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S.B. 35

             1     

SALES AND USE TAX DEFINITIONS

             2     
RELATING TO PROPERTY

             3     
2009 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Chief Sponsor: Wayne L. Niederhauser

             6     
House Sponsor: John Dougall

             7     
             8      LONG TITLE
             9      Committee Note:
             10          The Revenue and Taxation Interim Committee recommended this bill.
             11      General Description:
             12          This bill amends the Sales and Use Tax Act relating to definitions.
             13      Highlighted Provisions:
             14          This bill:
             15          .    modifies the definitions of:
             16              .    "permanently attached to real property"; and
             17              .    "tangible personal property"; and
             18          .    makes technical changes.
             19      Monies Appropriated in this Bill:
             20          None
             21      Other Special Clauses:
             22          This bill takes effect on July 1, 2009.
             23      Utah Code Sections Affected:
             24      AMENDS:
             25          59-12-102, as last amended by Laws of Utah 2008, Chapters 3, 28, 286, 323, 382, and
             26      384
             27     


             28      Be it enacted by the Legislature of the state of Utah:
             29          Section 1. Section 59-12-102 is amended to read:
             30           59-12-102. Definitions.
             31          As used in this chapter:
             32          (1) "800 service" means a telecommunications service that:
             33          (a) allows a caller to dial a toll-free number without incurring a charge for the call; and
             34          (b) is typically marketed:
             35          (i) under the name 800 toll-free calling;
             36          (ii) under the name 855 toll-free calling;
             37          (iii) under the name 866 toll-free calling;
             38          (iv) under the name 877 toll-free calling;
             39          (v) under the name 888 toll-free calling; or
             40          (vi) under a name similar to Subsections (1)(b)(i) through (v) as designated by the
             41      Federal Communications Commission.
             42          (2) (a) "900 service" means an inbound toll telecommunications service that:
             43          (i) a subscriber purchases;
             44          (ii) allows a customer of the subscriber described in Subsection (2)(a)(i) to call in to
             45      the subscriber's:
             46          (A) prerecorded announcement; or
             47          (B) live service; and
             48          (iii) is typically marketed:
             49          (A) under the name 900 service; or
             50          (B) under a name similar to Subsection (2)[(c)](a)(iii)(A) as designated by the Federal
             51      Communications Commission.
             52          (b) "900 service" does not include a charge for:
             53          (i) a collection service a seller of a telecommunications service provides to a
             54      subscriber; or
             55          (ii) the following a subscriber sells to the subscriber's customer:
             56          (A) a product; or
             57          (B) a service.
             58          (3) (a) "Admission or user fees" includes season passes.


             59          (b) "Admission or user fees" does not include annual membership dues to private
             60      organizations.
             61          (4) "Agreement" means the Streamlined Sales and Use Tax Agreement adopted on
             62      November 12, 2002, including amendments made to the Streamlined Sales and Use Tax
             63      Agreement after November 12, 2002.
             64          (5) "Agreement combined tax rate" means the sum of the tax rates:
             65          (a) listed under Subsection (6); and
             66          (b) that are imposed within a local taxing jurisdiction.
             67          (6) "Agreement sales and use tax" means a tax imposed under:
             68          (a) Subsection 59-12-103 (2)(a)(i)(A);
             69          (b) Subsection 59-12-103 (2)(b)(i);
             70          (c) Subsection 59-12-103 (2)(c)(i);
             71          (d) Subsection 59-12-103 (2)(d)(i)(A)(I);
             72          (e) Section 59-12-204 ;
             73          (f) Section 59-12-401 ;
             74          (g) Section 59-12-402 ;
             75          (h) Section 59-12-501 ;
             76          (i) Section 59-12-502 ;
             77          (j) Section 59-12-703 ;
             78          (k) Section 59-12-802 ;
             79          (l) Section 59-12-804 ;
             80          (m) Section 59-12-1001 ;
             81          (n) Section 59-12-1102 ;
             82          (o) Section 59-12-1302 ;
             83          (p) Section 59-12-1402 ;
             84          (q) Section 59-12-1503 ;
             85          (r) Section 59-12-1703 ;
             86          (s) Section 59-12-1802 ;
             87          (t) Section 59-12-1903 ;
             88          (u) Section 59-12-2003 ; or
             89          (v) Section 59-12-2103 .


             90          (7) "Aircraft" is as defined in Section 72-10-102 .
             91          (8) "Alcoholic beverage" means a beverage that:
             92          (a) is suitable for human consumption; and
             93          (b) contains .5% or more alcohol by volume.
             94          (9) (a) "Ancillary service" means a service associated with, or incidental to, the
             95      provision of telecommunications service.
             96          (b) "Ancillary service" includes:
             97          (i) a conference bridging service;
             98          (ii) a detailed communications billing service;
             99          (iii) directory assistance;
             100          (iv) a vertical service; or
             101          (v) a voice mail service.
             102          (10) "Area agency on aging" is as defined in Section 62A-3-101 .
             103          (11) "Assisted amusement device" means an amusement device, skill device, or ride
             104      device that is started and stopped by an individual:
             105          (a) who is not the purchaser or renter of the right to use or operate the amusement
             106      device, skill device, or ride device; and
             107          (b) at the direction of the seller of the right to use the amusement device, skill device,
             108      or ride device.
             109          (12) "Assisted cleaning or washing of tangible personal property" means cleaning or
             110      washing of tangible personal property if the cleaning or washing labor is primarily performed
             111      by an individual:
             112          (a) who is not the purchaser of the cleaning or washing of the tangible personal
             113      property; and
             114          (b) at the direction of the seller of the cleaning or washing of the tangible personal
             115      property.
             116          (13) "Authorized carrier" means:
             117          (a) in the case of vehicles operated over public highways, the holder of credentials
             118      indicating that the vehicle is or will be operated pursuant to both the International Registration
             119      Plan and the International Fuel Tax Agreement;
             120          (b) in the case of aircraft, the holder of a Federal Aviation Administration operating


             121      certificate or air carrier's operating certificate; or
             122          (c) in the case of locomotives, freight cars, railroad work equipment, or other rolling
             123      stock, the holder of a certificate issued by the United States Surface Transportation Board.
             124          (14) (a) Except as provided in Subsection (14)(b), "biomass energy" means any of the
             125      following that is used as the primary source of energy to produce fuel or electricity:
             126          (i) material from a plant or tree; or
             127          (ii) other organic matter that is available on a renewable basis, including:
             128          (A) slash and brush from forests and woodlands;
             129          (B) animal waste;
             130          (C) methane produced:
             131          (I) at landfills; or
             132          (II) as a byproduct of the treatment of wastewater residuals;
             133          (D) aquatic plants; and
             134          (E) agricultural products.
             135          (b) "Biomass energy" does not include:
             136          (i) black liquor;
             137          (ii) treated woods; or
             138          (iii) biomass from municipal solid waste other than methane produced:
             139          (A) at landfills; or
             140          (B) as a byproduct of the treatment of wastewater residuals.
             141          (15) (a) "Bundled transaction" means the sale of two or more items of tangible personal
             142      property, products, or services if the tangible personal property, products, or services are:
             143          (i) distinct and identifiable; and
             144          (ii) sold for one nonitemized price.
             145          (b) "Bundled transaction" does not include:
             146          (i) the sale of tangible personal property if the sales price varies, or is negotiable, on
             147      the basis of the selection by the purchaser of the items of tangible personal property included in
             148      the transaction;
             149          (ii) the sale of real property;
             150          (iii) the sale of services to real property;
             151          (iv) the retail sale of tangible personal property and a service if:


             152          (A) the tangible personal property:
             153          (I) is essential to the use of the service; and
             154          (II) is provided exclusively in connection with the service; and
             155          (B) the service is the true object of the transaction;
             156          (v) the retail sale of two services if:
             157          (A) one service is provided that is essential to the use or receipt of a second service;
             158          (B) the first service is provided exclusively in connection with the second service; and
             159          (C) the second service is the true object of the transaction;
             160          (vi) a transaction that includes tangible personal property or a product subject to
             161      taxation under this chapter and tangible personal property or a product that is not subject to
             162      taxation under this chapter if the:
             163          (A) seller's purchase price of the tangible personal property or product subject to
             164      taxation under this chapter is de minimis; or
             165          (B) seller's sales price of the tangible personal property or product subject to taxation
             166      under this chapter is de minimis; and
             167          (vii) the retail sale of tangible personal property that is not subject to taxation under
             168      this chapter and tangible personal property that is subject to taxation under this chapter if:
             169          (A) that retail sale includes:
             170          (I) food and food ingredients;
             171          (II) a drug;
             172          (III) durable medical equipment;
             173          (IV) mobility enhancing equipment;
             174          (V) an over-the-counter drug;
             175          (VI) a prosthetic device; or
             176          (VII) a medical supply; and
             177          (B) subject to Subsection (15)(f):
             178          (I) the seller's purchase price of the tangible personal property subject to taxation under
             179      this chapter is 50% or less of the seller's total purchase price of that retail sale; or
             180          (II) the seller's sales price of the tangible personal property subject to taxation under
             181      this chapter is 50% or less of the seller's total sales price of that retail sale.
             182          (c) (i) For purposes of Subsection (15)(a)(i), tangible personal property, a product, or a


