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S.B. 34
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9 LONG TITLE
10 Committee Note:
11 The Revenue and Taxation Interim Committee recommended this bill.
12 General Description:
13 This bill amends the Sales and Use Tax Act relating to a sales and use tax exemption
14 for certain machinery, equipment, or repair or replacement parts.
15 Highlighted Provisions:
16 This bill:
17 . provides a requirement that to be eligible for exemption from state and local sales
18 and use taxes, certain machinery, equipment, or repair or replacement parts be used
19 in an establishment or facility in the state;
20 . repeals obsolete language; and
21 . makes technical changes.
22 Monies Appropriated in this Bill:
23 None
24 Other Special Clauses:
25 None
26 Utah Code Sections Affected:
27 AMENDS:
28 59-12-104, as last amended by Laws of Utah 2008, Second Special Session, Chapter 2
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30 Be it enacted by the Legislature of the state of Utah:
31 Section 1. Section 59-12-104 is amended to read:
32 59-12-104. Exemptions.
33 The following sales and uses are exempt from the taxes imposed by this chapter:
34 (1) sales of aviation fuel, motor fuel, and special fuel subject to a Utah state excise tax
35 under Chapter 13, Motor and Special Fuel Tax Act;
36 (2) sales to the state, its institutions, and its political subdivisions; however, this
37 exemption does not apply to sales of:
38 (a) construction materials except:
39 (i) construction materials purchased by or on behalf of institutions of the public
40 education system as defined in Utah Constitution Article X, Section 2, provided the
41 construction materials are clearly identified and segregated and installed or converted to real
42 property which is owned by institutions of the public education system; and
43 (ii) construction materials purchased by the state, its institutions, or its political
44 subdivisions which are installed or converted to real property by employees of the state, its
45 institutions, or its political subdivisions; or
46 (b) tangible personal property in connection with the construction, operation,
47 maintenance, repair, or replacement of a project, as defined in Section 11-13-103 , or facilities
48 providing additional project capacity, as defined in Section 11-13-103 ;
49 (3) (a) sales of an item described in Subsection (3)(b) from a vending machine if:
50 (i) the proceeds of each sale do not exceed $1; and
51 (ii) the seller or operator of the vending machine reports an amount equal to 150% of
52 the cost of the item described in Subsection (3)(b) as goods consumed; and
53 (b) Subsection (3)(a) applies to:
54 (i) food and food ingredients; or
55 (ii) prepared food;
56 (4) sales of the following to a commercial airline carrier for in-flight consumption:
57 (a) food and food ingredients;
58 (b) prepared food; or
59 (c) services related to Subsection (4)(a) or (b);
60 (5) (a) (i) beginning on July 1, 2008, and ending on September 30, 2008, sales of parts
61 and equipment:
62 (A) (I) by an establishment described in NAICS Code 336411 or 336412 of the 2002
63 North American Industry Classification System of the federal Executive Office of the
64 President, Office of Management and Budget; and
65 (II) for:
66 (Aa) installation in an aircraft, including services relating to the installation of parts or
67 equipment in the aircraft;
68 (Bb) renovation of an aircraft; or
69 (Cc) repair of an aircraft; or
70 (B) for installation in an aircraft operated by a common carrier in interstate or foreign
71 commerce; or
72 (ii) beginning on October 1, 2008, sales of parts and equipment for installation in an
73 aircraft operated by a common carrier in interstate or foreign commerce; and
74 (b) notwithstanding the time period of Subsection 59-12-110 (2) for filing for a refund,
75 a person may claim the exemption allowed by Subsection (5)(a)(i)(B) for a sale by filing for a
76 refund:
77 (i) if the sale is made on or after July 1, 2008, but on or before September 30, 2008;
78 (ii) as if Subsection (5)(a)(i)(B) were in effect on the day on which the sale is made;
79 (iii) if the person did not claim the exemption allowed by Subsection (5)(a)(i)(B) for
80 the sale prior to filing for the refund;
81 (iv) for sales and use taxes paid under this chapter on the sale;
82 (v) in accordance with Section 59-12-110 ; and
83 (vi) subject to any extension allowed for filing for a refund under Section 59-12-110 , if
84 the person files for the refund on or before September 30, 2011;
85 (6) sales of commercials, motion picture films, prerecorded audio program tapes or
86 records, and prerecorded video tapes by a producer, distributor, or studio to a motion picture
87 exhibitor, distributor, or commercial television or radio broadcaster;
88 (7) (a) subject to Subsection (7)(b), sales of cleaning or washing of tangible personal
89 property if the cleaning or washing of the tangible personal property is not assisted cleaning or
90 washing of tangible personal property;
91 (b) if a seller that sells at the same business location assisted cleaning or washing of
92 tangible personal property and cleaning or washing of tangible personal property that is not
93 assisted cleaning or washing of tangible personal property, the exemption described in
94 Subsection (7)(a) applies if the seller separately accounts for the sales of the assisted cleaning
95 or washing of the tangible personal property; and
