price:
             636          (i) money;
             637          (ii) electricity;
             638          (iii) water;
             639          (iv) gas; or
             640          (v) steam;
             641          (18) (a) (i) except as provided in Subsection (18)(b), sales of tangible personal property
             642      used or consumed primarily and directly in farming operations, regardless of whether the
             643      tangible personal property:
             644          (A) becomes part of real estate; or
             645          (B) is installed by a:
             646          (I) farmer;
             647          (II) contractor; or


             648          (III) subcontractor; or
             649          (ii) sales of parts used in the repairs or renovations of tangible personal property if the
             650      tangible personal property is exempt under Subsection (18)(a)(i); and
             651          (b) notwithstanding Subsection (18)(a), amounts paid or charged for the following
             652      tangible personal property are subject to the taxes imposed by this chapter:
             653          (i) (A) subject to Subsection (18)(b)(i)(B), the following tangible personal property if
             654      the tangible personal property is used in a manner that is incidental to farming:
             655          (I) machinery;
             656          (II) equipment;
             657          (III) materials; or
             658          (IV) supplies; and
             659          (B) tangible personal property that is considered to be used in a manner that is
             660      incidental to farming includes:
             661          (I) hand tools; or
             662          (II) maintenance and janitorial equipment and supplies;
             663          (ii) (A) subject to Subsection (18)(b)(ii)(B), tangible personal property if the tangible
             664      personal property is used in an activity other than farming; and
             665          (B) tangible personal property that is considered to be used in an activity other than
             666      farming includes:
             667          (I) office equipment and supplies; or
             668          (II) equipment and supplies used in:
             669          (Aa) the sale or distribution of farm products;
             670          (Bb) research; or
             671          (Cc) transportation; or
             672          (iii) a vehicle required to be registered by the laws of this state during the period
             673      ending two years after the date of the vehicle's purchase;
             674          (19) sales of hay;
             675          (20) exclusive sale during the harvest season of seasonal crops, seedling plants, or
             676      garden, farm, or other agricultural produce if the seasonal crops are, seedling plants are, or
             677      garden, farm, or other agricultural produce is sold by:
             678          (a) the producer of the seasonal crops, seedling plants, or garden, farm, or other


             679      agricultural produce;
             680          (b) an employee of the producer described in Subsection (20)(a); or
             681          (c) a member of the immediate family of the producer described in Subsection (20)(a);
             682          (21) purchases made using a coupon as defined in 7 U.S.C. Sec. 2012 that is issued
             683      under the Food Stamp Program, 7 U.S.C. Sec. 2011 et seq.;
             684          (22) sales of nonreturnable containers, nonreturnable labels, nonreturnable bags,
             685      nonreturnable shipping cases, and nonreturnable casings to a manufacturer, processor,
             686      wholesaler, or retailer for use in packaging tangible personal property to be sold by that
             687      manufacturer, processor, wholesaler, or retailer;
             688          (23) property stored in the state for resale;
             689          (24) (a) purchases of property if:
             690          (i) the property is:
             691          (A) purchased outside of this state;
             692          (B) brought into this state:
             693          (I) at any time after the purchase described in Subsection (24)(a)(i)(A); and
             694          (II) by a nonresident person who is not living or working in this state at the time of the
             695      purchase;
             696          (C) used for the personal use or enjoyment of the nonresident person described in
             697      Subsection (24)(a)(i)(B)(II) while that nonresident person is within the state; and
             698          (D) not used in conducting business in this state; and
             699          (ii) for:
             700          (A) property other than the property described in Subsection (24)(a)(ii)(B), the first use
             701      of the property for a purpose for which the property is designed occurs outside of this state;
             702          (B) a boat, the boat is registered outside of this state; or
             703          (C) a vehicle other than a vehicle sold to an authorized carrier, the vehicle is registered
             704      outside of this state;
             705          (b) the exemption provided for in Subsection (24)(a) does not apply to:
             706          (i) a lease or rental of property; or
             707          (ii) a sale of a vehicle exempt under Subsection (33); and
             708          (c) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, for
             709      purposes of Subsection (24)(a), the commission may by rule define what constitutes the