             183      service that is distinct and identifiable does not include:
             184          (A) packaging that:
             185          (I) accompanies the sale of the tangible personal property, product, or service; and
             186          (II) is incidental or immaterial to the sale of the tangible personal property, product, or
             187      service;
             188          (B) tangible personal property, a product, or a service provided free of charge with the
             189      purchase of another item of tangible personal property, a product, or a service; or
             190          (C) an item of tangible personal property, a product, or a service included in the
             191      definition of "purchase price."
             192          (ii) For purposes of Subsection (15)(c)(i)(B), an item of tangible personal property, a
             193      product, or a service is provided free of charge with the purchase of another item of tangible
             194      personal property, a product, or a service if the sales price of the purchased item of tangible
             195      personal property, product, or service does not vary depending on the inclusion of the tangible
             196      personal property, product, or service provided free of charge.
             197          (d) (i) For purposes of Subsection (15)(a)(ii), property sold for one nonitemized price
             198      does not include a price that is separately identified by product on the following, regardless of
             199      whether the following is in paper format or electronic format:
             200          (A) a binding sales document; or
             201          (B) another supporting sales-related document that is available to a purchaser.
             202          (ii) For purposes of Subsection (15)(d)(i), a binding sales document or another
             203      supporting sales-related document that is available to a purchaser includes:
             204          (A) a bill of sale;
             205          (B) a contract;
             206          (C) an invoice;
             207          (D) a lease agreement;
             208          (E) a periodic notice of rates and services;
             209          (F) a price list;
             210          (G) a rate card;
             211          (H) a receipt; or
             212          (I) a service agreement.
             213          (e) (i) For purposes of Subsection (15)(b)(vi), the sales price of tangible personal


             214      property or a product subject to taxation under this chapter is de minimis if:
             215          (A) the seller's purchase price of the tangible personal property or product is 10% or
             216      less of the seller's total purchase price of the bundled transaction; or
             217          (B) the seller's sales price of the tangible personal property or product is 10% or less of
             218      the seller's total sales price of the bundled transaction.
             219          (ii) For purposes of Subsection (15)(b)(vi), a seller:
             220          (A) shall use the seller's purchase price or the seller's sales price to determine if the
             221      purchase price or sales price of the tangible personal property or product subject to taxation
             222      under this chapter is de minimis; and
             223          (B) may not use a combination of the seller's purchase price and the seller's sales price
             224      to determine if the purchase price or sales price of the tangible personal property or product
             225      subject to taxation under this chapter is de minimis.
             226          (iii) For purposes of Subsection (15)(b)(vi), a seller shall use the full term of a service
             227      contract to determine if the sales price of tangible personal property or a product is de minimis.
             228          (f) For purposes of Subsection (15)(b)(vii)(B), a seller may not use a combination of
             229      the seller's purchase price and the seller's sales price to determine if tangible personal property
             230      subject to taxation under this chapter is 50% or less of the seller's total purchase price or sales
             231      price of that retail sale.
             232          (16) "Certified automated system" means software certified by the governing board of
             233      the agreement in accordance with Section 59-12-102.1 that:
             234          (a) calculates the agreement sales and use tax imposed within a local taxing
             235      jurisdiction:
             236          (i) on a transaction; and
             237          (ii) in the states that are members of the agreement;
             238          (b) determines the amount of agreement sales and use tax to remit to a state that is a
             239      member of the agreement; and
             240          (c) maintains a record of the transaction described in Subsection (16)(a)(i).
             241          (17) "Certified service provider" means an agent certified:
             242          (a) by the governing board of the agreement in accordance with Section 59-12-102.1 ;
             243      and
             244          (b) to perform all of a seller's sales and use tax functions for an agreement sales and


             245      use tax other than the seller's obligation under Section 59-12-107.4 to remit a tax on the seller's
             246      own purchases.
             247          (18) (a) Subject to Subsection (18)(b), "clothing" means all human wearing apparel
             248      suitable for general use.
             249          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             250      commission shall make rules:
             251          (i) listing the items that constitute "clothing"; and
             252          (ii) that are consistent with the list of items that constitute "clothing" under the
             253      agreement.
             254          (19) "Coal-to-liquid" means the process of converting coal into a liquid synthetic fuel.
             255          (20) "Commercial use" means the use of gas, electricity, heat, coal, fuel oil, or other
             256      fuels that does not constitute industrial use under Subsection (46) or residential use under
             257      Subsection (91).
             258          (21) (a) "Common carrier" means a person engaged in or transacting the business of
             259      transporting passengers, freight, merchandise, or other property for hire within this state.
             260          (b) (i) "Common carrier" does not include a person who, at the time the person is
             261      traveling to or from that person's place of employment, transports a passenger to or from the
             262      passenger's place of employment.
             263          (ii) For purposes of Subsection (21)(b)(i), in accordance with Title 63G, Chapter 3,
             264      Utah Administrative Rulemaking Act, the commission may make rules defining what
             265      constitutes a person's place of employment.
             266          (22) "Component part" includes:
             267          (a) poultry, dairy, and other livestock feed, and their components;
             268          (b) baling ties and twine used in the baling of hay and straw;
             269          (c) fuel used for providing temperature control of orchards and commercial
             270      greenhouses doing a majority of their business in wholesale sales, and for providing power for
             271      off-highway type farm machinery; and
             272          (d) feed, seeds, and seedlings.
             273          (23) "Computer" means an electronic device that accepts information:
             274          (a) (i) in digital form; or
             275          (ii) in a form similar to digital form; and


             276          (b) manipulates that information for a result based on a sequence of instructions.
             277          (24) "Computer software" means a set of coded instructions designed to cause:
             278          (a) a computer to perform a task; or
             279          (b) automatic data processing equipment to perform a task.
             280          (25) (a) "Conference bridging service" means an ancillary service that links two or
             281      more participants of an audio conference call or video conference call.
             282          (b) "Conference bridging service" includes providing a telephone number as part of the
             283      ancillary service described in Subsection (25)(a).
             284          (c) "Conference bridging service" does not include a telecommunications service used
             285      to reach the ancillary service described in Subsection (25)(a).
             286          (26) "Construction materials" means any tangible personal property that will be
             287      converted into real property.
             288          (27) "Delivered electronically" means delivered to a purchaser by means other than
             289      tangible storage media.
             290          (28) (a) "Delivery charge" means a charge:
             291          (i) by a seller of:
             292          (A) tangible personal property;
             293          (B) a product transferred electronically; or
             294          (C) services; and
             295          (ii) for preparation and delivery of the tangible personal property, product transferred
             296      electronically, or services described in Subsection (28)(a)(i) to a location designated by the
             297      purchaser.
             298          (b) "Delivery charge" includes a charge for the following:
             299          (i) transportation;
             300          (ii) shipping;
             301          (iii) postage;
             302          (iv) handling;
             303          (v) crating; or
             304          (vi) packing.
             305          (29) "Detailed telecommunications billing service" means an ancillary service of
             306      separately stating information pertaining to individual calls on a customer's billing statement.


             307          (30) "Dietary supplement" means a product, other than tobacco, that:
             308          (a) is intended to supplement the diet;
             309          (b) contains one or more of the following dietary ingredients:
             310          (i) a vitamin;
             311          (ii) a mineral;
             312          (iii) an herb or other botanical;
             313          (iv) an amino acid;
             314          (v) a dietary substance for use by humans to supplement the diet by increasing the total
             315      dietary intake; or
             316          (vi) a concentrate, metabolite, constituent, extract, or combination of any ingredient
             317      described in Subsections (30)(b)(i) through (v);
             318          (c) (i) except as provided in Subsection (30)(c)(ii), is intended for ingestion in:
             319          (A) tablet form;
             320          (B) capsule form;
             321          (C) powder form;
             322          (D) softgel form;
             323          (E) gelcap form; or
             324          (F) liquid form; or
             325          (ii) notwithstanding Subsection (30)(c)(i), if the product is not intended for ingestion in
             326      a form described in Subsections (30)(c)(i)(A) through (F), is not represented:
             327          (A) as conventional food; and
             328          (B) for use as a sole item of:
             329          (I) a meal; or
             330          (II) the diet; and
             331          (d) is required to be labeled as a dietary supplement:
             332          (i) identifiable by the "Supplemental Facts" box found on the label; and
             333          (ii) as required by 21 C.F.R. Sec. 101.36.
             334          (31) (a) "Direct mail" means printed material delivered or distributed by United States
             335      mail or other delivery service:
             336          (i) to:
             337          (A) a mass audience; or