96 (c) for purposes of Subsection (7)(b) and in accordance with Title 63G, Chapter 3,
97 Utah Administrative Rulemaking Act, the commission may make rules:
98 (i) governing the circumstances under which sales are at the same business location;
99 and
100 (ii) establishing the procedures and requirements for a seller to separately account for
101 sales of assisted cleaning or washing of tangible personal property;
102 (8) sales made to or by religious or charitable institutions in the conduct of their regular
103 religious or charitable functions and activities, if the requirements of Section 59-12-104.1 are
104 fulfilled;
105 (9) sales of a vehicle of a type required to be registered under the motor vehicle laws of
106 this state if the vehicle is:
107 (a) not registered in this state; and
108 (b) (i) not used in this state; or
109 (ii) used in this state:
110 (A) if the vehicle is not used to conduct business, for a time period that does not
111 exceed the longer of:
112 (I) 30 days in any calendar year; or
113 (II) the time period necessary to transport the vehicle to the borders of this state; or
114 (B) if the vehicle is used to conduct business, for the time period necessary to transport
115 the vehicle to the borders of this state;
116 (10) (a) amounts paid for an item described in Subsection (10)(b) if:
117 (i) the item is intended for human use; and
118 (ii) (A) a prescription was issued for the item; or
119 (B) the item was purchased by a hospital or other medical facility; and
120 (b) (i) Subsection (10)(a) applies to:
121 (A) a drug;
122 (B) a syringe; or
123 (C) a stoma supply; and
124 (ii) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
125 commission may by rule define the terms:
126 (A) "syringe"; or
127 (B) "stoma supply";
128 (11) sales or use of property, materials, or services used in the construction of or
129 incorporated in pollution control facilities allowed by Sections 19-2-123 through 19-2-127 ;
130 (12) (a) sales of an item described in Subsection (12)(c) served by:
131 (i) the following if the item described in Subsection (12)(c) is not available to the
132 general public:
133 (A) a church; or
134 (B) a charitable institution;
135 (ii) an institution of higher education if:
136 (A) the item described in Subsection (12)(c) is not available to the general public; or
137 (B) the item described in Subsection (12)(c) is prepaid as part of a student meal plan
138 offered by the institution of higher education; or
139 (b) sales of an item described in Subsection (12)(c) provided for a patient by:
140 (i) a medical facility; or
141 (ii) a nursing facility; and
142 (c) Subsections (12)(a) and (b) apply to:
143 (i) food and food ingredients;
144 (ii) prepared food; or
145 (iii) alcoholic beverages;
146 (13) (a) except as provided in Subsection (13)(b), the sale of tangible personal property
147 or a product transferred electronically by a person:
148 (i) regardless of the number of transactions involving the sale of that tangible personal
149 property or product transferred electronically by that person; and
150 (ii) not regularly engaged in the business of selling that type of tangible personal
151 property or product transferred electronically;
152 (b) this Subsection (13) does not apply if:
153 (i) the sale is one of a series of sales of a character to indicate that the person is
154 regularly engaged in the business of selling that type of tangible personal property or product
155 transferred electronically;
156 (ii) the person holds that person out as regularly engaged in the business of selling that
157 type of tangible personal property or product transferred electronically;
158 (iii) the person sells an item of tangible personal property or product transferred
159 electronically that the person purchased as a sale that is exempt under Subsection (25); or
160 (iv) the sale is of a vehicle or vessel required to be titled or registered under the laws of
161 this state in which case the tax is based upon:
162 (A) the bill of sale or other written evidence of value of the vehicle or vessel being
163 sold; or
164 (B) in the absence of a bill of sale or other written evidence of value, the fair market
165 value of the vehicle or vessel being sold at the time of the sale as determined by the
166 commission; and
167 (c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
168 commission shall make rules establishing the circumstances under which:
169 (i) a person is regularly engaged in the business of selling a type of tangible personal
170 property or product transferred electronically;
171 (ii) a sale of tangible personal property or a product transferred electronically is one of
172 a series of sales of a character to indicate that a person is regularly engaged in the business of
173 selling that type of tangible personal property or product transferred electronically; or
174 (iii) a person holds that person out as regularly engaged in the business of selling a type
175 of tangible personal property or product transferred electronically;
176 (14) (a) except as provided in Subsection (14)(b), amounts paid or charged on or after
177 July 1, 2006, for a purchase or lease by a manufacturing facility [
178 cogeneration facility, for the following:
179 (i) machinery and equipment that:
180 (A) [
181 (I) for a manufacturing facility [
182 scrap recycler described in Subsection 59-12-102 (52)(b):
183 (Aa) in the manufacturing process; [
184 (Bb) to manufacture an item sold as tangible personal property; and