             710      following:
             711          (i) conducting business in this state if that phrase has the same meaning in this
             712      Subsection (24) as in Subsection (66);
             713          (ii) the first use of property if that phrase has the same meaning in this Subsection (24)
             714      as in Subsection (66); or
             715          (iii) a purpose for which property is designed if that phrase has the same meaning in
             716      this Subsection (24) as in Subsection (66);
             717          (25) property purchased for resale in this state, in the regular course of business, either
             718      in its original form or as an ingredient or component part of a manufactured or compounded
             719      product;
             720          (26) property upon which a sales or use tax was paid to some other state, or one of its
             721      subdivisions, except that the state shall be paid any difference between the tax paid and the tax
             722      imposed by this part and Part 2, Local Sales and Use Tax Act, and no adjustment is allowed if
             723      the tax paid was greater than the tax imposed by this part and Part 2, Local Sales and Use Tax
             724      Act;
             725          (27) any sale of a service described in Subsections 59-12-103 (1)(b), (c), and (d) to a
             726      person for use in compounding a service taxable under the subsections;
             727          (28) purchases made in accordance with the special supplemental nutrition program for
             728      women, infants, and children established in 42 U.S.C. Sec. 1786;
             729          (29) beginning on July 1, 1999, through June 30, 2014, sales or leases of rolls, rollers,
             730      refractory brick, electric motors, or other replacement parts used in the furnaces, mills, or ovens
             731      of a steel mill described in SIC Code 3312 of the 1987 Standard Industrial Classification
             732      Manual of the federal Executive Office of the President, Office of Management and Budget;
             733          (30) sales of a boat of a type required to be registered under Title 73, Chapter 18, State
             734      Boating Act, a boat trailer, or an outboard motor if the boat, boat trailer, or outboard motor is:
             735          (a) not registered in this state; and
             736          (b) (i) not used in this state; or
             737          (ii) used in this state:
             738          (A) if the boat, boat trailer, or outboard motor is not used to conduct business, for a
             739      time period that does not exceed the longer of:
             740          (I) 30 days in any calendar year; or


             741          (II) the time period necessary to transport the boat, boat trailer, or outboard motor to
             742      the borders of this state; or
             743          (B) if the boat, boat trailer, or outboard motor is used to conduct business, for the time
             744      period necessary to transport the boat, boat trailer, or outboard motor to the borders of this
             745      state;
             746          (31) sales of aircraft manufactured in Utah if sold for delivery and use outside Utah
             747      where a sales or use tax is not imposed, [even] if the title is passed in Utah;
             748          (32) amounts paid for the purchase of telephone service for purposes of providing
             749      telephone service;
             750          (33) sales, leases, or uses of the following:
             751          (a) a vehicle by an authorized carrier; or
             752          (b) tangible personal property that is installed on a vehicle:
             753          (i) sold or leased to or used by an authorized carrier; and
             754          (ii) before the vehicle is placed in service for the first time;
             755          (34) (a) 45% of the sales price of any new manufactured home; and
             756          (b) 100% of the sales price of any used manufactured home;
             757          (35) sales relating to schools and fundraising sales;
             758          (36) sales or rentals of durable medical equipment if:
             759          (a) a person presents a prescription for the durable medical equipment; and
             760          (b) the durable medical equipment is used for home use only;
             761          (37) (a) sales to a ski resort of electricity to operate a passenger ropeway as defined in
             762      Section 72-11-102 ; and
             763          (b) the commission shall by rule determine the method for calculating sales exempt
             764      under Subsection (37)(a) that are not separately metered and accounted for in utility billings;
             765          (38) sales to a ski resort of:
             766          (a) snowmaking equipment;
             767          (b) ski slope grooming equipment;
             768          (c) passenger ropeways as defined in Section 72-11-102 ; or
             769          (d) parts used in the repairs or renovations of equipment or passenger ropeways
             770      described in Subsections (38)(a) through (c);
             771          (39) sales of natural gas, electricity, heat, coal, fuel oil, or other fuels for industrial use;


             772          (40) (a) subject to Subsection (40)(b), sales or rentals of the right to use or operate for
             773      amusement, entertainment, or recreation an unassisted amusement device as defined in Section
             774      59-12-102 ;
             775          (b) if a seller that sells or rents at the same business location the right to use or operate
             776      for amusement, entertainment, or recreation one or more unassisted amusement devices and
             777      one or more assisted amusement devices, the exemption described in Subsection (40)(a)
             778      applies if the seller separately accounts for the sales or rentals of the right to use or operate for
             779      amusement, entertainment, or recreation for the assisted amusement devices; and
             780          (c) for purposes of Subsection (40)(b) and in accordance with Title 63, Chapter 46a,
             781      Utah Administrative Rulemaking Act, the commission may make rules:
             782          (i) governing the circumstances under which sales are at the same business location;
             783      and
             784          (ii) establishing the procedures and requirements for a seller to separately account for
             785      the sales or rentals of the right to use or operate for amusement, entertainment, or recreation for
             786      assisted amusement devices;
             787          (41) (a) sales of photocopies by:
             788          (i) a governmental entity; or
             789          (ii) an entity within the state system of public education, including:
             790          (A) a school; or
             791          (B) the State Board of Education; or
             792          (b) sales of publications by a governmental entity;
             793          (42) amounts paid for admission to an athletic event at an institution of higher
             794      education that is subject to the provisions of Title IX of the Education Amendments of 1972,
             795      20 U.S.C. Sec. 1681 et seq.;
             796          (43) sales of telephone service charged to a prepaid telephone calling card;
             797          (44) (a) sales of:
             798          (i) hearing aids;
             799          (ii) hearing aid accessories; or
             800          (iii) except as provided in Subsection (44)(b), parts used in the repairs or renovations
             801      of hearing aids or hearing aid accessories; and
             802          (b) for purposes of this Subsection (44), notwithstanding Subsection (44)(a)(iii),


