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First Substitute S.B. 189

Representative John Dougall proposes the following substitute bill:


             1     
AMENDMENTS TO SALES AND USE TAX

             2     
2009 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Wayne L. Niederhauser

             5     
House Sponsor: John Dougall

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill amends the Sales and Use Tax Act and related provisions to address
             10      transactions that are subject to taxation or exempt from taxation and to address sales
             11      and use tax funding for the Qualified Emergency Food Agencies Fund.
             12      Highlighted Provisions:
             13          This bill:
             14          .    modifies the sales and use tax funding sources for the Qualified Emergency Food
             15      Agencies Fund;
             16          .    repeals a defined term;
             17          .    reduces the amount of state sales and use tax to be deposited into the Qualified
             18      Emergency Food Agencies Fund;
             19          .    provides that the State Tax Commission shall calculate and retain a portion of the
             20      following taxes and deposit the amount retained into the Qualified Emergency Food
             21      Agencies Fund:
             22              .    the tax under Title 59, Chapter 12, Part 2, Local Sales and Use Tax Act; and
             23              .    the tax under Title 59, Chapter 12, Part 11, County Option Sales and Use Tax;
             24          .    modifies a sales and use tax exemption relating to a commercial airline carrier;
             25          .    provides that the tax under Title 59, Chapter 12, Part 20, Supplemental State Sales


             26      and Use Tax Act, is imposed on the same transactions as the state sales and use tax:
             27              .    except for food and food ingredients under certain circumstances; and
             28              .    including sales of gas, electricity, heat, coal, fuel oil, or other fuels for
             29      residential use; and
             30          .    makes technical changes.
             31      Monies Appropriated in this Bill:
             32          None
             33      Other Special Clauses:
             34          This bill provides effective dates.
             35          This bill provides for retrospective operation.
             36          This bill coordinates with H.B. 403, Sales and Use Tax and Income Tax Amendments,
             37      by technically merging the amendments.
             38      Utah Code Sections Affected:
             39      AMENDS:
             40          9-4-1409, as last amended by Laws of Utah 2008, Second Special Session, Chapter 5
             41          59-12-103, as last amended by Laws of Utah 2008, Second Special Session, Chapter 5
             42          59-12-104, as last amended by Laws of Utah 2008, Second Special Session, Chapter 2
             43          59-12-204, as last amended by Laws of Utah 2006, Chapter 253
             44          59-12-1102, as last amended by Laws of Utah 2008, Chapters 237, 382, and 384
             45          59-12-2003, as enacted by Laws of Utah 2008, Chapter 286
             46     
             47      Be it enacted by the Legislature of the state of Utah:
             48          Section 1. Section 9-4-1409 is amended to read:
             49           9-4-1409. Qualified Emergency Food Agencies Fund -- Expenditure of revenues.
             50          (1) As used in this section:
             51          (a) "Association of governments" means the following created under the authority of
             52      Title 11, Chapter 13, Interlocal Cooperation Act:
             53          (i) an association of governments; or
             54          (ii) a regional council that acts as an association of governments.
             55          [(b) "Consumer price index" is as described in Section 1(f)(4), Internal Revenue Code,
             56      and defined in Section 1(f)(5), Internal Revenue Code.]


             57          [(c)] (b) "Food and food ingredients" is as defined in Section 59-12-102 .
             58          [(d)] (c) "Pounds of food donated" means the aggregate number of pounds of food and
             59      food ingredients that are donated:
             60          (i) to a qualified emergency food agency; and
             61          (ii) by a person, other than an organization that as part of its activities operates a
             62      program that has as the program's primary purpose to:
             63          (A) warehouse and distribute food to other agencies and organizations providing food
             64      and food ingredients to low-income persons; or
             65          (B) provide food and food ingredients directly to low-income persons.
             66          [(e)] (d) "Qualified emergency food agency" means an organization that:
             67          (i) is:
             68          (A) exempt from federal income taxation under Section 501(c)(3), Internal Revenue
             69      Code; or
             70          (B) an association of governments;
             71          (ii) as part of its activities operates a program that has as the program's primary purpose
             72      to:
             73          (A) warehouse and distribute food to other agencies and organizations providing food
             74      and food ingredients to low-income persons; or
             75          (B) provide food and food ingredients directly to low-income persons; and
             76          (iii) the office determines to be a qualified emergency food agency.
             77          (2) There is created a restricted special revenue fund known as the Qualified
             78      Emergency Food Agencies Fund.
             79          (3) (a) The Qualified Emergency Food Agencies Fund shall be funded by the [state]
             80      sales and use tax revenues described in:
             81          (i) Section 59-12-103 [.];
             82          (ii) Section 59-12-204 ; and
             83          (iii) Section 59-12-1102 .
             84          (b) Any interest earned on the Qualified Emergency Food Agencies Fund shall be
             85      deposited into the General Fund.
             86          (4) The office shall for a fiscal year distribute monies deposited into the Qualified
             87      Emergency Food Agencies Fund to qualified emergency food agencies within the state as


             88      provided in this section.
             89          (5) A qualified emergency food agency shall file an application with the office before
             90      the qualified emergency food agency may receive a distribution under this section.
             91          (6) Except as provided in Subsection (7), the office shall for a fiscal year distribute to a
             92      qualified emergency food agency an amount equal to the product of:
             93          (a) the pounds of food donated to the qualified emergency food agency during that
             94      fiscal year; and
             95          (b) $.12.
             96          (7) If the monies deposited into the Qualified Emergency Food Agencies Fund are
             97      insufficient to make the distributions required by Subsection (6), the office shall make
             98      distributions to qualified emergency food agencies in the order that the office receives
             99      applications from the qualified emergency food agencies until all of the monies deposited into
             100      the Qualified Emergency Food Agencies Fund for the fiscal year are expended.
             101          (8) A qualified emergency food agency may expend a distribution received in
             102      accordance with this section only for a purpose related to:
             103          (a) warehousing and distributing food and food ingredients to other agencies and
             104      organizations providing food and food ingredients to low-income persons; or
             105          (b) providing food and food ingredients directly to low-income persons.
             106          (9) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             107      Division of Housing and Community Development may make rules providing procedures for
             108      implementing the distributions required by this section, including:
             109          (a) standards for determining and verifying the amount of a distribution that a qualified
             110      emergency food agency may receive;
             111          (b) procedures for a qualified emergency food agency to apply for a distribution,
             112      including the frequency with which a qualified emergency food agency may apply for a
             113      distribution; and
             114          (c) consistent with Subsection (1)(e), determining whether an entity is a qualified
             115      emergency food agency.
             116          Section 2. Section 59-12-103 is amended to read:
             117           59-12-103. Sales and use tax base -- Rates -- Effective dates -- Use of sales and use
             118      tax revenues.


             119          (1) A tax is imposed on the purchaser as provided in this part for amounts paid or
             120      charged for the following transactions:
             121          (a) retail sales of tangible personal property made within the state;
             122          (b) amounts paid for:
             123          (i) telecommunications service, other than mobile telecommunications service, that
             124      originates and terminates within the boundaries of this state;
             125          (ii) mobile telecommunications service that originates and terminates within the
             126      boundaries of one state only to the extent permitted by the Mobile Telecommunications
             127      Sourcing Act, 4 U.S.C. Sec. 116 et seq.; or
             128          (iii) an ancillary service associated with a:
             129          (A) telecommunications service described in Subsection (1)(b)(i); or
             130          (B) mobile telecommunications service described in Subsection (1)(b)(ii);
             131          (c) sales of the following for commercial use:
             132          (i) gas;
             133          (ii) electricity;
             134          (iii) heat;
             135          (iv) coal;
             136          (v) fuel oil; or
             137          (vi) other fuels;
             138          (d) sales of the following for residential use:
             139          (i) gas;
             140          (ii) electricity;
             141          (iii) heat;
             142          (iv) coal;
             143          (v) fuel oil; or
             144          (vi) other fuels;
             145          (e) sales of prepared food;
             146          (f) except as provided in Section 59-12-104 , amounts paid or charged as admission or
             147      user fees for theaters, movies, operas, museums, planetariums, shows of any type or nature,
             148      exhibitions, concerts, carnivals, amusement parks, amusement rides, circuses, menageries,
             149      fairs, races, contests, sporting events, dances, boxing matches, wrestling matches, closed circuit


             150      television broadcasts, billiard parlors, pool parlors, bowling lanes, golf, miniature golf, golf
             151      driving ranges, batting cages, skating rinks, ski lifts, ski runs, ski trails, snowmobile trails,
             152      tennis courts, swimming pools, water slides, river runs, jeep tours, boat tours, scenic cruises,
             153      horseback rides, sports activities, or any other amusement, entertainment, recreation,
             154      exhibition, cultural, or athletic activity;
             155          (g) amounts paid or charged for services for repairs or renovations of tangible personal
             156      property, unless Section 59-12-104 provides for an exemption from sales and use tax for:
             157          (i) the tangible personal property; and
             158          (ii) parts used in the repairs or renovations of the tangible personal property described
             159      in Subsection (1)(g)(i), whether or not any parts are actually used in the repairs or renovations
             160      of that tangible personal property;
             161          (h) except as provided in Subsection 59-12-104 (7), amounts paid or charged for
             162      assisted cleaning or washing of tangible personal property;
             163          (i) amounts paid or charged for tourist home, hotel, motel, or trailer court
             164      accommodations and services that are regularly rented for less than 30 consecutive days;
             165          (j) amounts paid or charged for laundry or dry cleaning services;
             166          (k) amounts paid or charged for leases or rentals of tangible personal property if within
             167      this state the tangible personal property is:
             168          (i) stored;
             169          (ii) used; or
             170          (iii) otherwise consumed;
             171          (l) amounts paid or charged for tangible personal property if within this state the
             172      tangible personal property is:
             173          (i) stored;
             174          (ii) used; or
             175          (iii) consumed;
             176          (m) amounts paid or charged for prepaid telephone calling cards; and
             177          (n) amounts paid or charged for a sale:
             178          (i) (A) of a product that:
             179          (I) is transferred electronically; and
             180          (II) would be subject to a tax under this chapter if the product was transferred in a


             181      manner other than electronically; or
             182          (B) of a repair or renovation of a product that:
             183          (I) is transferred electronically; and
             184          (II) would be subject to a tax under this chapter if the product was transferred in a
             185      manner other than electronically; and
             186          (ii) regardless of whether the sale provides:
             187          (A) a right of permanent use of the product; or
             188          (B) a right to use the product that is less than a permanent use, including a right:
             189          (I) for a definite or specified length of time; and
             190          (II) that terminates upon the occurrence of a condition.
             191          (2) (a) Except as provided in Subsections (2)(b) through (e), a state tax and a local tax
             192      is imposed on a transaction described in Subsection (1) equal to the sum of:
             193          (i) a state tax imposed on the transaction at a tax rate equal to the sum of:
             194          (A) 4.70%; and
             195          (B) (I) the tax rate the state imposes in accordance with Part 18, Additional State Sales
             196      and Use Tax Act, if the location of the transaction as determined under Sections 59-12-211
             197      through 59-12-215 is in a county in which the state imposes the tax under Part 18, Additional
             198      State Sales and Use Tax Act; and
             199          (II) the tax rate the state imposes in accordance with Part 20, Supplemental State Sales
             200      and Use Tax Act, if the location of the transaction as determined under Sections 59-12-211
             201      through 59-12-215 is in a city, town, or the unincorporated area of a county in which the state
             202      imposes the tax under Part 20, Supplemental State Sales and Use Tax Act; and
             203          (ii) a local tax equal to the sum of the tax rates a county, city, or town imposes on the
             204      transaction under this chapter other than this part.
             205          (b) Except as provided in Subsection (2)(d) or (e), a state tax and a local tax is imposed
             206      on a transaction described in Subsection (1)(d) equal to the sum of:
             207          (i) a state tax imposed on the transaction at a tax rate of 2%; and
             208          (ii) a local tax equal to the sum of the tax rates a county, city, or town imposes on the
             209      transaction under this chapter other than this part.
             210          (c) Except as provided in Subsection (2)(d) or (e), a state tax and a local tax is imposed
             211      on amounts paid or charged for food and food ingredients equal to the sum of:


             212          (i) a state tax imposed on the amounts paid or charged for food and food ingredients at
             213      a tax rate of 1.75%; and
             214          (ii) a local tax equal to the sum of the tax rates a county, city, or town imposes on the
             215      amounts paid or charged for food and food ingredients under this chapter other than this part.
             216          (d) (i) For a bundled transaction that is attributable to food and food ingredients and
             217      tangible personal property other than food and food ingredients, a state tax and a local tax is
             218      imposed on the entire bundled transaction equal to the sum of:
             219          (A) a state tax imposed on the entire bundled transaction equal to the sum of:
             220          (I) the tax rate described in Subsection (2)(a)(i)(A); and
             221          (II) (Aa) the tax rate the state imposes in accordance with Part 18, Additional State
             222      Sales and Use Tax Act, if the location of the transaction as determined under Sections
             223      59-12-211 through 59-12-215 is in a county in which the state imposes the tax under Part 18,
             224      Additional State Sales and Use Tax Act; and
             225          (Bb) the tax rate the state imposes in accordance with Part 20, Supplemental State
             226      Sales and Use Tax Act, if the location of the transaction as determined under Sections
             227      59-12-211 through 59-12-215 is in a city, town, or the unincorporated area of a county in which
             228      the state imposes the tax under Part 20, Supplemental State Sales and Use Tax Act; and
             229          (B) a local tax imposed on the entire bundled transaction at the sum of the tax rates
             230      described in Subsection (2)(a)(ii).
             231          (ii) Subject to Subsection (2)(d)(iii), for a bundled transaction other than a bundled
             232      transaction described in Subsection (2)(d)(i):
             233          (A) if the sales price of the bundled transaction is attributable to tangible personal
             234      property, a product, or a service that is subject to taxation under this chapter and tangible
             235      personal property, a product, or service that is not subject to taxation under this chapter, the
             236      entire bundled transaction is subject to taxation under this chapter unless:
             237          (I) the seller is able to identify by reasonable and verifiable standards the tangible
             238      personal property, product, or service that is not subject to taxation under this chapter from the
             239      books and records the seller keeps in the seller's regular course of business; or
             240          (II) state or federal law provides otherwise; or
             241          (B) if the sales price of a bundled transaction is attributable to two or more items of
             242      tangible personal property, products, or services that are subject to taxation under this chapter


             243      at different rates, the entire bundled transaction is subject to taxation under this chapter at the
             244      higher tax rate unless:
             245          (I) the seller is able to identify by reasonable and verifiable standards the tangible
             246      personal property, product, or service that is subject to taxation under this chapter at the lower
             247      tax rate from the books and records the seller keeps in the seller's regular course of business; or
             248          (II) state or federal law provides otherwise.
             249          (iii) For purposes of Subsection (2)(d)(ii), books and records that a seller keeps in the
             250      seller's regular course of business includes books and records the seller keeps in the regular
             251      course of business for nontax purposes.
             252          (e) Subject to Subsections (2) (f) and (g), a tax rate repeal or tax rate change for a tax
             253      rate imposed under the following shall take effect on the first day of a calendar quarter:
             254          (i) Subsection (2)(a)(i)(A);
             255          (ii) Subsection (2)(b)(i);
             256          (iii) Subsection (2)(c)(i); or
             257          (iv) Subsection (2)(d)(i)(A)(I).
             258          (f) (i) A tax rate increase shall take effect on the first day of the first billing period that
             259      begins after the effective date of the tax rate increase if the billing period for the transaction
             260      begins before the effective date of a tax rate increase imposed under:
             261          (A) Subsection (2)(a)(i)(A);
             262          (B) Subsection (2)(b)(i);
             263          (C) Subsection (2)(c)(i); or
             264          (D) Subsection (2)(d)(i)(A)(I).
             265          (ii) The repeal of a tax or a tax rate decrease shall take effect on the first day of the last
             266      billing period that began before the effective date of the repeal of the tax or the tax rate
             267      decrease if the billing period for the transaction begins before the effective date of the repeal of
             268      the tax or the tax rate decrease imposed under:
             269          (A) Subsection (2)(a)(i)(A);
             270          (B) Subsection (2)(b)(i);
             271          (C) Subsection (2)(c)(i); or
             272          (D) Subsection (2)(d)(i)(A)(I).
             273          (g) (i) For a tax rate described in Subsection (2) (g)(ii), if a tax due on a catalogue sale


             274      is computed on the basis of sales and use tax rates published in the catalogue, a tax rate repeal
             275      or change in a tax rate takes effect:
             276          (A) on the first day of a calendar quarter; and
             277          (B) beginning 60 days after the effective date of the tax rate repeal or tax rate change.
             278          (ii) Subsection (2) (g)(i) applies to the tax rates described in the following:
             279          (A) Subsection (2)(a)(i)(A);
             280          (B) Subsection (2)(b)(i);
             281          (C) Subsection (2)(c)(i); or
             282          (D) Subsection (2)(d)(i)(A)(I).
             283          (iii) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
             284      the commission may by rule define the term "catalogue sale."
             285          (3) (a) The following state taxes shall be deposited into the General Fund:
             286          (i) the tax imposed by Subsection (2)(a)(i)(A);
             287          (ii) the tax imposed by Subsection (2)(b)(i);
             288          (iii) the tax imposed by Subsection (2)(c)(i); or
             289          (iv) the tax imposed by Subsection (2)(d)(i)(A)(I).
             290          (b) The following local taxes shall be distributed to a county, city, or town as provided
             291      in this chapter:
             292          (i) the tax imposed by Subsection (2)(a)(ii);
             293          (ii) the tax imposed by Subsection (2)(b)(ii);
             294          (iii) the tax imposed by Subsection (2)(c)(ii); and
             295          (iv) the tax imposed by Subsection (2)(d)(i)(B).
             296          (4) (a) Notwithstanding Subsection (3)(a), for a fiscal year beginning on or after July 1,
             297      2003, the lesser of the following amounts shall be used as provided in Subsections (4)(b)
             298      through (g):
             299          (i) for taxes listed under Subsection (3)(a), the amount of tax revenue generated:
             300          (A) by a 1/16% tax rate on the transactions described in Subsection (1); and
             301          (B) for the fiscal year; or
             302          (ii) $17,500,000.
             303          (b) (i) For a fiscal year beginning on or after July 1, 2003, 14% of the amount
             304      described in Subsection (4)(a) shall be transferred each year as dedicated credits to the


             305      Department of Natural Resources to:
             306          (A) implement the measures described in Subsections 63-34-14 (4)(a) through (d) to
             307      protect sensitive plant and animal species; or
             308          (B) award grants, up to the amount authorized by the Legislature in an appropriations
             309      act, to political subdivisions of the state to implement the measures described in Subsections
             310      63-34-14 (4)(a) through (d) to protect sensitive plant and animal species.
             311          (ii) Money transferred to the Department of Natural Resources under Subsection
             312      (4)(b)(i) may not be used to assist the United States Fish and Wildlife Service or any other
             313      person to list or attempt to have listed a species as threatened or endangered under the
             314      Endangered Species Act of 1973, 16 U.S.C. Sec. 1531 et seq.
             315          (iii) At the end of each fiscal year:
             316          (A) 50% of any unexpended dedicated credits shall lapse to the Water Resources
             317      Conservation and Development Fund created in Section 73-10-24 ;
             318          (B) 25% of any unexpended dedicated credits shall lapse to the Utah Wastewater Loan
             319      Program Subaccount created in Section 73-10c-5 ; and
             320          (C) 25% of any unexpended dedicated credits shall lapse to the Drinking Water Loan
             321      Program Subaccount created in Section 73-10c-5 .
             322          (c) For a fiscal year beginning on or after July 1, 2003, 3% of the amount described in
             323      Subsection (4)(a) shall be deposited each year in the Agriculture Resource Development Fund
             324      created in Section 4-18-6 .
             325          (d) (i) For a fiscal year beginning on or after July 1, 2003, 1% of the amount described
             326      in Subsection (4)(a) shall be transferred each year as dedicated credits to the Division of Water
             327      Rights to cover the costs incurred in hiring legal and technical staff for the adjudication of
             328      water rights.
             329          (ii) At the end of each fiscal year:
             330          (A) 50% of any unexpended dedicated credits shall lapse to the Water Resources
             331      Conservation and Development Fund created in Section 73-10-24 ;
             332          (B) 25% of any unexpended dedicated credits shall lapse to the Utah Wastewater Loan
             333      Program Subaccount created in Section 73-10c-5 ; and
             334          (C) 25% of any unexpended dedicated credits shall lapse to the Drinking Water Loan
             335      Program Subaccount created in Section 73-10c-5 .


             336          (e) (i) For a fiscal year beginning on or after July 1, 2003, 41% of the amount described
             337      in Subsection (4)(a) shall be deposited in the Water Resources Conservation and Development
             338      Fund created in Section 73-10-24 for use by the Division of Water Resources.
             339          (ii) In addition to the uses allowed of the Water Resources Conservation and
             340      Development Fund under Section 73-10-24 , the Water Resources Conservation and
             341      Development Fund may also be used to:
             342          (A) conduct hydrologic and geotechnical investigations by the Division of Water
             343      Resources in a cooperative effort with other state, federal, or local entities, for the purpose of
             344      quantifying surface and ground water resources and describing the hydrologic systems of an
             345      area in sufficient detail so as to enable local and state resource managers to plan for and
             346      accommodate growth in water use without jeopardizing the resource;
             347          (B) fund state required dam safety improvements; and
             348          (C) protect the state's interest in interstate water compact allocations, including the
             349      hiring of technical and legal staff.
             350          (f) For a fiscal year beginning on or after July 1, 2003, 20.5% of the amount described
             351      in Subsection (4)(a) shall be deposited in the Utah Wastewater Loan Program Subaccount
             352      created in Section 73-10c-5 for use by the Water Quality Board to fund wastewater projects.
             353          (g) For a fiscal year beginning on or after July 1, 2003, 20.5% of the amount described
             354      in Subsection (4)(a) shall be deposited in the Drinking Water Loan Program Subaccount
             355      created in Section 73-10c-5 for use by the Division of Drinking Water to:
             356          (i) provide for the installation and repair of collection, treatment, storage, and
             357      distribution facilities for any public water system, as defined in Section 19-4-102 ;
             358          (ii) develop underground sources of water, including springs and wells; and
             359          (iii) develop surface water sources.
             360          (5) (a) Notwithstanding Subsection (3)(a), for a fiscal year beginning on or after July 1,
             361      2006, the difference between the following amounts shall be expended as provided in this
             362      Subsection (5), if that difference is greater than $1:
             363          (i) for taxes listed under Subsection (3)(a), the amount of tax revenue generated for the
             364      fiscal year by a 1/16% tax rate on the transactions described in Subsection (1); and
             365          (ii) $17,500,000.
             366          (b) (i) The first $500,000 of the difference described in Subsection (5)(a) shall be:


             367          (A) transferred each fiscal year to the Department of Natural Resources as dedicated
             368      credits; and
             369          (B) expended by the Department of Natural Resources for watershed rehabilitation or
             370      restoration.
             371          (ii) At the end of each fiscal year, 100% of any unexpended dedicated credits described
             372      in Subsection (5)(b)(i) shall lapse to the Water Resources Conservation and Development Fund
             373      created in Section 73-10-24 .
             374          (c) (i) After making the transfer required by Subsection (5)(b)(i), $150,000 of the
             375      remaining difference described in Subsection (5)(a) shall be:
             376          (A) transferred each fiscal year to the Division of Water Resources as dedicated
             377      credits; and
             378          (B) expended by the Division of Water Resources for cloud-seeding projects
             379      authorized by Title 73, Chapter 15, Modification of Weather.
             380          (ii) At the end of each fiscal year, 100% of any unexpended dedicated credits described
             381      in Subsection (5)(c)(i) shall lapse to the Water Resources Conservation and Development Fund
             382      created in Section 73-10-24 .
             383          (d) After making the transfers required by Subsections (5)(b) and (c), 94% of the
             384      remaining difference described in Subsection (5)(a) shall be deposited into the Water
             385      Resources Conservation and Development Fund created in Section 73-10-24 for use by the
             386      Division of Water Resources for:
             387          (i) preconstruction costs:
             388          (A) as defined in Subsection 73-26-103 (6) for projects authorized by Title 73, Chapter
             389      26, Bear River Development Act; and
             390          (B) as defined in Subsection 73-28-103 (8) for the Lake Powell Pipeline project
             391      authorized by Title 73, Chapter 28, Lake Powell Pipeline Development Act;
             392          (ii) the cost of employing a civil engineer to oversee any project authorized by Title 73,
             393      Chapter 26, Bear River Development Act;
             394          (iii) the cost of employing a civil engineer to oversee the Lake Powell Pipeline project
             395      authorized by Title 73, Chapter 28, Lake Powell Pipeline Development Act; and
             396          (iv) other uses authorized under Sections 73-10-24 , 73-10-25.1 , 73-10-30 , and
             397      Subsection (4)(e)(ii) after funding the uses specified in Subsections (5)(d)(i) through (iii).