185 (Cc) beginning on July 1, 2009, in a manufacturing facility described in this Subsection
186 (14)(a)(i)(A)(I) in the state; or
187 (II) for a manufacturing facility that is a scrap recycler described in Subsection
188 59-12-102 (52)(b)[
189 (Aa) to process an item sold as tangible personal property; and
190 (Bb) beginning on July 1, 2009, in a manufacturing facility described in this Subsection
191 (14)(a)(i)(A)(II) in the state; and
192 (B) [
193 (ii) normal operating repair or replacement parts that:
194 (A) have an economic life of three or more years; and
195 (B) are used:
196 (I) for a manufacturing facility [
197 facility that is a scrap recycler described in Subsection 59-12-102 (52)(b)[
198 (Aa) in the manufacturing process; and
199 (Bb) in a manufacturing facility described in this Subsection (14)(a)(ii)(B)(I) in the
200 state; or
201 (II) for a manufacturing facility [
202 Subsection 59-12-102 (52)(b)[
203 (Aa) to process an item sold as tangible personal property; and
204 (Bb) in a manufacturing facility described in this Subsection (14)(a)(ii)(B)(II) in the
205 state;
206 (b) [
207 manufacturing facility that is a cogeneration facility placed in service on or after May 1, 2006,
208 for the following:
209 [
210 [
211 [
212 [
213 (III) beginning on July 1, 2009, in a manufacturing facility described in this Subsection
214 (14)(b) in the state; and
215 [
216 [
217 [
218 (I) in the manufacturing process; and
219 (II) in a manufacturing facility described in this Subsection (14)(b) in the state; and
220 [
221 [
222
223
224 [
225
226 [
227 (c) amounts paid or charged for a purchase or lease made on or after January 1, 2008,
228 by an establishment described in NAICS Subsector 212, Mining (except Oil and Gas), or
229 NAICS Code 213113, Support Activities for Coal Mining, 213114, Support Activities for
230 Metal Mining, or 213115, Support Activities for Nonmetallic Minerals (except Fuels) Mining,
231 of the 2002 North American Industry Classification System of the federal Executive Office of
232 the President, Office of Management and Budget:
233 (i) machinery and equipment that:
234 (A) are used [
235 (I) (Aa) in the production process, other than the production of real property; or
236 [
237 (II) beginning on July 1, 2009, in an establishment described in this Subsection (14)(c)
238 in the state; and
239 (B) have an economic life of three or more years; and
240 (ii) normal operating repair or replacement parts that:
241 (A) have an economic life of three or more years; and
242 (B) are used in:
243 (I) (Aa) the production process, [
244
245 (Bb) an establishment described in this Subsection (14)(c) in the state; or
246 (II) (Aa) research and development; and
247 (Bb) in an establishment described in this Subsection (14)(c) in the state;
248 (d) for purposes of this Subsection (14) and in accordance with Title 63G, Chapter 3,
249 Utah Administrative Rulemaking Act, the commission:
250 (i) shall by rule define the term "establishment"; and
251 (ii) may by rule define what constitutes:
252 (A) processing an item sold as tangible personal property;
253 (B) the production process, [
254 (C) research and development; and
255 (e) on or before October 1, 2011, and every five years after October 1, 2011, the
256 commission shall:
257 (i) review the exemptions described in this Subsection (14) and make
258 recommendations to the Revenue and Taxation Interim Committee concerning whether the
259 exemptions should be continued, modified, or repealed; and
260 (ii) include in its report:
261 (A) the cost of the exemptions;
262 (B) the purpose and effectiveness of the exemptions; and
263 (C) the benefits of the exemptions to the state;
264 (15) (a) sales of the following if the requirements of Subsection (15)(b) are met:
265 (i) tooling;
266 (ii) special tooling;
267 (iii) support equipment;
268 (iv) special test equipment; or
269 (v) parts used in the repairs or renovations of tooling or equipment described in
270 Subsections (15)(a)(i) through (iv); and
271 (b) sales of tooling, equipment, or parts described in Subsection (15)(a) are exempt if:
272 (i) the tooling, equipment, or parts are used or consumed exclusively in the
273 performance of any aerospace or electronics industry contract with the United States
274 government or any subcontract under that contract; and
275 (ii) under the terms of the contract or subcontract described in Subsection (15)(b)(i),
276 title to the tooling, equipment, or parts is vested in the United States government as evidenced
277 by:
278 (A) a government identification tag placed on the tooling, equipment, or parts; or
279 (B) listing on a government-approved property record if placing a government
280 identification tag on the tooling, equipment, or parts is impractical;
281 (16) sales of newspapers or newspaper subscriptions;
282 (17) (a) except as provided in Subsection (17)(b), tangible personal property or a
283 product transferred electronically traded in as full or part payment of the purchase price, except
284 that for purposes of calculating sales or use tax upon vehicles not sold by a vehicle dealer,
285 trade-ins are limited to other vehicles only, and the tax is based upon:
286 (i) the bill of sale or other written evidence of value of the vehicle being sold and the
287 vehicle being traded in; or
288 (ii) in the absence of a bill of sale or other written evidence of value, the then existing
289 fair market value of the vehicle being sold and the vehicle being traded in, as determined by the
290 commission; and