             803      "parts" does not include batteries;
             804          (45) (a) sales made to or by:
             805          (i) an area agency on aging; or
             806          (ii) a senior citizen center owned by a county, city, or town; or
             807          (b) sales made by a senior citizen center that contracts with an area agency on aging;
             808          (46) sales or leases of semiconductor fabricating, processing, research, or development
             809      materials regardless of whether the semiconductor fabricating, processing, research, or
             810      development materials:
             811          (a) actually come into contact with a semiconductor; or
             812          (b) ultimately become incorporated into real property;
             813          (47) an amount paid by or charged to a purchaser for accommodations and services
             814      described in Subsection 59-12-103 (1)(i) to the extent the amount is exempt under Section
             815      59-12-104.2 ;
             816          (48) beginning on September 1, 2001, the lease or use of a vehicle issued a temporary
             817      sports event registration certificate in accordance with Section 41-3-306 for the event period
             818      specified on the temporary sports event registration certificate;
             819          (49) sales or uses of electricity, if the sales or uses are:
             820          (a) made under a tariff adopted by the Public Service Commission of Utah only for
             821      purchase of electricity produced from a new wind, geothermal, biomass, or solar power energy
             822      source, as designated in the tariff by the Public Service Commission of Utah; and
             823          (b) for an amount of electricity that is:
             824          (i) unrelated to the amount of electricity used by the person purchasing the electricity
             825      under the tariff described in Subsection (49)(a); and
             826          (ii) equivalent to the number of kilowatthours specified in the tariff described in
             827      Subsection (49)(a) that may be purchased under the tariff described in Subsection (49)(a);
             828          (50) sales or rentals of mobility enhancing equipment if a person presents a
             829      prescription for the mobility enhancing equipment;
             830          (51) sales of water in a:
             831          (a) pipe;
             832          (b) conduit;
             833          (c) ditch; or


             834          (d) reservoir;
             835          (52) sales of currency or coinage that constitute legal tender of the United States or of a
             836      foreign nation;
             837          (53) (a) sales of an item described in Subsection (53)(b) if the item:
             838          (i) does not constitute legal tender of any nation; and
             839          (ii) has a gold, silver, or platinum content of 80% or more; and
             840          (b) Subsection (53)(a) applies to a gold, silver, or platinum:
             841          (i) ingot;
             842          (ii) bar;
             843          (iii) medallion; or
             844          (iv) decorative coin;
             845          (54) amounts paid on a sale-leaseback transaction;
             846          (55) sales of a prosthetic device:
             847          (a) for use on or in a human;
             848          (b) for which a prescription is issued; and
             849          (c) to a person that presents a prescription for the prosthetic device;
             850          (56) (a) except as provided in Subsection (56)(b), purchases, leases, or rentals of
             851      machinery or equipment by an establishment described in Subsection (56)(c) if the machinery
             852      or equipment is primarily used in the production or postproduction of the following media for
             853      commercial distribution:
             854          (i) a motion picture;
             855          (ii) a television program;
             856          (iii) a movie made for television;
             857          (iv) a music video;
             858          (v) a commercial;
             859          (vi) a documentary; or
             860          (vii) a medium similar to Subsections (56)(a)(i) through (vi) as determined by the
             861      commission by administrative rule made in accordance with Subsection (56)(d); or
             862          (b) notwithstanding Subsection (56)(a), purchases, leases, or rentals of machinery or
             863      equipment by an establishment described in Subsection (56)(c) that is used for the production
             864      or postproduction of the following are subject to the taxes imposed by this chapter:


             865          (i) a live musical performance;
             866          (ii) a live news program; or
             867          (iii) a live sporting event;
             868          (c) the following establishments listed in the 1997 North American Industry
             869      Classification System of the federal Executive Office of the President, Office of Management
             870      and Budget, apply to Subsections (56)(a) and (b):
             871          (i) NAICS Code 512110; or
             872          (ii) NAICS Code 51219; and
             873          (d) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             874      commission may by rule:
             875          (i) prescribe what constitutes a medium similar to Subsections (56)(a)(i) through (vi);
             876      or
             877          (ii) define:
             878          (A) "commercial distribution";
             879          (B) "live musical performance";
             880          (C) "live news program"; or
             881          (D) "live sporting event";
             882          (57) (a) leases of seven or more years or purchases made on or after July 1, 2004 but on
             883      or before June 30, 2009, of machinery or equipment that:
             884          (i) is leased or purchased for or by a facility that:
             885          (A) is a renewable energy production facility;
             886          (B) is located in the state; and
             887          (C) (I) becomes operational on or after July 1, 2004; or
             888          (II) has its generation capacity increased by one or more megawatts on or after July 1,
             889      2004 as a result of the use of the machinery or equipment;
             890          (ii) has an economic life of five or more years; and
             891          (iii) is used to make the facility or the increase in capacity of the facility described in
             892      Subsection (57)(a)(i) operational up to the point of interconnection with an existing
             893      transmission grid including:
             894          (A) a wind turbine;
             895          (B) generating equipment;