             338          (B) addressees on a mailing list provided by a purchaser of the mailing list; and
             339          (ii) if the cost of the printed material is not billed directly to the recipients.
             340          (b) "Direct mail" includes tangible personal property supplied directly or indirectly by a
             341      purchaser to a seller of direct mail for inclusion in a package containing the printed material.
             342          (c) "Direct mail" does not include multiple items of printed material delivered to a
             343      single address.
             344          (32) "Directory assistance" means an ancillary service of providing:
             345          (a) address information; or
             346          (b) telephone number information.
             347          (33) (a) "Disposable home medical equipment or supplies" means medical equipment
             348      or supplies that:
             349          (i) cannot withstand repeated use; and
             350          (ii) are purchased by, for, or on behalf of a person other than:
             351          (A) a health care facility as defined in Section 26-21-2 ;
             352          (B) a health care provider as defined in Section 78B-3-403 ;
             353          (C) an office of a health care provider described in Subsection (33)(a)(ii)(B); or
             354          (D) a person similar to a person described in Subsections (33)(a)(ii)(A) through (C).
             355          (b) "Disposable home medical equipment or supplies" does not include:
             356          (i) a drug;
             357          (ii) durable medical equipment;
             358          (iii) a hearing aid;
             359          (iv) a hearing aid accessory;
             360          (v) mobility enhancing equipment; or
             361          (vi) tangible personal property used to correct impaired vision, including:
             362          (A) eyeglasses; or
             363          (B) contact lenses.
             364          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             365      commission may by rule define what constitutes medical equipment or supplies.
             366          (34) (a) "Drug" means a compound, substance, or preparation, or a component of a
             367      compound, substance, or preparation that is:
             368          (i) recognized in:


             369          (A) the official United States Pharmacopoeia;
             370          (B) the official Homeopathic Pharmacopoeia of the United States;
             371          (C) the official National Formulary; or
             372          (D) a supplement to a publication listed in Subsections (34)(a)(i)(A) through (C);
             373          (ii) intended for use in the:
             374          (A) diagnosis of disease;
             375          (B) cure of disease;
             376          (C) mitigation of disease;
             377          (D) treatment of disease; or
             378          (E) prevention of disease; or
             379          (iii) intended to affect:
             380          (A) the structure of the body; or
             381          (B) any function of the body.
             382          (b) "Drug" does not include:
             383          (i) food and food ingredients;
             384          (ii) a dietary supplement;
             385          (iii) an alcoholic beverage; or
             386          (iv) a prosthetic device.
             387          (35) (a) Except as provided in Subsection (35)(c), "durable medical equipment" means
             388      equipment that:
             389          (i) can withstand repeated use;
             390          (ii) is primarily and customarily used to serve a medical purpose;
             391          (iii) generally is not useful to a person in the absence of illness or injury; and
             392          (iv) is not worn in or on the body.
             393          (b) "Durable medical equipment" includes parts used in the repair or replacement of the
             394      equipment described in Subsection (35)(a).
             395          (c) Notwithstanding Subsection (35)(a), "durable medical equipment" does not include
             396      mobility enhancing equipment.
             397          (36) "Electronic" means:
             398          (a) relating to technology; and
             399          (b) having:


             400          (i) electrical capabilities;
             401          (ii) digital capabilities;
             402          (iii) magnetic capabilities;
             403          (iv) wireless capabilities;
             404          (v) optical capabilities;
             405          (vi) electromagnetic capabilities; or
             406          (vii) capabilities similar to Subsections (36)(b)(i) through (vi).
             407          (37) "Employee" is as defined in Section 59-10-401 .
             408          (38) "Fixed guideway" means a public transit facility that uses and occupies:
             409          (a) rail for the use of public transit; or
             410          (b) a separate right-of-way for the use of public transit.
             411          (39) "Fixed wireless service" means a telecommunications service that provides radio
             412      communication between fixed points.
             413          (40) (a) "Food and food ingredients" means substances:
             414          (i) regardless of whether the substances are in:
             415          (A) liquid form;
             416          (B) concentrated form;
             417          (C) solid form;
             418          (D) frozen form;
             419          (E) dried form; or
             420          (F) dehydrated form; and
             421          (ii) that are:
             422          (A) sold for:
             423          (I) ingestion by humans; or
             424          (II) chewing by humans; and
             425          (B) consumed for the substance's:
             426          (I) taste; or
             427          (II) nutritional value.
             428          (b) "Food and food ingredients" includes an item described in Subsection (75)(b)(iii).
             429          (c) "Food and food ingredients" does not include:
             430          (i) an alcoholic beverage;


             431          (ii) tobacco; or
             432          (iii) prepared food.
             433          (41) (a) "Fundraising sales" means sales:
             434          (i) (A) made by a school; or
             435          (B) made by a school student;
             436          (ii) that are for the purpose of raising funds for the school to purchase equipment,
             437      materials, or provide transportation; and
             438          (iii) that are part of an officially sanctioned school activity.
             439          (b) For purposes of Subsection (41)(a)(iii), "officially sanctioned school activity"
             440      means a school activity:
             441          (i) that is conducted in accordance with a formal policy adopted by the school or school
             442      district governing the authorization and supervision of fundraising activities;
             443          (ii) that does not directly or indirectly compensate an individual teacher or other
             444      educational personnel by direct payment, commissions, or payment in kind; and
             445          (iii) the net or gross revenues from which are deposited in a dedicated account
             446      controlled by the school or school district.
             447          (42) "Geothermal energy" means energy contained in heat that continuously flows
             448      outward from the earth that is used as the sole source of energy to produce electricity.
             449          (43) "Governing board of the agreement" means the governing board of the agreement
             450      that is:
             451          (a) authorized to administer the agreement; and
             452          (b) established in accordance with the agreement.
             453          (44) (a) For purposes of Subsection 59-12-104 (41), "governmental entity" means:
             454          (i) the executive branch of the state, including all departments, institutions, boards,
             455      divisions, bureaus, offices, commissions, and committees;
             456          (ii) the judicial branch of the state, including the courts, the Judicial Council, the
             457      Office of the Court Administrator, and similar administrative units in the judicial branch;
             458          (iii) the legislative branch of the state, including the House of Representatives, the
             459      Senate, the Legislative Printing Office, the Office of Legislative Research and General
             460      Counsel, the Office of the Legislative Auditor General, and the Office of the Legislative Fiscal
             461      Analyst;


             462          (iv) the National Guard;
             463          (v) an independent entity as defined in Section 63E-1-102 ; or
             464          (vi) a political subdivision as defined in Section 17B-1-102 .
             465          (b) "Governmental entity" does not include the state systems of public and higher
             466      education, including:
             467          (i) a college campus of the Utah College of Applied Technology;
             468          (ii) a school;
             469          (iii) the State Board of Education;
             470          (iv) the State Board of Regents; or
             471          (v) a state institution of higher education as defined in Section 53B-3-102 .
             472          (45) "Hydroelectric energy" means water used as the sole source of energy to produce
             473      electricity.
             474          (46) "Industrial use" means the use of natural gas, electricity, heat, coal, fuel oil, or
             475      other fuels:
             476          (a) in mining or extraction of minerals;
             477          (b) in agricultural operations to produce an agricultural product up to the time of
             478      harvest or placing the agricultural product into a storage facility, including:
             479          (i) commercial greenhouses;
             480          (ii) irrigation pumps;
             481          (iii) farm machinery;
             482          (iv) implements of husbandry as defined in Subsection 41-1a-102 (23) that are not
             483      registered under Title 41, Chapter 1a, Part 2, Registration; and
             484          (v) other farming activities;
             485          (c) in manufacturing tangible personal property at an establishment described in SIC
             486      Codes 2000 to 3999 of the 1987 Standard Industrial Classification Manual of the federal
             487      Executive Office of the President, Office of Management and Budget;
             488          (d) by a scrap recycler if:
             489          (i) from a fixed location, the scrap recycler utilizes machinery or equipment to process
             490      one or more of the following items into prepared grades of processed materials for use in new
             491      products:
             492          (A) iron;


             493          (B) steel;
             494          (C) nonferrous metal;
             495          (D) paper;
             496          (E) glass;
             497          (F) plastic;
             498          (G) textile; or
             499          (H) rubber; and
             500          (ii) the new products under Subsection (46)(d)(i) would otherwise be made with
             501      nonrecycled materials; or
             502          (e) in producing a form of energy or steam described in Subsection 54-2-1 (2)(a) by a
             503      cogeneration facility as defined in Section 54-2-1 .
             504          (47) (a) Except as provided in Subsection (47)(b), "installation charge" means a charge
             505      for installing:
             506          (i) tangible personal property; or
             507          (ii) a product transferred electronically.
             508          (b) "Installation charge" does not include a charge for repairs or renovations of:
             509          (i) tangible personal property; or
             510          (ii) a product transferred electronically.
             511          (48) (a) "Lease" or "rental" means a transfer of possession or control of tangible
             512      personal property or a product transferred electronically for:
             513          (i) (A) a fixed term; or
             514          (B) an indeterminate term; and
             515          (ii) consideration.
             516          (b) "Lease" or "rental" includes an agreement covering a motor vehicle and trailer if the
             517      amount of consideration may be increased or decreased by reference to the amount realized
             518      upon sale or disposition of the property as defined in Section 7701(h)(1), Internal Revenue
             519      Code.
             520          (c) "Lease" or "rental" does not include:
             521          (i) a transfer of possession or control of property under a security agreement or
             522      deferred payment plan that requires the transfer of title upon completion of the required
             523      payments;