291 (b) notwithstanding Subsection (17)(a), Subsection (17)(a) does not apply to the
292 following items of tangible personal property or products transferred electronically traded in as
293 full or part payment of the purchase price:
294 (i) money;
295 (ii) electricity;
296 (iii) water;
297 (iv) gas; or
298 (v) steam;
299 (18) (a) (i) except as provided in Subsection (18)(b), sales of tangible personal property
300 or a product transferred electronically used or consumed primarily and directly in farming
301 operations, regardless of whether the tangible personal property or product transferred
302 electronically:
303 (A) becomes part of real estate; or
304 (B) is installed by a:
305 (I) farmer;
306 (II) contractor; or
307 (III) subcontractor; or
308 (ii) sales of parts used in the repairs or renovations of tangible personal property or a
309 product transferred electronically if the tangible personal property or product transferred
310 electronically is exempt under Subsection (18)(a)(i); and
311 (b) notwithstanding Subsection (18)(a), amounts paid or charged for the following are
312 subject to the taxes imposed by this chapter:
313 (i) (A) subject to Subsection (18)(b)(i)(B), the following if used in a manner that is
314 incidental to farming:
315 (I) machinery;
316 (II) equipment;
317 (III) materials; or
318 (IV) supplies; and
319 (B) tangible personal property that is considered to be used in a manner that is
320 incidental to farming includes:
321 (I) hand tools; or
322 (II) maintenance and janitorial equipment and supplies;
323 (ii) (A) subject to Subsection (18)(b)(ii)(B), tangible personal property or a product
324 transferred electronically if the tangible personal property or product transferred electronically
325 is used in an activity other than farming; and
326 (B) tangible personal property or a product transferred electronically that is considered
327 to be used in an activity other than farming includes:
328 (I) office equipment and supplies; or
329 (II) equipment and supplies used in:
330 (Aa) the sale or distribution of farm products;
331 (Bb) research; or
332 (Cc) transportation; or
333 (iii) a vehicle required to be registered by the laws of this state during the period
334 ending two years after the date of the vehicle's purchase;
335 (19) sales of hay;
336 (20) exclusive sale during the harvest season of seasonal crops, seedling plants, or
337 garden, farm, or other agricultural produce if the seasonal crops are, seedling plants are, or
338 garden, farm, or other agricultural produce is sold by:
339 (a) the producer of the seasonal crops, seedling plants, or garden, farm, or other
340 agricultural produce;
341 (b) an employee of the producer described in Subsection (20)(a); or
342 (c) a member of the immediate family of the producer described in Subsection (20)(a);
343 (21) purchases made using a coupon as defined in 7 U.S.C. Sec. 2012 that is issued
344 under the Food Stamp Program, 7 U.S.C. Sec. 2011 et seq.;
345 (22) sales of nonreturnable containers, nonreturnable labels, nonreturnable bags,
346 nonreturnable shipping cases, and nonreturnable casings to a manufacturer, processor,
347 wholesaler, or retailer for use in packaging tangible personal property to be sold by that
348 manufacturer, processor, wholesaler, or retailer;
349 (23) a product stored in the state for resale;
350 (24) (a) purchases of a product if:
351 (i) the product is:
352 (A) purchased outside of this state;
353 (B) brought into this state:
354 (I) at any time after the purchase described in Subsection (24)(a)(i)(A); and
355 (II) by a nonresident person who is not living or working in this state at the time of the
356 purchase;
357 (C) used for the personal use or enjoyment of the nonresident person described in
358 Subsection (24)(a)(i)(B)(II) while that nonresident person is within the state; and
359 (D) not used in conducting business in this state; and
360 (ii) for:
361 (A) a product other than a boat described in Subsection (24)(a)(ii)(B), the first use of
362 the product for a purpose for which the product is designed occurs outside of this state;
363 (B) a boat, the boat is registered outside of this state; or
364 (C) a vehicle other than a vehicle sold to an authorized carrier, the vehicle is registered
365 outside of this state;
366 (b) the exemption provided for in Subsection (24)(a) does not apply to:
367 (i) a lease or rental of a product; or
368 (ii) a sale of a vehicle exempt under Subsection (33); and
369 (c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, for
370 purposes of Subsection (24)(a), the commission may by rule define what constitutes the
371 following:
372 (i) conducting business in this state if that phrase has the same meaning in this
373 Subsection (24) as in Subsection (64);
374 (ii) the first use of a product if that phrase has the same meaning in this Subsection (24)
375 as in Subsection (64); or
376 (iii) a purpose for which a product is designed if that phrase has the same meaning in
377 this Subsection (24) as in Subsection (64);
378 (25) a product purchased for resale in this state, in the regular course of business, either
379 in its original form or as an ingredient or component part of a manufactured or compounded
380 product;
381 (26) a product upon which a sales or use tax was paid to some other state, or one of its
382 subdivisions, except that the state shall be paid any difference between the tax paid and the tax
383 imposed by this part and Part 2, Local Sales and Use Tax Act, and no adjustment is allowed if