             896          (C) a control and monitoring system;
             897          (D) a power line;
             898          (E) substation equipment;
             899          (F) lighting;
             900          (G) fencing;
             901          (H) pipes; or
             902          (I) other equipment used for locating a power line or pole; and
             903          (b) this Subsection (57) does not apply to:
             904          (i) machinery or equipment used in construction of:
             905          (A) a new renewable energy production facility; or
             906          (B) the increase in the capacity of a renewable energy production facility;
             907          (ii) contracted services required for construction and routine maintenance activities;
             908      and
             909          (iii) unless the machinery or equipment is used or acquired for an increase in capacity
             910      of the facility described in Subsection (57)(a)(i)(C)(II), machinery or equipment used or
             911      acquired after:
             912          (A) the renewable energy production facility described in Subsection (57)(a)(i) is
             913      operational as described in Subsection (57)(a)(iii); or
             914          (B) the increased capacity described in Subsection (57)(a)(i) is operational as described
             915      in Subsection (57)(a)(iii);
             916          (58) (a) leases of seven or more years or purchases made on or after July 1, 2004 but on
             917      or before June 30, 2009, of machinery or equipment that:
             918          (i) is leased or purchased for or by a facility that:
             919          (A) is a waste energy production facility;
             920          (B) is located in the state; and
             921          (C) (I) becomes operational on or after July 1, 2004; or
             922          (II) has its generation capacity increased by one or more megawatts on or after July 1,
             923      2004 as a result of the use of the machinery or equipment;
             924          (ii) has an economic life of five or more years; and
             925          (iii) is used to make the facility or the increase in capacity of the facility described in
             926      Subsection (58)(a)(i) operational up to the point of interconnection with an existing


             927      transmission grid including:
             928          (A) generating equipment;
             929          (B) a control and monitoring system;
             930          (C) a power line;
             931          (D) substation equipment;
             932          (E) lighting;
             933          (F) fencing;
             934          (G) pipes; or
             935          (H) other equipment used for locating a power line or pole; and
             936          (b) this Subsection (58) does not apply to:
             937          (i) machinery or equipment used in construction of:
             938          (A) a new waste energy facility; or
             939          (B) the increase in the capacity of a waste energy facility;
             940          (ii) contracted services required for construction and routine maintenance activities;
             941      and
             942          (iii) unless the machinery or equipment is used or acquired for an increase in capacity
             943      described in Subsection (58)(a)(i)(C)(II), machinery or equipment used or acquired after:
             944          (A) the waste energy facility described in Subsection (58)(a)(i) is operational as
             945      described in Subsection (58)(a)(iii); or
             946          (B) the increased capacity described in Subsection (58)(a)(i) is operational as described
             947      in Subsection (58)(a)(iii);
             948          (59) (a) leases of five or more years or purchases made on or after July 1, 2004 but on
             949      or before June 30, 2009, of machinery or equipment that:
             950          (i) is leased or purchased for or by a facility that:
             951          (A) is located in the state;
             952          (B) produces fuel from biomass energy including:
             953          (I) methanol; or
             954          (II) ethanol; and
             955          (C) (I) becomes operational on or after July 1, 2004; or
             956          (II) has its capacity to produce fuel increase by 25% or more on or after July 1, 2004 as
             957      a result of the installation of the machinery or equipment;


             958          (ii) has an economic life of five or more years; and
             959          (iii) is installed on the facility described in Subsection (59)(a)(i);
             960          (b) this Subsection (59) does not apply to:
             961          (i) machinery or equipment used in construction of:
             962          (A) a new facility described in Subsection (59)(a)(i); or
             963          (B) the increase in capacity of the facility described in Subsection (59)(a)(i); or
             964          (ii) contracted services required for construction and routine maintenance activities;
             965      and
             966          (iii) unless the machinery or equipment is used or acquired for an increase in capacity
             967      described in Subsection (59)(a)(i)(C)(II), machinery or equipment used or acquired after:
             968          (A) the facility described in Subsection (59)(a)(i) is operational; or
             969          (B) the increased capacity described in Subsection (59)(a)(i) is operational;
             970          (60) amounts paid to a purchaser as a rebate from the manufacturer of a new vehicle
             971      for purchasing the new vehicle;
             972          (61) (a) subject to Subsection (61)(b), sales of tangible personal property to persons
             973      within this state that is subsequently shipped outside the state and incorporated pursuant to
             974      contract into and becomes a part of real property located outside of this state, except to the
             975      extent that the other state or political entity imposes a sales, use, gross receipts, or other similar
             976      transaction excise tax on it against which the other state or political entity allows a credit for
             977      taxes imposed by this chapter; and
             978          (b) the exemption provided for in Subsection (61)(a):
             979          (i) is allowed only if the exemption is applied:
             980          (A) in calculating the purchase price of the tangible personal property; and
             981          (B) to a written contract that is in effect on July 1, 2004; and
             982          (ii) (A) does not apply beginning on the day on which the contract described in
             983      Subsection (61)(b)(i):
             984          (I) is substantially modified; or
             985          (II) terminates; and
             986          (B) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
             987      the commission may by rule prescribe the circumstances under which a contract is substantially
             988      modified;