             524          (ii) a transfer of possession or control of property under an agreement that requires the
             525      transfer of title:
             526          (A) upon completion of required payments; and
             527          (B) if the payment of an option price does not exceed the greater of:
             528          (I) $100; or
             529          (II) 1% of the total required payments; or
             530          (iii) providing tangible personal property along with an operator for a fixed period of
             531      time or an indeterminate period of time if the operator is necessary for equipment to perform as
             532      designed.
             533          (d) For purposes of Subsection (48)(c)(iii), an operator is necessary for equipment to
             534      perform as designed if the operator's duties exceed the:
             535          (i) set-up of tangible personal property;
             536          (ii) maintenance of tangible personal property; or
             537          (iii) inspection of tangible personal property.
             538          (49) "Load and leave" means delivery to a purchaser by use of a tangible storage media
             539      if the tangible storage media is not physically transferred to the purchaser.
             540          (50) "Local taxing jurisdiction" means a:
             541          (a) county that is authorized to impose an agreement sales and use tax;
             542          (b) city that is authorized to impose an agreement sales and use tax; or
             543          (c) town that is authorized to impose an agreement sales and use tax.
             544          (51) "Manufactured home" is as defined in Section 58-56-3 .
             545          (52) For purposes of Section 59-12-104 , "manufacturing facility" means:
             546          (a) an establishment described in SIC Codes 2000 to 3999 of the 1987 Standard
             547      Industrial Classification Manual of the federal Executive Office of the President, Office of
             548      Management and Budget;
             549          (b) a scrap recycler if:
             550          (i) from a fixed location, the scrap recycler utilizes machinery or equipment to process
             551      one or more of the following items into prepared grades of processed materials for use in new
             552      products:
             553          (A) iron;
             554          (B) steel;


             555          (C) nonferrous metal;
             556          (D) paper;
             557          (E) glass;
             558          (F) plastic;
             559          (G) textile; or
             560          (H) rubber; and
             561          (ii) the new products under Subsection (52)(b)(i) would otherwise be made with
             562      nonrecycled materials; or
             563          (c) a cogeneration facility as defined in Section 54-2-1 .
             564          (53) "Member of the immediate family of the producer" means a person who is related
             565      to a producer described in Subsection 59-12-104 (20)(a) as a:
             566          (a) child or stepchild, regardless of whether the child or stepchild is:
             567          (i) an adopted child or adopted stepchild; or
             568          (ii) a foster child or foster stepchild;
             569          (b) grandchild or stepgrandchild;
             570          (c) grandparent or stepgrandparent;
             571          (d) nephew or stepnephew;
             572          (e) niece or stepniece;
             573          (f) parent or stepparent;
             574          (g) sibling or stepsibling;
             575          (h) spouse;
             576          (i) person who is the spouse of a person described in Subsections (53)(a) through (g);
             577      or
             578          (j) person similar to a person described in Subsections (53)(a) through (i) as
             579      determined by the commission by rule made in accordance with Title 63G, Chapter 3, Utah
             580      Administrative Rulemaking Act.
             581          (54) "Mobile home" is as defined in Section 58-56-3 .
             582          (55) "Mobile telecommunications service" is as defined in the Mobile
             583      Telecommunications Sourcing Act, 4 U.S.C. Sec. 124.
             584          (56) (a) "Mobile wireless service" means a telecommunications service, regardless of
             585      the technology used, if:


             586          (i) the origination point of the conveyance, routing, or transmission is not fixed;
             587          (ii) the termination point of the conveyance, routing, or transmission is not fixed; or
             588          (iii) the origination point described in Subsection (56)(a)(i) and the termination point
             589      described in Subsection (56)(a)(ii) are not fixed.
             590          (b) "Mobile wireless service" includes a telecommunications service that is provided
             591      by a commercial mobile radio service provider.
             592          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             593      commission may by rule define "commercial mobile radio service provider."
             594          (57) (a) Except as provided in Subsection (57)(c), "mobility enhancing equipment"
             595      means equipment that is:
             596          (i) primarily and customarily used to provide or increase the ability to move from one
             597      place to another;
             598          (ii) appropriate for use in a:
             599          (A) home; or
             600          (B) motor vehicle; and
             601          (iii) not generally used by persons with normal mobility.
             602          (b) "Mobility enhancing equipment" includes parts used in the repair or replacement of
             603      the equipment described in Subsection (57)(a).
             604          (c) Notwithstanding Subsection (57)(a), "mobility enhancing equipment" does not
             605      include:
             606          (i) a motor vehicle;
             607          (ii) equipment on a motor vehicle if that equipment is normally provided by the motor
             608      vehicle manufacturer;
             609          (iii) durable medical equipment; or
             610          (iv) a prosthetic device.
             611          (58) "Model 1 seller" means a seller that has selected a certified service provider as the
             612      seller's agent to perform all of the seller's sales and use tax functions for agreement sales and
             613      use taxes other than the seller's obligation under Section 59-12-107.4 to remit a tax on the
             614      seller's own purchases.
             615          (59) "Model 2 seller" means a seller that:
             616          (a) except as provided in Subsection (59)(b), has selected a certified automated system


             617      to perform the seller's sales tax functions for agreement sales and use taxes; and
             618          (b) notwithstanding Subsection (59)(a), retains responsibility for remitting all of the
             619      sales tax:
             620          (i) collected by the seller; and
             621          (ii) to the appropriate local taxing jurisdiction.
             622          (60) (a) Subject to Subsection (60)(b), "model 3 seller" means a seller that has:
             623          (i) sales in at least five states that are members of the agreement;
             624          (ii) total annual sales revenues of at least $500,000,000;
             625          (iii) a proprietary system that calculates the amount of tax:
             626          (A) for an agreement sales and use tax; and
             627          (B) due to each local taxing jurisdiction; and
             628          (iv) entered into a performance agreement with the governing board of the agreement.
             629          (b) For purposes of Subsection (60)(a), "model 3 seller" includes an affiliated group of
             630      sellers using the same proprietary system.
             631          (61) "Modular home" means a modular unit as defined in Section 58-56-3 .
             632          (62) "Motor vehicle" is as defined in Section 41-1a-102 .
             633          (63) "Oil shale" means a group of fine black to dark brown shales containing
             634      bituminous material that yields petroleum upon distillation.
             635          (64) (a) "Other fuels" means products that burn independently to produce heat or
             636      energy.
             637          (b) "Other fuels" includes oxygen when it is used in the manufacturing of tangible
             638      personal property.
             639          (65) (a) "Paging service" means a telecommunications service that provides
             640      transmission of a coded radio signal for the purpose of activating a specific pager.
             641          (b) For purposes of Subsection (65)(a), the transmission of a coded radio signal
             642      includes a transmission by message or sound.
             643          (66) "Pawnbroker" is as defined in Section 13-32a-102 .
             644          (67) "Pawn transaction" is as defined in Section 13-32a-102 .
             645          (68) (a) "Permanently attached to real property" means that for tangible personal
             646      property attached to real property:
             647          (i) the attachment of the tangible personal property to the real property:


             648          (A) is essential to the use of the tangible personal property; and
             649          (B) suggests that the tangible personal property will remain attached to the real
             650      property in the same place over the useful life of the tangible personal property; or
             651          (ii) if the tangible personal property is detached from the real property, the detachment
             652      would:
             653          (A) cause substantial damage to the tangible personal property; or
             654          (B) require substantial alteration or repair of the real property to which the tangible
             655      personal property is attached.
             656          (b) "Permanently attached to real property" includes:
             657          (i) the attachment of an accessory to the tangible personal property if the accessory is:
             658          (A) essential to the operation of the tangible personal property; and
             659          (B) attached only to facilitate the operation of the tangible personal property;
             660          (ii) a temporary detachment of tangible personal property from real property for a
             661      repair or renovation if the repair or renovation is performed where the tangible personal
             662      property and real property are located; or
             663          (iii) property attached to oil, gas, or water pipelines, [other than] except for the
             664      property listed in [Subsection] Subsections (68)(c)(iii) through (v).
             665          (c) "Permanently attached to real property" does not include:
             666          (i) the attachment of portable or movable tangible personal property to real property if
             667      that portable or movable tangible personal property is attached to real property only for:
             668          (A) convenience;
             669          (B) stability; or
             670          (C) for an obvious temporary purpose;
             671          (ii) the detachment of tangible personal property from real property [other than] except
             672      for the detachment described in Subsection (68)(b)(ii);
             673          (iii) an attachment of the following tangible personal property to real property if the
             674      attachment to real property is only through a line that supplies water, electricity, gas,
             675      telecommunications, cable, or supplies a similar item as determined by the commission by rule
             676      made in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act:
             677          [(A) a refrigerator;]
             678          [(B) a washer;]