             398          (e) Any unexpended monies described in Subsection (5)(d) that remain in the Water
             399      Resources Conservation and Development Fund at the end of the fiscal year are nonlapsing.
             400          (f) After making the transfers required by Subsections (5)(b) and (c) and subject to
             401      Subsection (5)(g), 6% of the remaining difference described in Subsection (5)(a) shall be
             402      transferred each year as dedicated credits to the Division of Water Rights to cover the costs
             403      incurred for employing additional technical staff for the administration of water rights.
             404          (g) At the end of each fiscal year, any unexpended dedicated credits described in
             405      Subsection (5)(f) over $150,000 lapse to the Water Resources Conservation and Development
             406      Fund created in Section 73-10-24 .
             407          (6) Notwithstanding Subsection (3)(a), for a fiscal year beginning on or after July 1,
             408      2003, and for taxes listed under Subsection (3)(a), the amount of revenue generated by a 1/16%
             409      tax rate on the transactions described in Subsection (1) for the fiscal year shall be deposited in
             410      the Transportation Fund created by Section 72-2-102 .
             411          (7) (a) Notwithstanding Subsection (3)(a) and until Subsection (7)(b) applies,
             412      beginning on January 1, 2000, the Division of Finance shall deposit into the Centennial
             413      Highway Fund Restricted Account created in Section 72-2-118 a portion of the taxes listed
             414      under Subsection (3)(a) equal to the revenues generated by a 1/64% tax rate on the taxable
             415      transactions under Subsection (1).
             416          (b) Notwithstanding Subsection (3)(a), when the highway general obligation bonds
             417      have been paid off and the highway projects completed that are intended to be paid from
             418      revenues deposited in the Centennial Highway Fund Restricted Account as determined by the
             419      Executive Appropriations Committee under Subsection 72-2-118 (6)(d), the Division of
             420      Finance shall deposit into the Transportation Investment Fund of 2005 created by Section
             421      72-2-124 a portion of the taxes listed under Subsection (3)(a) equal to the revenues generated
             422      by a 1/64% tax rate on the taxable transactions under Subsection (1).
             423          (8) (a) Notwithstanding Subsection (3)(a), in addition to the amount deposited in
             424      Subsection (7)(a), and until Subsection (8)(b) applies, for a fiscal year beginning on or after
             425      July 1, 2007, the Division of Finance shall deposit into the Centennial Highway Fund
             426      Restricted Account created by Section 72-2-118 a portion of the taxes listed under Subsection
             427      (3)(a) equal to 8.3% of the revenues collected from the following taxes, which represents a
             428      portion of the approximately 17% of sales and use tax revenues generated annually by the sales


             429      and use tax on vehicles and vehicle-related products:
             430          (i) the tax imposed by Subsection (2)(a)(i)(A);
             431          (ii) the tax imposed by Subsection (2)(b)(i);
             432          (iii) the tax imposed by Subsection (2)(c)(i); and
             433          (iv) the tax imposed by Subsection (2)(d)(i)(A)(I).
             434          (b) Notwithstanding Subsection (3)(a) and in addition to the amounts deposited under
             435      Subsection (7)(b), when the highway general obligation bonds have been paid off and the
             436      highway projects completed that are intended to be paid from revenues deposited in the
             437      Centennial Highway Fund Restricted Account as determined by the Executive Appropriations
             438      Committee under Subsection 72-2-118 (6)(d), the Division of Finance shall deposit into the
             439      Transportation Investment Fund of 2005 created by Section 72-2-124 a portion of the taxes
             440      listed under Subsection (3)(a) equal to 8.3% of the revenues collected from the following taxes,
             441      which represents a portion of the approximately 17% of sales and use tax revenues generated
             442      annually by the sales and use tax on vehicles and vehicle-related products:
             443          (i) the tax imposed by Subsection (2)(a)(i)(A);
             444          (ii) the tax imposed by Subsection (2)(b)(i);
             445          (iii) the tax imposed by Subsection (2)(c)(i); and
             446          (iv) the tax imposed by Subsection (2)(d)(i)(A)(I).
             447          (9) (a) Notwithstanding Subsection (3)(a) and for the fiscal year 2008-09 only, the
             448      Division of Finance shall deposit $55,000,000 of the revenues generated by the taxes listed
             449      under Subsection (3)(a) into the Critical Highway Needs Fund created by Section 72-2-125 .
             450          (b) Notwithstanding Subsection (3)(a) and until Subsection (9)(c) applies, for a fiscal
             451      year beginning on or after July 1, 2009, the Division of Finance shall annually deposit
             452      $90,000,000 of the revenues generated by the taxes listed under Subsection (3)(a) into the
             453      Critical Highway Needs Fund created by Section 72-2-125 .
             454          (c) Notwithstanding Subsection (3)(a) and in addition to any amounts deposited under
             455      Subsections (7) and (8), when the general obligation bonds authorized by Section 63B-16-101
             456      have been paid off and the highway projects completed that are included in the prioritized
             457      project list under Subsection 72-2-125 (4) as determined in accordance with Subsection
             458      72-2-125 (6), the Division of Finance shall annually deposit $90,000,000 of the revenues
             459      generated by the taxes listed under Subsection (3)(a) into the Transportation Investment Fund


             460      of 2005 created by Section 72-2-124 .
             461          (10) Notwithstanding Subsection (3)(a), for each fiscal year beginning with fiscal year
             462      [2008-09, $915,000] 2009-10, $533,750 shall be deposited into the Qualified Emergency Food
             463      Agencies Fund created by Section 9-4-1409 and expended as provided in Section 9-4-1409 .
             464          (11) (a) (i) Notwithstanding Subsection (3)(a), except as provided in Subsection
             465      (11)(a)(ii), and until Subsection (11)(b) applies, beginning on January 1, 2009, the Division of
             466      Finance shall deposit into the Critical Highway Needs Fund created by Section 72-2-125 the
             467      amount of tax revenue generated by a .025% tax rate on the transactions described in
             468      Subsection (1).
             469          (ii) For purposes of Subsection (11)(a)(i), the Division of Finance may not deposit into
             470      the Critical Highway Needs Fund any tax revenue generated by amounts paid or charged for
             471      food and food ingredients, except for tax revenue generated by a bundled transaction
             472      attributable to food and food ingredients and tangible personal property other than food and
             473      food ingredients described in Subsection (2)(e).
             474          (b) (i) Notwithstanding Subsection (3)(a), except as provided in Subsection (11)(b)(ii),
             475      and in addition to any amounts deposited under Subsections (7), (9), and (10), when the general
             476      obligation bonds authorized by Section 63B-16-101 have been paid off and the highway
             477      projects completed that are included in the prioritized project list under Subsection 72-2-125 (4)
             478      as determined in accordance with Subsection 72-2-125 (6), the Division of Finance shall
             479      deposit into the Transportation Investment Fund of 2005 created by Section 72-2-124 the
             480      amount of tax revenue generated by a .025% tax rate on the transactions described in
             481      Subsection (1).
             482          (ii) For purposes of Subsection (11)(b)(i), the Division of Finance may not deposit into
             483      the Transportation Investment Fund of 2005 any tax revenue generated by amounts paid or
             484      charged for food and food ingredients, except for tax revenue generated by a bundled
             485      transaction attributable to food and food ingredients and tangible personal property other than
             486      food and food ingredients described in Subsection (2)(e).
             487          (12) (a) Notwithstanding Subsection (3)(a), and except as provided in Subsection
             488      (12)(b), beginning on January 1, 2009, the Division of Finance shall deposit into the
             489      Transportation Fund created by Section 72-2-102 the amount of tax revenue generated by a
             490      .025% tax rate on the transactions described in Subsection (1) to be expended to address


             491      chokepoints in construction management.
             492          (b) For purposes of Subsection (12)(a), the Division of Finance may not deposit into
             493      the Transportation Fund any tax revenue generated by amounts paid or charged for food and
             494      food ingredients, except for tax revenue generated by a bundled transaction attributable to food
             495      and food ingredients and tangible personal property other than food and food ingredients
             496      described in Subsection (2)(e).
             497          Section 3. Section 59-12-104 is amended to read:
             498           59-12-104. Exemptions.
             499          The following sales and uses are exempt from the taxes imposed by this chapter:
             500          (1) sales of aviation fuel, motor fuel, and special fuel subject to a Utah state excise tax
             501      under Chapter 13, Motor and Special Fuel Tax Act;
             502          (2) sales to the state, its institutions, and its political subdivisions; however, this
             503      exemption does not apply to sales of:
             504          (a) construction materials except:
             505          (i) construction materials purchased by or on behalf of institutions of the public
             506      education system as defined in Utah Constitution Article X, Section 2, provided the
             507      construction materials are clearly identified and segregated and installed or converted to real
             508      property which is owned by institutions of the public education system; and
             509          (ii) construction materials purchased by the state, its institutions, or its political
             510      subdivisions which are installed or converted to real property by employees of the state, its
             511      institutions, or its political subdivisions; or
             512          (b) tangible personal property in connection with the construction, operation,
             513      maintenance, repair, or replacement of a project, as defined in Section 11-13-103 , or facilities
             514      providing additional project capacity, as defined in Section 11-13-103 ;
             515          (3) (a) sales of an item described in Subsection (3)(b) from a vending machine if:
             516          (i) the proceeds of each sale do not exceed $1; and
             517          (ii) the seller or operator of the vending machine reports an amount equal to 150% of
             518      the cost of the item described in Subsection (3)(b) as goods consumed; and
             519          (b) Subsection (3)(a) applies to:
             520          (i) food and food ingredients; or
             521          (ii) prepared food;


             522          (4) (a) sales of the following to a commercial airline carrier for in-flight consumption:
             523          (i) alcoholic beverages;
             524          [(a)] (ii) food and food ingredients; or
             525          [(b)] (iii) prepared food; [or]
             526          (b) sales of tangible personal property or a product transferred electronically:
             527          (i) to a passenger;
             528          (ii) by a commercial airline carrier; and
             529          (iii) during a flight for in-flight consumption or in-flight use by the passenger; or
             530          (c) services related to Subsection (4)(a) or (b);
             531          (5) (a) (i) beginning on July 1, 2008, and ending on September 30, 2008, sales of parts
             532      and equipment:
             533          (A) (I) by an establishment described in NAICS Code 336411 or 336412 of the 2002
             534      North American Industry Classification System of the federal Executive Office of the
             535      President, Office of Management and Budget; and
             536          (II) for:
             537          (Aa) installation in an aircraft, including services relating to the installation of parts or
             538      equipment in the aircraft;
             539          (Bb) renovation of an aircraft; or
             540          (Cc) repair of an aircraft; or
             541          (B) for installation in an aircraft operated by a common carrier in interstate or foreign
             542      commerce; or
             543          (ii) beginning on October 1, 2008, sales of parts and equipment for installation in an
             544      aircraft operated by a common carrier in interstate or foreign commerce; and
             545          (b) notwithstanding the time period of Subsection 59-12-110 (2) for filing for a refund,
             546      a person may claim the exemption allowed by Subsection (5)(a)(i)(B) for a sale by filing for a
             547      refund:
             548          (i) if the sale is made on or after July 1, 2008, but on or before September 30, 2008;
             549          (ii) as if Subsection (5)(a)(i)(B) were in effect on the day on which the sale is made;
             550          (iii) if the person did not claim the exemption allowed by Subsection (5)(a)(i)(B) for
             551      the sale prior to filing for the refund;
             552          (iv) for sales and use taxes paid under this chapter on the sale;