384 the tax paid was greater than the tax imposed by this part and Part 2, Local Sales and Use Tax
385 Act;
386 (27) any sale of a service described in Subsections 59-12-103 (1)(b), (c), and (d) to a
387 person for use in compounding a service taxable under the subsections;
388 (28) purchases made in accordance with the special supplemental nutrition program for
389 women, infants, and children established in 42 U.S.C. Sec. 1786;
390 (29) beginning on July 1, 1999, through June 30, 2014, sales or leases of rolls, rollers,
391 refractory brick, electric motors, or other replacement parts used in the furnaces, mills, or ovens
392 of a steel mill described in SIC Code 3312 of the 1987 Standard Industrial Classification
393 Manual of the federal Executive Office of the President, Office of Management and Budget;
394 (30) sales of a boat of a type required to be registered under Title 73, Chapter 18, State
395 Boating Act, a boat trailer, or an outboard motor if the boat, boat trailer, or outboard motor is:
396 (a) not registered in this state; and
397 (b) (i) not used in this state; or
398 (ii) used in this state:
399 (A) if the boat, boat trailer, or outboard motor is not used to conduct business, for a
400 time period that does not exceed the longer of:
401 (I) 30 days in any calendar year; or
402 (II) the time period necessary to transport the boat, boat trailer, or outboard motor to
403 the borders of this state; or
404 (B) if the boat, boat trailer, or outboard motor is used to conduct business, for the time
405 period necessary to transport the boat, boat trailer, or outboard motor to the borders of this
406 state;
407 (31) sales of aircraft manufactured in Utah;
408 (32) amounts paid for the purchase of telecommunications service for purposes of
409 providing telecommunications service;
410 (33) sales, leases, or uses of the following:
411 (a) a vehicle by an authorized carrier; or
412 (b) tangible personal property that is installed on a vehicle:
413 (i) sold or leased to or used by an authorized carrier; and
414 (ii) before the vehicle is placed in service for the first time;
415 (34) (a) 45% of the sales price of any new manufactured home; and
416 (b) 100% of the sales price of any used manufactured home;
417 (35) sales relating to schools and fundraising sales;
418 (36) sales or rentals of durable medical equipment if:
419 (a) a person presents a prescription for the durable medical equipment; and
420 (b) the durable medical equipment is used for home use only;
421 (37) (a) sales to a ski resort of electricity to operate a passenger ropeway as defined in
422 Section 72-11-102 ; and
423 (b) the commission shall by rule determine the method for calculating sales exempt
424 under Subsection (37)(a) that are not separately metered and accounted for in utility billings;
425 (38) sales to a ski resort of:
426 (a) snowmaking equipment;
427 (b) ski slope grooming equipment;
428 (c) passenger ropeways as defined in Section 72-11-102 ; or
429 (d) parts used in the repairs or renovations of equipment or passenger ropeways
430 described in Subsections (38)(a) through (c);
431 (39) sales of natural gas, electricity, heat, coal, fuel oil, or other fuels for industrial use;
432 (40) (a) subject to Subsection (40)(b), sales or rentals of the right to use or operate for
433 amusement, entertainment, or recreation an unassisted amusement device as defined in Section
434 59-12-102 ;
435 (b) if a seller that sells or rents at the same business location the right to use or operate
436 for amusement, entertainment, or recreation one or more unassisted amusement devices and
437 one or more assisted amusement devices, the exemption described in Subsection (40)(a)
438 applies if the seller separately accounts for the sales or rentals of the right to use or operate for
439 amusement, entertainment, or recreation for the assisted amusement devices; and
440 (c) for purposes of Subsection (40)(b) and in accordance with Title 63G, Chapter 3,
441 Utah Administrative Rulemaking Act, the commission may make rules:
442 (i) governing the circumstances under which sales are at the same business location;
443 and
444 (ii) establishing the procedures and requirements for a seller to separately account for
445 the sales or rentals of the right to use or operate for amusement, entertainment, or recreation for
446 assisted amusement devices;
447 (41) (a) sales of photocopies by:
448 (i) a governmental entity; or
449 (ii) an entity within the state system of public education, including:
450 (A) a school; or
451 (B) the State Board of Education; or
452 (b) sales of publications by a governmental entity;
453 (42) amounts paid for admission to an athletic event at an institution of higher
454 education that is subject to the provisions of Title IX of the Education Amendments of 1972,
455 20 U.S.C. Sec. 1681 et seq.;
456 (43) sales of telecommunications service charged to a prepaid telephone calling card;
457 (44) (a) sales made to or by:
458 (i) an area agency on aging; or
459 (ii) a senior citizen center owned by a county, city, or town; or
460 (b) sales made by a senior citizen center that contracts with an area agency on aging;
461 (45) sales or leases of semiconductor fabricating, processing, research, or development
462 materials regardless of whether the semiconductor fabricating, processing, research, or
463 development materials:
464 (a) actually come into contact with a semiconductor; or
465 (b) ultimately become incorporated into real property;