             679          [(C) a dryer;]
             680          [(D) a stove;]
             681          [(E) a television;]
             682          [(F)] (A) a computer;
             683          [(G)] (B) a telephone; [or]
             684          (C) a television; or
             685          [(H)] (D) tangible personal property similar to Subsections (68)(c)(iii)(A) through
             686      [(G)] (C) as determined by the commission by rule made in accordance with Title 63G, Chapter
             687      3, Utah Administrative Rulemaking Act; [or]
             688          (iv) the following if attached to real property, regardless of whether the attachment to
             689      real property is only through a line that supplies water, electricity, gas, telephone, cable, or
             690      supplies a similar item as determined by the commission by rule made in accordance with Title
             691      63G, Chapter 3, Utah Administrative Rulemaking Act:
             692          (A) a hot water heater;
             693          (B) a water [softener] filtration system; or
             694          (C) a water [filtration] softener system; or
             695          (v) an item listed in Subsection (108)(c).
             696          (69) "Person" includes any individual, firm, partnership, joint venture, association,
             697      corporation, estate, trust, business trust, receiver, syndicate, this state, any county, city,
             698      municipality, district, or other local governmental entity of the state, or any group or
             699      combination acting as a unit.
             700          (70) "Place of primary use":
             701          (a) for telecommunications service other than mobile telecommunications service,
             702      means the street address representative of where the purchaser's use of the telecommunications
             703      service primarily occurs, which shall be:
             704          (i) the residential street address of the purchaser; or
             705          (ii) the primary business street address of the purchaser; or
             706          (b) for mobile telecommunications service, is as defined in the Mobile
             707      Telecommunications Sourcing Act, 4 U.S.C. Sec. 124.
             708          (71) (a) "Postpaid calling service" means a telecommunications service a person
             709      obtains by making a payment on a call-by-call basis:


             710          (i) through the use of a:
             711          (A) bank card;
             712          (B) credit card;
             713          (C) debit card; or
             714          (D) travel card; or
             715          (ii) by a charge made to a telephone number that is not associated with the origination
             716      or termination of the telecommunications service.
             717          (b) "Postpaid calling service" includes a service that would be a prepaid wireless
             718      calling service if the service were exclusively a telecommunications service.
             719          (72) "Postproduction" means an activity related to the finishing or duplication of a
             720      medium described in Subsection 59-12-104 (55)(a).
             721          (73) "Prepaid calling service" means a telecommunications service:
             722          (a) that allows a purchaser access to telecommunications service that is exclusively
             723      telecommunications service;
             724          (b) that:
             725          (i) is paid for in advance; and
             726          (ii) enables the origination of a call using an:
             727          (A) access number; or
             728          (B) authorization code;
             729          (c) that is dialed:
             730          (i) manually; or
             731          (ii) electronically; and
             732          (d) sold in predetermined units or dollars that decline:
             733          (i) by a known amount; and
             734          (ii) with use.
             735          (74) "Prepaid wireless calling service" means a telecommunications service:
             736          (a) that provides the right to utilize:
             737          (i) mobile wireless service; and
             738          (ii) other service that is not a telecommunications service, including:
             739          (A) the download of a product transferred electronically;
             740          (B) a content service; or


             741          (C) an ancillary service;
             742          (b) that:
             743          (i) is paid for in advance; and
             744          (ii) enables the origination of a call using an:
             745          (A) access number; or
             746          (B) authorization code;
             747          (c) that is dialed:
             748          (i) manually; or
             749          (ii) electronically; and
             750          (d) sold in predetermined units or dollars that decline:
             751          (i) by a known amount; and
             752          (ii) with use.
             753          (75) (a) "Prepared food" means:
             754          (i) food:
             755          (A) sold in a heated state; or
             756          (B) heated by a seller;
             757          (ii) two or more food ingredients mixed or combined by the seller for sale as a single
             758      item; or
             759          (iii) except as provided in Subsection (75)(c), food sold with an eating utensil provided
             760      by the seller, including a:
             761          (A) plate;
             762          (B) knife;
             763          (C) fork;
             764          (D) spoon;
             765          (E) glass;
             766          (F) cup;
             767          (G) napkin; or
             768          (H) straw.
             769          (b) "Prepared food" does not include:
             770          (i) food that a seller only:
             771          (A) cuts;


             772          (B) repackages; or
             773          (C) pasteurizes; or
             774          (ii) (A) the following:
             775          (I) raw egg;
             776          (II) raw fish;
             777          (III) raw meat;
             778          (IV) raw poultry; or
             779          (V) a food containing an item described in Subsections (75)(b)(ii)(A)(I) through (IV);
             780      and
             781          (B) if the Food and Drug Administration recommends in Chapter 3, Part 401.11 of the
             782      Food and Drug Administration's Food Code that a consumer cook the items described in
             783      Subsection (75)(b)(ii)(A) to prevent food borne illness; or
             784          (iii) the following if sold without eating utensils provided by the seller:
             785          (A) food and food ingredients sold by a seller if the seller's proper primary
             786      classification under the 2002 North American Industry Classification System of the federal
             787      Executive Office of the President, Office of Management and Budget, is manufacturing in
             788      Sector 311, Food Manufacturing, except for Subsector 3118, Bakeries and Tortilla
             789      Manufacturing;
             790          (B) food and food ingredients sold in an unheated state:
             791          (I) by weight or volume; and
             792          (II) as a single item; or
             793          (C) a bakery item, including:
             794          (I) a bagel;
             795          (II) a bar;
             796          (III) a biscuit;
             797          (IV) bread;
             798          (V) a bun;
             799          (VI) a cake;
             800          (VII) a cookie;
             801          (VIII) a croissant;
             802          (IX) a danish;


             803          (X) a donut;
             804          (XI) a muffin;
             805          (XII) a pastry;
             806          (XIII) a pie;
             807          (XIV) a roll;
             808          (XV) a tart;
             809          (XVI) a torte; or
             810          (XVII) a tortilla.
             811          (c) Notwithstanding Subsection (75)(a)(iii), an eating utensil provided by the seller
             812      does not include the following used to transport the food:
             813          (i) a container; or
             814          (ii) packaging.
             815          (76) "Prescription" means an order, formula, or recipe that is issued:
             816          (a) (i) orally;
             817          (ii) in writing;
             818          (iii) electronically; or
             819          (iv) by any other manner of transmission; and
             820          (b) by a licensed practitioner authorized by the laws of a state.
             821          (77) (a) Except as provided in Subsection (77)(b)(ii) or (iii), "prewritten computer
             822      software" means computer software that is not designed and developed:
             823          (i) by the author or other creator of the computer software; and
             824          (ii) to the specifications of a specific purchaser.
             825          (b) "Prewritten computer software" includes:
             826          (i) a prewritten upgrade to computer software if the prewritten upgrade to the computer
             827      software is not designed and developed:
             828          (A) by the author or other creator of the computer software; and
             829          (B) to the specifications of a specific purchaser;
             830          (ii) notwithstanding Subsection (77)(a), computer software designed and developed by
             831      the author or other creator of the computer software to the specifications of a specific purchaser
             832      if the computer software is sold to a person other than the purchaser; or
             833          (iii) notwithstanding Subsection (77)(a) and except as provided in Subsection (77)(c),


             834      prewritten computer software or a prewritten portion of prewritten computer software:
             835          (A) that is modified or enhanced to any degree; and
             836          (B) if the modification or enhancement described in Subsection (77)(b)(iii)(A) is
             837      designed and developed to the specifications of a specific purchaser.
             838          (c) Notwithstanding Subsection (77)(b)(iii), "prewritten computer software" does not
             839      include a modification or enhancement described in Subsection (77)(b)(iii) if the charges for
             840      the modification or enhancement are:
             841          (i) reasonable; and
             842          (ii) separately stated on the invoice or other statement of price provided to the
             843      purchaser.
             844          (78) (a) "Private communication service" means a telecommunications service:
             845          (i) that entitles a customer to exclusive or priority use of one or more communications
             846      channels between or among termination points; and
             847          (ii) regardless of the manner in which the one or more communications channels are
             848      connected.
             849          (b) "Private communications service" includes the following provided in connection
             850      with the use of one or more communications channels:
             851          (i) an extension line;
             852          (ii) a station; or
             853          (iii) switching capacity.
             854          (79) (a) "Prosthetic device" means a device that is worn on or in the body to:
             855          (i) artificially replace a missing portion of the body;
             856          (ii) prevent or correct a physical deformity or physical malfunction; or
             857          (iii) support a weak or deformed portion of the body.
             858          (b) "Prosthetic device" includes:
             859          (i) parts used in the repairs or renovation of a prosthetic device;
             860          (ii) replacement parts for a prosthetic device;
             861          (iii) a dental prosthesis; or
             862          (iv) a hearing aid.
             863          (c) "Prosthetic device" does not include:
             864          (i) corrective eyeglasses; or