             553          (v) in accordance with Section 59-12-110 ; and
             554          (vi) subject to any extension allowed for filing for a refund under Section 59-12-110 , if
             555      the person files for the refund on or before September 30, 2011;
             556          (6) sales of commercials, motion picture films, prerecorded audio program tapes or
             557      records, and prerecorded video tapes by a producer, distributor, or studio to a motion picture
             558      exhibitor, distributor, or commercial television or radio broadcaster;
             559          (7) (a) subject to Subsection (7)(b), sales of cleaning or washing of tangible personal
             560      property if the cleaning or washing of the tangible personal property is not assisted cleaning or
             561      washing of tangible personal property;
             562          (b) if a seller that sells at the same business location assisted cleaning or washing of
             563      tangible personal property and cleaning or washing of tangible personal property that is not
             564      assisted cleaning or washing of tangible personal property, the exemption described in
             565      Subsection (7)(a) applies if the seller separately accounts for the sales of the assisted cleaning
             566      or washing of the tangible personal property; and
             567          (c) for purposes of Subsection (7)(b) and in accordance with Title 63G, Chapter 3,
             568      Utah Administrative Rulemaking Act, the commission may make rules:
             569          (i) governing the circumstances under which sales are at the same business location;
             570      and
             571          (ii) establishing the procedures and requirements for a seller to separately account for
             572      sales of assisted cleaning or washing of tangible personal property;
             573          (8) sales made to or by religious or charitable institutions in the conduct of their regular
             574      religious or charitable functions and activities, if the requirements of Section 59-12-104.1 are
             575      fulfilled;
             576          (9) sales of a vehicle of a type required to be registered under the motor vehicle laws of
             577      this state if the vehicle is:
             578          (a) not registered in this state; and
             579          (b) (i) not used in this state; or
             580          (ii) used in this state:
             581          (A) if the vehicle is not used to conduct business, for a time period that does not
             582      exceed the longer of:
             583          (I) 30 days in any calendar year; or


             584          (II) the time period necessary to transport the vehicle to the borders of this state; or
             585          (B) if the vehicle is used to conduct business, for the time period necessary to transport
             586      the vehicle to the borders of this state;
             587          (10) (a) amounts paid for an item described in Subsection (10)(b) if:
             588          (i) the item is intended for human use; and
             589          (ii) (A) a prescription was issued for the item; or
             590          (B) the item was purchased by a hospital or other medical facility; and
             591          (b) (i) Subsection (10)(a) applies to:
             592          (A) a drug;
             593          (B) a syringe; or
             594          (C) a stoma supply; and
             595          (ii) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             596      commission may by rule define the terms:
             597          (A) "syringe"; or
             598          (B) "stoma supply";
             599          (11) sales or use of property, materials, or services used in the construction of or
             600      incorporated in pollution control facilities allowed by Sections 19-2-123 through 19-2-127 ;
             601          (12) (a) sales of an item described in Subsection (12)(c) served by:
             602          (i) the following if the item described in Subsection (12)(c) is not available to the
             603      general public:
             604          (A) a church; or
             605          (B) a charitable institution;
             606          (ii) an institution of higher education if:
             607          (A) the item described in Subsection (12)(c) is not available to the general public; or
             608          (B) the item described in Subsection (12)(c) is prepaid as part of a student meal plan
             609      offered by the institution of higher education; or
             610          (b) sales of an item described in Subsection (12)(c) provided for a patient by:
             611          (i) a medical facility; or
             612          (ii) a nursing facility; and
             613          (c) Subsections (12)(a) and (b) apply to:
             614          (i) food and food ingredients;


             615          (ii) prepared food; or
             616          (iii) alcoholic beverages;
             617          (13) (a) except as provided in Subsection (13)(b), the sale of tangible personal property
             618      or a product transferred electronically by a person:
             619          (i) regardless of the number of transactions involving the sale of that tangible personal
             620      property or product transferred electronically by that person; and
             621          (ii) not regularly engaged in the business of selling that type of tangible personal
             622      property or product transferred electronically;
             623          (b) this Subsection (13) does not apply if:
             624          (i) the sale is one of a series of sales of a character to indicate that the person is
             625      regularly engaged in the business of selling that type of tangible personal property or product
             626      transferred electronically;
             627          (ii) the person holds that person out as regularly engaged in the business of selling that
             628      type of tangible personal property or product transferred electronically;
             629          (iii) the person sells an item of tangible personal property or product transferred
             630      electronically that the person purchased as a sale that is exempt under Subsection (25); or
             631          (iv) the sale is of a vehicle or vessel required to be titled or registered under the laws of
             632      this state in which case the tax is based upon:
             633          (A) the bill of sale or other written evidence of value of the vehicle or vessel being
             634      sold; or
             635          (B) in the absence of a bill of sale or other written evidence of value, the fair market
             636      value of the vehicle or vessel being sold at the time of the sale as determined by the
             637      commission; and
             638          (c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             639      commission shall make rules establishing the circumstances under which:
             640          (i) a person is regularly engaged in the business of selling a type of tangible personal
             641      property or product transferred electronically;
             642          (ii) a sale of tangible personal property or a product transferred electronically is one of
             643      a series of sales of a character to indicate that a person is regularly engaged in the business of
             644      selling that type of tangible personal property or product transferred electronically; or
             645          (iii) a person holds that person out as regularly engaged in the business of selling a type


             646      of tangible personal property or product transferred electronically;
             647          (14) (a) except as provided in Subsection (14)(b), amounts paid or charged on or after
             648      July 1, 2006, for a purchase or lease by a manufacturing facility other than a cogeneration
             649      facility, for the following:
             650          (i) machinery and equipment that:
             651          (A) is used:
             652          (I) for a manufacturing facility other than a manufacturing facility that is a scrap
             653      recycler described in Subsection 59-12-102 (52)(b):
             654          (Aa) in the manufacturing process; and
             655          (Bb) to manufacture an item sold as tangible personal property; or
             656          (II) for a manufacturing facility that is a scrap recycler described in Subsection
             657      59-12-102 (52)(b), to process an item sold as tangible personal property; and
             658          (B) has an economic life of three or more years; and
             659          (ii) normal operating repair or replacement parts that:
             660          (A) have an economic life of three or more years; and
             661          (B) are used:
             662          (I) for a manufacturing facility in the state other than a manufacturing facility that is a
             663      scrap recycler described in Subsection 59-12-102 (52)(b), in the manufacturing process; or
             664          (II) for a manufacturing facility in the state that is a scrap recycler described in
             665      Subsection 59-12-102 (52)(b), to process an item sold as tangible personal property;
             666          (b) (i) amounts paid or charged on or after July 1, 2005, for a purchase or lease by a
             667      manufacturing facility that is a cogeneration facility placed in service on or after May 1, 2006,
             668      for the following:
             669          (A) machinery and equipment that:
             670          (I) is used:
             671          (Aa) in the manufacturing process; and
             672          (Bb) to manufacture an item sold as tangible personal property; and
             673          (II) has an economic life of three or more years; and
             674          (B) normal operating repair or replacement parts that:
             675          (I) are used in the manufacturing process in a manufacturing facility in the state; and
             676          (II) have an economic life of three or more years; and


             677          (ii) for amounts paid or charged on or after July 1, 2005, but on or before June 30,
             678      2006, for a purchase or lease described in Subsection (14)(b)(i), a cogeneration facility may
             679      claim the exemption allowed by Subsection (14)(b)(i) by filing for a refund:
             680          (A) for sales and use taxes paid under this chapter on the purchase or lease payment;
             681      and
             682          (B) in accordance with Section 59-12-110 ;
             683          (c) amounts paid or charged for a purchase or lease made on or after January 1, 2008,
             684      by an establishment described in NAICS Subsector 212, Mining (except Oil and Gas), or
             685      NAICS Code 213113, Support Activities for Coal Mining, 213114, Support Activities for
             686      Metal Mining, or 213115, Support Activities for Nonmetallic Minerals (except Fuels) Mining,
             687      of the 2002 North American Industry Classification System of the federal Executive Office of
             688      the President, Office of Management and Budget:
             689          (i) machinery and equipment that:
             690          (A) are used in:
             691          (I) the production process, other than the production of real property; or
             692          (II) research and development; and
             693          (B) have an economic life of three or more years; and
             694          (ii) normal operating repair or replacement parts that:
             695          (A) have an economic life of three or more years; and
             696          (B) are used in:
             697          (I) the production process, other than the production of real property, in an
             698      establishment described in this Subsection (14)(c) in the state; or
             699          (II) research and development in an establishment described in this Subsection (14)(c)
             700      in the state;
             701          (d) for purposes of this Subsection (14) and in accordance with Title 63G, Chapter 3,
             702      Utah Administrative Rulemaking Act, the commission:
             703          (i) shall by rule define the term "establishment"; and
             704          (ii) may by rule define what constitutes:
             705          (A) processing an item sold as tangible personal property;
             706          (B) the production process, other than the production of real property; or
             707          (C) research and development; and


             708          (e) on or before October 1, 2011, and every five years after October 1, 2011, the
             709      commission shall:
             710          (i) review the exemptions described in this Subsection (14) and make
             711      recommendations to the Revenue and Taxation Interim Committee concerning whether the
             712      exemptions should be continued, modified, or repealed; and
             713          (ii) include in its report:
             714          (A) the cost of the exemptions;
             715          (B) the purpose and effectiveness of the exemptions; and
             716          (C) the benefits of the exemptions to the state;
             717          (15) (a) sales of the following if the requirements of Subsection (15)(b) are met:
             718          (i) tooling;
             719          (ii) special tooling;
             720          (iii) support equipment;
             721          (iv) special test equipment; or
             722          (v) parts used in the repairs or renovations of tooling or equipment described in
             723      Subsections (15)(a)(i) through (iv); and
             724          (b) sales of tooling, equipment, or parts described in Subsection (15)(a) are exempt if:
             725          (i) the tooling, equipment, or parts are used or consumed exclusively in the
             726      performance of any aerospace or electronics industry contract with the United States
             727      government or any subcontract under that contract; and
             728          (ii) under the terms of the contract or subcontract described in Subsection (15)(b)(i),
             729      title to the tooling, equipment, or parts is vested in the United States government as evidenced
             730      by:
             731          (A) a government identification tag placed on the tooling, equipment, or parts; or
             732          (B) listing on a government-approved property record if placing a government
             733      identification tag on the tooling, equipment, or parts is impractical;
             734          (16) sales of newspapers or newspaper subscriptions;
             735          (17) (a) except as provided in Subsection (17)(b), tangible personal property or a
             736      product transferred electronically traded in as full or part payment of the purchase price, except
             737      that for purposes of calculating sales or use tax upon vehicles not sold by a vehicle dealer,
             738      trade-ins are limited to other vehicles only, and the tax is based upon:


             739          (i) the bill of sale or other written evidence of value of the vehicle being sold and the
             740      vehicle being traded in; or
             741          (ii) in the absence of a bill of sale or other written evidence of value, the then existing
             742      fair market value of the vehicle being sold and the vehicle being traded in, as determined by the
             743      commission; and
             744          (b) notwithstanding Subsection (17)(a), Subsection (17)(a) does not apply to the
             745      following items of tangible personal property or products transferred electronically traded in as
             746      full or part payment of the purchase price:
             747          (i) money;
             748          (ii) electricity;
             749          (iii) water;
             750          (iv) gas; or
             751          (v) steam;
             752          (18) (a) (i) except as provided in Subsection (18)(b), sales of tangible personal property
             753      or a product transferred electronically used or consumed primarily and directly in farming
             754      operations, regardless of whether the tangible personal property or product transferred
             755      electronically:
             756          (A) becomes part of real estate; or
             757          (B) is installed by a:
             758          (I) farmer;
             759          (II) contractor; or
             760          (III) subcontractor; or
             761          (ii) sales of parts used in the repairs or renovations of tangible personal property or a
             762      product transferred electronically if the tangible personal property or product transferred
             763      electronically is exempt under Subsection (18)(a)(i); and
             764          (b) notwithstanding Subsection (18)(a), amounts paid or charged for the following are
             765      subject to the taxes imposed by this chapter:
             766          (i) (A) subject to Subsection (18)(b)(i)(B), the following if used in a manner that is
             767      incidental to farming:
             768          (I) machinery;
             769          (II) equipment;


             770          (III) materials; or
             771          (IV) supplies; and
             772          (B) tangible personal property that is considered to be used in a manner that is
             773      incidental to farming includes:
             774          (I) hand tools; or
             775          (II) maintenance and janitorial equipment and supplies;
             776          (ii) (A) subject to Subsection (18)(b)(ii)(B), tangible personal property or a product
             777      transferred electronically if the tangible personal property or product transferred electronically
             778      is used in an activity other than farming; and
             779          (B) tangible personal property or a product transferred electronically that is considered
             780      to be used in an activity other than farming includes:
             781          (I) office equipment and supplies; or
             782          (II) equipment and supplies used in:
             783          (Aa) the sale or distribution of farm products;
             784          (Bb) research; or
             785          (Cc) transportation; or
             786          (iii) a vehicle required to be registered by the laws of this state during the period
             787      ending two years after the date of the vehicle's purchase;
             788          (19) sales of hay;
             789          (20) exclusive sale during the harvest season of seasonal crops, seedling plants, or
             790      garden, farm, or other agricultural produce if the seasonal crops are, seedling plants are, or
             791      garden, farm, or other agricultural produce is sold by:
             792          (a) the producer of the seasonal crops, seedling plants, or garden, farm, or other
             793      agricultural produce;
             794          (b) an employee of the producer described in Subsection (20)(a); or
             795          (c) a member of the immediate family of the producer described in Subsection (20)(a);
             796          (21) purchases made using a coupon as defined in 7 U.S.C. Sec. 2012 that is issued
             797      under the Food Stamp Program, 7 U.S.C. Sec. 2011 et seq.;
             798          (22) sales of nonreturnable containers, nonreturnable labels, nonreturnable bags,
             799      nonreturnable shipping cases, and nonreturnable casings to a manufacturer, processor,
             800      wholesaler, or retailer for use in packaging tangible personal property to be sold by that


             801      manufacturer, processor, wholesaler, or retailer;
             802          (23) a product stored in the state for resale;
             803          (24) (a) purchases of a product if:
             804          (i) the product is:
             805          (A) purchased outside of this state;
             806          (B) brought into this state:
             807          (I) at any time after the purchase described in Subsection (24)(a)(i)(A); and
             808          (II) by a nonresident person who is not living or working in this state at the time of the
             809      purchase;
             810          (C) used for the personal use or enjoyment of the nonresident person described in
             811      Subsection (24)(a)(i)(B)(II) while that nonresident person is within the state; and
             812          (D) not used in conducting business in this state; and
             813          (ii) for:
             814          (A) a product other than a boat described in Subsection (24)(a)(ii)(B), the first use of
             815      the product for a purpose for which the product is designed occurs outside of this state;
             816          (B) a boat, the boat is registered outside of this state; or
             817          (C) a vehicle other than a vehicle sold to an authorized carrier, the vehicle is registered
             818      outside of this state;
             819          (b) the exemption provided for in Subsection (24)(a) does not apply to:
             820          (i) a lease or rental of a product; or
             821          (ii) a sale of a vehicle exempt under Subsection (33); and
             822          (c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, for
             823      purposes of Subsection (24)(a), the commission may by rule define what constitutes the
             824      following:
             825          (i) conducting business in this state if that phrase has the same meaning in this
             826      Subsection (24) as in Subsection (64);
             827          (ii) the first use of a product if that phrase has the same meaning in this Subsection (24)
             828      as in Subsection (64); or
             829          (iii) a purpose for which a product is designed if that phrase has the same meaning in
             830      this Subsection (24) as in Subsection (64);
             831          (25) a product purchased for resale in this state, in the regular course of business, either


             832      in its original form or as an ingredient or component part of a manufactured or compounded
             833      product;
             834          (26) a product upon which a sales or use tax was paid to some other state, or one of its
             835      subdivisions, except that the state shall be paid any difference between the tax paid and the tax
             836      imposed by this part and Part 2, Local Sales and Use Tax Act, and no adjustment is allowed if
             837      the tax paid was greater than the tax imposed by this part and Part 2, Local Sales and Use Tax
             838      Act;
             839          (27) any sale of a service described in Subsections 59-12-103 (1)(b), (c), and (d) to a
             840      person for use in compounding a service taxable under the subsections;
             841          (28) purchases made in accordance with the special supplemental nutrition program for
             842      women, infants, and children established in 42 U.S.C. Sec. 1786;
             843          (29) beginning on July 1, 1999, through June 30, 2014, sales or leases of rolls, rollers,
             844      refractory brick, electric motors, or other replacement parts used in the furnaces, mills, or ovens
             845      of a steel mill described in SIC Code 3312 of the 1987 Standard Industrial Classification
             846      Manual of the federal Executive Office of the President, Office of Management and Budget;
             847          (30) sales of a boat of a type required to be registered under Title 73, Chapter 18, State
             848      Boating Act, a boat trailer, or an outboard motor if the boat, boat trailer, or outboard motor is:
             849          (a) not registered in this state; and
             850          (b) (i) not used in this state; or
             851          (ii) used in this state:
             852          (A) if the boat, boat trailer, or outboard motor is not used to conduct business, for a
             853      time period that does not exceed the longer of:
             854          (I) 30 days in any calendar year; or
             855          (II) the time period necessary to transport the boat, boat trailer, or outboard motor to
             856      the borders of this state; or
             857          (B) if the boat, boat trailer, or outboard motor is used to conduct business, for the time
             858      period necessary to transport the boat, boat trailer, or outboard motor to the borders of this
             859      state;
             860          (31) sales of aircraft manufactured in Utah;
             861          (32) amounts paid for the purchase of telecommunications service for purposes of
             862      providing telecommunications service;


             863          (33) sales, leases, or uses of the following:
             864          (a) a vehicle by an authorized carrier; or
             865          (b) tangible personal property that is installed on a vehicle:
             866          (i) sold or leased to or used by an authorized carrier; and
             867          (ii) before the vehicle is placed in service for the first time;
             868          (34) (a) 45% of the sales price of any new manufactured home; and
             869          (b) 100% of the sales price of any used manufactured home;
             870          (35) sales relating to schools and fundraising sales;
             871          (36) sales or rentals of durable medical equipment if:
             872          (a) a person presents a prescription for the durable medical equipment; and
             873          (b) the durable medical equipment is used for home use only;
             874          (37) (a) sales to a ski resort of electricity to operate a passenger ropeway as defined in
             875      Section 72-11-102 ; and
             876          (b) the commission shall by rule determine the method for calculating sales exempt
             877      under Subsection (37)(a) that are not separately metered and accounted for in utility billings;
             878          (38) sales to a ski resort of:
             879          (a) snowmaking equipment;
             880          (b) ski slope grooming equipment;
             881          (c) passenger ropeways as defined in Section 72-11-102 ; or
             882          (d) parts used in the repairs or renovations of equipment or passenger ropeways
             883      described in Subsections (38)(a) through (c);
             884          (39) sales of natural gas, electricity, heat, coal, fuel oil, or other fuels for industrial use;
             885          (40) (a) subject to Subsection (40)(b), sales or rentals of the right to use or operate for
             886      amusement, entertainment, or recreation an unassisted amusement device as defined in Section
             887      59-12-102 ;
             888          (b) if a seller that sells or rents at the same business location the right to use or operate
             889      for amusement, entertainment, or recreation one or more unassisted amusement devices and
             890      one or more assisted amusement devices, the exemption described in Subsection (40)(a)
             891      applies if the seller separately accounts for the sales or rentals of the right to use or operate for
             892      amusement, entertainment, or recreation for the assisted amusement devices; and
             893          (c) for purposes of Subsection (40)(b) and in accordance with Title 63G, Chapter 3,


             894      Utah Administrative Rulemaking Act, the commission may make rules:
             895          (i) governing the circumstances under which sales are at the same business location;
             896      and
             897          (ii) establishing the procedures and requirements for a seller to separately account for
             898      the sales or rentals of the right to use or operate for amusement, entertainment, or recreation for
             899      assisted amusement devices;
             900          (41) (a) sales of photocopies by:
             901          (i) a governmental entity; or
             902          (ii) an entity within the state system of public education, including:
             903          (A) a school; or
             904          (B) the State Board of Education; or
             905          (b) sales of publications by a governmental entity;
             906          (42) amounts paid for admission to an athletic event at an institution of higher
             907      education that is subject to the provisions of Title IX of the Education Amendments of 1972,
             908      20 U.S.C. Sec. 1681 et seq.;
             909          (43) sales of telecommunications service charged to a prepaid telephone calling card;
             910          (44) (a) sales made to or by:
             911          (i) an area agency on aging; or
             912          (ii) a senior citizen center owned by a county, city, or town; or
             913          (b) sales made by a senior citizen center that contracts with an area agency on aging;
             914          (45) sales or leases of semiconductor fabricating, processing, research, or development
             915      materials regardless of whether the semiconductor fabricating, processing, research, or
             916      development materials:
             917          (a) actually come into contact with a semiconductor; or
             918          (b) ultimately become incorporated into real property;
             919          (46) an amount paid by or charged to a purchaser for accommodations and services
             920      described in Subsection 59-12-103 (1)(i) to the extent the amount is exempt under Section
             921      59-12-104.2 ;
             922          (47) beginning on September 1, 2001, the lease or use of a vehicle issued a temporary
             923      sports event registration certificate in accordance with Section 41-3-306 for the event period
             924      specified on the temporary sports event registration certificate;


             925          (48) sales or uses of electricity, if the sales or uses are:
             926          (a) made under a tariff adopted by the Public Service Commission of Utah only for
             927      purchase of electricity produced from a new wind, geothermal, biomass, or solar power energy
             928      source, as designated in the tariff by the Public Service Commission of Utah; and
             929          (b) for an amount of electricity that is:
             930          (i) unrelated to the amount of electricity used by the person purchasing the electricity
             931      under the tariff described in Subsection (48)(a); and
             932          (ii) equivalent to the number of kilowatthours specified in the tariff described in
             933      Subsection (48)(a) that may be purchased under the tariff described in Subsection (48)(a);
             934          (49) sales or rentals of mobility enhancing equipment if a person presents a
             935      prescription for the mobility enhancing equipment;
             936          (50) sales of water in a:
             937          (a) pipe;
             938          (b) conduit;
             939          (c) ditch; or
             940          (d) reservoir;
             941          (51) sales of currency or coinage that constitute legal tender of the United States or of a
             942      foreign nation;
             943          (52) (a) sales of an item described in Subsection (52)(b) if the item:
             944          (i) does not constitute legal tender of any nation; and
             945          (ii) has a gold, silver, or platinum content of 80% or more; and
             946          (b) Subsection (52)(a) applies to a gold, silver, or platinum:
             947          (i) ingot;
             948          (ii) bar;
             949          (iii) medallion; or
             950          (iv) decorative coin;
             951          (53) amounts paid on a sale-leaseback transaction;
             952          (54) sales of a prosthetic device:
             953          (a) for use on or in a human; and
             954          (b) (i) for which a prescription is required; or
             955          (ii) if the prosthetic device is purchased by a hospital or other medical facility;