466 (46) an amount paid by or charged to a purchaser for accommodations and services
467 described in Subsection 59-12-103 (1)(i) to the extent the amount is exempt under Section
468 59-12-104.2 ;
469 (47) beginning on September 1, 2001, the lease or use of a vehicle issued a temporary
470 sports event registration certificate in accordance with Section 41-3-306 for the event period
471 specified on the temporary sports event registration certificate;
472 (48) sales or uses of electricity, if the sales or uses are:
473 (a) made under a tariff adopted by the Public Service Commission of Utah only for
474 purchase of electricity produced from a new wind, geothermal, biomass, or solar power energy
475 source, as designated in the tariff by the Public Service Commission of Utah; and
476 (b) for an amount of electricity that is:
477 (i) unrelated to the amount of electricity used by the person purchasing the electricity
478 under the tariff described in Subsection (48)(a); and
479 (ii) equivalent to the number of kilowatthours specified in the tariff described in
480 Subsection (48)(a) that may be purchased under the tariff described in Subsection (48)(a);
481 (49) sales or rentals of mobility enhancing equipment if a person presents a
482 prescription for the mobility enhancing equipment;
483 (50) sales of water in a:
484 (a) pipe;
485 (b) conduit;
486 (c) ditch; or
487 (d) reservoir;
488 (51) sales of currency or coinage that constitute legal tender of the United States or of a
489 foreign nation;
490 (52) (a) sales of an item described in Subsection (52)(b) if the item:
491 (i) does not constitute legal tender of any nation; and
492 (ii) has a gold, silver, or platinum content of 80% or more; and
493 (b) Subsection (52)(a) applies to a gold, silver, or platinum:
494 (i) ingot;
495 (ii) bar;
496 (iii) medallion; or
497 (iv) decorative coin;
498 (53) amounts paid on a sale-leaseback transaction;
499 (54) sales of a prosthetic device:
500 (a) for use on or in a human; and
501 (b) (i) for which a prescription is required; or
502 (ii) if the prosthetic device is purchased by a hospital or other medical facility;
503 (55) (a) except as provided in Subsection (55)(b), purchases, leases, or rentals of
504 machinery or equipment by an establishment described in Subsection (55)(c) if the machinery
505 or equipment is primarily used in the production or postproduction of the following media for
506 commercial distribution:
507 (i) a motion picture;
508 (ii) a television program;
509 (iii) a movie made for television;
510 (iv) a music video;
511 (v) a commercial;
512 (vi) a documentary; or
513 (vii) a medium similar to Subsections (55)(a)(i) through (vi) as determined by the
514 commission by administrative rule made in accordance with Subsection (55)(d); or
515 (b) notwithstanding Subsection (55)(a), purchases, leases, or rentals of machinery or
516 equipment by an establishment described in Subsection (55)(c) that is used for the production
517 or postproduction of the following are subject to the taxes imposed by this chapter:
518 (i) a live musical performance;
519 (ii) a live news program; or
520 (iii) a live sporting event;
521 (c) the following establishments listed in the 1997 North American Industry
522 Classification System of the federal Executive Office of the President, Office of Management
523 and Budget, apply to Subsections (55)(a) and (b):
524 (i) NAICS Code 512110; or
525 (ii) NAICS Code 51219; and
526 (d) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
527 commission may by rule:
528 (i) prescribe what constitutes a medium similar to Subsections (55)(a)(i) through (vi);
529 or
530 (ii) define:
531 (A) "commercial distribution";
532 (B) "live musical performance";
533 (C) "live news program"; or
534 (D) "live sporting event";
535 (56) (a) leases of seven or more years or purchases made on or after July 1, 2004 but on
536 or before June 30, 2019, of machinery or equipment that:
537 (i) is leased or purchased for or by a facility that:
538 (A) is a renewable energy production facility;
539 (B) is located in the state; and
540 (C) (I) becomes operational on or after July 1, 2004; or
541 (II) has its generation capacity increased by one or more megawatts on or after July 1,
542 2004 as a result of the use of the machinery or equipment;
543 (ii) has an economic life of five or more years; and
544 (iii) is used to make the facility or the increase in capacity of the facility described in
545 Subsection (56)(a)(i) operational up to the point of interconnection with an existing
546 transmission grid including:
547 (A) a wind turbine;
548 (B) generating equipment;
549 (C) a control and monitoring system;
550 (D) a power line;
551 (E) substation equipment;
552 (F) lighting;
553 (G) fencing;
554 (H) pipes; or
555 (I) other equipment used for locating a power line or pole; and
556 (b) this Subsection (56) does not apply to:
557 (i) machinery or equipment used in construction of:
558 (A) a new renewable energy production facility; or
559 (B) the increase in the capacity of a renewable energy production facility;
560 (ii) contracted services required for construction and routine maintenance activities;
561 and
562 (iii) unless the machinery or equipment is used or acquired for an increase in capacity
563 of the facility described in Subsection (56)(a)(i)(C)(II), machinery or equipment used or
564 acquired after:
565 (A) the renewable energy production facility described in Subsection (56)(a)(i) is
566 operational as described in Subsection (56)(a)(iii); or