             865          (ii) contact lenses.
             866          (80) (a) "Protective equipment" means an item:
             867          (i) for human wear; and
             868          (ii) that is:
             869          (A) designed as protection:
             870          (I) to the wearer against injury or disease; or
             871          (II) against damage or injury of other persons or property; and
             872          (B) not suitable for general use.
             873          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             874      commission shall make rules:
             875          (i) listing the items that constitute "protective equipment"; and
             876          (ii) that are consistent with the list of items that constitute "protective equipment"
             877      under the agreement.
             878          (81) (a) For purposes of Subsection 59-12-104 (41), "publication" means any written or
             879      printed matter, other than a photocopy:
             880          (i) regardless of:
             881          (A) characteristics;
             882          (B) copyright;
             883          (C) form;
             884          (D) format;
             885          (E) method of reproduction; or
             886          (F) source; and
             887          (ii) made available in printed or electronic format.
             888          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             889      commission may by rule define the term "photocopy."
             890          (82) (a) "Purchase price" and "sales price" mean the total amount of consideration:
             891          (i) valued in money; and
             892          (ii) for which tangible personal property, a product transferred electronically, or
             893      services are:
             894          (A) sold;
             895          (B) leased; or


             896          (C) rented.
             897          (b) "Purchase price" and "sales price" include:
             898          (i) the seller's cost of the tangible personal property, a product transferred
             899      electronically, or services sold;
             900          (ii) expenses of the seller, including:
             901          (A) the cost of materials used;
             902          (B) a labor cost;
             903          (C) a service cost;
             904          (D) interest;
             905          (E) a loss;
             906          (F) the cost of transportation to the seller; or
             907          (G) a tax imposed on the seller;
             908          (iii) a charge by the seller for any service necessary to complete the sale; or
             909          (iv) consideration a seller receives from a person other than the purchaser if:
             910          (A) (I) the seller actually receives consideration from a person other than the purchaser;
             911      and
             912          (II) the consideration described in Subsection (82)(b)(iv)(A)(I) is directly related to a
             913      price reduction or discount on the sale;
             914          (B) the seller has an obligation to pass the price reduction or discount through to the
             915      purchaser;
             916          (C) the amount of the consideration attributable to the sale is fixed and determinable by
             917      the seller at the time of the sale to the purchaser; and
             918          (D) (I) (Aa) the purchaser presents a certificate, coupon, or other documentation to the
             919      seller to claim a price reduction or discount; and
             920          (Bb) a person other than the seller authorizes, distributes, or grants the certificate,
             921      coupon, or other documentation with the understanding that the person other than the seller
             922      will reimburse any seller to whom the certificate, coupon, or other documentation is presented;
             923          (II) the purchaser identifies that purchaser to the seller as a member of a group or
             924      organization allowed a price reduction or discount, except that a preferred customer card that is
             925      available to any patron of a seller does not constitute membership in a group or organization
             926      allowed a price reduction or discount; or


             927          (III) the price reduction or discount is identified as a third party price reduction or
             928      discount on the:
             929          (Aa) invoice the purchaser receives; or
             930          (Bb) certificate, coupon, or other documentation the purchaser presents.
             931          (c) "Purchase price" and "sales price" do not include:
             932          (i) a discount:
             933          (A) in a form including:
             934          (I) cash;
             935          (II) term; or
             936          (III) coupon;
             937          (B) that is allowed by a seller;
             938          (C) taken by a purchaser on a sale; and
             939          (D) that is not reimbursed by a third party; or
             940          (ii) the following if separately stated on an invoice, bill of sale, or similar document
             941      provided to the purchaser:
             942          (A) the following from credit extended on the sale of tangible personal property or
             943      services:
             944          (I) a carrying charge;
             945          (II) a financing charge; or
             946          (III) an interest charge;
             947          (B) a delivery charge;
             948          (C) an installation charge;
             949          (D) a manufacturer rebate on a motor vehicle; or
             950          (E) a tax or fee legally imposed directly on the consumer.
             951          (83) "Purchaser" means a person to whom:
             952          (a) a sale of tangible personal property is made;
             953          (b) a product is transferred electronically; or
             954          (c) a service is furnished.
             955          (84) "Regularly rented" means:
             956          (a) rented to a guest for value three or more times during a calendar year; or
             957          (b) advertised or held out to the public as a place that is regularly rented to guests for


             958      value.
             959          (85) "Renewable energy" means:
             960          (a) biomass energy;
             961          (b) hydroelectric energy;
             962          (c) geothermal energy;
             963          (d) solar energy; or
             964          (e) wind energy.
             965          (86) (a) "Renewable energy production facility" means a facility that:
             966          (i) uses renewable energy to produce electricity; and
             967          (ii) has a production capacity of 20 kilowatts or greater.
             968          (b) A facility is a renewable energy production facility regardless of whether the
             969      facility is:
             970          (i) connected to an electric grid; or
             971          (ii) located on the premises of an electricity consumer.
             972          (87) "Rental" is as defined in Subsection (48).
             973          (88) "Repairs or renovations of tangible personal property" means:
             974          (a) a repair or renovation of tangible personal property that is not permanently attached
             975      to real property; or
             976          (b) attaching tangible personal property or a product that is transferred electronically to
             977      other tangible personal property if the other tangible personal property to which the tangible
             978      personal property or product that is transferred electronically is attached is not permanently
             979      attached to real property.
             980          (89) "Research and development" means the process of inquiry or experimentation
             981      aimed at the discovery of facts, devices, technologies, or applications and the process of
             982      preparing those devices, technologies, or applications for marketing.
             983          (90) (a) "Residential telecommunications services" means a telecommunications
             984      service or an ancillary service that is provided to an individual for personal use:
             985          (i) at a residential address; or
             986          (ii) at an institution, including a nursing home or a school, if the telecommunications
             987      service or ancillary service is provided to and paid for by the individual residing at the
             988      institution rather than the institution.


             989          (b) For purposes of Subsection (90)(a), a residential address includes an:
             990          (i) apartment; or
             991          (ii) other individual dwelling unit.
             992          (91) "Residential use" means the use in or around a home, apartment building, sleeping
             993      quarters, and similar facilities or accommodations.
             994          (92) "Retail sale" or "sale at retail" means a sale, lease, or rental for a purpose other
             995      than:
             996          (a) resale;
             997          (b) sublease; or
             998          (c) subrent.
             999          (93) (a) "Retailer" means any person engaged in a regularly organized business in
             1000      tangible personal property or any other taxable transaction under Subsection 59-12-103 (1), and
             1001      who is selling to the user or consumer and not for resale.
             1002          (b) "Retailer" includes commission merchants, auctioneers, and any person regularly
             1003      engaged in the business of selling to users or consumers within the state.
             1004          (94) (a) "Sale" means any transfer of title, exchange, or barter, conditional or
             1005      otherwise, in any manner, of tangible personal property or any other taxable transaction under
             1006      Subsection 59-12-103 (1), for consideration.
             1007          (b) "Sale" includes:
             1008          (i) installment and credit sales;
             1009          (ii) any closed transaction constituting a sale;
             1010          (iii) any sale of electrical energy, gas, services, or entertainment taxable under this
             1011      chapter;
             1012          (iv) any transaction if the possession of property is transferred but the seller retains the
             1013      title as security for the payment of the price; and
             1014          (v) any transaction under which right to possession, operation, or use of any article of
             1015      tangible personal property is granted under a lease or contract and the transfer of possession
             1016      would be taxable if an outright sale were made.
             1017          (95) "Sale at retail" is as defined in Subsection (92).
             1018          (96) "Sale-leaseback transaction" means a transaction by which title to tangible
             1019      personal property or a product transferred electronically that is subject to a tax under this


             1020      chapter is transferred:
             1021          (a) by a purchaser-lessee;
             1022          (b) to a lessor;
             1023          (c) for consideration; and
             1024          (d) if:
             1025          (i) the purchaser-lessee paid sales and use tax on the purchaser-lessee's initial purchase
             1026      of the tangible personal property or product transferred electronically;
             1027          (ii) the sale of the tangible personal property or product transferred electronically to the
             1028      lessor is intended as a form of financing:
             1029          (A) for the tangible personal property or product transferred electronically; and
             1030          (B) to the purchaser-lessee; and
             1031          (iii) in accordance with generally accepted accounting principles, the purchaser-lessee
             1032      is required to:
             1033          (A) capitalize the tangible personal property or product transferred electronically for
             1034      financial reporting purposes; and
             1035          (B) account for the lease payments as payments made under a financing arrangement.
             1036          (97) "Sales price" is as defined in Subsection (82).
             1037          (98) (a) "Sales relating to schools" means the following sales by, amounts paid to, or
             1038      amounts charged by a school:
             1039          (i) sales that are directly related to the school's educational functions or activities
             1040      including:
             1041          (A) the sale of:
             1042          (I) textbooks;
             1043          (II) textbook fees;
             1044          (III) laboratory fees;
             1045          (IV) laboratory supplies; or
             1046          (V) safety equipment;
             1047          (B) the sale of a uniform, protective equipment, or sports or recreational equipment
             1048      that:
             1049          (I) a student is specifically required to wear as a condition of participation in a
             1050      school-related event or school-related activity; and