             956          (55) (a) except as provided in Subsection (55)(b), purchases, leases, or rentals of
             957      machinery or equipment by an establishment described in Subsection (55)(c) if the machinery
             958      or equipment is primarily used in the production or postproduction of the following media for
             959      commercial distribution:
             960          (i) a motion picture;
             961          (ii) a television program;
             962          (iii) a movie made for television;
             963          (iv) a music video;
             964          (v) a commercial;
             965          (vi) a documentary; or
             966          (vii) a medium similar to Subsections (55)(a)(i) through (vi) as determined by the
             967      commission by administrative rule made in accordance with Subsection (55)(d); or
             968          (b) notwithstanding Subsection (55)(a), purchases, leases, or rentals of machinery or
             969      equipment by an establishment described in Subsection (55)(c) that is used for the production
             970      or postproduction of the following are subject to the taxes imposed by this chapter:
             971          (i) a live musical performance;
             972          (ii) a live news program; or
             973          (iii) a live sporting event;
             974          (c) the following establishments listed in the 1997 North American Industry
             975      Classification System of the federal Executive Office of the President, Office of Management
             976      and Budget, apply to Subsections (55)(a) and (b):
             977          (i) NAICS Code 512110; or
             978          (ii) NAICS Code 51219; and
             979          (d) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             980      commission may by rule:
             981          (i) prescribe what constitutes a medium similar to Subsections (55)(a)(i) through (vi);
             982      or
             983          (ii) define:
             984          (A) "commercial distribution";
             985          (B) "live musical performance";
             986          (C) "live news program"; or


             987          (D) "live sporting event";
             988          (56) (a) leases of seven or more years or purchases made on or after July 1, 2004 but on
             989      or before June 30, 2019, of machinery or equipment that:
             990          (i) is leased or purchased for or by a facility that:
             991          (A) is a renewable energy production facility;
             992          (B) is located in the state; and
             993          (C) (I) becomes operational on or after July 1, 2004; or
             994          (II) has its generation capacity increased by one or more megawatts on or after July 1,
             995      2004 as a result of the use of the machinery or equipment;
             996          (ii) has an economic life of five or more years; and
             997          (iii) is used to make the facility or the increase in capacity of the facility described in
             998      Subsection (56)(a)(i) operational up to the point of interconnection with an existing
             999      transmission grid including:
             1000          (A) a wind turbine;
             1001          (B) generating equipment;
             1002          (C) a control and monitoring system;
             1003          (D) a power line;
             1004          (E) substation equipment;
             1005          (F) lighting;
             1006          (G) fencing;
             1007          (H) pipes; or
             1008          (I) other equipment used for locating a power line or pole; and
             1009          (b) this Subsection (56) does not apply to:
             1010          (i) machinery or equipment used in construction of:
             1011          (A) a new renewable energy production facility; or
             1012          (B) the increase in the capacity of a renewable energy production facility;
             1013          (ii) contracted services required for construction and routine maintenance activities;
             1014      and
             1015          (iii) unless the machinery or equipment is used or acquired for an increase in capacity
             1016      of the facility described in Subsection (56)(a)(i)(C)(II), machinery or equipment used or
             1017      acquired after:


             1018          (A) the renewable energy production facility described in Subsection (56)(a)(i) is
             1019      operational as described in Subsection (56)(a)(iii); or
             1020          (B) the increased capacity described in Subsection (56)(a)(i) is operational as described
             1021      in Subsection (56)(a)(iii);
             1022          (57) (a) leases of seven or more years or purchases made on or after July 1, 2004 but on
             1023      or before June 30, 2019, of machinery or equipment that:
             1024          (i) is leased or purchased for or by a facility that:
             1025          (A) is a waste energy production facility;
             1026          (B) is located in the state; and
             1027          (C) (I) becomes operational on or after July 1, 2004; or
             1028          (II) has its generation capacity increased by one or more megawatts on or after July 1,
             1029      2004 as a result of the use of the machinery or equipment;
             1030          (ii) has an economic life of five or more years; and
             1031          (iii) is used to make the facility or the increase in capacity of the facility described in
             1032      Subsection (57)(a)(i) operational up to the point of interconnection with an existing
             1033      transmission grid including:
             1034          (A) generating equipment;
             1035          (B) a control and monitoring system;
             1036          (C) a power line;
             1037          (D) substation equipment;
             1038          (E) lighting;
             1039          (F) fencing;
             1040          (G) pipes; or
             1041          (H) other equipment used for locating a power line or pole; and
             1042          (b) this Subsection (57) does not apply to:
             1043          (i) machinery or equipment used in construction of:
             1044          (A) a new waste energy facility; or
             1045          (B) the increase in the capacity of a waste energy facility;
             1046          (ii) contracted services required for construction and routine maintenance activities;
             1047      and
             1048          (iii) unless the machinery or equipment is used or acquired for an increase in capacity


             1049      described in Subsection (57)(a)(i)(C)(II), machinery or equipment used or acquired after:
             1050          (A) the waste energy facility described in Subsection (57)(a)(i) is operational as
             1051      described in Subsection (57)(a)(iii); or
             1052          (B) the increased capacity described in Subsection (57)(a)(i) is operational as described
             1053      in Subsection (57)(a)(iii);
             1054          (58) (a) leases of five or more years or purchases made on or after July 1, 2004 but on
             1055      or before June 30, 2019, of machinery or equipment that:
             1056          (i) is leased or purchased for or by a facility that:
             1057          (A) is located in the state;
             1058          (B) produces fuel from biomass energy including:
             1059          (I) methanol; or
             1060          (II) ethanol; and
             1061          (C) (I) becomes operational on or after July 1, 2004; or
             1062          (II) has its capacity to produce fuel increase by 25% or more on or after July 1, 2004 as
             1063      a result of the installation of the machinery or equipment;
             1064          (ii) has an economic life of five or more years; and
             1065          (iii) is installed on the facility described in Subsection (58)(a)(i);
             1066          (b) this Subsection (58) does not apply to:
             1067          (i) machinery or equipment used in construction of:
             1068          (A) a new facility described in Subsection (58)(a)(i); or
             1069          (B) the increase in capacity of the facility described in Subsection (58)(a)(i); or
             1070          (ii) contracted services required for construction and routine maintenance activities;
             1071      and
             1072          (iii) unless the machinery or equipment is used or acquired for an increase in capacity
             1073      described in Subsection (58)(a)(i)(C)(II), machinery or equipment used or acquired after:
             1074          (A) the facility described in Subsection (58)(a)(i) is operational; or
             1075          (B) the increased capacity described in Subsection (58)(a)(i) is operational;
             1076          (59) (a) subject to Subsection (59)(b) or (c), sales of tangible personal property or a
             1077      product transferred electronically to a person within this state if that tangible personal property
             1078      or product transferred electronically is subsequently shipped outside the state and incorporated
             1079      pursuant to contract into and becomes a part of real property located outside of this state;


             1080          (b) the exemption under Subsection (59)(a) is not allowed to the extent that the other
             1081      state or political entity to which the tangible personal property is shipped imposes a sales, use,
             1082      gross receipts, or other similar transaction excise tax on the transaction against which the other
             1083      state or political entity allows a credit for sales and use taxes imposed by this chapter; and
             1084          (c) notwithstanding the time period of Subsection 59-12-110 (2)(b) for filing for a
             1085      refund, a person may claim the exemption allowed by this Subsection (59) for a sale by filing
             1086      for a refund:
             1087          (i) if the sale is made on or after July 1, 2004, but on or before June 30, 2008;
             1088          (ii) as if this Subsection (59) as in effect on July 1, 2008, were in effect on the day on
             1089      which the sale is made;
             1090          (iii) if the person did not claim the exemption allowed by this Subsection (59) for the
             1091      sale prior to filing for the refund;
             1092          (iv) for sales and use taxes paid under this chapter on the sale;
             1093          (v) in accordance with Section 59-12-110 ; and
             1094          (vi) subject to any extension allowed for filing for a refund under Section 59-12-110 , if
             1095      the person files for the refund on or before June 30, 2011;
             1096          (60) purchases:
             1097          (a) of one or more of the following items in printed or electronic format:
             1098          (i) a list containing information that includes one or more:
             1099          (A) names; or
             1100          (B) addresses; or
             1101          (ii) a database containing information that includes one or more:
             1102          (A) names; or
             1103          (B) addresses; and
             1104          (b) used to send direct mail;
             1105          (61) redemptions or repurchases of a product by a person if that product was:
             1106          (a) delivered to a pawnbroker as part of a pawn transaction; and
             1107          (b) redeemed or repurchased within the time period established in a written agreement
             1108      between the person and the pawnbroker for redeeming or repurchasing the product;
             1109          (62) (a) purchases or leases of an item described in Subsection (62)(b) if the item:
             1110          (i) is purchased or leased by, or on behalf of, a telecommunications service provider;


             1111      and
             1112          (ii) has a useful economic life of one or more years; and
             1113          (b) the following apply to Subsection (62)(a):
             1114          (i) telecommunications enabling or facilitating equipment, machinery, or software;
             1115          (ii) telecommunications equipment, machinery, or software required for 911 service;
             1116          (iii) telecommunications maintenance or repair equipment, machinery, or software;
             1117          (iv) telecommunications switching or routing equipment, machinery, or software; or
             1118          (v) telecommunications transmission equipment, machinery, or software;
             1119          (63) (a) beginning on July 1, 2006, and ending on June 30, 2016, purchases of tangible
             1120      personal property or a product transferred electronically that are used in the research and
             1121      development of coal-to-liquids, oil shale, or tar sands technology; and
             1122          (b) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1123      commission may, for purposes of Subsection (63)(a), make rules defining what constitutes
             1124      purchases of tangible personal property or a product transferred electronically that are used in
             1125      the research and development of coal-to-liquids, oil shale, and tar sands technology;
             1126          (64) (a) purchases of tangible personal property or a product transferred electronically
             1127      if:
             1128          (i) the tangible personal property or product transferred electronically is:
             1129          (A) purchased outside of this state;
             1130          (B) brought into this state at any time after the purchase described in Subsection
             1131      (64)(a)(i)(A); and
             1132          (C) used in conducting business in this state; and
             1133          (ii) for:
             1134          (A) tangible personal property or a product transferred electronically other than the
             1135      tangible personal property described in Subsection (64)(a)(ii)(B), the first use of the property
             1136      for a purpose for which the property is designed occurs outside of this state; or
             1137          (B) a vehicle other than a vehicle sold to an authorized carrier, the vehicle is registered
             1138      outside of this state;
             1139          (b) the exemption provided for in Subsection (64)(a) does not apply to:
             1140          (i) a lease or rental of tangible personal property or a product transferred electronically;
             1141      or


             1142          (ii) a sale of a vehicle exempt under Subsection (33); and
             1143          (c) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, for
             1144      purposes of Subsection (64)(a), the commission may by rule define what constitutes the
             1145      following:
             1146          (i) conducting business in this state if that phrase has the same meaning in this
             1147      Subsection (64) as in Subsection (24);
             1148          (ii) the first use of tangible personal property or a product transferred electronically if
             1149      that phrase has the same meaning in this Subsection (64) as in Subsection (24); or
             1150          (iii) a purpose for which tangible personal property or a product transferred
             1151      electronically is designed if that phrase has the same meaning in this Subsection (64) as in
             1152      Subsection (24);
             1153          (65) sales of disposable home medical equipment or supplies if:
             1154          (a) a person presents a prescription for the disposable home medical equipment or
             1155      supplies;
             1156          (b) the disposable home medical equipment or supplies are used exclusively by the
             1157      person to whom the prescription described in Subsection (65)(a) is issued; and
             1158          (c) the disposable home medical equipment and supplies are listed as eligible for
             1159      payment under:
             1160          (i) Title XVIII, federal Social Security Act; or
             1161          (ii) the state plan for medical assistance under Title XIX, federal Social Security Act;
             1162          (66) sales:
             1163          (a) to a public transit district under Title 17B, Chapter 2a, Part 8, Public Transit
             1164      District Act; or
             1165          (b) of tangible personal property to a subcontractor of a public transit district, if the
             1166      tangible personal property is:
             1167          (i) clearly identified; and
             1168          (ii) installed or converted to real property owned by the public transit district;
             1169          (67) sales of construction materials:
             1170          (a) purchased on or after July 1, 2010;
             1171          (b) purchased by, on behalf of, or for the benefit of an international airport:
             1172          (i) located within a county of the first class; and