             989          (62) purchases:
             990          (a) of one or more of the following items in printed or electronic format:
             991          (i) a list containing information that includes one or more:
             992          (A) names; or
             993          (B) addresses; or
             994          (ii) a database containing information that includes one or more:
             995          (A) names; or
             996          (B) addresses; and
             997          (b) used to send direct mail;
             998          (63) redemptions or repurchases of property by a person if that property was:
             999          (a) delivered to a pawnbroker as part of a pawn transaction; and
             1000          (b) redeemed or repurchased within the time period established in a written agreement
             1001      between the person and the pawnbroker for redeeming or repurchasing the property;
             1002          (64) (a) purchases or leases of an item described in Subsection (64)(b) if the item:
             1003          (i) is purchased or leased by, or on behalf of, a telephone service provider; and
             1004          (ii) has a useful economic life of one or more years; and
             1005          (b) the following apply to Subsection (64)(a):
             1006          (i) telecommunications enabling or facilitating equipment, machinery, or software;
             1007          (ii) telecommunications equipment, machinery, or software required for 911 service;
             1008          (iii) telecommunications maintenance or repair equipment, machinery, or software;
             1009          (iv) telecommunications switching or routing equipment, machinery, or software; or
             1010          (v) telecommunications transmission equipment, machinery, or software;
             1011          (65) (a) beginning on July 1, 2006, and ending on June 30, 2016, purchases of tangible
             1012      personal property used in the research and development of coal-to-liquids, oil shale, or tar
             1013      sands technology; and
             1014          (b) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             1015      commission may, for purposes of Subsection (65)(a), make rules defining what constitutes
             1016      tangible personal property used in the research and development of coal-to-liquids, oil shale,
             1017      and tar sands technology;
             1018          (66) (a) purchases of property if:
             1019          (i) the property is:


             1020          (A) purchased outside of this state;
             1021          (B) brought into this state at any time after the purchase described in Subsection
             1022      (66)(a)(i)(A); and
             1023          (C) used in conducting business in this state; and
             1024          (ii) for:
             1025          (A) property other than the property described in Subsection (66)(a)(ii)(B), the first use
             1026      of the property for a purpose for which the property is designed occurs outside of this state; or
             1027          (B) a vehicle other than a vehicle sold to an authorized carrier, the vehicle is registered
             1028      outside of this state;
             1029          (b) the exemption provided for in Subsection (66)(a) does not apply to:
             1030          (i) a lease or rental of property; or
             1031          (ii) a sale of a vehicle exempt under Subsection (33); and
             1032          (c) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, for
             1033      purposes of Subsection (66)(a), the commission may by rule define what constitutes the
             1034      following:
             1035          (i) conducting business in this state if that phrase has the same meaning in this
             1036      Subsection (66) as in Subsection (24);
             1037          (ii) the first use of property if that phrase has the same meaning in this Subsection (66)
             1038      as in Subsection (24); or
             1039          (iii) a purpose for which property is designed if that phrase has the same meaning in
             1040      this Subsection (66) as in Subsection (24);
             1041          (67) sales of disposable home medical equipment or supplies if:
             1042          (a) a person presents a prescription for the disposable home medical equipment or
             1043      supplies;
             1044          (b) the disposable home medical equipment or supplies are used exclusively by the
             1045      person to whom the prescription described in Subsection (67)(a) is issued; and
             1046          (c) the disposable home medical equipment and supplies are listed as eligible for
             1047      payment under:
             1048          (i) Title XVIII, federal Social Security Act; or
             1049          (ii) the state plan for medical assistance under Title XIX, federal Social Security Act;
             1050      and


             1051          (68) sales to a public transit district under Title 17B, Chapter 2a, Part 8, Public Transit
             1052      District Act, or to a subcontractor of a public transit district, including sales of construction
             1053      materials that are to be installed or converted to real property owned by the public transit
             1054      district.
             1055          Section 3. Section 59-12-107 is amended to read:
             1056           59-12-107. Collection, remittance, and payment of tax by sellers or other persons
             1057      -- Returns -- Direct payment by purchaser of vehicle -- Other liability for collection --
             1058      Rulemaking authority -- Credits -- Treatment of bad debt -- Penalties.
             1059          (1) (a) Except as provided in Subsection (1)(d) or Section 59-12-107.1 and subject to
             1060      Subsection (1)(e), each seller shall pay or collect and remit the sales and use taxes imposed by
             1061      this chapter if within this state the seller:
             1062          (i) has or utilizes:
             1063          (A) an office;
             1064          (B) a distribution house;
             1065          (C) a sales house;
             1066          (D) a warehouse;
             1067          (E) a service enterprise; or
             1068          (F) a place of business similar to Subsections (1)(a)(i)(A) through (E);
             1069          (ii) maintains a stock of goods;
             1070          (iii) regularly solicits orders, regardless of whether or not the orders are accepted in the
             1071      state, unless the seller's only activity in the state is:
             1072          (A) advertising; or
             1073          (B) solicitation by:
             1074          (I) direct mail;
             1075          (II) electronic mail;
             1076          (III) the Internet;
             1077          (IV) telephone; or
             1078          (V) a means similar to Subsection (1)(a)(iii)(A) or (B);
             1079          (iv) regularly engages in the delivery of property in the state other than by:
             1080          (A) common carrier; or
             1081          (B) United States mail; or