             1051          (II) is not readily adaptable to general or continued usage to the extent that it takes the
             1052      place of ordinary clothing;
             1053          (C) sales of the following if the net or gross revenues generated by the sales are
             1054      deposited into a school district fund or school fund dedicated to school meals:
             1055          (I) food and food ingredients; or
             1056          (II) prepared food; or
             1057          (D) transportation charges for official school activities; or
             1058          (ii) amounts paid to or amounts charged by a school for admission to a school-related
             1059      event or school-related activity.
             1060          (b) "Sales relating to schools" does not include:
             1061          (i) bookstore sales of items that are not educational materials or supplies;
             1062          (ii) except as provided in Subsection (98)(a)(i)(B):
             1063          (A) clothing;
             1064          (B) clothing accessories or equipment;
             1065          (C) protective equipment; or
             1066          (D) sports or recreational equipment; or
             1067          (iii) amounts paid to or amounts charged by a school for admission to a school-related
             1068      event or school-related activity if the amounts paid or charged are passed through to a person:
             1069          (A) other than a:
             1070          (I) school;
             1071          (II) nonprofit organization authorized by a school board or a governing body of a
             1072      private school to organize and direct a competitive secondary school activity; or
             1073          (III) nonprofit association authorized by a school board or a governing body of a
             1074      private school to organize and direct a competitive secondary school activity; and
             1075          (B) that is required to collect sales and use taxes under this chapter.
             1076          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1077      commission may make rules defining the term "passed through."
             1078          (99) For purposes of this section and Section 59-12-104 , "school":
             1079          (a) means:
             1080          (i) an elementary school or a secondary school that:
             1081          (A) is a:


             1082          (I) public school; or
             1083          (II) private school; and
             1084          (B) provides instruction for one or more grades kindergarten through 12; or
             1085          (ii) a public school district; and
             1086          (b) includes the Electronic High School as defined in Section 53A-15-1002 .
             1087          (100) "Seller" means a person that makes a sale, lease, or rental of:
             1088          (a) tangible personal property;
             1089          (b) a product transferred electronically; or
             1090          (c) a service.
             1091          (101) (a) "Semiconductor fabricating, processing, research, or development materials"
             1092      means tangible personal property or a product transferred electronically if the tangible personal
             1093      property or product transferred electronically is:
             1094          (i) used primarily in the process of:
             1095          (A) (I) manufacturing a semiconductor;
             1096          (II) fabricating a semiconductor; or
             1097          (III) research or development of a:
             1098          (Aa) semiconductor; or
             1099          (Bb) semiconductor manufacturing process; or
             1100          (B) maintaining an environment suitable for a semiconductor; or
             1101          (ii) consumed primarily in the process of:
             1102          (A) (I) manufacturing a semiconductor;
             1103          (II) fabricating a semiconductor; or
             1104          (III) research or development of a:
             1105          (Aa) semiconductor; or
             1106          (Bb) semiconductor manufacturing process; or
             1107          (B) maintaining an environment suitable for a semiconductor.
             1108          (b) "Semiconductor fabricating, processing, research, or development materials"
             1109      includes:
             1110          (i) parts used in the repairs or renovations of tangible personal property or a product
             1111      transferred electronically described in Subsection (101)(a); or
             1112          (ii) a chemical, catalyst, or other material used to:


             1113          (A) produce or induce in a semiconductor a:
             1114          (I) chemical change; or
             1115          (II) physical change;
             1116          (B) remove impurities from a semiconductor; or
             1117          (C) improve the marketable condition of a semiconductor.
             1118          (102) "Senior citizen center" means a facility having the primary purpose of providing
             1119      services to the aged as defined in Section 62A-3-101 .
             1120          (103) "Simplified electronic return" means the electronic return:
             1121          (a) described in Section 318(C) of the agreement; and
             1122          (b) approved by the governing board of the agreement.
             1123          (104) "Solar energy" means the sun used as the sole source of energy for producing
             1124      electricity.
             1125          (105) (a) "Sports or recreational equipment" means an item:
             1126          (i) designed for human use; and
             1127          (ii) that is:
             1128          (A) worn in conjunction with:
             1129          (I) an athletic activity; or
             1130          (II) a recreational activity; and
             1131          (B) not suitable for general use.
             1132          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1133      commission shall make rules:
             1134          (i) listing the items that constitute "sports or recreational equipment"; and
             1135          (ii) that are consistent with the list of items that constitute "sports or recreational
             1136      equipment" under the agreement.
             1137          (106) "State" means the state of Utah, its departments, and agencies.
             1138          (107) "Storage" means any keeping or retention of tangible personal property or any
             1139      other taxable transaction under Subsection 59-12-103 (1), in this state for any purpose except
             1140      sale in the regular course of business.
             1141          (108) (a) Except as provided in Subsection (108)[(c)](d) or (e), " tangible personal
             1142      property" means personal property that:
             1143          (i) may be:


             1144          (A) seen;
             1145          (B) weighed;
             1146          (C) measured;
             1147          (D) felt; or
             1148          (E) touched; or
             1149          (ii) is in any manner perceptible to the senses.
             1150          (b) "Tangible personal property" includes:
             1151          (i) electricity;
             1152          (ii) water;
             1153          (iii) gas;
             1154          (iv) steam; or
             1155          (v) prewritten computer software.
             1156          (c) "Tangible personal property" includes the following regardless of whether the item
             1157      is attached to real property:
             1158          (i) a dishwasher;
             1159          (ii) a dryer;
             1160          (iii) a freezer;
             1161          (iv) a microwave;
             1162          (v) a refrigerator;
             1163          (vi) a stove;
             1164          (vii) a washer; or
             1165          (viii) an item similar to Subsections (108)(c)(i) through (vii) as determined by the
             1166      commission by rule made in accordance with Title 63G, Chapter 3, Utah Administrative
             1167      Rulemaking Act.
             1168          [(c)] (d) "Tangible personal property" does not include a product that is transferred
             1169      electronically.
             1170          [(d)] (e) "Tangible personal property" does not include the following if attached to real
             1171      property, regardless of whether the attachment to real property is only through a line that
             1172      supplies water, electricity, gas, telephone, cable, or supplies a similar item as determined by the
             1173      commission by rule made in accordance with Title 63G, Chapter 3, Utah Administrative
             1174      Rulemaking Act:


             1175          (i) a hot water heater;
             1176          (ii) a water [softener] filtration system; or
             1177          (iii) a water [filtration] softener system.
             1178          (109) "Tar sands" means impregnated sands that yield mixtures of liquid hydrocarbon
             1179      and require further processing other than mechanical blending before becoming finished
             1180      petroleum products.
             1181          (110) (a) "Telecommunications enabling or facilitating equipment, machinery, or
             1182      software" means an item listed in Subsection (110)(b) if that item is purchased or leased
             1183      primarily to enable or facilitate one or more of the following to function:
             1184          (i) telecommunications switching or routing equipment, machinery, or software; or
             1185          (ii) telecommunications transmission equipment, machinery, or software.
             1186          (b) The following apply to Subsection (110)(a):
             1187          (i) a pole;
             1188          (ii) software;
             1189          (iii) a supplementary power supply;
             1190          (iv) temperature or environmental equipment or machinery;
             1191          (v) test equipment;
             1192          (vi) a tower; or
             1193          (vii) equipment, machinery, or software that functions similarly to an item listed in
             1194      Subsections (110)(b)(i) through (vi) as determined by the commission by rule made in
             1195      accordance with Subsection (110)(c).
             1196          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1197      commission may by rule define what constitutes equipment, machinery, or software that
             1198      functions similarly to an item listed in Subsections (110)(b)(i) through (vi).
             1199          (111) "Telecommunications equipment, machinery, or software required for 911
             1200      service" means equipment, machinery, or software that is required to comply with 47 C.F.R.
             1201      Sec. 20.18.
             1202          (112) "Telecommunications maintenance or repair equipment, machinery, or software"
             1203      means equipment, machinery, or software purchased or leased primarily to maintain or repair
             1204      one or more of the following, regardless of whether the equipment, machinery, or software is
             1205      purchased or leased as a spare part or as an upgrade or modification to one or more of the


             1206      following:
             1207          (a) telecommunications enabling or facilitating equipment, machinery, or software;
             1208          (b) telecommunications switching or routing equipment, machinery, or software; or
             1209          (c) telecommunications transmission equipment, machinery, or software.
             1210          (113) (a) "Telecommunications service" means the electronic conveyance, routing, or
             1211      transmission of audio, data, video, voice, or any other information or signal to a point, or
             1212      among or between points.
             1213          (b) "Telecommunications service" includes:
             1214          (i) an electronic conveyance, routing, or transmission with respect to which a computer
             1215      processing application is used to act:
             1216          (A) on the code, form, or protocol of the content;
             1217          (B) for the purpose of electronic conveyance, routing, or transmission; and
             1218          (C) regardless of whether the service:
             1219          (I) is referred to as voice over Internet protocol service; or
             1220          (II) is classified by the Federal Communications Commission as enhanced or value
             1221      added;
             1222          (ii) an 800 service;
             1223          (iii) a 900 service;
             1224          (iv) a fixed wireless service;
             1225          (v) a mobile wireless service;
             1226          (vi) a postpaid calling service;
             1227          (vii) a prepaid calling service;
             1228          (viii) a prepaid wireless calling service; or
             1229          (ix) a private communications service.
             1230          (c) "Telecommunications service" does not include:
             1231          (i) advertising, including directory advertising;
             1232          (ii) an ancillary service;
             1233          (iii) a billing and collection service provided to a third party;
             1234          (iv) a data processing and information service if:
             1235          (A) the data processing and information service allows data to be:
             1236          (I) (Aa) acquired;