567 (B) the increased capacity described in Subsection (56)(a)(i) is operational as described
568 in Subsection (56)(a)(iii);
569 (57) (a) leases of seven or more years or purchases made on or after July 1, 2004 but on
570 or before June 30, 2019, of machinery or equipment that:
571 (i) is leased or purchased for or by a facility that:
572 (A) is a waste energy production facility;
573 (B) is located in the state; and
574 (C) (I) becomes operational on or after July 1, 2004; or
575 (II) has its generation capacity increased by one or more megawatts on or after July 1,
576 2004 as a result of the use of the machinery or equipment;
577 (ii) has an economic life of five or more years; and
578 (iii) is used to make the facility or the increase in capacity of the facility described in
579 Subsection (57)(a)(i) operational up to the point of interconnection with an existing
580 transmission grid including:
581 (A) generating equipment;
582 (B) a control and monitoring system;
583 (C) a power line;
584 (D) substation equipment;
585 (E) lighting;
586 (F) fencing;
587 (G) pipes; or
588 (H) other equipment used for locating a power line or pole; and
589 (b) this Subsection (57) does not apply to:
590 (i) machinery or equipment used in construction of:
591 (A) a new waste energy facility; or
592 (B) the increase in the capacity of a waste energy facility;
593 (ii) contracted services required for construction and routine maintenance activities;
594 and
595 (iii) unless the machinery or equipment is used or acquired for an increase in capacity
596 described in Subsection (57)(a)(i)(C)(II), machinery or equipment used or acquired after:
597 (A) the waste energy facility described in Subsection (57)(a)(i) is operational as
598 described in Subsection (57)(a)(iii); or
599 (B) the increased capacity described in Subsection (57)(a)(i) is operational as described
600 in Subsection (57)(a)(iii);
601 (58) (a) leases of five or more years or purchases made on or after July 1, 2004 but on
602 or before June 30, 2019, of machinery or equipment that:
603 (i) is leased or purchased for or by a facility that:
604 (A) is located in the state;
605 (B) produces fuel from biomass energy including:
606 (I) methanol; or
607 (II) ethanol; and
608 (C) (I) becomes operational on or after July 1, 2004; or
609 (II) has its capacity to produce fuel increase by 25% or more on or after July 1, 2004 as
610 a result of the installation of the machinery or equipment;
611 (ii) has an economic life of five or more years; and
612 (iii) is installed on the facility described in Subsection (58)(a)(i);
613 (b) this Subsection (58) does not apply to:
614 (i) machinery or equipment used in construction of:
615 (A) a new facility described in Subsection (58)(a)(i); or
616 (B) the increase in capacity of the facility described in Subsection (58)(a)(i); or
617 (ii) contracted services required for construction and routine maintenance activities;
618 and
619 (iii) unless the machinery or equipment is used or acquired for an increase in capacity
620 described in Subsection (58)(a)(i)(C)(II), machinery or equipment used or acquired after:
621 (A) the facility described in Subsection (58)(a)(i) is operational; or
622 (B) the increased capacity described in Subsection (58)(a)(i) is operational;
623 (59) (a) subject to Subsection (59)(b) or (c), sales of tangible personal property or a
624 product transferred electronically to a person within this state if that tangible personal property
625 or product transferred electronically is subsequently shipped outside the state and incorporated
626 pursuant to contract into and becomes a part of real property located outside of this state;
627 (b) the exemption under Subsection (59)(a) is not allowed to the extent that the other
628 state or political entity to which the tangible personal property is shipped imposes a sales, use,
629 gross receipts, or other similar transaction excise tax on the transaction against which the other
630 state or political entity allows a credit for sales and use taxes imposed by this chapter; and
631 (c) notwithstanding the time period of Subsection 59-12-110 (2)(b) for filing for a
632 refund, a person may claim the exemption allowed by this Subsection (59) for a sale by filing
633 for a refund:
634 (i) if the sale is made on or after July 1, 2004, but on or before June 30, 2008;
635 (ii) as if this Subsection (59) as in effect on July 1, 2008, were in effect on the day on
636 which the sale is made;
637 (iii) if the person did not claim the exemption allowed by this Subsection (59) for the
638 sale prior to filing for the refund;
639 (iv) for sales and use taxes paid under this chapter on the sale;
640 (v) in accordance with Section 59-12-110 ; and
641 (vi) subject to any extension allowed for filing for a refund under Section 59-12-110 , if
642 the person files for the refund on or before June 30, 2011;
643 (60) purchases:
644 (a) of one or more of the following items in printed or electronic format:
645 (i) a list containing information that includes one or more:
646 (A) names; or
647 (B) addresses; or
648 (ii) a database containing information that includes one or more:
649 (A) names; or
650 (B) addresses; and
651 (b) used to send direct mail;
652 (61) redemptions or repurchases of a product by a person if that product was:
653 (a) delivered to a pawnbroker as part of a pawn transaction; and
654 (b) redeemed or repurchased within the time period established in a written agreement
655 between the person and the pawnbroker for redeeming or repurchasing the product;