             1082          (v) regularly engages in an activity directly related to the leasing or servicing of
             1083      property located within the state.
             1084          (b) A seller that does not meet one or more of the criteria provided for in Subsection
             1085      (1)(a):
             1086          (i) except as provided in Subsection (1)(b)(ii), may voluntarily:
             1087          (A) collect a tax on a transaction described in Subsection 59-12-103 (1); and
             1088          (B) remit the tax to the commission as provided in this part; or
             1089          (ii) notwithstanding Subsection (1)(b)(i), shall collect a tax on a transaction described
             1090      in Subsection 59-12-103 (1) if Section 59-12-103.1 requires the seller to collect the tax.
             1091          (c) A person shall pay a use tax imposed by this chapter on a transaction described in
             1092      Subsection 59-12-103 (1) if:
             1093          (i) the seller did not collect a tax imposed by this chapter on the transaction; and
             1094          (ii) the person:
             1095          (A) stores the tangible personal property in the state;
             1096          (B) uses the tangible personal property in the state; or
             1097          (C) consumes the tangible personal property in the state.
             1098          (d) The ownership of property that is located at the premises of a printer's facility with
             1099      which the retailer has contracted for printing and that consists of the final printed product,
             1100      property that becomes a part of the final printed product, or copy from which the printed
             1101      product is produced, shall not result in the retailer being considered to have or maintain an
             1102      office, distribution house, sales house, warehouse, service enterprise, or other place of
             1103      business, or to maintain a stock of goods, within this state.
             1104          (e) (i) As used in this Subsection (1)(e):
             1105          (A) "affiliated group" is as defined in Section 59-7-101 , except that "affiliated group"
             1106      includes a corporation that is qualified to do business but is not otherwise doing business in
             1107      this state;
             1108          (B) "common ownership" is as defined in Section 59-7-101 ;
             1109          (C) "related seller" means a seller that:
             1110          (I) is not required to pay or collect and remit sales and use taxes under Subsection
             1111      (1)(a) or Section 59-12-103.1 ;
             1112          (II) is:


             1113          (Aa) related to a seller that is required to pay or collect and remit sales and use taxes
             1114      under Subsection (1)(a) as part of an affiliated group or because of common ownership; or
             1115          (Bb) a limited liability company owned by the parent corporation of an affiliated group
             1116      if that parent corporation of the affiliated group is required to pay or collect and remit sales and
             1117      use taxes under Subsection (1)(a); and
             1118          (III) does not voluntarily collect and remit a tax under Subsection (1)(b)(i).
             1119          (ii) A seller is not required to pay or collect and remit sales and use taxes under
             1120      Subsection (1)(a):
             1121          (A) if the seller is a related seller;
             1122          (B) if the seller to which the related seller is related does not engage in any of the
             1123      following activities on behalf of the related seller:
             1124          (I) advertising;
             1125          (II) marketing;
             1126          (III) sales; or
             1127          (IV) other services; and
             1128          (C) if the seller to which the related seller is related accepts the return of an item sold
             1129      by the related seller, the seller to which the related seller is related accepts the return of that
             1130      item:
             1131          (I) sold by a seller that is not a related seller; and
             1132          (II) on the same terms as the return of an item sold by that seller to which the related
             1133      seller is related.
             1134          (2) (a) Except as provided in Section 59-12-107.1 , a tax under this chapter shall be
             1135      collected from a purchaser.
             1136          (b) A seller may not collect as tax an amount, without regard to fractional parts of one
             1137      cent, in excess of the tax computed at the rates prescribed by this chapter.
             1138          (c) (i) Each seller shall:
             1139          (A) give the purchaser a receipt for the tax collected; or
             1140          (B) bill the tax as a separate item and declare the name of this state and the seller's
             1141      sales and use tax license number on the invoice for the sale.
             1142          (ii) The receipt or invoice is prima facie evidence that the seller has collected the tax
             1143      and relieves the purchaser of the liability for reporting the tax to the commission as a