             1173          (ii) that has a United States customs office on its premises; and
             1174          (c) if the construction materials are:
             1175          (i) clearly identified;
             1176          (ii) segregated; and
             1177          (iii) installed or converted to real property:
             1178          (A) owned or operated by the international airport described in Subsection (67)(b); and
             1179          (B) located at the international airport described in Subsection (67)(b);
             1180          (68) sales of construction materials:
             1181          (a) purchased on or after July 1, 2008;
             1182          (b) purchased by, on behalf of, or for the benefit of a new airport:
             1183          (i) located within a county of the second class; and
             1184          (ii) that is owned or operated by a city in which an airline as defined in Section
             1185      59-2-102 is headquartered; and
             1186          (c) if the construction materials are:
             1187          (i) clearly identified;
             1188          (ii) segregated; and
             1189          (iii) installed or converted to real property:
             1190          (A) owned or operated by the new airport described in Subsection (68)(b);
             1191          (B) located at the new airport described in Subsection (68)(b); and
             1192          (C) as part of the construction of the new airport described in Subsection (68)(b); and
             1193          (69) sales of fuel to a common carrier that is a railroad for use in a locomotive engine.
             1194          Section 4. Section 59-12-204 is amended to read:
             1195           59-12-204. Sales and use tax ordinance provisions -- Tax rate -- Distribution of
             1196      tax revenues -- Commission requirement to retain an amount to be deposited into the
             1197      Qualified Emergency Food Agencies Fund.
             1198          (1) The tax ordinance adopted pursuant to this part shall impose a tax upon those
             1199      transactions listed in Subsection 59-12-103 (1).
             1200          (2) (a) The tax ordinance under Subsection (1) shall include a provision imposing a tax
             1201      upon every transaction listed in Subsection 59-12-103 (1) made within a county, including areas
             1202      contained within the cities and towns located in the county:
             1203          (i) at the rate of 1% of the purchase price paid or charged; and


             1204          (ii) if the transaction is consummated within the county in accordance with Section
             1205      59-12-205 .
             1206          (b) Notwithstanding Subsection (2)(a), a tax ordinance under this Subsection (2) shall
             1207      include a provision prohibiting a county, city, or town from imposing a tax under this section
             1208      on:
             1209          (i) the sales and uses described in Section 59-12-104 to the extent the sales and uses
             1210      are exempt from taxation under Section 59-12-104 ; and
             1211          (ii) any amounts paid or charged by a seller that collects a tax in accordance with
             1212      Subsection 59-12-107 (1)(b) unless all of the counties, cities, and towns in the state impose the
             1213      tax under this section.
             1214          (3) Such tax ordinance shall include provisions substantially the same as those
             1215      contained in Part 1, Tax Collection, insofar as they relate to sales or use tax, except that the
             1216      name of the county as the taxing agency shall be substituted for that of the state where
             1217      necessary for the purpose of this part and that an additional license is not required if one has
             1218      been or is issued under Section 59-12-106 .
             1219          (4) Such tax ordinance shall include a provision that the county shall contract, prior to
             1220      the effective date of the ordinance, with the commission to perform all functions incident to the
             1221      administration or operation of the ordinance.
             1222          (5) Such tax ordinance shall include a provision that the sale, storage, use, or other
             1223      consumption of tangible personal property, the purchase price or the cost of which has been
             1224      subject to sales or use tax under a sales and use tax ordinance enacted in accordance with this
             1225      part by any county, city, or town in any other county in this state, shall be exempt from the tax
             1226      due under this ordinance.
             1227          (6) Such tax ordinance shall include a provision that any person subject to the
             1228      provisions of a city or town sales and use tax shall be exempt from the county sales and use tax
             1229      if the city or town sales and use tax is levied under an ordinance including provisions in
             1230      substance as follows:
             1231          (a) a provision imposing a tax upon every transaction listed in Section 59-12-103 made
             1232      within the city or town at the rate imposed by the county in which it is situated pursuant to
             1233      Subsection (2);
             1234          (b) notwithstanding Subsection (2)(a), a provision prohibiting the city or town from


             1235      imposing a tax under this section on any amounts paid or charged by a seller that collects a tax
             1236      in accordance with Subsection 59-12-107 (1)(b) unless all of the counties, cities, and towns in
             1237      the state impose a tax under this section;
             1238          (c) provisions substantially the same as those contained in Part 1, Tax Collection,
             1239      insofar as they relate to sales and use taxes, except that the name of the city or town as the
             1240      taxing agency shall be substituted for that of the state where necessary for the purposes of this
             1241      part;
             1242          (d) a provision that the city or town shall contract prior to the effective date of the city
             1243      or town sales and use tax ordinance with the commission to perform all functions incident to
             1244      the administration or operation of the sales and use tax ordinance of the city or town;
             1245          (e) a provision that the sale, storage, use, or other consumption of tangible personal
             1246      property, the gross receipts from the sale of or the cost of which has been subject to sales or use
             1247      tax under a sales and use tax ordinance enacted in accordance with this part by any county
             1248      other than the county in which the city or town is located, or city or town in this state, shall be
             1249      exempt from the tax; and
             1250          (f) a provision that the amount of any tax paid under Part 1, Tax Collection, shall not
             1251      be included as a part of the purchase price paid or charged for a taxable item.
             1252          (7) Notwithstanding any other provision of this section, beginning July 1, 2000, the
             1253      commission shall:
             1254          (a) determine and retain the portion of sales and use tax imposed under this section:
             1255          (i) by each county and by each city and town within that county whose legislative body
             1256      consents by resolution to the commission's retaining and depositing sales and use tax revenues
             1257      as provided in this Subsection (7); and
             1258          (ii) that is equal to the revenues generated by a 1/64% tax rate;
             1259          (b) deposit the revenues described in Subsection (7)(a) into a special fund of the
             1260      county, or a city, town, or other political subdivision of the state located within that county, that
             1261      has issued bonds to finance sports or recreational facilities or that is leasing sports or
             1262      recreational facilities, in order to repay those bonds or to pay the lease payments; and
             1263          (c) continue to deposit those revenues into the special fund only as long as the bonds or
             1264      leases are outstanding.
             1265          (8) (a) Notwithstanding any other provision of this section, beginning on July 1, 2009,


             1266      the commission shall calculate and retain a portion of the sales and use tax collected under this
             1267      part as provided in this Subsection (8).
             1268          (b) For a city, town, or unincorporated area of a county that imposes a tax under this
             1269      part, the commission shall calculate a percentage each month by dividing the sales and use tax
             1270      collected under this part for that month within the boundaries of that city, town, or
             1271      unincorporated area of a county by the total sales and use tax collected under this part for that
             1272      month within the boundaries of all of the cities, towns, and unincorporated areas of the
             1273      counties that impose a tax under this part.
             1274          (c) For a city, town, or unincorporated area of a county that imposes a tax under this
             1275      part, the commission shall retain each month an amount equal to the product of:
             1276          (i) the percentage the commission determines for the month under Subsection (8)(b)
             1277      for the city, town, or unincorporated area of a county; and
             1278          (ii) $25,417.
             1279          (d) The commission shall deposit an amount the commission retains in accordance
             1280      with this Subsection (8) into the Qualified Emergency Food Agencies Fund created by Section
             1281      9-4-1409 .
             1282          (e) An amount the commission deposits into the Qualified Emergency Food Agencies
             1283      Fund shall be expended as provided in Section 9-4-1409 .
             1284          Section 5. Section 59-12-1102 is amended to read:
             1285           59-12-1102. Base -- Rate -- Imposition of tax -- Distribution of revenue --
             1286      Administration -- Commission requirement to retain an amount to be deposited into the
             1287      Qualified Emergency Food Agencies Fund -- Enactment or repeal of tax -- Effective date
             1288      -- Notice requirements.
             1289          (1) (a) (i) Subject to Subsections (2) through [(5)] (6), and in addition to any other tax
             1290      authorized by this chapter, a county may impose by ordinance a county option sales and use tax
             1291      of .25% upon the transactions described in Subsection 59-12-103 (1).
             1292          (ii) Notwithstanding Subsection (1)(a)(i), a county may not impose a tax under this
             1293      section on the sales and uses described in Section 59-12-104 to the extent the sales and uses are
             1294      exempt from taxation under Section 59-12-104 .
             1295          (b) For purposes of this Subsection (1), the location of a transaction shall be
             1296      determined in accordance with Sections 59-12-211 through 59-12-215 .


             1297          (c) The county option sales and use tax under this section shall be imposed:
             1298          (i) upon transactions that are located within the county, including transactions that are
             1299      located within municipalities in the county; and
             1300          (ii) except as provided in Subsection (1)(d) or (5), beginning on the first day of
             1301      January:
             1302          (A) of the next calendar year after adoption of the ordinance imposing the tax if the
             1303      ordinance is adopted on or before May 25; or
             1304          (B) of the second calendar year after adoption of the ordinance imposing the tax if the
             1305      ordinance is adopted after May 25.
             1306          (d) Notwithstanding Subsection (1)(c)(ii), the county option sales and use tax under
             1307      this section shall be imposed:
             1308          (i) beginning January 1, 1998, if an ordinance adopting the tax imposed on or before
             1309      September 4, 1997; or
             1310          (ii) beginning January 1, 1999, if an ordinance adopting the tax is imposed during 1997
             1311      but after September 4, 1997.
             1312          (2) (a) Before imposing a county option sales and use tax under Subsection (1), a
             1313      county shall hold two public hearings on separate days in geographically diverse locations in
             1314      the county.
             1315          (b) (i) At least one of the hearings required by Subsection (2)(a) shall have a starting
             1316      time of no earlier than 6 p.m.
             1317          (ii) The earlier of the hearings required by Subsection (2)(a) shall be no less than seven
             1318      days after the day the first advertisement required by Subsection (2)(c) is published.
             1319          (c) (i) Before holding the public hearings required by Subsection (2)(a), the county
             1320      shall advertise in a newspaper of general circulation in the county:
             1321          (A) its intent to adopt a county option sales and use tax;
             1322          (B) the date, time, and location of each public hearing; and
             1323          (C) a statement that the purpose of each public hearing is to obtain public comments
             1324      regarding the proposed tax.
             1325          (ii) The advertisement shall be published once each week for the two weeks preceding
             1326      the earlier of the two public hearings.
             1327          (iii) The advertisement shall be no less than 1/8 page in size, and the type used shall be


             1328      no smaller than 18 point and surrounded by a 1/4-inch border.
             1329          (iv) The advertisement may not be placed in that portion of the newspaper where legal
             1330      notices and classified advertisements appear.
             1331          (v) Whenever possible:
             1332          (A) the advertisement shall appear in a newspaper that is published at least five days a
             1333      week, unless the only newspaper in the county is published less than five days a week; and
             1334          (B) the newspaper selected shall be one of general interest and readership in the
             1335      community, and not one of limited subject matter.
             1336          (d) The adoption of an ordinance imposing a county option sales and use tax is subject
             1337      to a local referendum election and shall be conducted as provided in Title 20A, Chapter 7, Part
             1338      6, Local Referenda - Procedures.
             1339          (3) (a) [If] Subject to Subsection (5), if the aggregate population of the counties
             1340      imposing a county option sales and use tax under Subsection (1) is less than 75% of the state
             1341      population, the tax levied under Subsection (1) shall be distributed to the county in which the
             1342      tax was collected.
             1343          (b) [If] Subject to Subsection (5), if the aggregate population of the counties imposing
             1344      a county option sales and use tax under Subsection (1) is greater than or equal to 75% of the
             1345      state population:
             1346          (i) 50% of the tax collected under Subsection (1) in each county shall be distributed to
             1347      the county in which the tax was collected; and
             1348          (ii) except as provided in Subsection (3)(c), 50% of the tax collected under Subsection
             1349      (1) in each county shall be distributed proportionately among all counties imposing the tax,
             1350      based on the total population of each county.
             1351          (c) [If] Except as provided in Subsection (5), the amount to be distributed annually to a
             1352      county under Subsection (3)(b)(ii), when combined with the amount distributed to the county
             1353      under Subsection (3)(b)(i), does not equal at least $75,000, then:
             1354          (i) the amount to be distributed annually to that county under Subsection (3)(b)(ii) shall
             1355      be increased so that, when combined with the amount distributed to the county under
             1356      Subsection (3)(b)(i), the amount distributed annually to the county is $75,000; and
             1357          (ii) the amount to be distributed annually to all other counties under Subsection
             1358      (3)(b)(ii) shall be reduced proportionately to offset the additional amount distributed under