656 (62) (a) purchases or leases of an item described in Subsection (62)(b) if the item:
657 (i) is purchased or leased by, or on behalf of, a telecommunications service provider;
658 and
659 (ii) has a useful economic life of one or more years; and
660 (b) the following apply to Subsection (62)(a):
661 (i) telecommunications enabling or facilitating equipment, machinery, or software;
662 (ii) telecommunications equipment, machinery, or software required for 911 service;
663 (iii) telecommunications maintenance or repair equipment, machinery, or software;
664 (iv) telecommunications switching or routing equipment, machinery, or software; or
665 (v) telecommunications transmission equipment, machinery, or software;
666 (63) (a) beginning on July 1, 2006, and ending on June 30, 2016, purchases of tangible
667 personal property or a product transferred electronically that are used in the research and
668 development of coal-to-liquids, oil shale, or tar sands technology; and
669 (b) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
670 commission may, for purposes of Subsection (63)(a), make rules defining what constitutes
671 purchases of tangible personal property or a product transferred electronically that are used in
672 the research and development of coal-to-liquids, oil shale, and tar sands technology;
673 (64) (a) purchases of tangible personal property or a product transferred electronically
674 if:
675 (i) the tangible personal property or product transferred electronically is:
676 (A) purchased outside of this state;
677 (B) brought into this state at any time after the purchase described in Subsection
678 (64)(a)(i)(A); and
679 (C) used in conducting business in this state; and
680 (ii) for:
681 (A) tangible personal property or a product transferred electronically other than the
682 tangible personal property described in Subsection (64)(a)(ii)(B), the first use of the property
683 for a purpose for which the property is designed occurs outside of this state; or
684 (B) a vehicle other than a vehicle sold to an authorized carrier, the vehicle is registered
685 outside of this state;
686 (b) the exemption provided for in Subsection (64)(a) does not apply to:
687 (i) a lease or rental of tangible personal property or a product transferred electronically;
688 or
689 (ii) a sale of a vehicle exempt under Subsection (33); and
690 (c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, for
691 purposes of Subsection (64)(a), the commission may by rule define what constitutes the
692 following:
693 (i) conducting business in this state if that phrase has the same meaning in this
694 Subsection (64) as in Subsection (24);
695 (ii) the first use of tangible personal property or a product transferred electronically if
696 that phrase has the same meaning in this Subsection (64) as in Subsection (24); or
697 (iii) a purpose for which tangible personal property or a product transferred
698 electronically is designed if that phrase has the same meaning in this Subsection (64) as in
699 Subsection (24);
700 (65) sales of disposable home medical equipment or supplies if:
701 (a) a person presents a prescription for the disposable home medical equipment or
702 supplies;
703 (b) the disposable home medical equipment or supplies are used exclusively by the
704 person to whom the prescription described in Subsection (65)(a) is issued; and
705 (c) the disposable home medical equipment and supplies are listed as eligible for
706 payment under:
707 (i) Title XVIII, federal Social Security Act; or
708 (ii) the state plan for medical assistance under Title XIX, federal Social Security Act;
709 (66) sales:
710 (a) to a public transit district under Title 17B, Chapter 2a, Part 8, Public Transit
711 District Act; or
712 (b) of tangible personal property to a subcontractor of a public transit district, if the
713 tangible personal property is:
714 (i) clearly identified; and
715 (ii) installed or converted to real property owned by the public transit district;
716 (67) sales of construction materials:
717 (a) purchased on or after July 1, 2010;
718 (b) purchased by, on behalf of, or for the benefit of an international airport:
719 (i) located within a county of the first class; and
720 (ii) that has a United States customs office on its premises; and
721 (c) if the construction materials are:
722 (i) clearly identified;
723 (ii) segregated; and
724 (iii) installed or converted to real property:
725 (A) owned or operated by the international airport described in Subsection (67)(b); and
726 (B) located at the international airport described in Subsection (67)(b);
727 (68) sales of construction materials:
728 (a) purchased on or after July 1, 2008;
729 (b) purchased by, on behalf of, or for the benefit of a new airport:
730 (i) located within a county of the second class; and
731 (ii) that is owned or operated by a city in which an airline as defined in Section
732 59-2-102 is headquartered; and
733 (c) if the construction materials are:
734 (i) clearly identified;
735 (ii) segregated; and
736 (iii) installed or converted to real property:
737 (A) owned or operated by the new airport described in Subsection (68)(b);
738 (B) located at the new airport described in Subsection (68)(b); and
739 (C) as part of the construction of the new airport described in Subsection (68)(b); and
740 (69) sales of fuel to a common carrier that is a railroad for use in a locomotive engine.
Legislative Review Note
as of 11-25-08 3:37 PM