             1237          (Bb) generated;
             1238          (Cc) processed;
             1239          (Dd) retrieved; or
             1240          (Ee) stored; and
             1241          (II) delivered by an electronic transmission to a purchaser; and
             1242          (B) the purchaser's primary purpose for the underlying transaction is the processed data
             1243      or information;
             1244          (v) installation or maintenance of the following on a customer's premises:
             1245          (A) equipment; or
             1246          (B) wiring;
             1247          (vi) Internet access service;
             1248          (vii) a paging service;
             1249          (viii) a product transferred electronically, including:
             1250          (A) music;
             1251          (B) reading material;
             1252          (C) a ring tone;
             1253          (D) software; or
             1254          (E) video;
             1255          (ix) a radio and television audio and video programming service:
             1256          (A) regardless of the medium; and
             1257          (B) including:
             1258          (I) furnishing conveyance, routing, or transmission of a television audio and video
             1259      programming service by a programming service provider;
             1260          (II) cable service as defined in 47 U.S.C. Sec. 522(6); or
             1261          (III) audio and video programming services delivered by a commercial mobile radio
             1262      service provider as defined in 47 C.F.R. Sec. 20.3;
             1263          (x) a value-added nonvoice data service; or
             1264          (xi) tangible personal property.
             1265          (114) (a) "Telecommunications service provider" means a person that:
             1266          (i) owns, controls, operates, or manages a telecommunications service; and
             1267          (ii) engages in an activity described in Subsection (114)(a)(i) for the shared use with or


             1268      resale to any person of the telecommunications service.
             1269          (b) A person described in Subsection (114)(a) is a telecommunications service provider
             1270      whether or not the Public Service Commission of Utah regulates:
             1271          (i) that person; or
             1272          (ii) the telecommunications service that the person owns, controls, operates, or
             1273      manages.
             1274          (115) (a) "Telecommunications switching or routing equipment, machinery, or
             1275      software" means an item listed in Subsection (115)(b) if that item is purchased or leased
             1276      primarily for switching or routing:
             1277          (i) an ancillary service;
             1278          (ii) data communications;
             1279          (iii) voice communications; or
             1280          (iv) telecommunications service.
             1281          (b) The following apply to Subsection (115)(a):
             1282          (i) a bridge;
             1283          (ii) a computer;
             1284          (iii) a cross connect;
             1285          (iv) a modem;
             1286          (v) a multiplexer;
             1287          (vi) plug in circuitry;
             1288          (vii) a router;
             1289          (viii) software;
             1290          (ix) a switch; or
             1291          (x) equipment, machinery, or software that functions similarly to an item listed in
             1292      Subsections (115)(b)(i) through (ix) as determined by the commission by rule made in
             1293      accordance with Subsection (115)(c).
             1294          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1295      commission may by rule define what constitutes equipment, machinery, or software that
             1296      functions similarly to an item listed in Subsections (115)(b)(i) through (ix).
             1297          (116) (a) "Telecommunications transmission equipment, machinery, or software"
             1298      means an item listed in Subsection (116)(b) if that item is purchased or leased primarily for


             1299      sending, receiving, or transporting:
             1300          (i) an ancillary service;
             1301          (ii) data communications;
             1302          (iii) voice communications; or
             1303          (iv) telecommunications service.
             1304          (b) The following apply to Subsection (116)(a):
             1305          (i) an amplifier;
             1306          (ii) a cable;
             1307          (iii) a closure;
             1308          (iv) a conduit;
             1309          (v) a controller;
             1310          (vi) a duplexer;
             1311          (vii) a filter;
             1312          (viii) an input device;
             1313          (ix) an input/output device;
             1314          (x) an insulator;
             1315          (xi) microwave machinery or equipment;
             1316          (xii) an oscillator;
             1317          (xiii) an output device;
             1318          (xiv) a pedestal;
             1319          (xv) a power converter;
             1320          (xvi) a power supply;
             1321          (xvii) a radio channel;
             1322          (xviii) a radio receiver;
             1323          (xix) a radio transmitter;
             1324          (xx) a repeater;
             1325          (xxi) software;
             1326          (xxii) a terminal;
             1327          (xxiii) a timing unit;
             1328          (xxiv) a transformer;
             1329          (xxv) a wire; or


             1330          (xxvi) equipment, machinery, or software that functions similarly to an item listed in
             1331      Subsections (116)(b)(i) through (xxv) as determined by the commission by rule made in
             1332      accordance with Subsection (116)(c).
             1333          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1334      commission may by rule define what constitutes equipment, machinery, or software that
             1335      functions similarly to an item listed in Subsections (116)(b)(i) through (xxv).
             1336          (117) "Tobacco" means:
             1337          (a) a cigarette;
             1338          (b) a cigar;
             1339          (c) chewing tobacco;
             1340          (d) pipe tobacco; or
             1341          (e) any other item that contains tobacco.
             1342          (118) "Unassisted amusement device" means an amusement device, skill device, or
             1343      ride device that is started and stopped by the purchaser or renter of the right to use or operate
             1344      the amusement device, skill device, or ride device.
             1345          (119) (a) "Use" means the exercise of any right or power over tangible personal
             1346      property, a product transferred electronically, or a service under Subsection 59-12-103 (1),
             1347      incident to the ownership or the leasing of that tangible personal property, product transferred
             1348      electronically, or service.
             1349          (b) "Use" does not include the sale, display, demonstration, or trial of tangible personal
             1350      property, a product transferred electronically, or a service in the regular course of business and
             1351      held for resale.
             1352          (120) "Value-added nonvoice data service" means a service:
             1353          (a) that otherwise meets the definition of a telecommunications service except that a
             1354      computer processing application is used to act primarily for a purpose other than conveyance,
             1355      routing, or transmission; and
             1356          (b) with respect to which a computer processing application is used to act on data or
             1357      information:
             1358          (i) code;
             1359          (ii) content;
             1360          (iii) form; or


             1361          (iv) protocol.
             1362          (121) (a) Subject to Subsection (121)(b), "vehicle" means the following that are
             1363      required to be titled, registered, or titled and registered:
             1364          (i) an aircraft as defined in Section 72-10-102 ;
             1365          (ii) a vehicle as defined in Section 41-1a-102 ;
             1366          (iii) an off-highway vehicle as defined in Section 41-22-2 ; or
             1367          (iv) a vessel as defined in Section 41-1a-102 .
             1368          (b) For purposes of Subsection 59-12-104 (33) only, "vehicle" includes:
             1369          (i) a vehicle described in Subsection (121)(a); or
             1370          (ii) (A) a locomotive;
             1371          (B) a freight car;
             1372          (C) railroad work equipment; or
             1373          (D) other railroad rolling stock.
             1374          (122) "Vehicle dealer" means a person engaged in the business of buying, selling, or
             1375      exchanging a vehicle as defined in Subsection (121).
             1376          (123) (a) "Vertical service" means an ancillary service that:
             1377          (i) is offered in connection with one or more telecommunications services; and
             1378          (ii) offers an advanced calling feature that allows a customer to:
             1379          (A) identify a caller; and
             1380          (B) manage multiple calls and call connections.
             1381          (b) "Vertical service" includes an ancillary service that allows a customer to manage a
             1382      conference bridging service.
             1383          (124) (a) "Voice mail service" means an ancillary service that enables a customer to
             1384      receive, send, or store a recorded message.
             1385          (b) "Voice mail service" does not include a vertical service that a customer is required
             1386      to have in order to utilize a voice mail service.
             1387          (125) (a) Except as provided in Subsection (125)(b), "waste energy facility" means a
             1388      facility that generates electricity:
             1389          (i) using as the primary source of energy waste materials that would be placed in a
             1390      landfill or refuse pit if it were not used to generate electricity, including:
             1391          (A) tires;


             1392          (B) waste coal; or
             1393          (C) oil shale; and
             1394          (ii) in amounts greater than actually required for the operation of the facility.
             1395          (b) "Waste energy facility" does not include a facility that incinerates:
             1396          (i) municipal solid waste;
             1397          (ii) hospital waste as defined in 40 C.F.R. 60.51c; or
             1398          (iii) medical/infectious waste as defined in 40 C.F.R. 60.51c.
             1399          (126) "Watercraft" means a vessel as defined in Section 73-18-2 .
             1400          (127) "Wind energy" means wind used as the sole source of energy to produce
             1401      electricity.
             1402          (128) "ZIP Code" means a Zoning Improvement Plan Code assigned to a geographic
             1403      location by the United States Postal Service.
             1404          Section 2. Effective date.
             1405          This bill takes effect on July 1, 2009.




Legislative Review Note
    as of 11-25-08 3:45 PM


Office of Legislative Research and General Counsel


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