             1359      Subsection (3)(c)(i).
             1360          (d) The commission shall establish rules to implement the distribution of the tax under
             1361      Subsections (3)(a), (b), and (c).
             1362          (4) (a) Except as provided in Subsection (4)(b) or (c), a tax authorized under this part
             1363      shall be administered, collected, and enforced in accordance with:
             1364          (i) the same procedures used to administer, collect, and enforce the tax under:
             1365          (A) Part 1, Tax Collection; or
             1366          (B) Part 2, Local Sales and Use Tax Act; and
             1367          (ii) Chapter 1, General Taxation Policies.
             1368          (b) Notwithstanding Subsection (4)(a), a tax under this part is not subject to
             1369      Subsections 59-12-205 (2) through (6).
             1370          (c) Notwithstanding Subsection (4)(a), the fee charged by the commission under
             1371      Section 59-12-206 shall be based on the distribution amounts resulting after [all]:
             1372          (i) the applicable distribution calculations under Subsection (3) have been made[.]; and
             1373          (ii) the commission retains the amount required by Subsection (5).
             1374          (5) (a) Beginning on July 1, 2009, the commission shall calculate and retain a portion
             1375      of the sales and use tax collected under this part as provided in this Subsection (5).
             1376          (b) For a county that imposes a tax under this part, the commission shall calculate a
             1377      percentage each month by dividing the sales and use tax collected under this part for that
             1378      month within the boundaries of that county by the total sales and use tax collected under this
             1379      part for that month within the boundaries of all of the counties that impose a tax under this part.
             1380          (c) For a county that imposes a tax under this part, the commission shall retain each
             1381      month an amount equal to the product of:
             1382          (i) the percentage the commission determines for the month under Subsection (5)(b)
             1383      for the county; and
             1384          (ii) $6,354.
             1385          (d) The commission shall deposit an amount the commission retains in accordance
             1386      with this Subsection (5) into the Qualified Emergency Food Agencies Fund created by Section
             1387      9-4-1409 .
             1388          (e) An amount the commission deposits into the Qualified Emergency Food Agencies
             1389      Fund shall be expended as provided in Section 9-4-1409 .


             1390          [(5)] (6) (a) For purposes of this Subsection [(5)] (6):
             1391          (i) "Annexation" means an annexation to a county under Title 17, Chapter 2,
             1392      Annexation to County.
             1393          (ii) "Annexing area" means an area that is annexed into a county.
             1394          (b) (i) Except as provided in Subsection [(5)] (6)(c) or (d), if, on or after July 1, 2004, a
             1395      county enacts or repeals a tax under this part:
             1396          (A) (I) the enactment shall take effect as provided in Subsection (1)(c); or
             1397          (II) the repeal shall take effect on the first day of a calendar quarter; and
             1398          (B) after a 90-day period beginning on the date the commission receives notice meeting
             1399      the requirements of Subsection [(5)] (6)(b)(ii) from the county.
             1400          (ii) The notice described in Subsection [(5)] (6)(b)(i)(B) shall state:
             1401          (A) that the county will enact or repeal a tax under this part;
             1402          (B) the statutory authority for the tax described in Subsection [(5)] (6)(b)(ii)(A);
             1403          (C) the effective date of the tax described in Subsection [(5)] (6)(b)(ii)(A); and
             1404          (D) if the county enacts the tax described in Subsection [(5)] (6)(b)(ii)(A), the rate of
             1405      the tax.
             1406          (c) (i) The enactment of a tax shall take effect on the first day of the first billing period:
             1407          (A) that begins after the effective date of the enactment of the tax; and
             1408          (B) if the billing period for the transaction begins before the effective date of the
             1409      enactment of the tax under Subsection (1).
             1410          (ii) The repeal of a tax shall take effect on the first day of the last billing period:
             1411          (A) that began before the effective date of the repeal of the tax; and
             1412          (B) if the billing period for the transaction begins before the effective date of the repeal
             1413      of the tax imposed under Subsection (1).
             1414          (d) (i) If a tax due under this chapter on a catalogue sale is computed on the basis of
             1415      sales and use tax rates published in the catalogue, an enactment or repeal of a tax described in
             1416      Subsection [(5)] (6)(b)(i) takes effect:
             1417          (A) on the first day of a calendar quarter; and
             1418          (B) beginning 60 days after the effective date of the enactment or repeal under
             1419      Subsection [(5)] (6)(b)(i).
             1420          (ii) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the


             1421      commission may by rule define the term "catalogue sale."
             1422          (e) (i) Except as provided in Subsection [(5)] (6)(f) or (g), if, for an annexation that
             1423      occurs on or after July 1, 2004, the annexation will result in the enactment or repeal of a tax
             1424      under this part for an annexing area, the enactment or repeal shall take effect:
             1425          (A) on the first day of a calendar quarter; and
             1426          (B) after a 90-day period beginning on the date the commission receives notice meeting
             1427      the requirements of Subsection [(5)] (6)(e)(ii) from the county that annexes the annexing area.
             1428          (ii) The notice described in Subsection [(5)] (6)(e)(i)(B) shall state:
             1429          (A) that the annexation described in Subsection [(5)] (6)(e)(i) will result in an
             1430      enactment or repeal of a tax under this part for the annexing area;
             1431          (B) the statutory authority for the tax described in Subsection [(5)] (6)(e)(ii)(A);
             1432          (C) the effective date of the tax described in Subsection [(5)] (6)(e)(ii)(A); and
             1433          (D) the rate of the tax described in Subsection [(5)] (6)(e)(ii)(A).
             1434          (f) (i) The enactment of a tax shall take effect on the first day of the first billing period:
             1435          (A) that begins after the effective date of the enactment of the tax; and
             1436          (B) if the billing period for the transaction begins before the effective date of the
             1437      enactment of the tax under Subsection (1).
             1438          (ii) The repeal of a tax shall take effect on the first day of the last billing period:
             1439          (A) that began before the effective date of the repeal of the tax; and
             1440          (B) if the billing period for the transaction begins before the effective date of the repeal
             1441      of the tax imposed under Subsection (1).
             1442          (g) (i) If a tax due under this chapter on a catalogue sale is computed on the basis of
             1443      sales and use tax rates published in the catalogue, an enactment or repeal of a tax described in
             1444      Subsection [(5)] (6)(e)(i) takes effect:
             1445          (A) on the first day of a calendar quarter; and
             1446          (B) beginning 60 days after the effective date of the enactment or repeal under
             1447      Subsection [(5)] (6)(e)(i).
             1448          (ii) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1449      commission may by rule define the term "catalogue sale."
             1450          Section 6. Section 59-12-2003 is amended to read:
             1451           59-12-2003. Imposition -- Base -- Rate -- Revenues distributed to certain public


             1452      transit districts.
             1453          (1) Subject to the other provisions of this section and except as provided in Subsection
             1454      (2) or (4), beginning on July 1, 2008, the state shall impose a tax under this part on the
             1455      transactions described in Subsection 59-12-103 (1) within a city, town, or the unincorporated
             1456      area of a county of the first or second class if, on January 1, 2008, there is a public transit
             1457      district within any portion of that county of the first or second class.
             1458          (2) The state may not impose a tax under this part within a county of the first or second
             1459      class if within all of the cities, towns, and the unincorporated area of the county of the first or
             1460      second class there is imposed a sales and use tax of:
             1461          (a) .30% under Section 59-12-501 ;
             1462          (b) .30% under Section 59-12-1001 ; or
             1463          (c) .30% under Section 59-12-1503 .
             1464          (3) (a) Subject to Subsection (3)(b), if the state imposes a tax under this part, the tax
             1465      rate imposed within a city, town, or the unincorporated area of a county of the first or second
             1466      class is a percentage equal to the difference between:
             1467          (i) .30%; and
             1468          (ii) (A) for a city within the county of the first or second class, the highest tax rate
             1469      imposed within that city under:
             1470          (I) Section 59-12-501 ;
             1471          (II) Section 59-12-1001 ; or
             1472          (III) Section 59-12-1503 ;
             1473          (B) for a town within the county of the first or second class, the highest tax rate
             1474      imposed within that town under:
             1475          (I) Section 59-12-501 ;
             1476          (II) Section 59-12-1001 ; or
             1477          (III) Section 59-12-1503 ; or
             1478          (C) for the unincorporated area of the county of the first or second class, the highest tax
             1479      rate imposed within that unincorporated area under:
             1480          (I) Section 59-12-501 ;
             1481          (II) Section 59-12-1001 ; or
             1482          (III) Section 59-12-1503 .


             1483          (b) For purposes of Subsection (3)(a), if for a city, town, or the unincorporated area of
             1484      a county of the first or second class, the highest tax rate imposed under Section 59-12-501 ,
             1485      59-12-1001 , or 59-12-1503 within that city, town, or unincorporated area of the county of the
             1486      first or second class is .30%, the state may not impose a tax under this part within that city,
             1487      town, or unincorporated area.
             1488          (4) (a) The state may not impose a tax under this part on:
             1489          [(i) a transaction described in Subsection 59-12-103 (1)(d);]
             1490          [(ii) except as provided in Subsection (4)(b), a transaction described in Subsection
             1491      59-12-103 (2)(c); or]
             1492          [(iii)] (i) the sales and uses described in Section 59-12-104 to the extent the sales and
             1493      uses are exempt from taxation under Section 59-12-104 [.]; or
             1494          (ii) except as provided in Subsection (4)(b), amounts paid or charged for food and food
             1495      ingredients.
             1496          (b) The state shall impose a tax under this part on amounts paid or charged for food
             1497      and food ingredients if the food and food ingredients are sold as part of a bundled transaction
             1498      attributable to food and ingredients and tangible personal property other than food and food
             1499      ingredients.
             1500          (5) For purposes of Subsection (1), the location of a transaction shall be determined in
             1501      accordance with Sections 59-12-211 through 59-12-215 .
             1502          (6) The commission shall distribute the revenues the state collects from the sales and
             1503      use tax under this part, after subtracting amounts a seller retains in accordance with Section
             1504      59-12-108 , to the public transit districts within the cities, towns, and unincorporated areas:
             1505          (a) within which the state imposes a tax under this part; and
             1506          (b) in proportion to the revenues collected from the sales and use tax under this part
             1507      within each city, town, and unincorporated area within which the state imposes a tax under this
             1508      part.
             1509          Section 7. Effective dates -- Retrospective operation.
             1510          (1) Except as provided in Subsection (2), this bill takes effect on July 1, 2009.
             1511          (2) The amendments to Section 59-12-2003 in this bill:
             1512          (a) if approved by two-thirds of all the members elected to each house, take effect upon
             1513      approval by the governor, or the day following the constitutional time limit of Utah


             1514      Constitution Article VII, Section 8, without the governor's signature, or in the case of a veto,
             1515      the date of veto override; and
             1516          (b) have retrospective operation to July 1, 2008.
             1517          Section 8. Coordinating S.B. 189 with H.B. 403 -- Technically merging the
             1518      amendments.
             1519          If this S.B. 189 and H.B. 403, Sales and Use Tax and Income Tax Amendments, both
             1520      pass, it is the intent of the Legislature that the Office of Legislative Research and General
             1521      Counsel prepare the version of the Utah Code database that takes effect on July 1, 2009 for
             1522      publication by modifying Subsection 59-12-2003(4) to read:
             1523          "(4) The state may not impose a tax under this part on the sales and uses described in
             1524      Section 59-12-104 to the extent the sales and uses are exempt from taxation under Section
             1525      59-12-104."


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