             1144      consumer.
             1145          (d) A seller is not required to maintain a separate account for the tax collected, but is
             1146      considered to be a person charged with receipt, safekeeping, and transfer of public moneys.
             1147          (e) Taxes collected by a seller pursuant to this chapter shall be held in trust for the
             1148      benefit of the state and for payment to the commission in the manner and at the time provided
             1149      for in this chapter.
             1150          (f) If any seller, during any reporting period, collects as a tax an amount in excess of
             1151      the lawful state and local percentage of total taxable sales allowed under this chapter, the seller
             1152      shall remit to the commission the full amount of the tax imposed under this chapter, plus any
             1153      excess.
             1154          (g) If the accounting methods regularly employed by the seller in the transaction of the
             1155      seller's business are such that reports of sales made during a calendar month or quarterly period
             1156      will impose unnecessary hardships, the commission may accept reports at intervals that will, in
             1157      the commission's opinion, better suit the convenience of the taxpayer or seller and will not
             1158      jeopardize collection of the tax.
             1159          (3) (a) Except as provided in Subsection (4) and Section 59-12-108 , the sales or use tax
             1160      imposed by this chapter is due and payable to the commission quarterly on or before the last
             1161      day of the month next succeeding each calendar quarterly period.
             1162          (b) (i) Each seller shall, on or before the last day of the month next succeeding each
             1163      calendar quarterly period, file with the commission a return for the preceding quarterly period.
             1164          (ii) The seller shall remit with the return under Subsection (3)(b)(i) the amount of the
             1165      tax required under this chapter to be collected or paid for the period covered by the return.
             1166          (c) Each return shall contain information and be in a form the commission prescribes
             1167      by rule.
             1168          (d) The sales tax as computed in the return shall be based upon the total nonexempt
             1169      sales made during the period, including both cash and charge sales.
             1170          (e) The use tax as computed in the return shall be based upon the total amount of [sales
             1171      and] purchases for storage, use, or other consumption in this state made during the period,
             1172      including both by cash and by charge.
             1173          (f) (i) Subject to Subsection (3)(f)(ii) and in accordance with Title 63, Chapter 46a,
             1174      Utah Administrative Rulemaking Act, the commission may by rule extend the time for making


             1175      returns and paying the taxes.
             1176          (ii) An extension under Subsection (3)(f)(i) may not be for more than 90 days.
             1177          (g) The commission may require returns and payment of the tax to be made for other
             1178      than quarterly periods if the commission considers it necessary in order to ensure the payment
             1179      of the tax imposed by this chapter.
             1180          (4) (a) On each vehicle sale made by other than a regular licensed vehicle dealer, the
             1181      purchaser shall pay the sales or use tax directly to the commission if the vehicle is subject to
             1182      titling or registration under the laws of this state.
             1183          (b) The commission shall collect the tax described in Subsection (4)(a) when the
             1184      vehicle is titled or registered.
             1185          (5) If any sale of tangible personal property or any other taxable transaction under
             1186      Subsection 59-12-103 (1), is made by a wholesaler to a retailer, the wholesaler is not
             1187      responsible for the collection or payment of the tax imposed on the sale and the retailer is
             1188      responsible for the collection or payment of the tax imposed on the sale if:
             1189          (a) the retailer represents that the personal property is purchased by the retailer for
             1190      resale; and
             1191          (b) the personal property is not subsequently resold.
             1192          (6) If any sale of property or service subject to the tax is made to a person prepaying
             1193      sales or use tax in accordance with Title 63, Chapter 51, Resource Development, or to a
             1194      contractor or subcontractor of that person, the person to whom such payment or consideration
             1195      is payable is not responsible for the collection or payment of the sales or use tax and the person
             1196      prepaying the sales or use tax is responsible for the collection or payment of the sales or use tax
             1197      if the person prepaying the sales or use tax represents that the amount prepaid as sales or use
             1198      tax has not been fully credited against sales or use tax due and payable under the rules
             1199      promulgated by the commission.
             1200          (7) (a) For purposes of this Subsection (7):
             1201          (i) Except as provided in Subsection (7)(a)(ii), "bad debt" is as defined in Section 166,
             1202      Internal Revenue Code.
             1203          (ii) Notwithstanding Subsection (7)(a)(i), "bad debt" does not include:
             1204          (A) an amount included in the purchase price of tangible personal property or a service
             1205      that is:


             1206          (I) not a transaction described in Subsection 59-12-103 (1); or
             1207          (II) exempt under Section 59-12-104 ;
             1208          (B) a financing charge;
             1209          (C) interest;
             1210          (D) a tax imposed under this chapter on the purchase price of tangible personal
             1211      property or a service;
             1212          (E) an uncollectible amount on tangible personal property that:
             1213          (I) is subject to a tax under this chapter; and
             1214          (II) remains in the possession of a seller until the full purchase price is paid;
             1215          (F) an expense incurred in attempting to collect any debt; or
             1216          (G) an amount that a seller does not collect on repossessed property.
             1217          (b) A seller may deduct bad debt from the total amount from which a tax under this
             1218      chapter is calculated on a return.
             1219          (c) A seller may file a refund claim with the commission if:
             1220          (i) the amount of bad debt for the time period described in Subsection (7)(e) exceeds
             1221      the amount of the seller's sales that are subject to a tax under this chapter for that same time
             1222      period; and
             1223          (ii) as provided in Section 59-12-110 .
             1224          (d) A bad debt deduction under this section may not include interest.
             1225          (e) A bad debt may be deducted under this Subsection (7) on a return for the time
             1226      period during which the bad debt:
             1227          (i) is written off as uncollectible in the seller's books and records; and
             1228          (ii) would be eligible for a bad debt deduction:
             1229          (A) for federal income tax purposes; and
             1230          (B) if the seller were required to file a federal income tax return.
             1231          (f) If a seller recovers any portion of bad debt for which the seller makes a deduction or
             1232      claims a refund under this Subsection (7), the seller shall report and remit a tax under this
             1233      chapter:
             1234          (i) on the portion of the bad debt the seller recovers; and
             1235          (ii) on a return filed for the time period for which the portion of the bad debt is
             1236      recovered.


             1237          (g) For purposes of reporting a recovery of a portion of bad debt under Subsection
             1238      (7)(f), a seller shall apply amounts received on the bad debt in the following order:
             1239          (i) in a proportional amount:
             1240          (A) to the purchase price of the tangible personal property or service; and
             1241          (B) to the tax due under this chapter on the tangible personal property or service; and
             1242          (ii) to:
             1243          (A) interest charges;
             1244          (B) service charges; and
             1245          (C) other charges.
             1246          (8) (a) A seller may not, with intent to evade any tax, fail to timely remit the full
             1247      amount of tax required by this chapter.
             1248          (b) A violation of this section is punishable as provided in Section 59-1-401 .
             1249          (c) Each person who fails to pay any tax to the state or any amount of tax required to be
             1250      paid to the state, except amounts determined to be due by the commission under Sections
             1251      59-12-110 and 59-12-111 , within the time required by this chapter, or who fails to file any
             1252      return as required by this chapter, shall pay, in addition to the tax, penalties and interest as
             1253      provided in Section 59-12-110 .
             1254          (d) For purposes of prosecution under this section, each quarterly tax period in which a
             1255      seller, with intent to evade any tax, collects a tax and fails to timely remit the full amount of the
             1256      tax required to be remitted, constitutes a separate offense.
             1257          Section 4. Section 59-12-501 is amended to read:
             1258           59-12-501. Public transit tax -- Base -- Rate -- Voter approval.
             1259          (1) (a) (i) In addition to other sales and use taxes, any county, city, or town may impose
             1260      a sales and use tax of up to:
             1261          (A) [beginning on January 1, 1988, and ending on December 31, 2007] for a county,
             1262      city, or town other than a county, city, or town described in Subsection (1)(a)(i)(B), .25% on
             1263      the transactions described in Subsection 59-12-103 (1) located within the county, city, or town,
             1264      to fund a public transportation system; or
             1265          (B) beginning on January 1, 2008, [if within the boundaries of the] for a county, city, or
             1266      town within which a tax is not imposed under Part 15, County Option Sales and Use Tax for
             1267      Highways, Fixed Guideways, or Systems for Public Transit Act, .30% on the transactions


             1268      described in Subsection 59-12-103 (1) located within the county, city, or town, to fund a public
             1269      transportation system.
             1270          (ii) Notwithstanding Subsection (1)(a)(i), a county, city, or town may not impose a tax
             1271      under this section on:
             1272          (A) the sales and uses described in Section 59-12-104 to the extent the sales and uses
             1273      are exempt from taxation under Section 59-12-104 ;
             1274          (B) amounts paid or charged by a seller that collects a tax under Subsection
             1275      59-12-107 (1)(b); and
             1276          (C) except as provided in Subsection (1)(c), amounts paid or charged for food and food
             1277      ingredients.
             1278          (b) For purposes of this Subsection (1), the location of a transaction shall be
             1279      determined in accordance with Section 59-12-207 .
             1280          (c) A county, city, or town imposing a tax under this section shall impose the tax on
             1281      amounts paid or charged for food and food ingredients if:
             1282          (i) the food and food ingredients are sold as part of a bundled transaction attributable to
             1283      food and food ingredients and tangible personal property other than food and food ingredients;
             1284      and
             1285          (ii) the seller collecting the tax is a seller other than a seller that collects a tax in
             1286      accordance with Subsection 59-12-107 (1)(b).
             1287          (d) Except as provided in Subsection (3) or (4), a county, city, or town may impose a
             1288      tax under this section only if the governing body of the county, city, or town, by resolution,
             1289      submits the proposal to all the qualified voters within the county, city, or town for approval at a
             1290      general or special election conducted in the manner provided by statute.
             1291          (2) (a) Notice of any such election shall be given by the county, city, or town governing
             1292      body 15 days in advance in the manner prescribed by statute.
             1293          (b) If a majority of the voters voting in such election approve the proposal, it shall
             1294      become effective on the date provided by the county, city, or town governing body.
             1295          (3) This section may not be construed to require an election in jurisdictions where
             1296      voters have previously approved a public transit sales or use tax.
             1297          (4) A county, city, or town is not subject to the voter approval requirements of this
             1298      section if:


             1299          (a) on December 31, 2007, the county, city, or town imposes a tax of .25% under this
             1300      section; and
             1301          (b) on or after January 1, 2008, subject to Subsection (1)(a)(i)(B), the county, city, or
             1302      town increases the tax rate under this section to up to .30%.
             1303          Section 5. Effective date -- Retrospective operation.
             1304          If approved by two-thirds of all the members elected to each house, this bill:
             1305          (1) takes effect upon approval by the governor, or the day following the constitutional
             1306      time limit of Utah Constitution Article VII, Section 8, without the governor's signature, or in
             1307      the case of a veto, the date of veto override; and
             1308          (2) has retrospective operation to January 1, 2008.




Legislative Review Note
    as of 12-7-07 12:44 PM


Office of Legislative Research and General Counsel


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